Exhibit 4.3
-----------
________________________________________________________________________________
McKESSON CORPORATION
and
The First National Bank of Chicago,
as Trustee
_________________
5% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURES
_________________
INDENTURE
Dated as of February 20, 1997
________________________________________________________________________________
McKESSON CORPORATION
Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of May 1, 1996
Trust Indenture
Act Section Indenture Section
----------------- -----------------
310(a)(1)............................................ 6.10
(a)(2)............................................ 6.10
(a)(3)............................................ Not Applicable
(a)(4)............................................ Not Applicable
(a)(5)............................................ 6.10
(b)............................................... 6.8, 6.10
311(a)............................................... 6.11
(b)............................................... 6.11
312(a)............................................... 4.1 and 4.2
(b)............................................... 4.2
(c)............................................... 4.2
313(a)(1)-(5) & (7)(8) ............................. 6.6
(a)(6)............................................ Not Applicable
(b)(1)............................................ Not Applicable
(b)(2)............................................ 6.6
(c)............................................... 6.6
(d)............................................... 6.6
314(a)(1)-(3)........................................ 4.3
(a)(4)............................................ 3.4
(b)............................................... Not Applicable
(c)(1)............................................ 11.5
(c)(2)............................................ 11.5
(c)(3)............................................ Not Applicable
(d)............................................... Not Applicable
(e)............................................... 11.5
(f)............................................... Not Applicable
315(a)............................................... Not Applicable
(b)............................................... 6.5
(c)............................................... 6.1
(d)............................................... 6.1
(d)(1)............................................ 6.1
(d)(2)............................................ 6.1
(d)(3)............................................ 6.1
(e)............................................... 5.10
316(a)............................................ 7.4
(a)(1)(A)....................................... 5.8
(a)(1)(B)....................................... 5.1, 5.9
(a)(2).......................................... Not Applicable
(b)............................................. 5.6
(c)............................................. 7.1
317(a)(1)......................................... 5.2
(a)(2).......................................... 5.2
(b)............................................. 3.3
318(a)............................................ 11.7
_______________________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of the Indenture.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined......................................... 1
ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount.............................. 12
Section 2.2 Maturity...................................................... 12
Section 2.3 Form and Payment.............................................. 12
Section 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary............. 12
Section 2.5 Interest...................................................... 17
Section 2.6 Authentication and Delivery of Convertible Debentures......... 18
Section 2.7 Execution of Convertible Debentures........................... 19
Section 2.8 Certificate of Authentication................................. 19
Section 2.9 Denomination and Date of Convertible Debentures;
Payments of Interest.......................................... 20
Section 2.10 Registration, Transfer and Exchange........................... 21
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen
Convertible Debentures........................................ 24
Section 2.12 Cancellation of Convertible Debentures........................ 25
Section 2.13 Temporary Convertible Debentures.............................. 25
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 Payment of Principal and Interest............................. 26
Section 3.2 Offices for Payment, etc...................................... 26
Section 3.3 Paying Agents................................................. 27
Section 3.4 Written Statement to Trustee.................................. 27
Section 3.5 Limitation on Dividends; Transactions with Affiliates......... 28
Section 3.6 Covenants as to McKesson Trust................................ 28
Section 3.7 Existence..................................................... 28
i
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1 Company to Furnish Trustee Information as to Names
and Addresses of Holders of Convertible Debentures............ 29
Section 4.2 Preservation and Disclosure of Holders of Convertible
Debentures' Lists............................................. 29
Section 4.3 Reports by the Company........................................ 30
ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity;
Waiver of Default............................................. 31
Section 5.2 Collection of Indebtedness by Trustee; Trustee May
Prove Debt.................................................... 33
Section 5.3 Application of Proceeds....................................... 35
Section 5.4 Restoration of Rights on Abandonment of Proceedings........... 36
Section 5.5 Limitations on Suits by Holders of Convertible
Debentures.................................................... 36
Section 5.6 Unconditional Right of Holders of Convertible
Debentures to Institute Certain Suits......................... 37
Section 5.7 Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default......................................... 37
Section 5.8 Control by Holders of Convertible Debentures.................. 37
Section 5.9 Waiver of Past Defaults....................................... 38
Section 5.10 Right of Court to Require Filing of Undertaking to Pay
Costs......................................................... 38
Section 5.11 Suits for Enforcement......................................... 39
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of the Trustee......................................... 39
Section 6.2 Rights of Trustee............................................. 40
Section 6.3 Individual Rights of Trustee.................................. 41
Section 6.4 Trustee's Disclaimer.......................................... 41
ii
Section 6.5 Notice of Defaults........................................... 41
Section 6.6 Reports by Trustee to Holders................................ 41
Section 6.7 Compensation and Indemnity................................... 41
Section 6.8 Replacement of Trustee....................................... 42
Section 6.9 Successor Trustee by Merger.................................. 43
Section 6.10 Eligibility; Disqualification................................ 43
Section 6.11 Preferential Collection of Claims Against Company............ 43
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 Evidence of Action Taken by Holders of Convertible
Debentures.................................................... 43
Section 7.2 Proof of Execution of Instruments............................. 44
Section 7.3 Holders to be Treated as Owners............................... 44
Section 7.4 Convertible Debentures Owned by Company Deemed Not
Outstanding................................................... 44
Section 7.5 Right of Revocation of Action Taken........................... 44
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders of
Convertible Debentures........................................ 45
Section 8.2 Supplemental Indentures With Consent of Holders of
Convertible Debentures........................................ 46
Section 8.3 Effect of Supplemental Indenture.............................. 47
Section 8.4 Documents to Be Given to Trustee.............................. 47
Section 8.5 Notation on Convertible Debentures in Respect of
Supplemental Indentures....................................... 47
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms............... 47
Section 9.2 Successor Corporation Substituted............................. 48
Section 9.3 Opinion of Counsel to Trustee................................. 48
iii
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 Tax Event Redemption.......................................... 49
Section 10.2 Optional Redemption by Company................................ 49
Section 10.3 No Sinking Fund............................................... 51
Section 10.4 Election to Redeem; Notice of Redemption; Partial
Redemptions................................................... 51
Section 10.5 Payment of Convertible Debentures Called for
Redemption.................................................... 52
Section 10.6 Exclusion of Certain Convertible Debentures from
Eligibility for Selection for Redemption...................... 53
ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 11.1 Extension of Interest Payment Period.......................... 53
Section 11.2 Notice of Extension........................................... 54
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 Conversion Rights............................................. 54
Section 12.2 Conversion Procedures......................................... 55
Section 12.3 Conversion Price Adjustments.................................. 56
Section 12.4 Merger, Consolidation or Sale of Assets....................... 62
Section 12.5 Notice of Adjustments of Conversion Price..................... 63
Section 12.6 Prior Notice of Certain Events................................ 64
Section 12.7 Certain Additional Rights..................................... 65
Section 12.8 Trustee Not Responsible for Determining Conversion
Price or Adjustments.......................................... 65
Section 12.9 Reservation of Shares of Common Stock......................... 66
Section 12.10 Payment of Certain Taxes upon Conversion...................... 66
Section 12.11 Nonassessability.............................................. 66
iv
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 Convertible Debentures Subordinate to Senior
Indebtedness.................................................. 66
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc................ 66
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration
of Convertible Debentures..................................... 68
Section 13.4 No Payment When Senior Indebtedness in Default................ 68
Section 13.5 Payment Permitted in Certain Situations....................... 68
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness....... 69
Section 13.7 Provisions Solely to Define Relative Rights................... 69
Section 13.8 Trustee to Effectuate Subordination........................... 69
Section 13.9 No Waiver of Subordination Provisions......................... 69
Section 13.10 Notice to Trustee............................................. 70
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating
Agent......................................................... 71
Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness...... 71
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights.............................. 71
Section 13.14 Article Applicable to Paying Agents........................... 71
Section 13.15 Certain Conversions Deemed Payment............................ 72
ARTICLE XIV
EXPENSES
Section 14.1 Payment of Expenses........................................... 72
Section 14.2 Payment Upon Resignation or Removal........................... 73
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability...................... 73
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties
and Holders of Convertible Debentures......................... 73
Section 15.3 Right to Assign; Successors and Assigns Bound by
Indenture..................................................... 74
Section 15.4 Notices and Demands on Company, Trustee and Holders
of Convertible Debentures..................................... 74
v
Section 15.5 Officers' Certificates and Opinions of Counsel;
Statements to Be Contained Therein............................ 75
Section 15.6 Payments Due on Saturdays, Sundays and Holidays............... 76
Section 15.7 Conflict of Any Provision of Indenture with Trust
Indenture Act................................................. 76
Section 15.8 New York Law to Govern........................................ 76
Section 15.9 Counterparts.................................................. 76
Section 15.10 Effect of Headings; Gender.................................... 76
vi
THIS INDENTURE, dated as of February 20, 1997 between McKESSON CORPORATION,
a Delaware corporation (the "Company") and The First National Bank of Chicago,
(the "Trustee"),
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company desires and has requested the Trustee to join it in
the execution and delivery of this Indenture in order to establish and provide
for the issuance by the Company of Convertible Debentures designated as its 5%
Convertible Junior Subordinated Debentures (the "Convertible Debentures"), a
specimen copy of which is attached hereto as Exhibit A, on the terms set forth
herein;
WHEREAS, McKesson Financing Trust, a Delaware statutory business trust
("McKesson Trust" or the "Trust"), has offered to Xxxxxx Xxxxxxx & Co.
Incorporated (the "Initial Purchaser") in a private placement $200,000,000
aggregate liquidation amount of its 5% Trust Convertible Preferred Securities
(the "Convertible Preferred Securities"), representing undivided beneficial
interests in the assets of the Trust, and proposes to invest the proceeds from
such offering, together with the proceeds of the issuance and sale by the Trust
to the Company of $6,186,000 aggregate liquidation amount of its Common
Securities, in $206,186,000 aggregate principal amount of the Convertible
Debentures; and
WHEREAS, all things necessary to make this Indenture a valid agreement of
the Company and the Trustee, in accordance with its terms, have been done.
NOW, THEREFORE:
There is hereby established the terms of the Convertible Debentures to be
issued under this Indenture, which shall be as set forth herein and in the form
of Convertible Debentures attached hereto as Exhibit A, and in consideration of
the premises and the purchase and acceptance of the Convertible Debentures by
the holders thereof, the Company mutually covenants and agrees with the Trustee,
for the equal and proportionate benefit of all holders of the Convertible
Debentures, as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Terms Defined. The following terms (except as other
expressly provided or unless the context otherwise clearly requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), or the definitions of which in the Securities Act of
1933, as amended (the "Securities Act"), are referred to in the Trust Indenture
Act, including terms defined therein by reference to the Securities Act (except
as herein otherwise expressly provided or unless the context otherwise clearly
requires), shall have the meanings
assigned to such terms in the Trust Indenture Act and in the Securities Act as
in force at the date of this Indenture. All accounting terms used herein and
not expressly defined shall have the meanings assigned to such terms in
accordance with generally accepted accounting principles, and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted at the time of any computation. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole, as supplemented and amended from time to time, and not to
any particular Article, Section or other subdivision. The terms defined in this
Article have the meanings assigned to them in this Article and include the
plural as well as the singular.
"Additional Sums" shall have the meaning set forth in Section 2.5(c).
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act of 1933, as amended, or any successor rule thereunder.
"Applicable Price" means (i) in the event of a Non-Stock Fundamental Change
in which the holders of the Common Stock receive only cash, the amount of cash
received by a holder of one share of Common Stock and (ii) in the event of any
other Fundamental Change, the average of the daily Closing Price for one share
of Common Stock during the 10 Trading Days immediately prior to the record date
for the determination of the holders of Common Stock entitled to receive cash,
securities, property or other assets in connection with such Fundamental Change
or, if there is no such record date, prior to the date upon which the holders of
the Common Stock shall have the right to receive such cash, securities, property
or other assets.
"Board of Directors" means either the Board of Directors of the Company or
any duly authorized committee of that Board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday, or any other
day on which banking institutions in New York, New York or Wilmington, Delaware
are permitted or required by any applicable law to close.
"Capital Stock" means, with respect to any Person, any and all shares,
interests, units representing interests, participations, rights in or other
equivalents (however designated) of such Person's capital stock, including, with
respect to partnerships, partnership interests (whether general or limited) and
any other interest or participation that confers upon a Person the right to
receive a share of the profits and losses of, or distributions of assets of,
such partnership, and any rights (other than debt securities convertible into
capital stock), warrants or options exchangeable for or convertible into such
capital stock.
"Certificated Convertible Preferred Securities" means Convertible Preferred
Securities issued in definitive registered form.
2
"Clearing Agent" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as a depositary for
the Convertible Debentures and in whose name or in the name of a nominee of that
organization shall be registered one or more Global Debentures and which shall
undertake to effect book entry transfers and pledges of the Convertible
Debentures.
"Closing Price" with respect to any security on any day means the last
reported sale price, regular way on such day, or, if no sale takes place on such
day, the average of the reported closing bid and asked prices on such day,
regular way, in either case as reported on the NYSE Composite Tape, or, if such
security is not listed or admitted to trading on the New York Stock Exchange, on
the principal national securities exchange on which such security is listed or
admitted to trading, or, if such security is not listed or admitted to trading
on a national securities exchange, on the National Market System of the National
Association of Securities Dealers, Inc., or, if such security is not quoted or
admitted to trading on such quotation system, on the principal quotation system
on which such security is listed or admitted to trading or quoted, or, if not
listed or admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security in the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or, if not so available in such manner, as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Directors (or any committee duly authorized by the Board of Directors) of the
Company for that purpose or, if not so available in such manner, as otherwise
determined in good faith by the Board of Directors (or any committee duly
authorized by the Board of Directors) of the Company.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, as amended, or if at any time
after the execution and delivery of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties on such date.
"Common Securities" means undivided beneficial interests in the assets of
the McKesson Trust which rank pari passu with Convertible Preferred Securities
issued by the McKesson Trust; provided, however, that upon the occurrence of an
Event of Default, the rights of holders of Common Securities to payment in
respect to distributions and payments upon liquidation, redemption and otherwise
are subordinated to the rights of holders of Convertible Preferred Securities.
"Common Securities Guarantee" means the Common Securities Guarantee
Agreement dated as of February 20, 1997 by the Guarantor.
"Common Securities Registration Rights Agreement" means the Registration
Rights Agreement dated as of February 20, 1997 by the Company and the Trust,
relating to the Common Securities.
3
"Common Stock" includes any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding-up of the Company
and which is not subject to redemption by the Company.
"Common Stock Fundamental Change" means any Fundamental Change in which
more than 50% of the value (as determined in good faith by the Board of
Directors of the Company) of the consideration received by holders of Common
Stock consists of common stock that, for the 10 Trading Days immediately prior
to such Fundamental Change, has been admitted for listing or admitted for
listing subject to notice of issuance on a national securities exchange or
quoted on The Nasdaq National Market; provided, however, that a Fundamental
Change shall not be a Common Stock Fundamental Change unless either (i) the
Company continues to exist after the occurrence of such Fundamental Change and
the outstanding Convertible Preferred Securities continue to exist as
outstanding Convertible Preferred Securities, or (ii) not later than the
occurrence of such Fundamental Change, the outstanding Convertible Preferred
Securities are converted into or exchanged for convertible preferred stock or
debentures of a corporation succeeding to the business of the Company, which
convertible preferred stock has powers, preferences and relative, participating,
optional or other rights, and qualifications, limitations and restrictions
substantially similar to those of the Convertible Preferred Securities and which
debentures have terms substantially similar to those of the Convertible
Debentures.
"Company" means McKesson Corporation, a Delaware corporation, until a
successor corporation shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Company" shall mean such successor
corporation.
"Compound Interest" shall have the meaning specified in Section 11.1.
"Convertible Debenture" or "Convertible Debentures" has the meaning stated
in the first recital of this Indenture and more particularly means any
Convertible Debentures authenticated and delivered under this Indenture.
"Convertible Preferred Securities" has the meaning specified in the
recitals to this Indenture.
"Conversion Agent" has the meaning assigned thereto in the Declaration.
"Conversion Price" has the meaning set forth in Section 12.1.
"Corporate Trust Office" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
administered, which office at the date of execution of this Indenture is located
at Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, XX 00000-0000, Attention:
Corporation Trust Services Division.
4
"Declaration" means the Amended and Restated Declaration of Trust of
McKesson Financing Trust, a Delaware statutory business trust, dated as of
February 20, 1997.
"Debt" of a Person means, all indebtedness of such Person which is for
money borrowed.
"defaulted interest" has the meaning specified in Section 2.9.
"Deferred Interest" has the meaning specified in Section 11.1.
"Delaware Trustee" has the meaning specified in the Declaration.
"Depositary" means, with respect to the Convertible Debentures issuable or
issued in the form of one or more Global Debentures, the Person designated as
Depositary by the Company until a successor Depositary shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Depositary" shall mean or include each Person who is then a Depositary
hereunder, and if at any time there is more than one such person, "Depositary"
as used with respect to the Convertible Debentures shall mean the Depositary
with respect to the Global Debentures.
"Depositary Convertible Debenture" means a Convertible Debenture executed
by the Company and authenticated and delivered by the Trustee to the Depositary
or pursuant to the Depositary's instruction, all in accordance with this
Indenture, which (i) shall be registered as to principal and interest in the
name of the Depositary or its nominee and (ii) shall represent, and shall be
denominated in an amount equal to the aggregate principal amount of, all or a
portion of the Outstanding Convertible Debentures.
"Dissolution Event" means that, as a result of the occurrence and
continuation of a Special Event (as described in the Declaration), the Trust is
to be dissolved in accordance with the Declaration, and the Convertible
Debentures held by the Institutional Trustee are to be distributed to the
holders of the Trust Securities issued by the Trust pro rata in accordance with
the Declaration.
"Dollar" means the coin or currency of the United States of America which
as of the time of payment is legal tender for the payment of public and private
debts.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extension Period" has the meaning specified in Section 11.1.
"Fundamental Change" means the occurrence of any transaction or event or
series of transactions or events pursuant to which all or substantially all of
the Common Stock shall be exchanged for, converted into, acquired for or shall
constitute solely the right to receive
5
cash, securities, property or other assets (whether by means of an exchange
offer, liquidation, tender offer, consolidation, merger, combination,
reclassification, recapitalization or otherwise); provided, however, in the case
of any such series of transactions or events, for purposes of adjustment of the
Conversion Price, such Fundamental Change shall be deemed to have occurred when
substantially all of the Common Stock shall have been exchanged for, converted
into or acquired for, or shall constitute solely the right to receive, such
cash, securities, property or other assets, but the adjustment shall be based
upon the consideration that the holders of Common Stock received in the
transaction or event as a result of which more than 50% of the Common Stock
shall have been exchanged for, converted into or acquired for, or shall
constitute solely the right to receive, such cash, securities, property or other
assets.
"Global Debenture" has the meaning specified in Section 2.4(a).
"Government Obligations" means securities which are (i) direct obligations
of the United States government for which its full faith and credit is pledged
or (ii) obligations of a Person controlled or supervised by, or acting as an
agency or instrumentality of, the United States government, the payment of which
obligations is unconditionally guaranteed by the United States government, and
which, in either case, are full faith and credit obligations of the United
States government, and which are not callable or redeemable at the option of the
issuer thereof prior to their stated maturity.
"Guarantor" means the Company in its capacity as guarantor under any Trust
Securities Guarantees.
"Holder" or "Holder of Convertible Debentures" or other similar terms mean
the person in whose name such Convertible Debenture is registered in the
Security Register.
"incur" means to issue, incur, assume, guarantee, become liable,
contingently or otherwise, with respect to, or otherwise become responsible for
the payment of, any Debt.
"Indenture" means this instrument as originally executed and delivered or
as it may from time to time be amended or supplemented as herein provided, as so
amended or supplemented or both, and shall include the forms and terms of the
Convertible Debentures appearing as Exhibit A to this instrument.
"Institutional Trustee" has the meaning specified in the Declaration.
"Interest Payment Date," when used with respect to any Convertible
Debenture, means the Stated Maturity of an installment of interest on such
Convertible Debenture.
"Lien" means any mortgage or deed of trust, pledge, assignment, security
interest, lien, charge, or other encumbrance or preferential arrangement
(including, without limitation, any conditional sale or other title retention
agreement having substantially the same economic effect as any of the
foregoing).
6
"Maturity" when used with respect to any Convertible Debenture means the
date on which the principal of such Convertible Debenture or an installment of
principal becomes due and payable as therein or herein provided, whether at
Stated Maturity or by declaration of acceleration, call for redemption or
otherwise.
"Maturity Date" means the date on which the Convertible Debentures mature
and on which the principal shall be due and payable together with all accrued
and unpaid interest thereon including Additional Sums, if any, and (to the
extent permitted by applicable law) Compound Interest, if any.
"Non-Stock Fundamental Change" means any Fundamental Change other than a
Common Stock Fundamental Change.
"Non-U.S. Person" means any person that is not a "U.S. person" as such term
is defined in Rule 902 under the Securities Act.
"Officers' Certificate" means a certificate signed on behalf of the Company
by the Chairman of the Board of Directors or the vice chairman or the president
or any vice president and by the treasurer, the controller, any assistant
treasurer, the secretary or any assistant secretary of the Company and delivered
to the Trustee. Each such certificate shall include the statements provided for
in Section 15.5.
"Opinion of Counsel" means a written opinion of legal counsel, who may be
an employee of or counsel to the Company, and who shall be reasonably acceptable
to the Trustee. Each Opinion of Counsel shall include the statements provided
for in Section 15.5, if and to the extent required hereby.
"Optional Redemption Price" has the meaning specified in Section 10.2.
"Outstanding" when used with reference to Convertible Debentures, subject
to the provisions of Section 7.4, means, as of any particular time, all
Convertible Debentures authenticated and delivered under this Indenture, except
(a) Convertible Debentures theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(b) Convertible Debentures, or portions thereof, for the payment or
redemption of which moneys in the necessary amount and in the required
currency shall have been deposited in trust with the Trustee or with any
Paying Agent (other than the Company) or shall have been set aside,
segregated and held in trust by the Company for the Holders of such
Convertible Debentures (if the Company shall act as its own Paying Agent),
provided that if such Convertible Debentures, or portions thereof, are to
be redeemed prior to the Maturity thereof, notice of such redemption shall
have been given as herein provided, or provision satisfactory to the
Trustee shall have been made for giving such notice; and
7
(c) Convertible Debentures that have been paid pursuant to Section
2.11, converted into Common Stock pursuant to Article XII, or in exchange
for or in lieu of which other Convertible Debentures have been
authenticated and delivered pursuant to the Indenture (except with respect
to any such Convertible Debenture as to which proof satisfactory to the
Trustee and the Company is presented that such Convertible Debenture is
held by a person in whose hands such Convertible Debenture is a legal,
valid and binding obligation of the Company).
"Paying Agent" means any Person (which may include the Company) authorized
by the Company to pay the principal of or interest, if any, on any Convertible
Debenture on behalf of the Company.
"Persons" or "Person" means any individual, corporation, partnership, joint
venture, limited liability company, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Place of Payment", when used with respect to the Convertible Debentures,
means the place or places where the principal of and interest, if any, on the
Convertible Debentures are payable as specified pursuant to Section 3.2.
"Placement Agreement" means the Placement Agreement dated February 13, 1997
between the Company and the Trust and Xxxxxx Xxxxxxx & Co. Incorporated.
"Predecessor Convertible Debenture" of a Convertible Debenture means every
previous Convertible Debenture evidencing all or a portion of the same debt as
that evidenced by such Convertible Debenture; and, for the purposes of this
definition, a Convertible Debenture authenticated and delivered under Section
2.11 in exchange for or in lieu of a mutilated, destroyed, lost or stolen
Convertible Debenture shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Convertible Debenture.
"Preferred Securities Guarantee" means the Preferred Securities Guarantee
Agreement dated as of February 20, 1997 between the Guarantor and The First
National Bank of Chicago, as Preferred Guarantee Trustee.
"Preferred Securities Registration Rights Agreement" means the Registration
Rights Agreement dated as of February 20, 1997 among the Company, the Trust and
Xxxxxx Xxxxxxx & Co. Incorporated as the Initial Purchaser, relating to the
Convertible Preferred Securities.
"Preferred Stock", as applied to the Capital Stock of any Person, means
Capital Stock of such Person of any class or classes (however designated) that
ranks prior, as to the payment of dividends or as to the distribution of assets
upon any voluntary or involuntary liquidation, dissolution or winding up of such
Person, to shares of Capital Stock of any other class of such Person.
8
"principal" whenever used with reference to the Convertible Debentures or
any Convertible Debenture or any portion thereof, shall be deemed to include
"and premium, if any."
"Purchaser Stock Price" means, with respect to any Common Stock Fundamental
Change, the average of the daily Closing Price for one share of the common stock
received by holders of Common Stock (determined as provided herein) in such
Common Stock Fundamental Change during the 10 Trading Days immediately prior to
the date fixed for the determination of the holders of Common Stock entitled to
receive such common stock or, if there is no such date, prior to the date upon
which the holders of Common Stock shall have the right to receive such common
stock.
"QIB" or "Qualified Institutional Buyer" shall mean "Qualified
Institutional Buyer" as such term is defined in Rule 144A under the Securities
Act.
"record date" has the meaning specified in Section 2.9.
"Reference Market Price" initially means $39.75 (which is an amount equal
to 66-2/3% of the reported last sale price for the Common Stock on the New York
Stock Exchange on February 13, 1997) and, in the event of any adjustment to the
Conversion Price other than as a result of a Fundamental Change, the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
also be the same as the ratio of the initial Reference Market Price to the
initial Conversion Price.
"Registrar" has the meaning specified in Section 2.10.
"Registration Rights Agreements" means the Preferred Securities
Registration Rights Agreement and the Common Securities Registration Rights
Agreement.
"Regulation S" means Regulation S under the Securities Act.
"Representative" means the (a) indenture trustee or other trustee, agent or
representative for any Senior Indebtedness or (b) with respect to any Senior
Indebtedness that does not have any such trustee, agent or other representative
(i) in the case of such Senior Indebtedness issued pursuant to an agreement
providing for voting arrangements as among the holders or owners of such Senior
Indebtedness, any holder or owner of such Senior Indebtedness acting with the
consent of the required persons necessary to bind such holders or owners of such
Senior Indebtedness and (ii) in the case of all other such Senior Indebtedness,
the holder or owner of such Senior Indebtedness.
"Responsible Officer" when used with respect to the Trustee means any
officer within the corporate trust department (or any successor department) of
the Trustee including any vice president, assistant vice president, assistant
secretary, senior trust officer, trust officer or any other officer or assistant
officer of the Trustee customarily performing functions
9
similar to those performed by the persons who at the time shall be such
officers, respectively, or to whom any corporate trust matter is referred at the
Corporate Trust Office because of his or her knowledge of and familiarity with
the particular subject.
"Rule 144" means Rule 144 under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" has the meaning specified in Section 2.10.
"Senior Indebtedness" means, with respect to the Company, (i) the
principal, premium, if any, and interest in respect of (a) indebtedness of the
Company for money borrowed (but excluding trade accounts payable arising in the
ordinary course of business) under any credit agreements, notes, guarantees or
similar documents and (b) indebtedness evidenced by securities, debentures,
bonds or other similar instruments issued by the Company; (ii) all capital lease
obligations of the Company; (iii) all obligations of the Company issued or
assumed as the deferred purchase price of property, all conditional sale
obligations of the Company and all obligations of the Company under any title
retention agreement (but excluding trade accounts payable arising in the
ordinary course of business); (iv) all obligations of the Company for the
reimbursement on any letter of credit, banker's acceptance, security purchase
facility or similar credit transaction; (v) all obligations of the Company
(contingent or otherwise) with respect to an interest rate or other swap, cap or
collar agreements or other similar instruments or agreements or foreign
currency hedge, exchange, purchase or similar instruments or agreements; (vi)
all obligations of the types referred to in clauses (i) through (v) of other
Persons for the payment of which the Company is responsible or liable as
obligor, guarantor or otherwise; and (vii) all obligations of the types referred
to in clauses (i) through (vi) above of other Persons secured by any lien on any
property or asset of the Company (whether or not such obligation is assumed by
the Company), whether outstand ing on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company,
except for any such indebtedness that is by its terms subordinated to or pari
passu with the Convertible Debentures. Such Senior Indebtedness shall continue
to be Senior Indebtedness irrespective of any deferrals, renewals, extensions or
refundings of, or amendments, modifications, supplements or waivers of any term
of such Senior Indebtedness.
"Stated Maturity" when used with respect to any Convertible Debenture or
any installment of principal thereof or interest thereon, means the date on
which the principal of such Convertible Debenture or such installment of
principal or interest is due and payable in accordance with the terms thereof.
"Subsidiary" means any corporation, association, partnership or other
business entity of which more than 50% of the total voting power of the
outstanding Capital Stock (or other interests entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, general
partners, managers, managing members, managing partners or trustees
10
thereof or, if such persons are not elected, to vote on any matter that is
submitted to the vote of all persons holding ownership interests in such entity)
is at the time owned or controlled, directly or indirectly, by (i) the Company,
(ii) the Company and one or more Subsidiaries or (iii) one or more Subsidiaries.
"Trading Day" shall mean a day on which any securities are traded on the
national securities exchange or quotation system used to determine the Closing
Price or any day on which the New York Stock Exchange is open for trading.
"Transfer Restriction Termination Date" means the earlier of the first date
on which (i) the Convertible Preferred Securities, the Convertible Debentures
and any Common Stock issued or issuable upon the conversion or exchange thereof
(other than (A) such securities acquired by the Company or any Affiliate thereof
since the Issue Date of the Convertible Preferred Securities and (B) Common
Stock issued upon the conversion or exchange of any such security described in
clause (A) above) may be sold pursuant to Rule 144(k) (or any successor
provision) and (ii) all the Offered Securities have been sold pursuant to an
effective registration statement.
"Trust" or "McKesson Trust" means McKesson Financing Trust, a Delaware
statutory business trust.
"Trust Indenture Act" or "TIA" (except as otherwise provided in Sections
8.1 and 8.2) means the Trust Indenture Act of 1939, as amended, as in force at
the date as of which this Indenture was originally executed.
"Trust Securities" means the Common Securities and the Convertible
Preferred Securities of McKesson Trust.
"Trust Securities Guarantees" means the Common Securities Guarantee and the
Preferred Securities Guarantee.
"Trustee" means the Person identified as "Trustee" in the first paragraph
hereof until a successor Trustee shall have become such pursuant to the
provisions hereof, and thereafter, "Trustee" shall mean or include each Person
who is then a Trustee hereunder.
"United States of America" or "United States" means the United States of
America (including the states and the District of Columbia), its territories,
possessions, the Commonwealth of Puerto Rico and other areas subject to its
jurisdiction.
"U.S. Person" means (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any state or political subdivision thereof, (iii)
an estate the income of which is subject to United States federal income
taxation regardless of its sources or (iv) a trust whose administration is
subject to the primary supervision of a United States court and which has
11
one or more United States fiduciaries who have the authority to control all
substantial decisions of the Trust.
"vice president" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title of "vice president."
ARTICLE II
THE CONVERTIBLE DEBENTURES
Section 2.1 Designation and Principal Amount. There are hereby authorized
Debentures designated the "5% Junior Convertible Subordinated Debentures,"
limited in aggregate principal amount to $206,186,000 which amount shall be as
set forth in any written order of the Company for the authentication and
delivery of Convertible Debentures pursuant to Section 2.6 of this Indenture.
Section 2.2 Maturity. The Maturity Date is June 1, 2027.
Section 2.3 Form and Payment.
(a) Except as provided in Section 2.6, the Convertible Debentures shall be
issued in fully registered certificated form without coupons in denominations of
$50 in principal amount and integral multiples thereof. Principal and interest
on the Convertible Debentures issued in certificated form will be payable, the
transfer of such Convertible Debentures will be registrable and such Convertible
Debentures will be exchangeable for Convertible Debentures bearing identical
terms and provisions at the office or agency of the Trustee; provided, however,
that payment of interest may be made at the option of the Company by check
mailed to the Holder at such address as shall appear in the Security Register.
Notwithstanding the foregoing, so long as the Holder of any Convertible
Debentures is the Institutional Trustee, the payment of the principal of and
interest (including Compound Interest and Additional Sums, if any) on such
Convertible Debentures held by the Institutional Trustee will be made at such
place and to such account as may be designated by the Institutional Trustee.
(b) The Convertible Debentures are subject to the terms set forth in this
Indenture including, without limitation, Exhibit A hereto, the terms of which
---------
are hereby incorporated in their entirety by reference.
(c) The Convertible Debentures and the Trustee's Certificate of
Authentication to be endorsed thereon are to be substantially in the form of
Exhibit A to this Indenture.
---------
12
Section 2.4 Exchange and Registration of Transfer of Convertible
Debentures; Restrictions on Transfers; Depositary.
If distributed to holders of Trust Securities, the Convertible Debentures
will be issued to such holders in the same form as the Trust Securities that
such Convertible Debentures replace in accordance with the following procedures:
(a) So long as Convertible Debentures are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Convertible Debentures that are so eligible may be represented by one or more
Convertible Debentures in global form registered in the name of the Depositary
or the nominee of the Depositary, except as otherwise specified below. The
transfer and exchange of beneficial interests in any such Convertible Debenture
in global form shall be effected through the Depositary in accordance with this
Indenture and the procedures of the Depositary therefor.
Convertible Debentures that are distributed to QIBs in replacement of
Convertible Preferred Securities represented by a global Convertible Preferred
Security will be represented by a global Convertible Debenture (the "144A Global
Debenture"). Convertible Debentures that are distributed to Non-U.S. Persons in
replacement of Convertible Preferred Securities represented by a global
Convertible Preferred Security will be represented by a global Convertible
Debenture (the "Regulation S Global Debenture"). Each of the 000X Xxxxxx
Xxxxxxxxx and the Regulation S Global Debenture shall be referred to herein as a
Global Debenture. Convertible Debentures that are distributed to QIBs or to
Non-U.S. Persons in replacement of Certificated Convertible Preferred Securities
will be represented by definitive Convertible Debentures as set forth in Section
2.4(b). If Global Debentures are issued, transfers of interests in the
Convertible Debentures between the 000X Xxxxxx Xxxxxxxxx and the Regulation S
Global Debenture will be made in accordance with the standing instructions and
procedures of the Depositary and its participants and the Trustee shall make
appropriate endorsements to reflect increases or decreases in the principal
amounts of such Global Debentures to reflect any such transfers.
Except as provided below, beneficial owners of a Convertible Debenture in
global form shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Convertible Debentures in global form.
(b) Convertible Preferred Securities held in certificated form, except for
certificates representing Convertible Preferred Securities held by the
Depositary or its nominee (or any successor Clearing Agency or its nominee),
shall upon presentation to the Trustee by the Institutional Trustee or by the
holder thereof or by the Institutional Trustee on behalf of such holder shall be
exchanged for Convertible Debentures in fully registered certificated form of
like aggregate principal amount and tenor.
(c) So long as the Convertible Debentures are eligible for book-entry
settlement, and to the extent that Convertible Debentures are held by QIBs or
Non-U.S. Persons, as the case may be, in a Global Debenture, or unless otherwise
required by law, upon any transfer
13
of a definitive Convertible Debenture to a QIB in accordance with Rule 144A or
to a Non-U.S. Person in accordance with Regulation S, unless otherwise requested
by the transferor, and upon receipt of the definitive Convertible Debenture or
Convertible Debentures being so transferred, together with a certification from
the transferor that the transfer is being made in compliance with Rule 144A or
Regulation S, as the case may be (or other evidence satisfactory to the
Trustee), the Trustee shall make an endorsement on any 000X Xxxxxx Xxxxxxxxx or
any Regulation S Global Debenture, as the case may be, to reflect an increase in
the aggregate principal amount of the Convertible Debentures represented by such
Global Debenture, and the Trustee shall cancel such definitive Convertible
Debenture or Convertible Debentures in accordance with the standing instructions
and procedures of the Depositary, the aggregate principal amount of Convertible
Debentures represented by such Global Debenture to be increased accordingly;
provided that no definitive Convertible Debenture, or portion thereof, in
respect of which the Company or an Affiliate of the Company held any beneficial
interest shall be included in such Global Debenture until such definitive
Convertible Debenture is freely tradable in accordance with Rule 144(k);
provided further that the Trustee shall, at the written request of the Company,
issue Convertible Debentures in definitive form upon any transfer of a
beneficial interest in the Global Debenture to the Company or any Affiliate of
the Company.
Any Global Debenture may be endorsed with or have incorporated in the text
thereof such legends or recitals or changes not inconsistent with the provisions
of this Indenture as may be required by the Depositary, by the New York Stock
Exchange or by the National Association of Securities Dealers, Inc. in order for
the Convertible Debentures to be tradeable on the PORTAL Market or as may be
required for the Convertible Debentures to be tradeable on any other market
developed for trading of securities pursuant to Rule 144A or required to comply
with any applicable law or any regulation thereunder or with the rules and
regulations of any securities exchange upon which the Convertible Debentures may
be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Convertible Debentures are subject.
(d) Each Convertible Debenture that bears or is required to bear the legend
set forth in this Section 2.4(d) (a "Restricted Convertible Debenture") shall be
subject to the restrictions on transfer provided in the legend set forth in this
Section 2.4(d), unless such restrictions on transfer shall be waived by the
written consent of the Company, and the Holder of each Restricted Convertible
Debenture, by such Holder's acceptance thereof, agrees to be bound by such
restrictions on transfer. As used in this Section 2.4(d) and in Section 2.4(e),
the term "transfer" encompasses any sale, pledge, transfer or other disposition
of any Restricted Convertible Debenture.
Prior to the Transfer Restriction Termination Date, any certificate
evidencing a Convertible Debenture shall bear a legend in substantially the
following form, unless otherwise agreed by the Company (with written notice
thereof to the Trustee):
THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN
14
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY
IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION) RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED
HEREBY OR, IF THIS SECURITY IS CONVERTIBLE INTO COMMON STOCK, THE COMMON
STOCK ISSUABLE UPON CONVERSION OR EXCHANGE OF THIS SECURITY EXCEPT (A) TO
McKESSON CORPORATION (THE "COMPANY") OR ANY SUBSIDIARY THEREOF, (B)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
(C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER
THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR
TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED
SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS
CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE COMMON
STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER
AGENT), (E) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE SECURITY EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR
THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF THIS CERTIFICATE
EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE TRANSFER AGENT SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR
McKESSON
15
FINANCING TRUST (THE "TRUST") MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT). IF
THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS
NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE
TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE
DEBENTURES, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS THE COMPANY OR THE TRUST MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
Following the Transfer Restriction Termination Date, any Convertible
Debenture or security issued in exchange or substitution therefor (other than
(i) Convertible Debentures acquired by the Company or any Affiliate thereof
since the issue date of the Convertible Preferred Securities and (ii) Common
Stock issued upon the conversion or exchange of any Convertible Debenture
described in clause (i) above) may upon surrender of such Convertible Debenture
for exchange to the Registrar in accordance with the provisions of this Section
2.4, be exchanged for a new Convertible Debenture or Convertible Debentures, of
like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.4(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in this Section 2.4(d)), a Global Debenture may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to all or a portion of the Convertible Debentures in
global form. Initially, the Global Debentures shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Trustee as custodian for Cede & Co.
Definitive Convertible Debentures issued in exchange for all or a part of a
Global Debenture pursuant to this Section 2.4(d) shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or
16
indirect participants or otherwise, shall instruct the Trustee. Upon execution
and authentication, the Trustee shall deliver such definitive Convertible
Debentures to the person in whose names such definitive Convertible Debentures
are so registered.
At such time as all interests in a Global Debenture have been redeemed,
converted, exchanged, repurchased or canceled, such Global Debenture shall be,
upon receipt thereof, canceled by the Trustee in accordance with standing
procedures and instructions of the Depositary. At any time prior to such
cancellation, if any interest in a Global Debenture is exchanged for definitive
Convertible Debentures, redeemed, converted, exchanged or repurchased by the
Company pursuant to Article X or canceled, or transferred for part of a Global
Debenture, the principal amount of such Global Debenture shall, in accordance
with the standing procedures and instructions of the Depositary be reduced or
increased, as the case may be, and an endorsement shall be made on such Global
Debenture by, or at the direction of, the Trustee to reflect such reduction or
increase.
(e) Any Convertible Debenture or Common Stock issued upon the conversion or
exchange of a Convertible Debenture that, prior to the Transfer Restriction
Termination Date, is purchased or owned by the Company or any Affiliate thereof
may not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction which results in such
Convertible Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
Section 2.5 Interest.
(a) Each Convertible Debenture will bear interest at the rate of 5% per
annum (the "Coupon Rate") from February 20, 1997 until the principal thereof
becomes due and payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly, payable
(subject to the provisions of Article XI) quarterly in arrears on March 1, June
1, September 1 and December 1 of each year (each, an "Interest Payment Date"),
commencing on June 1, 1997, to the Person in whose name such Convertible
Debenture or any Predecessor Convertible Debenture is registered, at the close
of business on the record date for such interest installment, which shall be the
close of business on the fifteenth day prior to that Interest Payment Date.
(b) The amount of interest payable for any period will be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on the
Convertible Debentures is not a Business Day, then payment of interest payable
on such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date.
17
(c) If at any time the Trust is required to pay any taxes, duties,
assessments or governmental charges of whatever nature (other than withholding
taxes) imposed by the United States, or any other taxing authority, then, in any
such case, the Company will pay as additional sums ("Additional Sums") such
additional amounts as shall be required so that the net amounts received and
retained by the Trust after paying any such taxes, duties, assessments or other
governmental charges will not be less than the amounts the Trust would have
received had no such taxes, duties, assessments or other government charges been
imposed so long as the Trust is the holder of the Convertible Debentures.
The definitive Convertible Debentures shall be printed, lithographed or
engraved on steel engraved borders or may be produced in any other manner, all
as determined by the officers executing such Convertible Debentures, as
evidenced by their execution of such Convertible Debentures.
Section 2.6 Authentication and Delivery of Convertible Debentures. At any
time and from time to time after the execution and delivery of this Indenture,
the Company may deliver Convertible Debentures in the aggregate principal amount
of up to $206,186,000 executed by the Company to the Trustee for authentication,
and the Trustee shall thereupon authenticate and make available for delivery
such Convertible Debentures to or upon the written order of the Company, signed
by both (i) the chairman of its Board of Directors, or any vice chairman of its
Board of Directors, or its president or any vice president and (ii) its
treasurer or any assistant treasurer or its secretary or any assistant
secretary, without any further action by the Company. In authenticating such
Convertible Debentures and accepting the additional responsibilities under this
Indenture in relation to such Convertible Debentures, the Trustee shall be
entitled to receive and (subject to Section 6.1) shall be fully protected in
relying upon:
(a) a copy of any resolution or resolutions of the Board of Directors
relating to the issuance of such Convertible Debentures, in each case certified
by the secretary or an assistant secretary of the Company;
(b) a supplemental indenture, if any;
(c) an Opinion of Counsel, prepared in accordance with Section 15.5, which
shall state that the Convertible Debentures have been duly authorized, and, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel, will
constitute valid and binding obligations of the Company enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
Notwithstanding the provisions of the preceding paragraph, if the
Convertible Debentures are not to be originally issued at one time, it shall
not be necessary to deliver the resolution of the Board of Directors and Opinion
of Counsel otherwise required pursuant to such preceding paragraph at or prior
to the time of authentication of each Convertible Deben-
18
ture if such documents are delivered at or prior to the time of authentication
upon original issuance of the first Convertible Debentures to be issued. After
the original issuance of the first Convertible Debenture to be issued, any
separate request by the Company that the Trustee authenticate Convertible
Debentures for original issuance will be deemed to be a certification by the
Company that it is in compliance with all conditions precedent provided for in
this Indenture relating to the authentication and delivery of such Convertible
Debentures.
The Trustee shall have the right to decline to authenticate and deliver any
Convertible Debentures under this Section if the Trustee is advised by counsel
in good faith that the issuance of such Convertible Debentures would expose the
Trustee to personal liability or is unlawful.
If the Convertible Debentures are to be issued in the form of one or more
Global Debentures, then the Company shall execute and the Trustee shall, in
accordance with this Section, authenticate and deliver one or more Global
Debentures that (i) shall represent and shall be denominated in an amount equal
to the aggregate principal amount of all of the Convertible Debentures issued
and not yet cancelled, (ii) shall be registered in the name of the Depositary
for such Global Debenture or Convertible Debentures or the nominee of such
Depositary, (iii) shall be delivered by the Trustee to such Depositary or
pursuant to such Depositary's instructions and (iv) shall bear a legend
substantially to the following effect: "Unless and until it is exchanged in
whole or in part for Convertible Debentures in definitive registered form, this
Convertible Debenture may not be transferred except as a whole by the Depositary
to the 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."
Each Depositary must, at the time of its designation and at all times while
it serves as Depositary, be a clearing agency registered under the Exchange Act
and any other applicable statute or regulation to be so registered to act as
such depositary.
Section 2.7 Execution of Convertible Debentures. The Convertible
Debentures shall be signed on behalf of the Company by the chairman of its Board
of Directors, or any vice chairman of its Board of Directors, or its president
or any vice president and attested by its treasurer or any assistant treasurer
or its secretary or any assistant secretary, under its corporate seal. Such
signatures may be the manual or facsimile signatures of such officers. The seal
of the Company may be in the form of a facsimile thereof and may be impressed,
affixed, imprinted or otherwise reproduced on the Convertible Debentures.
Typographical and other minor errors or defects in any such reproduction of the
seal or any such signature shall not affect the validity or enforceability of
any Convertible Debenture that has been duly authenticated and delivered by the
Trustee.
In case any officer of the Company who shall have signed any of the
Convertible Debentures shall cease to be such officer before the Convertible
Debenture so signed shall be authenticated and delivered by the Trustee or
disposed of by the Company, such Convertible Debenture nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Convertible Debenture had not ceased to be such officer of the
19
Company; and any Convertible Debenture may be signed on behalf of the Company by
such persons as, at the actual date of the execution of such Convertible
Debenture, shall be the proper officers of the Company, although at the date of
the execution and delivery of this Indenture any such person was not such an
officer.
Section 2.8 Certificate of Authentication. Only such Convertible
Debentures as shall bear thereon a certificate of authentication substantially
in the form attached hereto as a part of Exhibit A and executed by the Trustee
by the manual signature of one of its authorized signatories shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
The execution of such certificate by the Trustee upon any Convertible Debenture
executed by the Company shall be conclusive evidence that the Convertible
Debenture so authenticated has been duly authenticated and delivered hereunder
and that the Holder is entitled to the benefits of this Indenture.
Notwithstanding the foregoing, if any Convertible Debenture shall have been
duly authenticated and delivered hereunder but never issued and sold by the
Company, the Company shall deliver such Convertible Debenture to the Trustee for
cancellation as provided in Section 2.12 together with a written statement
(which need not comply with Section 15.5 and need not be accompanied by an
Opinion of Counsel) stating that such Convertible Debenture has never been
issued and sold by the Company, for all purposes of this Indenture such
Convertible Debenture shall be deemed never to have been authenticated and
delivered hereunder and shall never be entitled to the benefits of this
Indenture.
Section 2.9 Denomination and Date of Convertible Debentures; Payments of
Interest. Convertible Debentures shall be issuable in denominations of $50 and
any integral multiple thereof. The Convertible Debentures shall be numbered,
lettered, or otherwise distinguished in such manner or in accordance with such
plans as the officers of the Company executing the same may determine with the
approval of the Trustee as evidenced by the execution and authentication
thereof.
Each Convertible Debenture shall be dated the date of its authentication.
The term "record date" as used with respect to any interest payment date
(except for payment of defaulted interest) shall mean the close of business on
the fifteenth day preceding such interest payment date, whether or not such
record date is a Business Day.
Any interest on any Convertible Debenture which is payable, but is not
punctually paid or duly provided for, on any interest payment date, subject to
the provisions of Article XI (called "defaulted interest" for purposes of this
Section) shall forthwith cease to be payable to the Holder on the relevant
record date by virtue of his having been such Holder; and such defaulted
interest may be paid by the Company, at its election in each case, as provided
in clause (1) or clause (2) below:
(1) The Company may elect to make payment of any defaulted interest to
the persons in whose names any such Convertible Debentures (or their
respective predecessor Convertible Debentures) are registered at the close
of business on a special
20
special record date for the payment of such defaulted interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each
Convertible Debentures and the date of the proposed payment, and at the
same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such
defaulted interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the persons entitled to
such defaulted interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such defaulted interest
in respect of Convertible Debentures which shall not be more than 15 nor
less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such special
record date and, in the name and at the expense of the Company shall cause
notice of the proposed payment of such defaulted interest and the special
record date thereof to be mailed, first class postage prepaid, to each
Holder at his address as it appears in the Security Register, not less than
10 days prior to such special record date. Notice of the proposed payment
of such defaulted interest and the special record date therefor having been
mailed as aforesaid, such defaulted interest in respect of Convertible
Debentures shall be paid to the person in whose names such Convertible
Debentures (or their respective predecessor Convertible Debentures) are
registered on such special record date and such defaulted interest shall no
longer be payable pursuant to the following clause (2).
(2) The Company may make payment of any defaulted interest on the
Convertible Debentures in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Convertible Debentures
may be listed, and upon such notice as may be required by such exchange,
if, after notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Convertible
Debenture delivered under this Indenture upon transfer of or in exchange for or
in lieu of any other Convertible Debenture shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Convertible
Debenture.
In the case of any Convertible Debenture which is converted into Common
Stock of the Company after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Convertible Debenture whose
Maturity is prior to such Interest Payment Date), interest whose Stated Maturity
is on such Interest Payment Date shall be payable on such Interest Payment Date
notwithstanding such conversion, and such interest (whether or not punctually
paid or duly provided for) shall be paid to the Person in whose name that
Convertible Debenture (or one or more Predecessor Convertible Debentures) is
registered at the close of business on such record date. However, if a
redemption date falls between a record date and the subsequent Interest Payment
Date, the amount of such payment shall include accumulated and unpaid interest
accrued to, but excluding, such redemption date.
21
Except as otherwise expressly provided in the first two sentences of this
paragraph, in the case of any Convertible Debenture which is converted, interest
whose Stated Maturity is after the date of conversion of such Convertible
Debenture shall not be payable.
Section 2.10 Registration, Transfer and Exchange. The provisions of this
Section 2.10 shall be subject in their entirety to the provisions of Section
2.4. The Company will cause to be kept at each office or agency to be
maintained for the purpose as provided in Section 3.2 a register or registers
(herein sometimes referred to as the "Security Register") in which, subject to
such reasonable regulations as it may prescribe, the Company will provide for
the registration and the registration of the transfer or exchange of the
Convertible Debentures. The Trustee is hereby appointed and accepts the
appointment as Registrar (the "Registrar") for purposes of registering, and
registering transfers of, the Convertible Debentures.
Upon surrender for registration of transfer of any Convertible Debenture at
any such office or agency to be maintained for the purpose as provided in
Section 3.2, the Company shall execute and the Trustee shall authenticate and
make available for delivery in the name of the transferee or transferees a new
Convertible Debenture or Convertible Debentures and of a like tenor and
containing the same terms (other than the principal amount thereof, if more than
one Convertible Debenture is executed, authenticated and delivered in respect to
any Convertible Debenture so presented, in which case the aggregate principal
amount of the executed, authenticated and delivered Convertible Debentures shall
equal the principal amount of the Convertible Debenture presented in respect
thereof) and conditions.
At the option of the Holder thereof, Convertible Debentures (other than a
Global Debenture, except as set forth below) may be exchanged for a Convertible
Debenture or Convertible Debentures having authorized denominations and an equal
aggregate principal amount, upon surrender of such Convertible Debentures to be
exchanged at the agency of the Company that shall be maintained for such purpose
in accordance with Section 3.2 and upon payment, if the Company shall so
require, of the charge hereinafter provided. Whenever any Convertible
Debentures are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Convertible Debentures which the
Holder making the exchange is entitled to receive. All Convertible Debentures
surrendered upon any exchange or transfer provided for in this Indenture shall
be promptly cancelled by the Trustee and the Trustee will deliver a certificate
of cancellation thereof to the Company.
All Convertible Debentures issued upon any transfer or exchange of
Convertible Debentures shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Convertible Debentures surrendered upon such transfer or exchange.
Every Convertible Debenture presented or surrendered for registration of
transfer or exchange shall (if so required by the Company or the Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
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No service charge shall be made to the Holder for any registration of
transfer or exchange of Convertible Debentures, but the company may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Convertible
Debentures, other than exchanges pursuant to Sections 2.13, 8.5 or 12.5 not
involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange any Convertible Debenture during a 15-day period prior to the day of
mailing of the relevant notice of redemption or (ii) to register the transfer of
or exchange any Convertible Debenture so selected for redemption in whole or in
part, except, in the case of any Convertible Debenture to be redeemed in part,
the portion thereof not redeemed.
Notwithstanding any other provisions of this Section 2.10, unless and until
it is exchanged in whole or in part for Convertible Debentures in definitive
registered form, a Global Debenture representing all or a portion of the
Convertible Debentures may not be transferred except as a whole by the
Depositary to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary or a nominee of such successor
Depositary.
If at any time the Depositary for any Convertible Debentures represented by
one or more Global Debentures notifies the Company that it is unwilling or
unable to continue as Depositary for such Convertible Debentures or if at any
time the Depositary for such Convertible Debentures shall no longer be eligible
under Section 2.6, the Company shall appoint a successor Depositary with respect
to such Convertible Debentures. If a successor Depositary for such Convertible
Debentures is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, as the case may be,
the Company's election that such Convertible Debentures be represented by one or
more Global Debentures shall no longer be effective and the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of definitive Convertible Debentures, will
authenticate and deliver, Convertible Debentures in definitive registered form,
in any authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Debenture or Convertible Debentures representing
such Convertible Debentures in exchange for such Global Debenture or Convertible
Debentures.
The Company may at any time and in its sole discretion determine that the
Convertible Debentures issued in the form of one or more Global Debentures shall
no longer be represented by a Global Debenture. In such event the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of definitive Convertible Debentures, will
authenticate and deliver, Convertible Debentures in definitive registered form,
in any authorized denominations, in an aggregate principal amount equal to the
principal amount of the Global Debenture, in exchange for such Global Debenture.
23
If an Event of Default occurs and is continuing with respect to Convertible
Debentures issued in the form of one or more Global Debentures, upon written
notice from the Depositary, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and delivery of
definitive Convertible Debentures, will authenticate and deliver, Convertible
Debentures in definitive registered form, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of the Global Debenture
or Convertible Debentures, representing such Convertible Debentures, in exchange
for such Global Debenture or Convertible Debentures.
If specified by the Company, the Depositary for such Global Debenture may
surrender such Global Debenture in exchange in whole or in part for Convertible
Debentures in definitive registered form on such terms as are acceptable to the
Company and such Depositary. Thereupon, the Company shall execute, and the
Trustee shall authenticate and deliver, without service charge to the Holder,
(i) to the Person specified by such Depositary a new Convertible
Debenture or Convertible Debentures, of any authorized denominations as
requested by such Person, in an aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Global Debenture; and
(ii) to such Depositary a new Global Debenture in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Debenture and the aggregate principal amount of Convertible
Debentures authenticated and delivered pursuant to clause (i) above.
Upon the exchange of a Global Debenture for Convertible Debentures in
definitive registered form, in authorized denominations, such Global Debenture
shall be cancelled by the Trustee or an agent of the Company or the Trustee.
Convertible Debentures in definitive registered form issued in exchange for a
Global Debenture pursuant to this Section 2.10 shall be registered in such names
and in such authorized denominations as the Depositary for such Global
Debenture, pursuant to instructions from its direct or indirect participants or
otherwise, shall instruct the Trustee or agent of the Company or the Trustee.
The Trustee or such agent shall deliver such Convertible Debentures to or as
directed by the Persons in whose names such Convertible Debentures are so
registered.
Section 2.11 Mutilated, Defaced, Destroyed, Lost and Stolen Convertible
Debentures. In case any temporary or definitive Convertible Debenture shall
become mutilated or defaced or be destroyed, lost or stolen, then, in the
absence of notice to the Company or the Trustee that the Convertible Debenture
has been acquired by a bona fide purchaser, the Company shall execute, and upon
the written request of any officer of the Company, the Trustee shall
authenticate and make available for delivery a new Convertible Debenture and of
like tenor and principal amount and with the same terms and conditions, bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated or defaced Convertible Debenture or in lieu of and substitution for
the Convertible Debenture so destroyed, lost or stolen. In every case the
applicant for a substitute Convertible Debenture shall furnish to the Company
and to the Trustee and to any agent of the Company or the
24
Trustee such security or indemnity as may be required by them to indemnify and
defend and to save each of them harmless and, in every case of destruction, loss
or theft, evidence to their satisfaction of the destruction, loss or theft of
such Convertible Debenture and of the ownership thereof and in the case of
mutilation or defacement shall surrender the Convertible Debenture to the
Trustee or such agent.
Upon the issuance of any substitute Convertible Debenture, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee or its agent) connected therewith. In case
any Convertible Debenture which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Convertible
Debenture, pay or authorize, the payment of the same (without surrender thereof
except in the case of a mutilated or defaced Convertible Debenture); provided,
however, that the applicant for such payment shall furnish to the Company and to
the Trustee and any agent of the Company or the Trustee such security or
indemnity as any of them may require to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall also furnish to
the Company and the Trustee and any agent of the Company or the Trustee evidence
to their satisfaction of the destruction, loss or theft of such Convertible
Debenture and of the ownership thereof.
Every substitute Convertible Debenture issued pursuant to the provisions of
this Section by virtue of the fact that any Convertible Debenture is destroyed,
lost or stolen shall constitute an additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Convertible Debenture
shall be at any time enforceable by anyone and shall be entitled to all the
benefits of (but shall be subject to all the limitations of rights set forth in)
this Indenture equally and proportionately with any and all other Convertible
Debentures duly authenticated and delivered hereunder. All Convertible
Debentures shall be held upon the express condition that, to the extent
permitted by law, the foregoing provisions are exclusive with respect to the
replacement or payment of mutilated, defaced, destroyed, lost or stolen
Convertible Debentures and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment of negotiable instruments or
other securities without their surrender.
Section 2.12 Cancellation of Convertible Debentures. All Convertible
Debentures surrendered for payment, redemption, conversion, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, shall, if surrendered to the Company or any agent of the
Company or the Trustee, be delivered to the Trustee for cancellation or, if
surrendered to the Trustee, shall be cancelled by it; and no Convertible
Debentures shall be issued in lieu thereof, except as expressly permitted by any
of the provisions of this Indenture. The Company may at any time deliver to the
Trustee for cancellation any Convertible Debentures previously authenticated
hereunder which the Company has not issued and sold and all Convertible
Debentures so delivered shall be promptly cancelled by the Trustee. If the
Company shall acquire any of the Convertible Debentures, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Convertible Debentures unless and until the same are
25
delivered to the Trustee for cancellation. All cancelled Convertible Debentures
shall be disposed of as directed by a Company Order or, in the absence of such
Company Order, in accordance with the Trustee's customary practices. The Trustee
shall provide a certificate of destruction to the Company with respect to all
Convertible Debentures disposed of by the Trustee.
Section 2.13 Temporary Convertible Debentures. Pending the preparation of
definitive Convertible Debentures, the Company may execute and the Trustee shall
authenticate and make available for delivery temporary Convertible Debentures
(printed, lithographed, typewritten or otherwise reproduced, in each case in
form reasonably acceptable to the Trustee). Temporary Convertible Debentures
shall be issuable in any authorized denomination, and substantially in the form
of the definitive Convertible Debentures but with such omissions, insertions and
variations as may be appropriate for temporary Convertible Debentures, all as
may be determined by the Company with the reasonable concurrence of the Trustee.
Temporary Convertible Debentures may contain such reference to any provisions of
this Indenture as may be appropriate. Every temporary Convertible Debenture
shall be executed by the Company and be authenticated by the Trustee upon the
same conditions and in substantially the same manner, and with like effect, as
the definitive Convertible Debentures. Without unreasonable delay the Company
shall execute and shall furnish definitive Convertible Debentures and thereupon
temporary Convertible Debentures may be surrendered in exchange therefor without
charge to the Holder at each office or agency to be maintained by the Company
for that purpose pursuant to Section 3.2, and the Trustee shall authenticate and
make available for delivery in exchange for such temporary Convertible
Debentures an equal aggregate principal amount of definitive Convertible
Debentures of authorized denominations. Until so exchanged, the temporary
Convertible Debentures shall be entitled to the same benefits under this
Indenture as definitive Convertible Debentures.
ARTICLE III
COVENANTS OF THE COMPANY
Section 3.1 Payment of Principal and Interest. The Company covenants and
agrees for the benefit of the Convertible Debentures that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Convertible Debentures in accordance with the terms of such Convertible
Debentures and of this Indenture. The interest on Convertible Debentures
(together with any additional amounts payable pursuant to the terms of such
Convertible Debentures) shall be payable only to or upon the written order of
the Holders thereof and at the option of the Company may be paid by wire
transfer or by mailing checks for such interest payable to or upon the written
order of such Holders at their last addresses as they appear on the Security
Register.
Payment of principal of and any interest on any Convertible Debenture in
definitive global form shall be made to the Person or Persons specified therein.
26
Except as provided in the preceding paragraph, the Company, the Trustee and
any agent of the Company and the Trustee shall treat a Person as the Holder of
such principal amount of Outstanding Convertible Debentures represented by a
Global Debenture as shall be specified in a written statement of the Holder of
such Global Debenture.
Section 3.2 Offices for Payment, etc. So long as any of the Convertible
Debentures remain outstanding, the Company will maintain the following: an
office or agency in the Borough of Manhattan, City of New York (a) where the
Convertible Debentures may be presented for payment, (b) where the Convertible
Debentures may be presented for registration of transfer and for exchange as
provided in this Indenture, and (c) where notices and demands may be served upon
the Company in respect of the Convertible Debentures, or this Indenture.
The Company will give to the Trustee written notice of the location of any
such office or agency and of any change of location thereof. In case the
Company shall fail to so designate or maintain any such office or agency or
shall fail to give such notice of the location or of any change in the location
thereof, presentations and demands may be made and notices may be served at the
Corporate Trust Office. The Trustee is hereby appointed, and accepts its
appointment as, Paying Agent.
Section 3.3 Paying Agents. Whenever the Company shall appoint a Paying
Agent other than the Trustee with respect to the Convertible Debentures, it will
cause such Paying Agent to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section:
(a) that it will hold all sums received by it as such Paying Agent
for the payment of the principal of or interest on the Convertible
Debentures (whether such sums have been paid to it by the Company or by any
other obligor on the Convertible Debentures) in trust for the benefit of
the Holders of the Convertible Debentures or of the Trustee, and upon the
occurrence of an Event of Default and upon the written request of the
Trustee, pay over all such sums received by it to the Trustee; and
(b) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Convertible Debentures) to make any
payment of the principal of or interest on the Convertible Debentures when
the same shall be due and payable.
The Company will, on or prior to each due date of the principal of or
interest on the Convertible Debentures, deposit in a timely manner with the
Paying Agent a sum sufficient to pay such principal or interest so becoming due,
and (unless such Paying Agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action.
If the Company shall act as its own Paying Agent with respect to the
Convertible Debentures, it will, on or before each due date of the principal of
or interest on the Convertible Debentures, set aside, segregate and hold in
trust for the benefit of the holders
27
of the Convertible Debentures a sum sufficient to pay such principal or interest
so becoming due. The Company will promptly notify the Trustee of any failure to
take such action.
Section 3.4 Written Statement to Trustee. The Company will deliver to the
Trustee, within 120 days after the end of each fiscal year of the Company ending
after the date hereof, a brief certificate (which need not comply with Section
15.5) from the principal executive, financial or accounting officer of the
Company as to his or her knowledge, after due inquiry, of the Company's
compliance with all conditions and covenants under this Indenture (such
compliance to be determined without regard to any period of grace or requirement
of notice provided under this Indenture), and if the Company shall not be in
compliance, specifying all such defaults or non-compliance and the nature and
status thereof.
Section 3.5 Limitation on Dividends; Transactions with Affiliates. If any
Convertible Debentures are outstanding and (i) there shall have occurred any
Event of Default or any event that, with the giving of notice or lapse of time
or both, would constitute an Event of Default, (ii) the Guarantor shall be in
default with respect to its payment or other obligations under the Preferred
Securities Guarantee or the Common Securities Guarantee, or (iii) the Company
shall have given notice of its election to defer payments of interest on
Convertible Debentures by extending the interest payment period as provided in
Article XI and such period, or any extension thereof, shall be continuing, then
the Company shall not (a) declare or pay any dividend on, make any distribution
with respect to, or redeem, purchase or make a liquidation payment with respect
to, any of its Capital Stock or (b) make any payment of interest, principal or
premium, if any, on or repay, repurchase or redeem any debt securities issued by
the Company that rank pari passu with or junior in interest to the Convertible
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu with or junior in interest to the Convertible
Debentures (other than (i) as a result of a reclassification of the Capital
Stock of the Company or the exchange or conversion of one class or series of the
Capital Stock of the Company for another class or series of the Capital Stock of
the Company, (ii) the purchase of fractional interests in shares of the Capital
Stock of the Company pursuant to the conversion or exchange provisions of such
Capital Stock or the security being converted into or exchanged for such Capital
Stock, (iii) dividends or distributions in Common Stock of the Company, (iv) any
declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan in the
future, or the redemption or repurchase of any such rights pursuant thereto, (v)
payments under the Trust Securities Guarantees, (vi) purchases of Common Stock
of the Company related to the issuance of Common Stock of the Company or rights
under any of the Company's benefit plans for its directors, officers or
employees and (vii) obligations under any dividend reinvestment and stock
purchase plans).
Section 3.6 Covenants as to McKesson Trust. For so long as the Trust
Securities remain outstanding, the Company will (a) maintain 100% direct or
indirect ownership of the Common Securities of McKesson Trust; provided,
however, that any permitted successor of the Company under this Indenture may
succeed to the Company's ownership of the Common Securities, (b) use its
reasonable efforts to cause McKesson Trust (i) to remain a statutory business
trust, except in connection with the distribution of Convertible Debentures to
the
28
holders of Trust Securities in liquidation of McKesson Trust, the redemption of
all of the Trust Securities of McKesson Trust, or certain mergers,
consolidations or amalgamations, each as permitted by the Declaration, and (ii)
to continue to be classified as a grantor trust for United States federal income
tax purposes and (c) to use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the
Convertible Debentures.
Section 3.7 Existence. Subject to Article IX, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence, rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
ARTICLE IV
HOLDERS OF CONVERTIBLE DEBENTURES LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
Section 4.1 Company to Furnish Trustee Information as to Names and
Addresses of Holders of Convertible Debentures. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee a list in
such form as the Trustee may reasonably require of the names and addresses of
the Holders of the Convertible Debentures:
(a) semiannually and not more than 15 days after each record date for
the payment of interest on such Convertible Debentures, as hereinabove
specified, as of such record date, and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after receipt by the Company of any such request,
such list to be as of a date not more than 15 days prior to the time such
information is furnished,
provided that if and so long as the Trustee shall be the Registrar, such list
shall not be required to be furnished.
Section 4.2 Preservation and Disclosure of Holders of Convertible
Debentures' Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the Holders of
Convertible Debentures contained in the most recent list furnished to it as
provided in Section 4.1 or maintained by the Trustee in its capacity as
Registrar, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 4.1 upon receipt of a new list so furnished.
(b) In case three or more Holders of Convertible Debentures (hereinafter
referred to as "applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof
29
that each such applicant has owned a Convertible Debenture for a period of at
least six months preceding the date of such application, and such application
states that the applicants desire to communicate with other Holders of
Convertible Debentures (in which case the applicants must all hold Convertible
Debentures) or with Holders of all Convertible Debentures with respect to their
rights under this Indenture or under such Convertible Debentures and such
application is accompanied by a copy of the form of proxy or other communication
which such applicants propose to transmit, then the Trustee shall, within five
business days after the receipt of such application, at is election, either
(i) afford to such applicants access to the information preserved at
the time by the Trustee in accordance with the provisions of subsection (a)
of this Section, or
(ii) inform such applicants as to the approximate number of Holders of
Convertible Debentures or of all Convertible Debentures, as the case may
be, whose names and addresses appear in the information preserved at the
time by the Trustee, in accordance with the provisions of subsection (a) of
this Section, as to the approximate cost of mailing to such Holders of
Convertible Debentures the form of proxy or other communication, if any,
specified in such application.
If the Trustee shall elect not to afford to such applicants access to such
information, the Trustee shall, upon the written request of such applicants,
mail to each Holder of Convertible Debentures or all Holders of Convertible
Debentures, as the case may be, whose name and address appears in the
information preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, a copy of the form of proxy or
other communication which is specified in such request, with reasonable
promptness after a tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses of mailing,
unless within five days after such tender, the Trustee shall mail to such
applicants and file with the Commission together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the Holders of
Convertible Debentures or could be in violation of applicable law. Such written
statement shall specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the written statement
so filed, shall enter an order refusing to sustain any of such objections or if,
after the entry of such order sustaining one or more of such objections, the
Commission shall find, after notice and opportunity for hearing, that all the
objections so sustained have been met, and shall enter an order so declaring,
the Trustee shall mail copies of such material to all such Holders of
Convertible Debentures with reasonable promptness after the entry of such order
and the renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Each and every Holder of Convertible Debentures, by receiving and
holding the same, agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of the Company or the Trustee shall be
held accountable by reason of the disclosure of any such information as to the
names and addresses of the Holders of Convertible Debentures in accordance with
the provisions of subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall
30
not be held accountable by reason of mailing any material pursuant to a request
made under such subsection (b).
Section 4.3 Reports by the Company. The Company covenants:
(a) to file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports
and of the information, documents, and other reports (or copies of such
portions and any of the foregoing as the Commission may from time to time
by rules and regulations prescribe) which the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act, or if the Company is not required to file information,
documents, or reports pursuant to either of such Sections, then to file
with the Trustee and the Commission to the extent permitted, in accordance
with rules and regulations prescribed from time to time by the Commission,
such of the supplemen tary and periodic information, documents, and reports
which may be required pursuant to Section 13 of the Exchange Act, in
respect of a security listed and registered on a national securities
exchange as may be prescribed from time to time in such rules and
regulations;
(b) to file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents, and reports with respect to compliance
by the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations; and
(c) to transmit by mail to the Holders of Convertible Debentures in
the manner and to the extent required by Sections 6.6 and 15.4, within 30
days after the filing thereof with the Trustee, such summaries of any
information, documents, and reports required to be filed by the Company
pursuant to subsections (a) and (b) of this Section as may be required to
be transmitted to such Holders by rules and regulations prescribed from
time to time by the Commission.
ARTICLE V
REMEDIES OF THE TRUSTEE AND HOLDERS OF
CONVERTIBLE DEBENTURES ON EVENT OF DEFAULT
Section 5.1 Event of Default Defined; Acceleration of Maturity; Waiver of
Default. "Event of Default" with respect to the Convertible Debentures wherever
used herein, means any one or more of the following events which shall have
occurred and be continuing (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
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(a) default in the payment of any interest (including any Additional
Sums and Compound Interest) upon or any additional amounts, including any
Liquidated Damages Amount (as defined in the Preferred Securities
Registration Rights Agreement), payable in respect of any Convertible
Debentures when it becomes due and payable, and continuance of such default
for a period of 30 days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the terms of this
Indenture shall not constitute a default in the payment of interest for
this purpose; or
(b) default in the payment of the principal of, or premium, if any,
on, any Convertible Debentures as and when the same shall become due and
payable whether at maturity, upon redemption, by declaration or otherwise;
or
(c) default in the performance, or breach of any covenant or warranty
of the Company contained in the Convertible Debentures or in this Indenture
(other than a covenant or warranty a default in whose performance or whose
breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 30 days after there
has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Convertible Debentures a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" hereunder;
or
(d) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjust ment or composition of or in
respect of the Company under any applicable federal or state law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of all or any
substantial part of its property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of 90
consecutive days; or
(e) the commencement by the Company of a voluntary case or proceeding
under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law or to the commence ment of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable federal or state law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or similar
official of the Company or of all or any substantial
32
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due, or the taking of corporate action by
the Company in furtherance of any such action; or
(f) failure by the Company to convert Convertible Debentures into
shares of Common Stock of the Company upon an appropriate election by a
holder of Trust Securities or Convertible Debentures to convert such Trust
Securities or Convertible Debentures, as the case may be, into such Common
Stock (whether or not conversion or exchange is prohibited by the
subordination provisions set forth herein); or
(g) the McKesson Trust shall have voluntarily or involuntarily
dissolved, wound-up its business or otherwise terminated its existence
except in connection with (i) the distribution of Convertible Debentures to
holders of Trust Securities in liquidation of their interest in the
McKesson Trust upon the occurrence of a Special Event or upon the
occurrence of events as described in Section 3 of Annex I to the
Declaration, (ii) the redemption of all of the outstanding Trust Securities
of the McKesson Trust, (iii) the conversion of all outstanding Convertible
Preferred Securities into Common Stock of the Company or (iv) certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
If an Event of Default occurs and is continuing, then and in each and every
such case, unless the principal of all Convertible Debentures shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Convertible Debentures then Outstanding
hereunder, by notice in writing to the Company (and to the Trustee if given by
such Holders), may declare the entire principal of, plus accrued and unpaid
interest on, all the Convertible Debentures (including Additional Sums, if any,
and, to the extent permitted by applicable law, Compound Interest, if any) and
any other amounts payable under this Indenture to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable. These provisions, however, are subject to the
condition that if at any time after the principal and other amounts due on the
Convertible Debentures shall have been so declared due and payable, and before
any judgment or decree for the payment of the moneys due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest, if any, upon all the Convertible Debentures and the principal of any
and all Convertible Debentures which shall have become due otherwise than by
such acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, Compound Interest
to the date of such payment or deposit in Dollars such amount as shall be
sufficient to cover reasonable compensation to the Trustee, its agents,
attorneys and counsel and all other expenses and liabilities incurred, and all
advances with interest made, by the Trustee, its agents, attorneys and counsel
and if any and all defaults under this Indenture, other than the nonpayment of
the principal and interest of Convertible Debentures which shall have become due
by such acceleration, shall have been cured or waived as provided herein, then
and in every such case the Holders of a majority in aggregate principal amount
of the Convertible Debentures then Outstanding, by written notice to the Company
and to the
33
Trustee for the Convertible Debentures, may waive all defaults and rescind and
annul such declaration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or shall
impair any right consequent thereon.
Section 5.2 Collection of Indebtedness by Trustee; Trustee May Prove Debt.
The Company covenants that (a) in case default shall be made in the payment of
any installment of interest on any of the Convertible Debentures when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Convertible Debentures
when the same shall have become due and payable, whether upon Maturity or upon
any redemption or by declaration or otherwise, then upon demand of the Trustee
for the Convertible Debentures, the Company will pay to the Trustee for the
benefit of the Holders of the Convertible Debentures the whole amount that then
shall have become due and payable on all Convertible Debentures for principal of
or interest, as the case may be (with interest to the date of such payment upon
the overdue principal and, to the extent that payment of such interest is
enforceable under applicable law, on overdue installments of interest at the
same rate as the rate of interest specified in the Convertible Debentures); and
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to, and all
expenses and liabilities incurred and all advances with interest made by, the
Trustee and each predecessor Trustee except as a result of its negligence or bad
faith.
Until such demand is made by the Trustee, the Company may pay the principal
of and interest on the Convertible Debentures to the persons entitled thereto,
whether or not the principal of and interest on the Convertible Debentures are
overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee for the Convertible Debentures, in its own name and as
trustee of an express trust, shall be entitled and empowered to institute any
action or proceedings at law or in equity for the collection of the sums so due
and unpaid, and may prosecute any such action or proceedings to judgment or
final decree, and may enforce any such judgment or final decree against the
Company or other obligor upon such Convertible Debentures and collect in the
manner provided by law out of the property of the Company or other obligor upon
such Convertible Debentures, wherever situated, the moneys adjudged or decreed
to be payable.
In case there shall be pending proceedings relative to the Company or any
other obligor upon the securities under Title 11 of the United States Code or
any other applicable federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Company or its property or such other obligor, or in
case of any other comparable judicial proceedings relative to the Company or
other obligor under the Convertible Debentures, or to the property of the
Company or such other obligor, the Trustee, irrespective of whether the
principal of any Convertible Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the
34
provisions of this Section, shall be entitled and empowered, by intervention in
such proceeding or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Convertible
Debentures, and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for reasonable compensation to, and all expenses and liabilities
incurred and all advances with interest made by, the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel,
except as a result of negligence or bad faith) and of the Holders of
Convertible Debentures allowed in any judicial proceedings relative to the
Company or other obligor upon all Convertible Debentures, or to the
property of the Company or such obligor, and
(b) to collect and receive any moneys or other property payable or
deliver able on any such claims, and to distribute all amounts received
with respect to the claims of the Holders of Convertible Debentures and of
the Trustee on their behalf; and any trustee, receiver, liquidator,
custodian or other similar official is hereby authorized by each of the
Holders of Convertible Debentures to make payments to the Trustee for the
Convertible Debentures, and, in the event that such Trustee shall consent
to the making of payments directly to the Holders of Convertible
Debentures, to pay to such Trustee such amounts as shall be sufficient to
cover reasonable compensation to, and all expenses and liabilities incurred
and all advances with interest made by, such Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel and all other
amounts due to such Trustee or any predecessor Trustee pursuant to Section
6.7, except as a result of Trustee's negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of
Convertible Debentures any plan of reorganization, arrangement, adjustment or
composition affecting the Convertible Debentures or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder of Convertible Debentures in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
any of the Convertible Debentures, may be enforced by the Trustee for the
Convertible Debentures without the possession of any of the Convertible
Debentures or the production thereof at any trial or other proceedings relative
thereto, any such action or proceedings instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any recovery of
judgment, subject to the payment of the expenses, disbursements and compensation
of the Trustee, each predecessor Trustee and their respective agents and
attorneys, shall be for the ratable benefit of the Holders of the Convertible
Debentures in respect of which such action was taken.
In any proceedings brought by the Trustee for the Convertible Debentures
(and also any proceedings involving the interpretation of any provision of this
Indenture to which the
35
Trustee shall be a party), the Trustee shall be held to represent all the
Holders of the Convertible Debentures in respect to which such action was taken,
and it shall not be necessary to make any Holders of such Convertible Debentures
parties to any such proceedings.
Section 5.3 Application of Proceeds. Any moneys collected by the Trustee
for the Convertible Debentures pursuant to this Article in respect of the
Convertible Debentures shall be applied in the following order at the date or
dates fixed by such Trustee and, in case of the distribution of such moneys on
account of principal or interest, upon presentation of the several Convertible
Debentures in respect of which moneys have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Convertible Debentures in
reduced principal amounts in exchange for the presented Convertible Debentures
if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable in respect of
which moneys have been collected, including reasonable compensation to, and
all expenses and liabilities incurred and all advances with interest made
by, the Trustee and each predecessor Trustee and their respective agents
and attorneys and all other amounts due to the Trustee or any predecessor
Trustee pursuant to Section 6.7, except as a result of Trustee's negligence
or bad faith;
SECOND: To the payment of the amounts then due and unpaid for
interest on the Convertible Debentures for which principal is not yet due
and payable in respect of which moneys have been collected, such payments
to be made ratably to the persons entitled thereto, without discrimination
or preference, according to the amounts then due and payable on such
Convertible Debentures for interest;
THIRD: To the payment of the amounts then due and unpaid for
principal of and interest on the Convertible Debentures for which principal
is due and payable in respect of which moneys have been collected, such
payments to be made ratably to the persons entitled thereto, without
discrimination or preference, according to the amounts then due and payable
on such Convertible Debentures of principal and interest, respectively; and
FOURTH: To the payment of the remainder, if any, to the Company or
any other Person lawfully entitled thereto.
Section 5.4 Restoration of Rights on Abandonment of Proceedings. In case
the Trustee for the Convertible Debentures or any Holder shall have proceeded to
enforce any right under this Indenture and such proceedings shall have been
discontinued or abandoned for any reason, or shall have been determined
adversely to the Trustee or to such Holder, then and in every such case, subject
to the determination in any such proceeding, the Company, the Trustee and the
Holders shall be restored respectively to their former positions and rights
hereunder, and all rights, remedies and powers of the Company, the Trustee and
the Holders of Convertible Debentures shall continue as though no such
proceedings had been taken.
36
Section 5.5 Limitations on Suits by Holders of Convertible Debentures. No
Holder of any Convertible Debenture shall have any right by virtue or by
availing of any provision of this Indenture to institute any action or
proceeding at law or in equity or in bankruptcy or otherwise upon or under with
respect to this Indenture, or for the appointment of a trustee, receiver,
liquidator, custodian or other similar official or for any other remedy
hereunder, unless such Holder previously shall have given to the Trustee written
notice of any Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Convertible Debentures then Outstanding shall have made
written request upon the Trustee to institute such action or proceedings in its
own name as trustee hereunder and shall have offered to the Trustee such
reasonable indemnity, as it may require, against the costs, expenses and
liabilities to be incurred therein or thereby and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity shall have failed to
institute any such action or proceeding and no direction inconsistent with such
written request shall have been given to the Trustee during such 60 day period
by Holders of a majority in principal amount of the Convertible Debentures then
Outstanding; it being understood and intended, and being expressly covenanted by
the taker and Holder of every Convertible Debenture with every other taker and
Holder of a Convertible Debenture and the Trustee, that no one or more Holders
of Convertible Debentures shall have any right in any manner whatever, by virtue
or by availing of any provision of this Indenture to affect, disturb or
prejudice the rights of any other such Holder of Convertible Debentures, or to
obtain or seek to obtain priority over or preference to any other such Holder or
to enforce any right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all Holders of Convertible
Debentures.
Section 5.6 Unconditional Right of Holders of Convertible Debentures to
Institute Certain Suits. Notwithstanding any provision in this Indenture and
any provision of any Convertible Debenture, the right of any Holder of any
Convertible Debenture to receive payment of the principal of and (subject to
Section 2.9 and Article XI) interest on such Convertible Debenture at the
respective rates, in the respective amount on or after the respective due dates
expressed in such Convertible Debenture, and to institute suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of such Holder.
Section 5.7 Powers and Remedies Cumulative; Delay or Omission Not Waiver
of Default. Except as provided in Section 2.11 and Section 5.5, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Convertible Debentures is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Convertible
Debentures to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any
37
such Event of Default or an acquiescence therein; and, subject to Section 5.5,
every power and remedy given by this Indenture or by law to the Trustee or to
the Holders of Convertible Debentures may be exercised from time to time, and as
often as shall be deemed expedient, by the Trustee or the Holders of Convertible
Debentures.
Section 5.8 Control by Holders of Convertible Debentures. The Holders of
a majority in aggregate principal amount of the Convertible Debentures at the
time Outstanding shall have the right to 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 the Trustee with respect to the Convertible
Debentures by this Indenture; provided that such direction shall not be in
conflict with any rule of law or the provisions of this Indenture; and provided
further that the Trustee, being advised by counsel, shall have the right to
decline to follow any such direction if the Trustee shall determine that the
action or proceedings so directed would involve the Trustee in personal
liability or if the Trustee in good faith shall so determine that the actions or
forbearance specified in or pursuant to such direction would be unduly
prejudicial to the interest of Holders of the Convertible Debentures not joining
in the giving of said direction.
Section 5.9 Waiver of Past Defaults. The Holders of not less than a
majority in aggregate principal amount of the Convertible Debentures at the time
Outstanding may on behalf of the Holders of all the Convertible Debentures waive
any past default hereunder or its consequences, except a default:
(a) in the payment of the principal of (or premium, if any) or any
interest on any Convertible Debenture as and when the same shall become due
by the terms of Convertible Debentures otherwise than by acceleration
(unless such default has been cured and sums sufficient to pay all matured
installments of interest and principal and any premium has been deposited
with the Trustee (in accordance with Section 5.1)), or
(b) in respect of a covenant or provision hereof which under Article
VIII cannot be modified or amended without the consent of the Holder of
each Outstanding Convertible Debenture affected;
provided, however, that if the Convertible Debentures are held by the McKesson
Trust or the Institutional Trustee of such Trust, such waiver or modification to
such waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities of the McKesson Trust shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each Outstanding Convertible Debenture is
required, such waiver shall not be effective until each holder of the Trust
Securities of the McKesson Trust shall have consented to such waiver.
Upon any such waiver, such default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture; but no such
38
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 5.10 Right of Court to Require Filing of Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of any Convertible
Debenture, by his acceptance thereof, shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture or in any suit against the Trustee for any
action taken, suffered or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder of Convertible
Debentures or group of Holders of Convertible Debentures holding in the
aggregate more than 10% in principal amount of the Outstanding Convertible
Debentures, or to any suit instituted by a Holder of Convertible Debentures for
the enforcement of the payment of the principal of or interest on any
Convertible Debenture on or after the due date expressed in such Convertible
Debenture or any date fixed for redemption.
Section 5.11 Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.1 Duties of the Trustee.
(a) If an Event of Default has occurred and is continuing with respect to
the Convertible Debentures, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) Except during the continuance of an Event of Default with respect to
the Convertible Debentures:
(i) the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others; and
39
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming on their face to the requirements of this
Indenture. However, in the case of any such certificates or opinions which
by any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the certificates and opinions to
determine whether or not they conform on their face to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
failure to act or its own willful misconduct, except that:
(i) this paragraph (c) does not limit the effect of paragraph (b)
of this Section 6.1;
(ii) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.8.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section 6.1.
(e) The Trustee may refuse to perform any duty or exercise any right or
power or extend or risk its own funds or otherwise incur any financial liability
unless it receives indemnity satisfactory to it against any loss, liability or
expense.
(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
Section 6.2 Rights of Trustee. Subject to Section 6.1 and the provisions
of the Trust Indenture Act:
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on such
Officers' Certificate or Opinion of Counsel.
40
(c) Subject to the provisions of Section 6.1(c), the Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes
to be authorized or within its rights or powers.
(d) The Trustee may consult with counsel of its selection and the advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel.
(e) The Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
(f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
Section 6.3 Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Convertible Debentures
and may otherwise deal with the Company or its affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar or co-
Registrar may do the same with like rights. However, the Trustee must comply
with Sections 6.10 and 6.11.
Section 6.4 Trustee's Disclaimer. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Convertible Debentures, it
shall not be accountable for the Company's use of the proceeds from the
Convertible Debentures, it shall not be responsible for any statement in the
registration statement for the Convertible Debentures under the Securities Act
or in the Indenture or the Convertible Debentures (other than its certificate of
authentication).
Section 6.5 Notice of Defaults. If a default occurs and is continuing
with respect to any Convertible Debentures and if it is known to the Trustee
through oral or written notice to a Responsible Officer, the Trustee shall give
to each Holder of Convertible Debentures notice of the default within 90 days
after such default occurs. Except in the case of a default described in Section
5.1(a) or (b), the Trustee may withhold the notice if and so long as a committee
of its Responsible Officers in good faith determines that withholding the notice
is in the interest of Holders of Convertible Debentures.
Section 6.6 Reports by Trustee to Holders. Within 60 days after each May
15 beginning with the May 15 following the date of this Indenture, the Trustee
shall mail to each Holder of Convertible Debentures and each other person
specified in TIA Section 313(c) a brief report dated as of such May 15 that
complies with TIA Section 313(a) to the extent required thereby. The Trustee
also shall comply with TIA Section 313(b).
41
A copy of each report at the time of its mailing to Holders of Convertible
Debentures shall be filed with the Commission and each securities exchange on
which the Convertible Debentures are listed. The Company agrees promptly to
notify the Trustee whenever the Convertible Debentures become listed on any
securities exchange and of any delisting thereof.
Section 6.7 Compensation and Indemnity. The Company agrees:
(a) to pay to the Trustee from time to time in Dollars such
compensation as shall be agreed to in writing between the Company and the
Trustee for all services rendered by it hereunder (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances with interest thereon incurred or made
by the Trustee in accordance with any provision of this Indenture
(including the reasonable compensation and the expenses, advances with
interest thereon and disbursements of its agents and counsel), except to
the extent any such expense, disbursement or advance may be attributable to
its negligence or bad faith; and
(c) to indemnify the Trustee in Dollars for, and to hold it harmless
against, any loss, liability or expense arising out of or in connection
with the acceptance or administration of this trust or the performance of
its duties hereunder, including the costs and expenses of defending itself
against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder (including the
reasonable compensation and the expenses, advances with interest thereon
and disbursements of its agents and counsel), except to the extent that any
such loss, liability or expense may be attributable to its negligence or
bad faith.
As security for the performance of the obligations of the Company in this
Section 6.7, the Trustee shall have a lien prior to the Convertible Debentures
on all money or property held or collected by the Trustee, except that held in
trust to pay the principal of or interest, if any, on particular Convertible
Debentures.
"Trustee" for purposes of this Section 6.7 includes any predecessor
Trustee, provided that the negligence or bad faith of any Trustee shall not be
attributable to any other Trustee.
The Company's payment obligations pursuant to this Section 6.7 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a default specified in Sections 5.1(d) and 5.1(e), such
expenses are intended to constitute expenses of administration under bankruptcy
law.
Section 6.8 Replacement of Trustee. The Trustee may resign at any time
with respect to Convertible Debentures by so notifying the Company; provided,
however, no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 6.8. The Holders of a
majority in aggregate principal amount of the
42
Outstanding Convertible Debentures may remove the Trustee at the time
outstanding by so notifying the Trustee and the Company. The Company shall
remove the Trustee if:
(1) the Trustee fails to comply with Section 6.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, with respect to the Convertible Debentures, the
Company shall promptly appoint, by resolution of its Board of Directors, a
successor Trustee with respect to the Convertible Debentures.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture with respect to the Convertible Debentures. The successor Trustee
shall mail a notice of its succession to Holders of Convertible Debentures so
affected. The retiring Trustee shall promptly transfer all property held by it
as Trustee to the successor Trustee, subject to the lien provided for in Section
6.7.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate principal amount of the Convertible
Debentures at the time Outstanding may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 6.10, any Holder of Convertible
Debentures may petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor Trustee.
Section 6.9 Successor Trustee by Merger. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 6.10 Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Section 310(a)(1) and Section 310(a)(5).
The Trustee shall have combined capital and surplus of at least $50,000,000 as
set forth in its most recent published annual report of condition. The Trustee
shall comply with TIA Section 310(b).
Section 6.11 Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section
43
311(b). A Trustee who has resigned or been removed shall be subject to TIA
Section 311(a) to the extent indicated therein.
ARTICLE VII
CONCERNING THE HOLDERS OF CONVERTIBLE DEBENTURES
Section 7.1 Evidence of Action Taken by Holders of Convertible Debentures.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided in this Indenture to be given or taken by a specified
percentage in principal amount of the Holders of Convertible Debentures may be
embodied in and evidenced by one or more instruments or substantially similar
tenor signed by such specified percentage of Holders of Convertible Debentures
in person or by agent duly appointed in writing; and, except as herein otherwise
expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee. Proof of execution of any instrument
or of a writing appointing any such agent shall be sufficient for any purpose of
this Indenture and (subject to Sections 6.1 and 6.2) conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Article.
(b) The ownership of such Convertible Debentures shall be provided by the
Security Register.
Section 7.2 Proof of Execution of Instruments. Subject to Sections 6.1
and 6.2, the execution of any instrument by a Holder of Convertible Debentures
or his agent or proxy may be proved in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee.
Section 7.3 Holders to be Treated as Owners. The Company, the Trustee and
any agent of the Company or the Trustee may deem and treat the person in whose
name any Convertible Debenture shall be registered upon the Security Register as
the absolute owner of such Convertible Debenture (whether or not such
Convertible Debenture shall be overdue and notwithstanding any notification of
ownership or other writing thereon) for the purpose of receiving payment of or
on account of the principal of and (subject to Section 2.9) interest on such
Convertible Debenture and for all other purposes; and neither the Company nor
the Trustee nor any agent of the Company or the Trustee shall be affected by any
notice to the contrary.
Section 7.4 Convertible Debentures Owned by Company Deemed Not
Outstanding. In determining whether the Holders of the requisite aggregate
principal amount of Outstanding Convertible Debentures have concurred in any
direction, consent or waiver under this Indenture, Convertible Debentures which
are owned by the Company or any other obligor on the Convertible Debentures with
respect to which such determination is being made or by any person directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company or any other obligor on the Convertible
44
Debentures with respect to which such determination is being made shall be
disregarded and deemed not to be Outstanding for the purpose of any such
determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Convertible Debentures which the Trustee knows are so owned shall be so
disregarded. Convertible Debentures so owned which have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Convertible Debentures and that the pledgee is not the Company or any other
obligor upon the Convertible Debentures or any person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Convertible Debentures.
Section 7.5 Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 7.1, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Convertible Debentures, as the case may be, specified in this
Indenture in connection with such action, any Holder of a Convertible Debenture
the serial number of which is shown by the evidence to be included among the
serial numbers of the Convertible Debentures the Holders of which have consented
to such action may, by filing written notice at the Corporate Trust Office and
upon proof of holding as provided in this Article, revoke such action so far as
concerns such Convertible Debenture. Except as aforesaid any such action taken
by the Holder of any Convertible Debentures shall be conclusive and binding upon
such Holder and upon all future Holders and owners of such Convertible Debenture
and of any Convertible Debentures issued in exchange or substitution therefor,
irrespective of whether or not any notation in regard thereto is made upon any
such Convertible Debenture. Any action taken by the Holders of the percentage
in aggregate principal amount of the Convertible Debentures, as the case may be,
specified in this Indenture in connection with such action shall be conclusively
binding upon the Company, the Trustee and the Holders of all the Convertible
Debentures affected by such action.
ARTICLE VIII
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Holders of
Convertible Debentures. The Company, when authorized by a resolution of its
Board of Directors, and the Trustee for the Convertible Debentures may from time
to time and at any time enter into an indenture or indentures supplemental
hereto (which shall conform to the provisions of the Trust Indenture Act as in
force at the date of the execution thereof), in form satisfactory to such
Trustee, for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Convertible Debentures any property or assets;
45
(b) to evidence the succession of another corporation to the Company,
or successive successions, and the assumption by the successor corporation
of the covenants, agreements and obligations of the Company pursuant to
Article IX;
(c) to add to the covenants of the Company such further covenants,
restrictions, conditions or provisions for the protection of the Holders of
Convertible Debentures;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any
supplemental indenture; or to make such other provisions in regard to
matters or questions arising under this Indenture or under any supplemental
indenture as the Board of Directors may deem necessary or desirable and
which shall not materially and adversely affect the interests of the
Holders of the Convertible Debentures; or
(e) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Convertible
Debentures.
The Trustee is hereby authorized to join with the Company in the execution
of any such supplemental indenture, to make any further appropriate agreements
and stipulations which may be therein contained and to accept the conveyance,
transfer, assignment, mortgage or pledge of any property thereunder, but the
Trustee shall not be obligated to enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section may
be executed without the consent of the Holders of any of the Convertible
Debentures at the time Outstanding, notwithstanding any of the provisions of
Section 8.2.
Section 8.2 Supplemental Indentures With Consent of Holders of Convertible
Debentures. With the consent (evidenced as provided in Article VII) of the
Holders of not less than a majority in aggregate principal amount of the
Convertible Debentures at the time Outstanding (voting as one class), the
Company, when authorized by a resolution of its Board of Directors, and the
Trustee may, from time to time and at any time, enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of execution thereof) for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Convertible Debentures;
provided, however, that no such supplemental indenture shall (a) except to the
extent permitted by Article XI, extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable on redemption thereof, or make the principal thereof or interest
thereon payable in any coin or currency other than that provided in the
Convertible Debentures or in accordance with the terms thereof, or impair or
affect the right of any Holder of Convertible Debentures
46
to institute suit for payment thereof, or adversely affect the right to convert
Convertible Debentures, or modify the subordination provisions of this Indenture
in any manner adverse to the Holders of Convertible Debentures without the
consent of the Holders of each Convertible Debenture so affected, or (b) reduce
the aforesaid percentage of Convertible Debentures, the consent of the Holders
of which is required for any such supplemental indenture, without the consent of
the Holders of each Convertible Debenture so affected.
Upon the request of the Company, accompanied by a copy of a resolution of
the Board of Directors certified by the secretary or assistant secretary of the
Company authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Holders of Convertible
Debentures as aforesaid and other documents, if any, required by Section 7.1,
the Trustee shall join with the Company in the execution of such supplemental
indenture or otherwise, in which case such Trustee may in its discretion, but
shall not be obligated to, enter into such supplemental indenture which affects
the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
It shall not be necessary for the consent of the Holders of Convertible
Debentures under this Section to approve the particular form of any proposed
supplemental indenture, but it shall be sufficient if such consent shall approve
the substance thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall give notice thereof to the Holders of then Outstanding Convertible
Debentures, by mailing a notice thereof by first-class mail to such Holders at
their addresses as they shall appear on the Security Register, and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Company to give such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
Section 8.3 Effect of Supplemental Indenture. Every supplemental
indenture executed pursuant to this Article VIII shall conform to the
requirements of the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions hereof, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the Holders of Convertible Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be a part of the
terms and conditions of this Indenture for any and all purposes.
Section 8.4 Documents to Be Given to Trustee. The Trustee, subject to the
provisions of Section 6.1 and 6.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article VIII complies with the applicable provisions
of this Indenture.
47
Section 8.5 Notation on Convertible Debentures in Respect of Supplemental
Indentures. Convertible Debentures authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article VIII may bear, upon the direction of the Company, a notation in form
satisfactory to the Trustee for the Convertible Debentures as to any matter
provided for by such supplemental indenture. If the Company or the Trustee shall
so determine, new Convertible Debentures so modified as to conform, in the
opinion of the Trustee and the Company, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Company,
authenticated by the Trustee and delivered in exchange for the Convertible
Debentures then Outstanding.
ARTICLE IX
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
Section 9.1 Company May Consolidate, etc., on Certain Terms. The Company
may sell, transfer, lease or otherwise convey all or substantially all of its
assets on a consolidated basis to any Person, or consolidate or merge with or
into, any other Person, provided that in any such case, (a) either (i) the
Company shall be the continuing corporation, or (ii) if the Company is not the
continuing corporation, the successor corporation or Person which acquires by
sale, transfer, lease or other conveyance all or substantially all of the assets
of the Company, shall be a corporation organized and validly existing under the
laws of the United States of America or any state thereof or the District of
Columbia and shall expressly assume the due and punctual payment of the
principal of, premium, if any, and interest (including Additional Sums and
Compound Interest) on all of the Convertible Debentures according to their
tenor, and the due and punctual performance and observance of all of the
covenants, agreements and conditions (A) of this Indenture to be performed or
observed by the Company by supplemental indenture satisfactory to the Trustee,
executed and delivered to the Trustee by such corporation or entity, and (B) of
the Registration Rights Agreements, by amendment thereto, (b) immediately after
such merger or consolidation, or such sale, transfer, lease or other conveyance,
no Event of Default, and no event which, after notice or lapse of time or both,
would become an Event of Default, shall have occurred and be continuing, and (c)
the Company has delivered to the Trustee an Officers' Certificate and an Opinion
of Counsel, each stating that the requirements of this Section have been
complied with.
Section 9.2 Successor Corporation Substituted. In case of any such
consolidation, merger, sale, transfer, lease or conveyance, and following such
an assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein, and the Company shall be discharged from all obligations and
covenants under this Indenture, the Convertible Debentures and the Registration
Rights Agreements and may be liquidated and dissolved. Such successor
corporation may cause to be signed, and may issue either in its own name or in
the name of the Company any or all of the Convertible Debentures issuable
hereunder which theretofore shall not have been signed by the Company and be
delivered to the Trustee; and, upon the order of such successor corporation
instead of the Company and
48
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall make available for delivery
any Convertible Debentures which previously shall have been signed and delivered
by the officers of the Company to the Trustee for authentication, and any
Convertible Debentures, which such successor corporation thereafter shall cause
to be signed and delivered to the Trustee for that purpose. All of the
Convertible Debentures so issued shall in all respects have the same legal rank
and benefit under this Indenture as the Convertible Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Convertible Debentures had been issued at the date of the execution
hereof.
In case of any such consolidation, merger, sale, transfer, lease or
conveyance such changes in phraseology and form (but not in substance) may be
made in the Convertible Debentures thereafter to be issued as may be
appropriate.
Section 9.3 Opinion of Counsel to Trustee. The Trustee, subject to the
provisions of Section 6.1 and 6.2, may receive an Opinion of Counsel, prepared
in accordance with Section 15.5, as conclusive evidence that any such
consolidation, merger, sale, lease or conveyance, and any such assumption, and
any such liquidation or dissolution, complies with the applicable provisions of
this Indenture.
ARTICLE X
REDEMPTION OF THE CONVERTIBLE DEBENTURES
Section 10.1 Tax Event Redemption. If a Tax Event (as defined in the
Declaration) has occurred and is continuing and:
(a) the Company has received a Redemption Tax Opinion (as defined in
the Declaration); or
(b) after receiving a Dissolution Tax Opinion (as defined in the
Declaration), the Regular Trustees shall have been informed by tax counsel
rendering the Dissolution Tax Opinion that a No-Recognition Opinion (as
defined in the Declaration) cannot be delivered to the Trust,
then, notwithstanding Section 10.2(a) but subject to Section 10.2(b), the
Company shall have the right upon not less than 30 days nor more than 60 days
notice to the Holders of the Convertible Debentures to redeem the Convertible
Debentures, in whole or in part, for cash within 90 days following the
occurrence of such Tax Event (the "90-Day Period") at a redemption price equal
to 100% of the principal amount to be redeemed plus any accrued and unpaid
interest thereon to the date of such redemption (the "Redemption Price"),
provided that if at the time there is available to the Company or the Trust the
opportunity to eliminate, within the 90-Day Period, the Tax Event by taking some
ministerial action ("Ministerial Action"), such as filing a form or making an
election, or pursuing some other similar reasonable measure which has no adverse
effect on the Company, the Trust or the
49
Holders of the Trust Securities issued by the Trust, the Company shall pursue
such Ministerial Action in lieu of redemption. The Redemption Price shall be
paid prior to 12:00 noon, New York time, on the date of such redemption or such
earlier time as the Company determines, provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Redemption Price prior to the
redemption date.
Section 10.2 Optional Redemption by Company.
(a) Subject to the provisions of Section 10.2(b) and to the provisions of
this Article X generally, except as otherwise may be specified in Section 10.1
or elsewhere in this Indenture, the Company shall have the right to redeem the
Convertible Debentures, in whole or in part, from time to time, on or after
March 4, 2000. Any redemption pursuant to this paragraph will be made upon not
less than 30 days nor more than 60 days notice to the Holders of the Convertible
Debentures, at the following prices (expressed as percentages of the principal
amount of the Convertible Debentures) (the "Optional Redemption Price") together
with accrued and unpaid interest (including Additional Sums, if any, and, to the
extent permitted by applicable law, Compounded Interest, if any) to, but
excluding, the redemption date, if redeemed during the 12-month period beginning
March 4, of the applicable year set forth below:
Year Redemption Price
------ -----------------
2000 103.500%
2001 103.000%
2002 102.500%
2003 102.000%
2004 101.500%
2005 101.000%
2006 100.500%
and 100% if redeemed on or after March 4, 2007.
If Convertible Debentures are redeemed on any March 1, June 1, September 1,
or December 1, accrued and unpaid interest shall be payable to holders of record
on the relevant record date.
The Company may not redeem fewer than all of the outstanding Convertible
Debentures unless all accrued and unpaid interest has been paid on all
Convertible Debentures for all quarterly interest payment periods terminating on
or prior to the date of redemption.
So long as the corresponding Trust Securities are outstanding, the proceeds
from the redemption of the Convertible Debentures will be used to redeem the
Trust Securities.
50
If the Convertible Debentures are only partially redeemed pursuant to this
Section 10.2, the Convertible Debentures will be redeemed pro rata. The
Optional Redemption Price, together with any required interest payment, shall be
paid prior to 12:00 noon, New York time, on the redemption date or at such
earlier time as the Company determines provided that the Company shall deposit
with the Trustee an amount sufficient to pay the Optional Redemption Price,
together with any required interest payment, by 10:00 a.m., New York time, on
the date such amounts are to be paid. Partial redemptions must be in an amount
not less than $1,000 principal amount of Convertible Debentures.
If Convertible Debentures selected for partial redemption are converted in
part before termination of the conversion right with respect to the portion of
the Convertible Debentures so selected, the converted portion of the Convertible
Debentures shall be deemed (so far as may be) to be the portion selected for
redemption. Convertible Debentures (or portions thereof) which have been
converted during a selection of Convertible Debentures to be redeemed shall be
treated by the Trustee as Outstanding for the purpose of such selection. In any
case where more than one Convertible Debenture is registered in the same name,
the Trustee in its discretion may treat the aggregate principal amount so
registered as if it were represented by one Convertible Debenture.
If any Convertible Debenture called for redemption is converted into Common
Stock of the Company, any money deposited with the Trustee or with any Paying
Agent or so segregated and held in trust for the redemption of such Convertible
Debenture shall (subject to any right of the Holder of such Convertible
Debenture or any Predecessor Convertible Debenture to receive interest as
provided in the last paragraph of Section 2.9) be paid to the Company upon the
Company's request or, if then held by the Company, shall be discharged from such
trust.
(b) If a partial redemption of the Convertible Debentures would result in
the delisting of the Convertible Preferred Securities issued by the Trust from
any national securities exchange or other organization on which the Convertible
Preferred Securities are then listed, the Company shall not be permitted to
effect such partial redemption and may only redeem the Convertible Debentures in
whole.
Section 10.3 No Sinking Fund. The Convertible Debentures are not entitled
to the benefit of any sinking fund or subject to any sinking fund.
Section 10.4 Election to Redeem; Notice of Redemption; Partial
Redemptions. The election of the Company to redeem any Convertible Debentures
shall be evidenced by, or pursuant to, a resolution of the Board of Directors.
Notice of redemption to the Holders of Convertible Debentures required to be
redeemed or to be redeemed as a whole or in part at the option of the Company
shall be given by giving notice of such redemption as provided in Section 15.4,
at least 30 days and not more than 60 days prior to the date fixed for
redemption to such Holders of Convertible Debentures. Any notice which is mailed
in the manner herein provided shall be conclusively presumed to have been duly
given, whether or not the Holder receives the notice. Neither the failure to
give notice by mail, nor any defect in the
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notice so mailed to the Holder of any Convertible Debenture designated for
redemption as a whole or in part shall affect the validity of the proceedings
for such redemption.
The notice of redemption to each such Holder shall specify the date fixed
for redemption, the "CUSIP" number or numbers for such Convertible Debentures,
the redemption price, the Place or Places of Payment, that payment will be made
upon presentation and surrender of such Convertible Debentures, that interest
accrued to the date fixed for redemption will be paid as specified in such
notice and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue, the conversion rate or price, the
date on which the right to convert the Convertible Debentures to be redeemed
will terminate and the place or places where such Convertible Debentures may be
surrendered for conversion. If less than all of the Convertible Debentures are
to be redeemed, the notice of redemption shall specify the number of the
Convertible Debentures to be redeemed. In case any Convertible Debenture is to
be redeemed in part, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that on and after the
date fixed for redemption, upon surrender of such Convertible Debenture, a new
Convertible Debenture or Convertible Debentures in principal amount equal to the
unredeemed portion thereof will be issued.
The notice of redemption of Convertible Debentures to be redeemed at the
option of the Company shall be given by the Company or, at the Company's
request, by the Trustee in the name and at the expense of the Company. If such
notice is to be given by the Trustee, the Company shall provide notice of such
redemption to the Trustee at least 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee). If
such notice is given by the Company, the Company shall provide a copy of such
notice given to the Holders of such redemption to the Trustee at least 2 days
prior to the date such notice is given to such Holders, but in any event at
least 30 days and not more than 60 days prior to the date fixed for redemption.
The Company or the Trust shall give public notice of any such redemption by
the issuance of a press release through the services of the Dow Xxxxx Broad
Tape, Reuters News Service and Bloomberg News Service.
Not later than the redemption date specified in the notice of redemption
given as provided in this Section, the Company will have on deposit with the
Trustee or with one or more Paying Agents (or, if the Company is acting as its
own Paying Agent, set aside, segregate and hold in trust as provided in Section
3.3) in funds available on such date an amount of money sufficient to redeem on
the redemption date all the Convertible Debentures so called for redemption at
the appropriate redemption price, together with accrued interest to the date
fixed for redemption. If less than all of the Outstanding Convertible
Debentures are to be redeemed at the election of the Company, the Company will
deliver to the Trustee at least 60 days prior to the date fixed for redemption
(unless a shorter notice shall be satisfactory to the Trustee) an Officers'
Certificate stating the aggregate principal amount of Convertible Debentures to
be redeemed.
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For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Convertible Debentures shall
relate, in the case of any Convertible Debenture redeemed or to be redeemed only
in part, to the portion of the principal amount of such Convertible Debenture
which has been or is to be redeemed.
Section 10.5 Payment of Convertible Debentures Called for Redemption. If
notice of redemption has been given as above provided, the Convertible
Debentures or portions of Convertible Debentures specified in such notice shall
become due and payable on the date and at the place stated in such notice at the
applicable redemption price, together with interest accrued to the date fixed
for redemption, and on and after said date (unless the Company shall default in
the payment of such Convertible Debentures at the redemption price, together
with interest accrued to said date) interest on the Convertible Debentures or
portions of Convertible Debentures so called for redemption shall cease to
accrue, and, except as provided in Section 6.1, such Convertible Debentures
shall cease from and after the date fixed for redemption to be entitled to any
benefit or security under this Indenture, and the Holders thereof shall have no
right in respect of such Convertible Debentures except the right to receive the
redemption price thereof and unpaid interest to the date fixed for redemption.
On presentation and surrender of such Convertible Debentures at a Place of
Payment specified in said notice, said Convertible Debentures or the specified
portions thereof shall be paid and redeemed by the Company at the applicable
redemption price, together with interest accrued thereon to the date fixed for
redemption; provided that, payment of interest becoming due on or prior to the
date fixed for redemption shall be payable to the Holders of such Convertible
Debentures registered as such on the relevant record date subject to the terms
and provisions of Section 2.9 hereof.
If any Convertible Debenture called for redemption shall not be so paid
upon surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the Coupon
Rate.
Upon presentation of any Convertible Debenture redeemed in part only, the
Company shall execute and the Trustee shall authenticate and make available for
delivery to or on the order of the Holder thereof, at the expense of the
Company, a new Convertible Debenture or Convertible Debentures, of authorized
denominations, in principal amount equal to the unredeemed portion of the
Convertible Debenture so presented.
Section 10.6 Exclusion of Certain Convertible Debentures from Eligibility
for Selection for Redemption. Convertible Debentures shall be excluded from
eligibility for selection for redemption if they are identified by registration
and certificate number in a written statement signed by an authorized officer of
the Company and delivered to the Trustee at least 30 days prior to the last date
on which notice of redemption may be given as being owned of record and
beneficially by, and not pledged or hypothecated by, either (a) the Company or
(b) an entity specifically identified in such written statement as directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company.
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ARTICLE XI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 11.1 Extension of Interest Payment Period. As long as an Event of
Default under Section 5.1(a) of this Indenture shall not have occurred and be
continuing, the Company shall have the right, at any time and from time to time
during the term of the Convertible Debentures, to defer payments of interest by
extending the interest payment period of such Convertible Debentures for a
period not exceeding 20 consecutive quarters (the "Extension Period"), during
which Extension Period no interest shall be due and payable; provided that no
Extension Period may extend beyond the Maturity Date or any earlier redemption
date. To the extent permitted by applicable law, interest, the payment of which
has been deferred because of the extension of the interest payment period
pursuant to this Section 11.1, will bear interest thereon at the Coupon Rate
compounded quarterly for each quarter of the Extension Period ("Compound
Interest"). Each Extension Period, if any, will end on an Interest Payment Date.
At the end of the Extension Period, the Company shall pay all interest accrued
and unpaid on the Convertible Debentures, including any Additional Sums and, to
the extent permitted by law, Compound Interest (together, "Deferred Interest")
that shall be payable to the Holders of the Convertible Debentures in whose
names the Convertible Debentures are registered in the Security Register at the
close of business on the record date next preceding such Interest Payment Date.
Before the termination of any Extension Period, the Company may further extend
such period, provided that such period together with all previous and further
extensions thereof shall not exceed 20 consecutive quarters, or extend beyond
the Maturity Date or any earlier redemption date. Upon the termination of any
Extension Period and upon the payment of all Deferred Interest then due, the
Company may commence a new Extension Period, subject to the foregoing
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extension Period.
Section 11.2 Notice of Extension.
(a) If the Institutional Trustee is the only registered Holder of the
Convertible Debentures at the time the Company selects an Extension Period, the
Company shall give written notice to the Regular Trustees, the Institutional
Trustee and the Trustee of its selection of such Extension Period at least one
Business Day before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by the Trust are payable, or (ii)
the date the Regular Trustees are required to give notice of the record date, or
the date such Distributions are payable, to the New York Stock Exchange or other
applicable self-regulatory organization or to holders of the Convertible
Preferred Securities issued by the Trust, but in any event at least ten Business
Days before such record date. The Company shall cause the Trust to give notice
of the Company's selection of such Extension Period to holders of the
Convertible Preferred Securities.
(b) If the Institutional Trustee is not the only Holder of the Convertible
Debentures at the time the Company selects an Extension Period, the Company
shall give the
54
Holders of the Convertible Debentures, the Institutional Trustee and the Trustee
written notice of its selection of such Extension Period at least 10 Business
Days before the earlier of (i) the next succeeding Interest Payment Date or (ii)
the date the Company is required to give notice of the record or payment date of
such interest payment to the New York Stock Exchange or other applicable self-
regulatory organization or to Holders of the Convertible Debentures, but in any
event not less than two Business Days prior to such record date.
(c) The quarter in which any notice is given pursuant to paragraphs (a) or
(b) of this Section 11.2 shall be counted as one of the 20 consecutive quarters
permitted in the maximum Extension Period permitted under Section 11.1.
ARTICLE XII
CONVERSION OF CONVERTIBLE DEBENTURES
Section 12.1 Conversion Rights. Subject to and upon compliance with the
provisions of this Article XII, the Convertible Debentures are convertible, at
the option of the Holders, at any time beginning May 21, 1997 through the close
of business on May 28, 2027 (or, in the case of Convertible Debentures called
for redemption, prior to the close of business on the Business Day prior to the
corresponding redemption date) into fully paid and nonassessable shares of
Common Stock of the Company at an initial conversion rate of .6709 shares of
Common Stock for each $50 in principal amount of Convertible Debentures
(equivalent to a conversion price of $74.53 per share of Common Stock (the
"Conversion Price")), subject to adjustment and reset as described in this
Article XII. A Holder of Convertible Debentures may convert any portion of the
principal amount of the Convertible Debentures into that number of fully paid
and nonassessable shares of Common Stock obtained by dividing the principal
amount of the Convertible Debentures to be converted by such Conversion Price.
All calculations under this Article XII shall be made to the nearest cent or to
the nearest 1/100th of a share, as the case may be.
Section 12.2 Conversion Procedures.
(a) In order to convert all or a portion of the Convertible Debentures,
the Holder thereof shall deliver to the Conversion Agent an irrevocable notice
of conversion (the "Notice of Conversion") setting forth the principal amount of
Convertible Debentures to be converted, together with the name or names, if
other than the Holder, in which the shares of Common Stock should be issued upon
conversion and, if such Convertible Debentures are definitive Convertible
Debentures, surrender to the Conversion Agent the Convertible Debentures to be
converted, duly endorsed or assigned to the Company or in blank. In addition, a
holder of Convertible Preferred Securities may exercise its right under the
Declaration to convert such Convertible Preferred Securities into Common Stock
by delivering to the Conversion Agent an irrevocable Notice of Conversion
setting forth the information called for by the preceding sentence and directing
the Conversion Agent (i) to exchange such Convertible Preferred Security for a
portion of the Convertible Debentures held by the Trust (at an exchange rate of
$50 principal amount of Convertible Debentures for each Convertible Preferred
Security)
55
and (ii) to immediately convert such Convertible Debentures, on behalf of such
holder, into Common Stock of the Company pursuant to this Article XII and, if
such Convertible Preferred Securities are in definitive form, surrendering such
Convertible Preferred Securities, duly endorsed or assigned to the Company or in
blank. So long as any Convertible Preferred Securities are outstanding, the
Trust shall not convert any Convertible Debentures except pursuant to a Notice
of Conversion delivered to the Conversion Agent by a holder of Convertible
Preferred Securities.
If a Notice of Conversion is delivered on or after the record date and
prior to the subsequent Interest Payment Date, the Holder will be entitled to
receive the interest payable on the subsequent Interest Payment Date on the
portion of Convertible Debentures to be converted notwithstanding the conversion
thereof prior to such Interest Payment Date. However, if a redemption date falls
between a record date and the subsequent Interest Payment Date, the Holder will
be entitled to receive, on such Interest Payment Date, the interest accrued to,
but excluding, the redemption date. Except as otherwise provided in the first
and second sentences of this paragraph, in the case of any Convertible Debenture
which is converted, interest whose Stated Maturity is after the date of
conversion of such Convertible Debenture shall not be payable, and the Company
shall not make nor be required to make any other payment, adjustment or
allowance with respect to accrued but unpaid interest on the Convertible
Debentures being converted, which shall be deemed to be paid in full. Each
conversion shall be deemed to have been effected immediately prior to the close
of business on the day on which the Notice of Conversion was received (the
"Conversion Date") by the Conversion Agent from the Holder or from a holder of
the Convertible Preferred Securities effecting a conversion thereof pursuant to
its conversion rights under the Declaration, as the case may be. The Person or
Persons entitled to receive the Common Stock issuable upon such conversion shall
be treated for all purposes as the record holder or holders of such Common Stock
as of the Conversion Date. As promptly as practicable on or after the Conversion
Date, the Company shall issue and deliver at the office of the Conversion Agent,
unless otherwise directed by the Holder in the Notice of Conversion, a
certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion, together with the cash payment, if any, in lieu
of any fraction of any share to the Person or Persons entitled to receive the
same. The Conversion Agent shall deliver such certificate or certificates to
such Person or Persons.
(b) The Company's delivery upon conversion of the fixed number of shares
of Common Stock into which the Convertible Debentures are convertible (together
with the cash payment, if any, in lieu of fractional shares) shall be deemed to
satisfy the Company's obligation to pay the principal amount at Maturity of the
portion of Convertible Debentures so converted and any unpaid interest
(including Compound Interest) accrued on such Convertible Debentures at the time
of such conversion.
(c) No fractional shares of Common Stock will be issued as a result of
conversion, but in lieu thereof, the Company shall pay to the Conversion Agent a
cash adjustment in an amount equal to the same fraction of the Closing Price of
such fractional interest on the date on which the Convertible Debentures were
duly surrendered to the Conversion Agent for conversion, or, if such day is not
a Trading Day, on the next Trading
56
Day, and the Conversion Agent in turn will make such payment, if any, to the
Holder of the Convertible Debentures or the holder of the Convertible Preferred
Securities so converted.
(d) In the event of the conversion of any Convertible Debenture in part
only, the Company shall execute and the Trustee shall authenticate and make
available for delivery to or on the order of the Holder thereof, at the expense
of the Company, a new Convertible Debenture or Convertible Debentures in the
aggregate principal amount equal to the unconverted portion thereof.
(e) In effecting the conversion transactions described in this Section
12.2, the Conversion Agent is acting as agent of the holders of Convertible
Preferred Securities (in the exchange of Convertible Preferred Securities for
Convertible Debentures) and as agent of the Holders of Convertible Debentures
(in the conversion of Convertible Debentures into Common Stock), as the case may
be. The Conversion Agent is hereby authorized (i) to exchange Convertible
Debentures held by the Trust from time to time for Convertible Preferred
Securities in connection with the conversion of such Convertible Preferred
Securities in accordance with this Article XII and (ii) to convert all or a
portion of the Convertible Debentures into Common Stock and thereupon to deliver
such shares of Common Stock in accordance with the provisions of this Article
XII and to deliver to the Trust a new Convertible Debenture or Convertible
Debentures for any resulting unconverted principal amount.
Section 12.3 Conversion Price Adjustments. The Conversion Price shall be
adjusted from time to time as follows:
(a) In case the Company shall, while any of the Convertible Debentures are
outstanding, (i) pay a dividend or make a distribution with respect to Common
Stock in shares of Common Stock, (ii) subdivide outstanding shares of Common
Stock, (iii) combine outstanding shares of Common Stock into a smaller number of
shares or (iv) issue by reclassification of its shares of Common Stock any
shares of capital stock of the Company, the conversion privilege and the
Conversion Price for the Convertible Debentures shall be adjusted so that the
Holder of any Convertible Debenture thereafter surrendered for conversion shall
be entitled to receive the number of shares of capital stock of the Company
which such Holder would have owned immediately following such action had such
Convertible Debenture been converted immediately prior thereto. An adjustment
made pursuant to this subsection (a) shall become effective immediately after
the record date in the case of a dividend or other distribution and shall become
effective immediately after the effective date in case of a subdivision,
combination or reclassification (or immediately after the record date if a
record date shall have been established for such event). If, as a result of an
adjustment made pursuant to this subsection (a), the Holder of any Convertible
Debenture thereafter surrendered for conversion shall become entitled to receive
shares of two or more classes or series of capital stock of the Company, the
Board of Directors (whose determination shall be conclusive and shall be
evidenced by a Board Resolution filed with the Trustee) shall determine the
allocation of the adjusted Conversion Price for the Convertible Debentures
between or among shares of such classes or series of capital stock.
57
(b) In case the Company shall, while any of the Convertible Debentures are
outstanding, issue rights or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the record date
mentioned below) to subscribe for or purchase shares of Common Stock at a price
per share less than the current market price per share of Common Stock (as
determined pursuant to subsection (g) below) on the record date mentioned below,
the Conversion Price for the Convertible Debentures shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of issuance of such rights or warrants by a
fraction of which the numerator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered for subscription or purchase would purchase at such current market
price, and of which the denominator shall be the number of shares of Common
Stock outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall become effective immediately after the record
date for the determination of stockholders entitled to receive such rights or
warrants. To the extent that no shares of Common Stock are so delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price which 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. For the purposes of this subsection, the number of
shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Company. In case any rights or warrants referred to in this
subsection in respect of which an adjustment shall have been made shall expire
unexercised within 45 days after the same shall have been distributed or issued
by the Company, the Conversion Price shall be readjusted at the time of such
expiration to the Conversion Price that would have been in effect if no
adjustment had been made on account of the distribution or issuance of such
expired rights or warrants.
(c) Subject to the last sentence of this subsection (c), in case the
Company shall, by dividend or otherwise, distribute to all holders of its Common
Stock evidences of its indebtedness, shares of any class or series of capital
stock, cash or assets or rights or warrants to subscribe for or purchase any of
its securities (excluding any rights or warrants referred to in subsection (b),
any dividend or distribution paid exclusively in cash and any dividend or
distribution referred to in subsection (a) of this Section 12.3), the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contem plated by this subsection
(c) by a fraction of which the numerator shall be the current market price per
share (determined as provided in subsection (g)) of the Common Stock on the date
fixed for the payment of such distribution (the "Reference Date") less the fair
market value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive and evidenced by a resolution of the Board of
Directors), on the Reference Date, of the portion of the evidences of
indebtedness, shares of capital stock, cash and assets so distributed or of such
subscription rights or warrants applicable to one share of Common Stock and the
denominator shall be such current market price per share of the Common Stock,
such reduc tion to become effective immediately prior to the opening of business
on the day following the Reference Date; provided, however, that in the
58
event the numerator shall be less than one, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder of Convertible Debentures
shall have the right to receive upon conversion the amount of such distribution
such Holder would have received had such Holder converted each Convertible
Debenture immediately prior to the Reference Date. In the event that no such
dividend or distribution is so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not occurred. If the Board of Directors determines
the fair market value of any distribution for purposes of this subsection (c) by
reference to the actual or when issued trading market for any securities
comprising such distribution, it must in doing so consider the prices in such
market over the same period used in computing the current market price per share
of Common Stock (determined as provided in subsection (g)). For purposes of this
subsection (c), any dividend or distribution that includes shares of Common
Stock, or rights or warrants of the type described in subsection (b), shall be
deemed instead to be a dividend or distribution of the evidences of
indebtedness, shares of capital stock, cash or assets or rights or warrants
other than such shares of Common Stock, or such rights or warrants of the type
described in subsection (b) (making any Conversion Price reduction required by
this subsection (c)), immediately followed by a dividend or distribution of such
shares of Common Stock or such rights or warrants of the type described in
subsection (b) (making any further Conversion Price adjustment required by
subsection (a) or (b)), except (A) the Reference Date of such dividend or
distribution as defined in this subsection (c) shall be substituted as (1) "the
record date in the case of a dividend or other distribution," and (2) "the
record date for the determination of stockholders entitled to receive such
rights or warrants" and (3) "the date fixed for such determination" within the
meaning of subsections (a) and (b) and (B) any shares of Common Stock included
in such dividend or distribution shall not be deemed outstanding for purposes of
computing any adjustment of the Conversion Price in subsection (b).
(d) In case the Company shall pay or make a dividend or other distribution
on its Common Stock exclusively in cash (excluding any quarterly cash dividend
on Common Stock to the extent that the aggregate cash dividend per share of
Common Stock in any quarter does not exceed the greater of (i) the amount per
share of Common Stock of the next preceding quarterly dividend on Common Stock
to the extent such preceding quarterly dividend did not require an adjustment of
the Conversion Price pursuant to this subsection (d) (as adjusted to reflect
subdivisions or combinations of Common Stock), and (ii) 3.75% of the daily
Closing Price per share determined as provided in subsection (g), and excluding
any dividend or distribution in connection with the liquidation, dissolution or
winding-up of the Company), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection (d) by a fraction of which the numerator shall
be the current market price per share (determined as provided in subsection (g))
of the Common Stock on the date fixed for the payment of such distribution less
the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator shall be such
current market price per share of the Common Stock (determined as provided in
subsection (g)), such reduction to become effective immediately prior to the
opening of business on the day following the date fixed for the payment of such
distribution; provided, however, that in the
59
event the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the current market price per share (as defined
in subsection (g)) of the Common Stock on the record date mentioned above, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Holder of shares of Convertible Debentures shall have the right to receive upon
conversion the amount of cash such Holder would have received had such Holder
converted each Convertible Debenture immediately prior to the record date for
the distribution of the cash. If an adjustment is required to be made pursuant
to this subsection (d) as a result of a distribution that is a quarterly
dividend, such adjustment shall be based upon the amount by which such
distribution exceeds the amount of the quarterly cash dividend permitted to be
excluded as provided above. If an adjustment is required to be made pursuant to
this subsec tion (d) as a result of a distribution that is not a quarterly
dividend, such adjustment shall be based upon the full amount of the
distribution. In the event that no such dividend or distribution is so paid or
made, the Conversion Price shall again be adjusted to be the Conversion Price
which would then be in effect if such Record Date had not been fixed.
(e) In case a tender or exchange offer (other than an odd-lot offer) made
by the Company or any Subsidiary of the Company for all or any portion of the
Company's Common Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such subsidiary of consideration per share
of Common Stock having a fair market value (as determined in good faith by the
Board of Directors, whose determination shall be conclusive and evidenced by a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Closing Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, the Conversion Price
shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this subsection
(e) by a fraction (which shall not be greater than one) of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) at the Expiration Time multiplied by the Closing
Price of the Common Stock on the Trading Day next succeeding the Expiration Time
and the denominator shall be the sum of (i) 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 (ii) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) at the Expiration
Time and the Closing Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become retroactively effective
immediately prior to the opening of business on the day following the Expiration
Time.
(f) In case a tender or exchange offer made by a Person other than the
Company or any Subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall involve the payment
by a Person other than the Company or any Subsidiary of the Company of
consideration per share of Common Stock having a fair market value (as
determined in good faith by the Board of Directors, whose
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determination shall be conclusive and evidenced by a resolution of the Board of
Directors) at the applicable Expiration Time that exceeds the Closing Price of
the Common Stock on the Trading Day next succeeding the applicable Expiration
Time in which as of the closing date of the offer the Board of Directors of the
Company is not recommending rejection of the offer, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this subsection (f) by a fraction
(which shall not be greater than one) of which the numerator shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) at the Expiration Time multiplied by the Closing Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the
denominator shall be the sum of (i) 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 the Purchased Shares and, (ii) the product of the number of shares of
Common Stock outstanding (less any Purchased Shares) at the Expiration Time and
the Closing Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such reduction to become retroactively effective immediately
prior to the opening of business on the day following the Expiration Time;
provided, however, that the reduction of the Conversion Price contemplated by
this subsection (f) will only be made if the tender offer or exchange offer is
made for an amount which increases that Person's ownership of Common Stock to
more than 25% of the total shares of Common Stock outstanding and provided,
further, that the reduction of the Conversion Price contemplated by this
subsection (f) will not be made if as of the close of the offer, the offering
documents with respect to such offer disclose a plan or an intention to cause
the Company to engage in a consolidation or merger of the Company or a sale of
all or substantially all of the assets of the Company.
(g) For the purpose of any computation under subsection (b), (c) or (d),
the current market price per share of Common Stock on any date in question shall
be deemed to be the average of the daily Closing Prices for the ten Trading Day
period ending on the earlier of the day in question and, if applicable, the day
before the "ex" date with respect to the issuance or distribution requiring such
computation; provided, however, that if more than one event occurs that would
require an adjustment pursuant to subsections (a) through (f), inclusive, the
Board of Directors may make such adjustments to the Closing Prices during such
ten Trading Day period as it deems appropriate to effectuate the intent of the
adjustments in this Section 12.3, in which case any such determination by the
Board of Directors shall be set forth in a Board Resolution and shall be
conclusive. For purposes 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 New York Stock Exchange or on such
successor securities exchange as the Common Stock may be listed or in the
relevant market from which the Closing Prices were obtained without the right to
receive such issuance or distribution, and (2) when used with respect to any
tender or exchange offer means the first date on which the Common Stock trades
regular way on such securities exchange or in such market after the Expiration
Time of such offer.
(h) The Company may make such reductions in the Conversion Price, in
addition to those required by subsections (a) through (f), as the Board of
Directors considers to be
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advisable to avoid or diminish any income tax to holders of Common Stock or
rights to purchase Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes. The Company from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least twenty (20) days.
Whenever the Conversion Price is reduced pursuant to the preceding sentence, the
Company shall mail to Holders of record of the Convertible Debentures a notice
of the reduction at least 15 days prior to the date the reduced Conversion Price
takes effect, and such notice shall state the reduced Conversion Price and the
period it will be in effect.
(i) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Conversion Price; provided, however, that any adjustments which by reason of
this subsection (i) are not required to be made shall be carried forward and
taken into account in determining whether any subsequent adjustment shall be
required.
(j) If any action would require adjustment of the Conversion Price
pursuant to more than one of the provisions described above, only one adjustment
shall be made and such adjustment shall be the amount of adjustment that has the
highest absolute value to the Holder of Convertible Debentures.
(k) Except as stated above, the Conversion Rate will not be adjusted for
the issuance of Common Stock or any securities convertible into, or exchangeable
for, Common Stock, or carrying the right to purchase any of the foregoing.
Section 12.4 Merger, Consolidation or Sale of Assets.
(a) In the event that the Company shall be a party to any transaction
(including without limitation (i) any recapitalization or reclassification of
the 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 of the Common Stock), (ii) any consolidation of the Company with, or
merger of the Company into, any other Person, any merger of another Person into
the Company (other than a merger which does not result in a reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company), (iii) any sale or transfer of all or substantially all of the
assets of the Company or (iv) any compulsory share exchange) pursuant to which
either shares of Common Stock shall be converted into the right to receive other
securities, cash or other property, or, in the case of a sale or transfer of all
or substantially all of the assets of the Company, the holders of Common Stock
shall be entitled to receive other securities, cash or other property, then
lawful provision shall be made as part of the terms of such transaction whereby
the Holder of each Convertible Debenture then outstanding shall have the right
thereafter to convert such Convertible Debenture only into:
(i) in the case of any such transaction that does not constitute a
Common Stock Fundamental Change and subject to funds being legally
available for such purpose under applicable law at the time of such
conversion, the kind and amount of
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the securities, cash or other property that would have been receivable upon
such recapitalization, reclassification, consolidation, merger, sale,
transfer or share exchange by a holder of the number of shares of Common
Stock issuable upon conversion of such Convertible Debenture immediately
prior to such recapitalization, reclassification, consolidation, merger,
sale, transfer or share exchange, after giving effect, in the case of any
Non-Stock Fundamental Change, to any adjustment in the Conversion Price in
accordance with clause (i) of subsection (c) of this Section 12.4; and
(ii) in the case of any such transaction that constitutes a Common
Stock Fundamental Change, common stock of the kind received by holders of
Common Stock as a result of such Common Stock Fundamental Change in an
amount determined in accordance with clause (ii) of subsection (c) of this
Section 12.4.
(b) The Company or the Person formed by such consolidation or resulting
from such merger or which acquired such assets or which acquires the Company's
shares, as the case may be, shall make provision in its certificate or articles
of incorporation or other constituent document to establish such right. Such
certificate or articles of incorporation or other constituent document shall
provide for adjustments which, for events subsequent to the effective date of
such certificate or articles of incorporation or other constituent document,
shall be as nearly equivalent as may be practicable to the adjustments provided
for in this Article XII. The above provisions shall similarly apply to
successive transactions of the foregoing type.
(c) Notwithstanding any other provision of this Section 12.4 to the
contrary, if any Fundamental Change occurs, then the Conversion Price in effect
will be adjusted immediately after such Fundamental Change as follows:
(i) in the case of a Non-Stock Fundamental Change, the Conversion
Price of the Convertible Debentures immediately following such Non-Stock
Fundamental Change shall be the lower of (A) the Conversion Price in effect
immediately prior to such Non-Stock Fundamental Change, but after giving
effect to any other prior adjustments effected pursuant to Section 12.3,
and (B) the product of (1) the greater of the Applicable Price and the then
applicable Reference Market Price and (2) a fraction, the numerator of
which is $50 and the denominator of which is (x) the amount of the Optional
Redemption Price set forth in Section 10.2 for $50 in principal amount of
Convertible Debentures if the redemption date were the date of such Non-
Stock Fundamental Change (or, for the twelve-month periods commencing March
4, 1997, March 4, 1998 and March 4, 1999, the product of 105.0%, 104.5% and
104.0%, respectively, times $50) plus (y) any then-accrued and unpaid
interest on $50 principal amount of Convertible Debentures; and
(ii) in the case of a Common Stock Fundamental Change, the Conversion
Price of the Convertible Debentures immediately following such Common Stock
Fundamental Change shall be the Conversion Price in effect immediately
prior to such Common Stock Fundamental Change, but after giving effect to
any other prior
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adjustments effected pursuant to Section 12.3, multiplied by a fraction,
the numerator of which is the Purchaser Stock Price and the denominator of
which is the Applicable Price; provided, however, that in the event of a
Common Stock Fundamental Change in which (A) 100% of the value of the
consideration received by a holder of Common Stock is common stock of the
successor, acquiror or other third party (and cash, if any, paid with
respect to any fractional interests in such common stock resulting from
such Common Stock Fundamental Change) and (B) all of the Common Stock shall
have been exchanged for, converted into or acquired for, common stock of
the successor, acquiror or other third party (and any cash with respect to
fractional interests), the Conversion Price of the Convertible Debentures
immediately following such Common Stock Fundamental Change shall be the
Conversion Price in effect immediately prior to such Common Stock
Fundamental Change multiplied by a fraction, the numerator of which is one
(1) and the denominator of which is the number of shares of common stock of
the successor, acquiror or other third party received by a holder of one
share of Common Stock as a result of such Common Stock Fundamental Change.
Section 12.5 Notice of Adjustments of Conversion Price. Whenever the
Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price and shall
prepare a certificate signed by the Chief Financial Officer or the
Treasurer of the Company setting forth the adjusted Conversion Price and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith be filed with the Trustee and the
transfer agent for the Convertible Preferred Securities and the Convertible
Debentures; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall as soon as practicable be
mailed by the Company to all record holders of Convertible Preferred
Securities and the Convertible Debentures at their last addresses as they
appear upon the transfer books of the Company and the Trust.
Section 12.6 Prior Notice of Certain Events. In case:
(a) the Company shall (i) declare any dividend (or any other
distribution) on its Common Stock, other than (A) a dividend payable in
shares of Common Stock or (B) a dividend payable in cash that would not
require an adjustment pursuant to Section 12.3(c) or (d) or (ii) authorize
a tender or exchange offer that would require an adjustment pursuant to
Section 12.3(e);
(b) the Company shall authorize the granting to all holders of Common
Stock of rights or warrants to subscribe for or purchase any shares of
stock of any class or series or of any other rights or warrants;
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(c) of any reclassification of Common Stock (other than a subdivision
or combination of the outstanding Common Stock, or a change in par value,
or from par value to no par value, or from no par value to par value), or
of any consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Company shall be required, or of
the sale or transfer of all or substantially all of the assets of the
Company or of any compulsory share exchange whereby the Common Stock is
converted into other securities, cash or other property; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall (i) if any Convertible Preferred Securities are
outstanding, cause to be filed with the transfer agent for the Convertible
Preferred Securities, and shall cause to be mailed to the holders of record of
the Convertible Preferred Securities, at their last addresses as they shall
appear upon the stock transfer books of the Trust or (ii) shall cause to be
mailed to all Holders at their last addresses as they shall appear in the
Security Register, at least 15 days prior to the applicable record or effective
date hereinafter specified, a notice stating (A) the date on which a record (if
any) is to be taken for the purpose of such dividend, distribution, 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, distribution, rights or
warrants are to be determined or (B) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effec tive, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange
their shares of Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer, share
exchange, dissolution, liquidation or winding up (but no failure to mail such
notice or any defect therein or in the mailing thereof shall affect the validity
of the corporate action required to be specified in such notice). If at any time
the Trustee shall not be the Conversion Agent, a copy of such notice shall also
forthwith be filed by the Company with the Trustee.
Section 12.7 Certain Additional Rights. In case the Company shall, by
dividend or otherwise, declare or make a distribution on the Common Stock
referred to in Section 12.3(c) or 12.3(d)), the Holder of the Convertible
Debentures, upon the conversion thereof subsequent to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution and prior to the effectiveness of the Conversion Price adjustment
in respect of such distribution, shall also be entitled to receive for each
share of Common Stock into which the Convertible Debentures are converted, the
portion of the shares of Common Stock, rights, warrants, evidences of
indebtedness, shares of capital stock, cash and assets so distributed applicable
to one share of Common Stock; provided, however, that, at the election of the
Company (whose election shall be evidenced by a resolution of the Board of
Directors) with respect to all Holders so converting, the Company may, in lieu
of distributing to such Holder any portion of such distribution not consisting
of cash or securities of the Company, pay such Holder an amount in cash equal to
the fair market value thereof (as determined in good faith by the Board of
Directors, whose determination shall be conclusive and evidenced by a resolution
of the Board of Directors).
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If any conversion of Convertible Debentures described in the immediately
preceding sentence occurs prior to the payment date for a distribution to
holders of Common Stock which the Holder of Convertible Debentures so converted
is entitled to receive in accordance with the immediately preceding sentence,
the Company may elect (such election to be evidenced by a resolution of the
Board of Directors) to distribute to such Holder a due xxxx for the shares of
Common Stock, rights, warrants, evidences of indebtedness, shares of capital
stock, cash or assets to which such Holder is so entitled, provided, that such
due xxxx (a) meets any applicable requirements of the principal national
securities exchange or other market on which the Common Stock is then traded and
(b) requires payment or delivery of such shares of Common Stock, rights,
warrants, evidences of indebtedness, shares of capital stock, cash or assets no
later than the date of payment or delivery thereof to holders of shares of
Common Stock receiving such distribution.
Section 12.8 Trustee Not Responsible for Determining Conversion Price or
Adjustments. Neither the Trustee nor any Conversion Agent shall at any time be
under any duty or responsibility to any Holder of any Convertible Debenture to
determine whether any facts exist which may require any adjustment of the
Conversion Price, or with respect to the nature or extent of any such adjustment
when made, or with respect to the method employed. Neither the Trustee nor any
Conversion Agent shall be accountable with respect to the validity or value (or
the kind or amount) of any shares of Common Stock or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Conver tible Debenture; 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 Common Stock or
stock certificates or other securities or property upon the surrender of any
Convertible Debenture for the purpose of conversion. All Convertible Debentures
delivered for conversion shall be delivered to the Trustee to be cancelled by or
at the discretion of the Trustee, which shall dispose of the same as provided in
Section 2.12 of this Indenture.
Section 12.9 Reservation of Shares of Common Stock. The Company shall at
all times reserve and keep available, free from preemptive rights, out of its
authorized but unissued Common Stock or treasury shares, for the purpose of
effecting the conversion of Convertible Debentures, the full number of shares of
Common Stock of the Company then issuable upon the conversion of all outstanding
Convertible Debentures.
Section 12.10 Payment of Certain Taxes upon Conversion. The Company will
pay any and all taxes that may be payable in respect of the issue or delivery of
shares of its Common Stock on conversion of Convertible Debentures pursuant
hereto. 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 shares
of its Common Stock in a name other than that of the Holder of the Convertible
Debenture or Convertible Debentures to be converted, and no such issue or
delivery shall be made unless and until the person requesting such issue has
paid to the Company the amount of any such tax, or has established, to the
satisfaction of the Company, that such tax has been paid.
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Section 12.11 Nonassessability. The Company covenants that all shares of
Common Stock which may be issued upon conversion of Convertible Debentures will
upon issue in accordance with the terms hereof be duly and validly issued and
fully paid and nonassessable.
ARTICLE XIII
SUBORDINATION OF CONVERTIBLE DEBENTURES
Section 13.1 Convertible Debentures Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Convertible Debenture, by
the Holder's acceptance thereof, likewise covenants and agrees, that, to the
extent and in the manner hereinafter set forth in this Article, the indebtedness
represented by the Convertible Debentures and the payment of the principal of
(and premium, if any) and interest on each and all of the Convertible Debentures
are hereby expressly made subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred. No provision
of this Article shall prevent the occurrence of any default or Event of Default
hereunder.
Section 13.2 Payment Over of Proceeds upon Dissolution, Etc. In the event
of (i) any insolvency, bankruptcy, receivership, liquidation, reorganization,
readjustment, composition or other similar proceeding relating to the Company,
its creditors or its property, (ii) any proceeding for the liquidation,
dissolution or other winding up of the Company voluntarily or involuntarily,
whether or not involving insolvency or bankruptcy proceedings, (iii) any
assignment by the Company for the benefit of creditors or (iv) any other
marshalling of assets of the Company, all amounts due upon all Senior
Indebtedness of the Company (including any interest thereon accruing after the
commencement of such proceedings) shall first be paid in full, or payment
thereof provided for in money in accordance with its terms, before any payment
is made by the Company on account of the principal (and premium, if any) or
interest on the Convertible Debentures; and any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the Holders of the Convertible Debentures or
the Trustee would be entitled to receive from the Company, except for the
provisions of this Article, shall be paid by the Company or by any receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, or by the Holders of the Convertible Debentures or by
the Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness
(including any interest thereon accruing after the commencement of such
proceedings) in full, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Holders of the Convertible Debentures or
to the Trustee.
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In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment, such payment or distribution shall be held
in trust for the benefit of and shall be paid over or delivered to the holders
of such Senior Indebtedness or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, and their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior Indebtedness of the Company, as the case may be, remaining
unpaid to the extent necessary to pay such Senior Indebtedness in full, after
giving effect to any concurrent payment or distribution to or for the benefit of
the holders of such Senior Indebtedness.
For purposes of this Article only, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment which are subordinated in right of
payment to all Senior Indebtedness which may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Convertible
Debentures are so subordinated as provided in this Article. The consolidation of
the Company with, or the merger of the Company into, another Person or the
liquidation or dissolution of the Company following the conveyance or transfer
of its properties and assets substantially as an entirety to another Person upon
the terms and conditions set forth in Article IX of this Indenture shall not be
deemed a dissolution, winding up, liquidation, reorganization, readjustment,
composition, assignment for the benefit of creditors or marshalling of assets
and liabilities of the Company for the purposes of this Section if the Person
formed by such consolidation or into which the Company is merged or the Person
which acquires by conveyance or transfer such properties and assets
substantially as an entirety, as the case may be, shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions set
forth in Article IX of this Indenture.
Section 13.3 Prior Payment to Senior Indebtedness upon Acceleration of
Convertible Debentures. In the event that any Convertible Debentures are
declared due and payable before their Stated Maturity, then and in such event
the holders of Senior Indebtedness shall be entitled to receive payment in full
of all amounts due or to become due on or in respect of all Senior Indebtedness
or provision shall be made for such payment in cash, before the Holders of the
Convertible Debentures are entitled to receive any payment (including any
payment which may be payable by reason of the payment of any other indebtedness
of the Company being subordinated to the payment of the Convertible Debentures)
by the Company on account of the principal of (or premium, if any) or interest
on the Convertible Debentures or on account of the purchase or other acquisition
of Convertible Debentures.
In the event that, notwithstanding the foregoing, the Company shall make
any payment to the Trustee or the Holder of any Convertible Debenture prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
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The provisions of this Section shall not apply to any payment with respect
to which Section 13.2 would be applicable.
Section 13.4 No Payment When Senior Indebtedness in Default. In the event
and during the continuation of any default by the Company in the payment of
principal, premium, if any, interest or any other payment due on any Senior
Indebtedness of the Company, as the case may be, beyond any applicable grace
period with respect thereto, or in the event that the maturity of any Senior
Indebtedness of the Company has been accelerated because of a default, then, in
any such case, no payment shall be made by the Company with respect to the
principal (including redemption payments, if any) of, premium, if any, or
interest on the Convertible Debentures until such default is cured or waived or
ceases to exist or any such acceleration or demand for payment has been
rescinded.
Section 13.5 Payment Permitted in Certain Situations. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
shall prevent (a) the Company, at any time except during the pendency of any
dissolution, winding-up, liquidation or reorganization of the Company, whether
voluntary or involuntary or any bankruptcy, insolvency, receivership or other
proceedings of the Company referred to in Section 13.2 or under the conditions
described in Section 13.3 or 13.4, from making payments at any time of principal
of or premium, if any, or interest on the Convertible Debentures, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of, or premium, if any, or interest on
the Convertible Debentures or the retention of such payment by the Holders, if,
at the time of such application by the Trustee, it did not have knowledge that
such payment would have been prohibited by the provisions of this Article.
Section 13.6 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Indebtedness, the rights of the Holders of Convertible
Debentures shall be subrogated to the extent of the payments or distributions
made to the holders of such Senior Indebtedness pursuant to the provisions of
this Article (equally and ratably with the holders of indebtedness of the
Company which by its express terms is subordinated to indebtedness of the
Company to substantially the same extent as the Convertible Debentures are
subordinated to the Senior Indebtedness and is entitled to like rights of
subrogation) to the rights of the holders of such Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Senior Indebtedness until the principal of (and premium, if any) and interest on
the Convertible Debentures shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of the Senior
Indebtedness of any cash, property or securities to which the Holders of
Convertible Debentures or the Trustee would be entitled except for the
provisions of this Article, and no payments over pursuant to the provisions of
this Article to or for the benefit of the holders of Senior Indebtedness by
Holders of Convertible Debentures or the Trustee, shall, as among the Company,
its creditors other than holders of Senior Indebtedness and the Holders of
Convertible Debentures, be deemed to be a payment or distribution by the Company
to or on account of the Senior Indebtedness.
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Section 13.7 Provisions Solely to Define Relative Rights. The provisions
of this Article are and are intended solely for the purpose of defining the
relative rights of the Holders of Convertible Debentures on the one hand and the
holders of Senior Indebtedness on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Convertible Debentures is
intended to or shall (a) impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of Convertible Debentures, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article of the holders of Senior Indebtedness,
is intended to rank equally with all other general obligations of the Company),
to pay to the Holders of Convertible Debentures the principal of (and premium,
if any) and interest on the Convertible Debentures as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of Convertible Debentures and
creditors of the Company, as the case may be, other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Convertible
Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Senior Indebtedness to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 13.8 Trustee to Effectuate Subordination. Each Holder of a
Convertible Debenture by such Holder's acceptance thereof authorizes and directs
the Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
Section 13.9 No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Indebtedness to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Convertible
Debentures, without incurring responsibility to the Holders of Convertible
Debentures and without impairing or releasing the subordination provided in this
Article or the obligations hereunder of the Holders of Convertible Debentures to
the holders of Senior Indebtedness do any one or more of the following (a)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, Senior Indebtedness or otherwise amend or supplement in any
manner Senior Indebtedness or any instrument evidencing the same or any
agreement under which Senior Indebtedness is outstanding; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (c) release any Person liable in any manner for
the collection of Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company and any other Person.
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Section 13.10 Notice to Trustee. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment to or by the Trustee in respect
of the Convertible Debentures pursuant to the provisions of this Article.
Notwithstanding the provisions of this Article or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Convertible Debentures pursuant to the provisions of this
Article, unless and until a Responsible Officer of the Trustee shall have
received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and, prior to the receipt of
any such written notice, the Trustee, subject to the provisions of Section 6.2
of this Indenture, shall be entitled in all respects to assume that no such
facts exist; provided, however, that if the Trustee shall have not received the
notice provided for in this Section at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Convertible Debentures, then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
Subject to the provisions of Section 6.2 of this Indenture, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Indebtedness (or a trustee
therefor) to establish that such notice has been given by a holder of Senior
Indebtedness (or a trustee therefor). In the event that the Trustee determines
in good faith that further evidence is required with respect to the right of any
Person as a holder of Senior Indebtedness to participate in any payment or
distribution pursuant to this Article, the Trustee may request such Person to
furnish evidence to the reasonable satisfaction of the Trustee as to the amount
of Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 13.11 Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 6.2 of this
Indenture, and the Holders of Convertible Debentures shall be entitled to
conclusively rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Convertible Debentures, for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of Senior
Indebtedness and other indebtedness of the Company, as the case may be, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
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Section 13.12 Trustee Not Fiduciary for Holders of Senior Indebtedness.
With respect to the holders of Senior Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article, and no implied covenants or obligations
with respect to the holders of such Senior Indebtedness shall be read into this
Indenture against the Trustee. Except with respect to Section 13.4, the Trustee
shall not be deemed to owe any fiduciary duty to the holders of Senior
Indebtedness and shall not be liable to any such holders or creditors if it
shall in good faith pay over or distribute to Holders of Convertible Debentures
or to the Company or to any other Person cash, property or securities to which
any holders of Senior Indebtedness shall be entitled by virtue of this Article
or otherwise.
Section 13.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Indebtedness which may at any time be held by it, to the same extent as
any other holder of Senior Indebtedness and nothing in this Indenture shall
deprive the Trustee of any of its rights as such holder.
Nothing in this Article XIII shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7 of this Indenture.
Section 13.14 Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee; provided, however, that Section 13.13 shall not
apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 13.15 Certain Conversions Deemed Payment. For purposes of this
Article only, (a) the issuance and delivery of junior securities (or cash paid
in lieu of fractional shares) upon conversion of Convertible Debentures in
accordance with Article XII shall not be deemed to constitute a payment or
distribution on account of the principal of or premium or interest on
Convertible Debentures or on account of the purchase or other acquisition of
Convertible Debentures, and (b) the payment, issuance or delivery of cash,
property or securities (other than junior securities and cash paid in lieu of
fractional shares) upon conversion of a Convertible Debenture shall be deemed to
constitute payment on account of the principal of such Convertible Debenture.
For the purposes of this Section, the term "junior securities" means (i) shares
of any stock of any class of the Company and (ii) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness which may
be outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Convertible
Debentures are so subordinated as provided in this Article. Nothing contained
in this Article or elsewhere in this Indenture or in the Convertible Debentures
is intended to or shall impair, as among the Company, its creditors other than
holders of Senior Indebtedness and the Holders of Convertible Debentures, the
right, which is absolute and unconditional, of the Holder of
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any Convertible Debenture to convert such Convertible Debenture in accordance
with Article XII.
ARTICLE XIV
EXPENSES
Section 14.1 Payment of Expenses. In connection with the offering, sale
and issuance of the Convertible Debentures to the Institutional Trustee and in
connection with the sale of the Trust Securities by the Trust, the Company, in
its capacity as borrower with respect to the Convertible Debentures, shall:
(a) pay all costs and expenses relating to the offering, sale,
issuance and registration under the Securities Act of the Convertible
Debentures and the Trust Securities, including commissions to the
purchasers payable pursuant to the Placement Agreement and compensation of
the Trustee under this Indenture in accordance with the provisions of
Section 6.7 of this Indenture;
(b) pay all costs and expenses of the Trust (including, but not
limited to, costs and expenses relating to the organization of the Trust,
the fees and expenses of the Institutional Trustee and the Delaware
Trustee, the costs and expenses relating to the operation of the Trust,
including without limitation, costs and expenses of accountants, attorneys,
statistical or bookkeeping services, expenses for printing and engraving
and computing or accounting equipment, paying agent(s), registrar(s),
transfer agent(s), duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection
with the acquisition, financing, and disposition of Trust assets);
(c) pay all costs and expenses related to the enforcement by the
Institutional Trustee of the rights of the holders of the Trust Securities;
(d) be primarily liable for any indemnification obligations arising
with respect to the Declaration; and
(e) pay any and all taxes (other than United States withholding taxes
attributable to the Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust.
Section 14.2 Payment Upon Resignation or Removal. Upon termination of
this Indenture or the removal or resignation of the Trustee pursuant to Section
6.8 of this Indenture, the Company shall pay to the Trustee all amounts accrued
to the date of such termination, removal or resignation. Upon termination of
the Declaration or the removal or resignation of the Delaware Trustee or the
Institutional Trustee, as the case may be, pursuant to Section 5.6 of the
Declaration, the Company shall pay to the Delaware Trustee or the
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Institutional Trustee, and their respective counsel, as the case may be, all
amounts accrued to the date of such termination, removal or resignation.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1 Incorporators, Stockholders, Officers and Directors of
Company Exempt from Individual Liability. No recourse under or upon any
obligations, covenant or agreement contained in this Indenture, in any
Convertible Debenture, or because of any indebtedness evidenced thereby, shall
be had against any incorporator, as such or against any past, present or future
stockholder, officer or director, as such, of the Company or of any successor,
either directly or through the Company or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Convertible Debentures by
the Holders thereof and as part of the consideration of the issue of the
Convertible Debentures.
Section 15.2 Provisions of Indenture for the Sole Benefit of Parties and
Holders of Convertible Debentures. Nothing in this Indenture or in the
Convertible Debentures, expressed or implied, shall give or be construed to give
to any Person, firm or corporation, other than the parties hereto, any Paying
Agent and their successors hereunder, the holders of Senior Indebtedness, the
holders of Convertible Preferred Securities (to the extent provided herein) and
the Holders of the Convertible Debentures any legal or equitable right, remedy
or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors and of the Holders of the Convertible
Debentures.
Section 15.3 Right to Assign; Successors and Assigns Bound by Indenture.
The Company shall have the right at all times to assign any of its respective
rights or obligations under this Indenture to a direct or indirect wholly-owned
Subsidiary of the Company; provided that, in the event of any such assignment,
the Company shall remain liable for all of its obligations under this Indenture.
Subject to the foregoing, this Indenture will be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns. The
rights and obligations of the parties under this Indenture may not otherwise be
assigned by such parties.
All the covenants, stipulations, promises and agreements in this Indenture
by the parties hereto shall bind their respective successors and assigns,
whether so expressed or not.
Section 15.4 Notices and Demands on Company, Trustee and Holders of
Convertible Debentures. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Convertible Debentures to or on the Company may be given or
served by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the
74
Company is filed by the Company with the Trustee) to McKesson Corporation,
XxXxxxxx Xxxxx, Xxx Xxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attention:
General Counsel. Any notice, direction, request or demand by the Company or any
Holder of Convertible Debentures to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made at the
Corporate Trust Office.
Where this Indenture provides for notice to Holders of Convertible
Debentures of any event such notice shall be sufficiently given (unless
otherwise herein expressly provided) if in writing and mailed by first-class
mail, postage prepaid to such Holders as their names and addresses appear in the
Convertible Debenture register within the time prescribed. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by
Holders shall be filed with the Trustee, but such filing shall not be a
condition precedent to the validity of any action taken in reliance upon such
waiver. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, shall
affect the sufficiency of such notice, and any notice which is mailed in the
manner herein provided shall be conclusively presumed to have been duly given.
In case, by reason of the suspension of or irregularities in regular mail
service, it shall be impracticable to mail notice to the Company and Holders of
Convertible Debentures when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall be
reasonably acceptable to the Trustee shall be deemed to be a sufficient giving
of such notice.
Section 15.5 Officers' Certificates and Opinions of Counsel; Statements to
Be Contained Therein. Upon any application or demand by the Company to the
Trustee to take action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include (a) a statement that the person making such
certificate or opinion has read such covenant or condition and the definitions
herein relating thereto, (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based, (c) a statement that, in the opinion of
such person, he has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not such covenant or
condition has been complied with and (d) a statement as to whether or not, in
the opinion of such person, such condition or covenant has been complied with.
75
Any certificate, statement or opinion of any officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of
or representations by counsel, unless such officer knows that the certificate or
opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters or information with respect to which is in the possession of
the Company, upon the certificate, statement or opinion of or representations by
an officer or officers of the Company, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Company or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Company, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are erroneous.
Any certificate or opinion of any independent firm of public accountants
filed with and directed to the Trustee shall contain a statement that such firm
is independent.
Section 15.6 Payments Due on Saturdays, Sundays and Holidays. Except as
otherwise provided in Section 2.5, if the date of Maturity of interest on or
principal of the Convertible Debentures or the date fixed for redemption or
repayment of any such Convertible Debenture shall not be a Business Day, then
payment of interest or principal need not be made on such date, but may be made
on the next succeeding Business Day; provided that if such next succeeding
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on the date of Maturity or the date fixed for redemption,
and no interest shall accrue for the period after such date.
Section 15.7 Conflict of Any Provision of Indenture with Trust Indenture
Act. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with another provision included in this Indenture which
is required by the Trust Indenture Act, such required provision shall control.
Section 15.8 New York Law to Govern. THIS INDENTURE AND THE CONVERTIBLE
DEBENTURES SHALL BE DEEMED TO BE CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN
THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW
RULES OF SAID STATE.
76
Section 15.9 Counterparts. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same instrument.
Section 15.10 Effect of Headings; Gender. The Article and Section
headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof. The use of the masculine, feminine or neuter
gender herein shall not limit in any way the applicability of any term or
provision hereof.
77
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereto affixed and
attested, all as of the day and year first above written.
McKESSON CORPORATION
By: /s/ Xxxx X. Xxxxxxxx
--------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
78
EXHIBIT A
[(FORM OF FACE OF CONVERTIBLE DEBENTURE)]
[IF THE DEBENTURE IS TO BE A GLOBAL DEBENTURE, INSERT THE FOLLOWING - -
THIS DEBENTURE IS A BOOK-ENTRY DEBENTURE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS DEBENTURE IS EXCHANGEABLE FOR CONVERTIBLE
DEBENTURES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO
TRANSFER OF THIS DEBENTURE (OTHER THAN A TRANSFER OF THIS DEBENTURE 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) MAY BE
REGISTERED EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 XXXXX XXXXXX, XXX XXXX, XXX XXXX) TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY DEBENTURE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. __________ CUSIP NO. __________
MCKESSON CORPORATION
5% CONVERTIBLE JUNIOR SUBORDINATED DEBENTURE
[PRIOR TO THE TRANSFER RESTRICTION TERMINATION DATE, ANY CERTIFICATE EVIDENCING
A CONVERTIBLE DEBENTURE SHALL BEAR A LEGEND IN SUBSTANTIALLY THE FOLLOWING FORM,
UNLESS OTHERWISE AGREED BY THE COMPANY (WITH WRITTEN NOTICE THEREOF TO THE
TRUSTEE): THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
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INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B)
IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED INVESTOR") OR
(C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT PRIOR TO THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR, IF THIS SECURITY IS
CONVERTIBLE INTO COMMON STOCK, THE COMMON STOCK ISSUABLE UPON CONVERSION OR
EXCHANGE OF THIS SECURITY EXCEPT (A) TO McKESSON CORPORATION (THE "COMPANY") OR
ANY SUBSIDIARY THEREOF, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE FOR THE
CONVERTIBLE PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY
BE (OR, IF THIS CERTIFICATE EVIDENCES COMMON STOCK, THE TRANSFER AGENT FOR THE
COMMON STOCK), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS
RELATING TO THE RESTRICTIONS ON TRANSFER OF THE SECURITY EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR TRANSFER AGENT), (E)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
OR (F) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER
THE SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITY EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE FOR THE CONVERTIBLE
PREFERRED SECURITIES OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE (OR, IF
THIS CERTIFICATE EVIDENCES COMMON STOCK, SUCH HOLDER MUST FURNISH TO THE
TRANSFER AGENT SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE
COMPANY OR McKESSON FINANCING TRUST (THE "TRUST") MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT). IF THIS CERTIFICATE DOES NOT EVIDENCE COMMON STOCK AND IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO
A-2
SUCH TRANSFER, FURNISH TO THE TRUSTEE FOR THE CONVERTIBLE PREFERRED SECURITIES
OR THE CONVERTIBLE DEBENTURES, AS THE CASE MAY BE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUST MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER
THE SECURITIES ACT.]
McKesson Corporation, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to, The First National Bank of
Chicago, as Institutional Trustee (the "Institutional Trustee") for McKesson
Financing Trust or registered assigns, the principal sum of [Two Hundred Six
Million One Hundred Eighty-Six Thousand Dollars ($206,186,000)]/1/ on June 1,
2027 and to pay interest on said principal sum from February 20, 1997, or from
the most recent interest payment date to which interest has been paid or duly
provided for, quarterly (subject to deferral as set forth herein) in arrears on
March 1, June 1, September 1, and December 1 (each such date, an "Interest
Payment Date") of each year commencing June 1, 1997, at the rate of 5% per annum
until the principal hereof shall have become due and payable, and on any overdue
principal and premium, if any, and (without duplication and to the extent that
payment of such interest is enforceable under applicable law) on any overdue
installment of interest at the same rate per annum compounded quarterly. The
amount of interest payable on any Interest Payment Date shall be computed on the
basis of a 360-day year of twelve 30-day months. The amount of interest payable
for any period shorter than a full quarterly period for which interest is
computed, will be computed on the basis of the actual number of days elapsed per
30-day month. In the event that any date on which interest is payable on this
Convertible Debenture is not a Business Day, then payment of interest payable on
such date will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except
that, if such Business Day is in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each case with the
same force and effect as if made on such date. The interest installment so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in the Indenture (referred to on the reverse hereof) be paid
to the person in whose name this Convertible Debenture (or one or more
Predecessor Convertible Debentures, as defined in said Indenture) is registered
on the record date for such interest installment, which shall be the close of
business on the fifteenth day prior to such Interest Payment Date. Any such
interest installment not punctually paid or duly provided for shall forthwith
cease to be
_____________________
/1/ In the case of a Global Debenture the bracketed text will be replaced
with the following: "principal amount set forth on Schedule A hereto".
A-3
payable to the registered Holders on such record date and may be paid to the
Person in whose name this Convertible Debenture (or one or more Predecessor
Convertible Debentures) is registered at the close of business on a special
record date to be fixed by the Trustee for the payment of such defaulted
interest, notice whereof shall be given to the registered Holders of the
Convertible Debentures not less than 10 days prior to such special record date,
or may be paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Convertible Debentures may
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest on this Convertible Debenture shall be payable at the office or agency
of the Trustee maintained for that purpose in any coin or currency of the United
States of America that at the time of payment is legal tender for payment of
public and private debts; provided, however, that payment of interest may be
made at the option of the Company by check mailed to the registered Holder at
such address as shall appear in the Security Register. Notwith standing the
foregoing, so long as the Holder of this Convertible Debenture is the
Institutional Trustee, the payment of the principal of (and premium, if any) and
interest on this Convertible Debenture will be made at such place and to such
account as may be designated by the Institutional Trustee.
The indebtedness evidenced by this Convertible Debenture is, to the extent
provided in the Indenture, subordinate and junior in right of payment to the
prior payment in full of all Senior Indebtedness, and this Convertible Debenture
is issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Convertible Debenture, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
or her behalf to take such action as may be necessary or appropriate to
acknowledge or effectuate the subordination so provided and (c) appoints the
Trustee his or her attorney-in-fact for any and all such purposes. Each Holder
hereof, by his or her acceptance hereof, hereby waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
This Convertible Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, be valid or become obligatory for any purpose
until the Certificate of Authentication hereon shall have been signed by or on
behalf of the Trustee.
The provisions of this Convertible Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes have the same
effect as though fully set forth at this place.
Capitalized terms used but not defined herein shall have the meaning given
them in the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this instrument to be executed.
McKESSON CORPORATION
By: ____________________________________
Name:
Title:
Attest:
By: ________________________________
Name:
Title:
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[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Convertible Debentures described in the within-mentioned
Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By: ________________________________
Authorized Signatory
A-6
[FORM OF REVERSE OF DEBENTURE]
This Convertible Debenture is one of the 5% Convertible Junior Subordinated
Debentures (herein referred to as the "Convertible Debentures"), all issued or
to be issued under and pursuant to an Indenture dated as of February 20, 1997,
duly executed and delivered between the Company and The First National Bank of
Chicago, as Trustee (the "Trustee") (the "Indenture"), to which Indenture and
all indentures supplemental thereto reference is hereby made for a description
of the rights, limitations of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the Holders of the Convertible
Debentures. The Convertible Debentures are limited in aggregate principal
amount as specified in the Indenture.
Because of the occurrence and continuation of a Tax Event, in certain
circumstances, this Convertible Debenture may become due and payable at the
principal amount specified on the face hereof together with any interest accrued
thereon (the "Redemption Price"). The Redemption Price shall be paid prior to
12:00 noon, New York City time, on the date of such redemption or at such
earlier time as the Company determines. The Company shall have the right to
redeem this Convertible Debenture at the option of the Company, upon not less
than 30 nor more than 60 days notice, without premium or penalty, in whole or in
part at any time on or after March 4, 2000 (an "Optional Redemption") at the
following prices (expressed as percentages of the principal amount of the
Convertible Debentures) (the "Optional Redemption Price") together with accrued
and unpaid interest (including Additional Sums, if any, and, to the extent
permitted by applicable law, Compound Interest, if any) to, but excluding, the
redemption date, if redeemed during the 12-month period beginning March 4 of the
applicable year set forth below:
Year Redemption Price
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2000 103.500%
2001 103.000%
2002 102.500%
2003 102.000%
2004 101.500%
2005 101.000%
2006 100.500%
and 100% if redeemed on or after March 4, 2007.
If Convertible Debentures are redeemed on any March 1, June 1, September 1,
or December 1, accrued and unpaid interest shall be payable to holders of record
on the relevant record date.
So long as the corresponding Trust Securities are outstanding, the proceeds
from the redemption of any of the Convertible Debentures will be used to redeem
Trust Securities.
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If the Convertible Debentures are only partially redeemed by the Company
pursuant to an Optional Redemption, the Convertible Debentures will be redeemed
pro rata;
In the event of redemption of this Convertible Debenture in part only, a
new Convertible Debenture or Convertible Debentures for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Convertible Debentures
and the interest accrued thereon may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and subject to the
conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the Holders of a majority of the aggregate principal amount
of the Convertible Debentures at the time Outstanding, evidenced as provided in
the Indenture, to execute supplemental indentures adding any provisions to or
changing in any manner or eliminating any of the provisions of the Indenture or
of any supplemental indenture or modifying in any manner the rights of the
Holders of the Convertible Debentures; provided, however, that no such
supplemental indenture shall (i) extend the Stated Maturity of any Convertible
Debenture, or reduce the principal amount thereof or any premium thereon, or
reduce the rate or extend the time of payment of interest thereon, or reduce any
amount payable upon redemption thereof, or impair or affect the right of any
Holder to institute suit for the payment thereof, without the consent of the
Holder of each Convertible Debenture so affected, or (ii) reduce the aforesaid
percentage of Convertible Debentures, the Holders of which are required to
consent to any such supplemental indenture, without the consent of the Holder of
each Convertible Debenture. It is also provided in the Indenture that, with
respect to certain defaults or Events of Default regarding the Convertible
Debentures, prior to any declaration accelerating the maturity of such
Convertible Debentures, the Holders of a majority in aggregate principal amount
Outstanding of the Convertible Debentures (or, in the case of certain defaults
or Events of Default, all of the Convertible Debentures), may on behalf of the
Holders of all the Convertible Debentures waive any such past default or Event
of Default and its consequences. The preceding sentence shall not , however,
apply to a default in the payment of the principal of or premium, if any, or
interest on any of the Convertible Debentures. Any such consent or waiver by
the Holder of this Convertible Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Convertible Debenture and any Convertible Debenture
which may be issued in exchange or substitution therefor, irrespective of
whether or not any notation thereof is made upon this Convertible Debenture or
such other Convertible Debenture.
No reference herein to the Indenture and no provision of this Convertible
Debenture or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of and
premium, if any, and interest on this Convertible Debenture at the time and
place and at the rate and in the money herein prescribed.
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As long as an Event of Default under Section 5.1(a) of the Indenture shall
not have occurred and be continuing, the Company shall have the right at any
time during the term of the Convertible Debentures and from time to time to
extend the interest payment period of such Convertible Debentures for up to 20
consecutive quarters (an "Extension Period"), at the end of which period the
Company shall pay all interest then accrued and unpaid (together with interest
thereon at the rate specified for the Convertible Debentures to the extent that
payment of such interest is enforceable under applicable law). Before the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that such Extension Period together with all such
further extensions thereof shall not exceed 20 consecutive quarters. At the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any additional amounts then due, the Company may commence a
new Extension Period.
As provided in the Indenture and subject to certain limitations therein set
forth, this Convertible Debenture is transferable by the registered Holder
hereof on the Security Register of the Company, upon surrender of this
Convertible Debenture for registration of transfer at the office or agency of
the Trustee in the City and State of New York accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company or the
Trustee duly executed by the registered Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Convertible Debentures of
authorized denominations and for the same aggregate principal amount will be
issued to the designated transferee or transferees. No service charge will be
made for any such transfer, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in relation
thereto.
Prior to due presentment for registration of transfer of this Convertible
Debenture, the Company, the Trustee, any paying agent and the Registrar may deem
and treat the registered holder hereof as the absolute owner hereof (whether or
not this Convertible Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Registrar) for the
purpose of receiving payment of or on account of the principal hereof and
premium, if any, and interest due hereon and for all other purposes, and neither
the Company nor the Trustee nor any paying agent nor any Registrar shall be
affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Convertible Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the Indenture, against
any incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
The Holder of any Convertible Debenture has the right, exercisable at any
time beginning May 21, 1997 through the close of business (New York time) on May
28, 2027 (or, in the case of a Convertible Debenture called for redemption,
prior to the close of business on the Business Day prior to the corresponding
redemption date), to convert the principal amount thereof (or any portion
thereof that is an integral multiple of $50) into shares of Common Stock at the
initial
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conversion rate of .6709 shares of Common Stock for each Convertible Debenture
(equivalent to a Conversion Price of $74.53 per share of Common Stock), subject
to adjustment under certain circumstances.
To convert a Convertible Debenture, a Holder must (a) complete and sign a
conversion notice substantially in the form attached hereto, (b) surrender the
Convertible Debenture to a Conversion Agent, (c) furnish appropriate
endorsements or transfer documents if required by the Conversion Agent and (d)
pay any transfer or similar tax, if required. Upon conversion, no adjustment or
payment will be made for interest or dividends, but if any Holder surrenders a
Convertible Debenture for conversion on or after the record date for the payment
of an installment of interest and prior to the opening of business on the next
Interest Payment Date, then, notwithstanding such conversion, the interest
payable on such Interest Payment Date will be paid to the registered Holder of
such Convertible Debenture on such record date. In such event, such Convertible
Debenture, when surrendered for conversion, need not be accompanied by payment
of an amount equal to the interest payable on such Interest Payment Date on the
portion so converted. However, if a redemption date falls between a record date
and the subsequent Interest Payment Date, the Holder will be entitled to
receive, on such redemption date, the interest accrued to, but excluding, the
redemption date. The number of shares issuable upon conversion of a Convertible
Debenture is determined by dividing the principal amount of the Convertible
Debenture converted by the Conversion Price in effect on the Conversion Date.
No fractional shares will be issued upon conversion but a cash adjustment will
be made for any fractional interest. The outstanding principal amount of any
Convertible Debenture shall be reduced by the portion of the principal amount
thereof converted into shares of Common Stock.
The Convertible Debentures are issuable only in registered form without
coupons in denominations of $50 and any integral multiple thereof./2/ This
Global Debenture is exchangeable for Convertible Debentures in definitive form
only under certain limited circumstances set forth in the Indenture.
Convertible Debentures so issued are issuable only in registered form without
coupons in denominations of $50 and any integral multiple thereof./3/ As
provided in the Indenture and subject to certain limitations therein set forth,
Convertible Debentures are exchangeable for a like aggregate principal amount of
Convertible Debentures of a different authorized denomination, as requested by
the Holder surrendering the same.
THE INDENTURE AND THE CONVERTIBLE DEBENTURES SHALL BE DEEMED TO BE
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY IN THE STATE OF NEW YORK, AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SAID STATE WITHOUT REGARD TO THE CONFLICTS OF LAW RULES OF SAID STATE.
______________________
/2/ This text will appear in the case of registered definitive
certificates issued to Institutional Accredited Investors.
/3/ This text will appear in the case of a Global Debenture.
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[FORM OF ELECTION TO CONVERT]
ELECTION TO CONVERT
To: McKesson Corporation
The undersigned owner of this Convertible Debenture hereby irrevocably
exercises the option to convert this Convertible Debenture, or the portion below
designated, into Common Stock of McKESSON CORPORATION in accordance with the
terms of the Indenture referred to in this Convertible Debenture, and directs
that the shares issuable and deliverable upon conversion, together with any
check in payment for fractional shares, be issued in the name of and delivered
to the undersigned, unless a different name has been indicated in the assignment
below. If shares are to be issued in the name of a person other than the
undersigned, the undersigned will pay all transfer taxes payable with respect
thereto.
Date: _______________, ____
in whole _____ Portions of Convertible Debenture to be converted
($50 or integral multiples-thereof):$________________
_____________________________________________________
Signature (for conversion only)
Please Print or Typewrite Name and Address, Including
Zip Code, and Social Security or Other Identifying
Number
_____________________________________________________
_____________________________________________________
_____________________________________________________
Signature Guarantee:/4/ _____________________________
___________________
/4/ Signature must be guaranteed by an "eligible guarantor institution" that is
a bank, stockbroker, savings and loan association or credit union meeting the
requirements of the Conversion Agent, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Conversion
Agent in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
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ASSIGNMENT
[FORM OF ASSIGNMENT FOR CONVERTIBLE DEBENTURES
THAT ARE NOT GLOBAL DEBENTURES]
For value received__________________________ hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
(Please insert social security or other taxpayer identification number of
assignee.)
the within Convertible Debenture and hereby irrevocably constitutes and appoints
_______ attorney to transfer the said Convertible Debenture on the books of the
Company, with full power of substitution in the premises.
In connection with any transfer of the within Convertible Debenture occurring
prior to the Transfer Restriction Termination Date, the undersigned confirms
that such Convertible Debenture is being transferred:
[_] To McKesson Corporation or a subsidiary thereof; or
[_] Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
[_] To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the Securities Act
of 1933, as amended; or
[_] Pursuant to an effective registration statement.
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and unless the box below is checked, the undersigned confirms that such
Convertible Debenture is not being transferred to an "affiliate" of the Company
as defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate"):
[_] The transferee is an Affiliate of the Company.
Dated: _____________________________
_____________________________
_____________________________
Signature(s)
____________________________________
Signature Guarantee /5/
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of this Convertible Debenture in every particular
without alteration or enlargement or any change whatever.
____________________
/5/ (Signature must be guaranteed by an "eligible guarantor institution,"
that is, a bank, stockbroker, savings and loan association or credit union
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.)
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL DEBENTURES
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Debentures
Principal Amount of
Convertible Debentures
by which this Global
Debenture is to be
Reduced or Increased, Remaining Principal
and Reason for Amount of this
Date Reduction or Increase Global Debenture Notation Made By
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