EXHIBIT 4.8
HOMEBASE INC.
5 1/4% CONVERTIBLE SUBORDINATED NOTE
DUE NOVEMBER 1, 2004
No. 03 $_____________*
Registered (1933 Act) Global Security - CUSIP No. 43738 E AB 4
HOMEBASE, INC., a Delaware corporation (herein called the "Company,"
which term includes any successor Person under the Indenture referred to on the
reverse hereof), for value received, hereby promises to pay to The Depository
Trust Company, or registered assigns, the principal sum of $_______________*,
(which principal amount may from time to time be increased or decreased to such
other principal amounts (which, taken together with the principal amounts of all
other Outstanding Securities, shall not exceed $100,000,000 in the aggregate at
any time) by adjustments made on the records of the Trustee hereinafter referred
to in accordance with the Indenture) on November 1, 2004, and to pay interest
thereon from November 17, 1997 or from the most recent Interest Payment Date (as
defined below) to which interest has been paid or duly provided for, semi-
annually in arrears on May 1 and November 1 in each year, commencing on May 1,
1998, and at Maturity at the rate of 5 1/4% per annum, until the principal
hereof is paid or made available for payment, provided that any amount of such
--------
principal or interest that is overdue shall bear interest at the rate of 5 1/4%
per annum (to the extent that payment of such interest shall be legally
enforceable), from the date such amount is due until it is paid or made
available for payment, and such interest on any overdue amount shall be payable
on demand. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the April 15 or October 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, provided notice thereof
shall have been given to Holders of Securities not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture.
* The principal sum outstanding under this Note, added to the principal
amounts outstanding under the Notes bearing CUSIP numbers 43738 E AA 6 and
U 4368W AA2, shall in no event exceed ONE HUNDRED MILLION U.S. DOLLARS
($100,000,000).
Payment of the principal of and interest on this Security will be made in
immediately available funds and in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the office or agency of the Company maintained for that
purpose in the Borough of Manhattan, The City of New York, provided, however,
-------- -------
that payment of interest may, at the option of the Company, be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register. If this Security is a Global Security, then
each such payment will be made in accordance with the procedures of the
Depositary as then in effect.
1
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
HOMEBASE, INC.
[Corporate Seal]
By_______________________________
Name: Xxxxx Xxxxxxx
Title: President and CEO
Attest:
_______________________
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: February 6, 1998
STATE STREET BANK AND TRUST COMPANY OF
CALIFORNIA, N.A.,
as Trustee
By:_____________________________
Authorized Signatory
2
(Reverse of Security)
This Security is one of a duly authorized issue of securities of the
Company designated as its "5 1/4% Convertible Subordinated Notes due November 1,
2004" (herein called the "Securities"), limited in aggregate principal amount to
$100,000,000, issued and to be issued under an Indenture, dated as of November
10, 1997 (herein called the "Indenture") between the Company and State Street
Bank and Trust Company of California, N.A., as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which the Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the Holders of Senior Debt of
the Company and the Holders of the Securities and of the terms upon which the
Securities are, and are to be, authenticated and delivered.
No sinking fund is provided for in the Securities. The Securities may
not be redeemed at the option of the Company prior to November 1, 2000.
Thereafter, the Securities may be redeemed at the option of the Company, in
whole or in part, at the Redemption Prices set forth below: Such Redemption
Prices (expressed as a percentage of principal amount) are as follows for the
12-month period beginning on November 1 of the following years:
Year Redemption Price
---- -----------------
2000 103.15%
2001 102.10
2002 101.05
and thereafter at a Redemption Price equal to 100% of the principal amount, in
each case together with accrued interest to the Redemption Date provided that
interest installments whose Stated Maturity is on or prior to such Redemption
Date will be payable to the Holders of such Securities, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
Notice of redemption (which notice shall be irrevocable) will be given
by first-class mail to Holders of Securities at their registered addresses as
recorded in the Security Register. Notice will be given not more than 60 nor
less than 30 days prior to the Redemption Date, as provided in the Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, or interest (including Liquidated Damages) on, any Security or
the last day on which a Holder of a Security has a right to convert his Security
shall be at any place of payment or place of conversion, as the case may be, a
day on which banking institutions at such place of payment or place of
conversion are authorized or obligated by law or executive order to close, then
payment of principal of, premium, if any, or interest (including Liquidated
Damages) on, or delivery for conversion of such Security need not be made on or
by such date at such place but may be made on or by the next succeeding day at
such place which is not a day on which banking institutions are authorized or
obligated by law or executive order to close, with the same force and effect as
if made on the date for such payment or the date fixed for redemption or
repurchase, or at the Stated Maturity or by such last day for conversion, and no
interest shall accrue for the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
the 90th day following the last original issue date of the
3
Securities (the "Non-Conversion Period") and prior to the close of business on
November 1, 2004, or in case this Security is called for redemption or the
Holder hereof has exercised its right to require the Company to repurchase this
Security, then in respect of this Security until and including, but (unless the
Company defaults in making the payment due upon redemption or repurchase, as the
case may be) not after, the close of business on the Redemption Date or the
Repurchase Date, as the case may be, to convert this Security into newly issued
fully paid and nonassessable shares of Common Stock of the Company at an initial
Conversion Rate equal to 97.8713 shares of Common Stock per $1,000 principal
amount of Securities (or at the current adjusted Conversion Rate if an
adjustment has been made as provided in the Indenture) by surrender of this
Security, and also a duly executed conversion notice, substantially in the form
provided in Annex A of the Indenture (including the tax certification contained
in such notice), to the Company, subject to any laws or regulations applicable
thereto and subject to the right of the Company to terminate the appointment of
the Conversion Agent (as defined below), at the office or agency of the Company
in The City of New York or at such other offices or agencies outside the United
States that the Company may designate (each a "Conversion Agent"). Any Security
surrendered for conversion during a Record Date Period (except Securities called
for redemption on a Redemption Date or to be repurchased on a Repurchase Date
during, in each case, such period) must be accompanied by payment of an amount
equal to the interest payable on the Interest Payment Date relating to such
Record Date Period on the principal amount of such Security being surrendered
for conversion, and the interest payable in respect of such Security on such
Interest Payment Date shall be paid to the Holder of such Security as of the
Regular Record Date relating to such Record Date Period. The interest payable on
such Interest Payment Date with respect to any Security which has been called
for redemption on a Redemption Date, or is repurchaseable on a Repurchase Date,
occurring, in either case, during a Record Date Period, which Security is
surrendered for conversion during such Record Date Period, shall be paid to the
Holder of such Security being converted in an amount equal to the interest that
would have been payable on such Security if such Security had been converted as
of the close of business on such Interest Payment Date. Interest payable in
respect of any Security surrendered for conversion on or after an Interest
Payment Date shall be paid to the Holder of such Security as of the next
preceding Regular Record Date, notwithstanding the exercise of the right of
conversion.
The Company shall thereafter deliver to the Holder the fixed number of
shares of Common Stock (together with any cash adjustment, as provided in the
Indenture) into which this Security is convertible and such delivery will be
deemed to satisfy the Company's obligation to pay the principal amount of this
Security. No fractions of shares or scrip representing fractions of shares will
be issued on conversion, but instead of any fractional interest (calculated to
the nearest 1/100th of a share) the Company shall pay a cash adjustment as
provided in the Indenture, or alternatively the Company shall round up the
conversion transaction to the next higher whole share. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the sale or transfer of all or substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then Outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon consolidation, merger, sale or transfer by a holder of
the number of shares of Common Stock of the Company into which this Security
might have been converted immediately prior to such consolidation, merger, sale
or transfer (assuming such holder of Common Stock failed to exercise any rights
of election and received per share the kind and amount received per share by at
least a plurality of Non-Electing Shares). Adjustments in the Conversion Rate
of less than one percent of such price will not be required, but any adjustment
that would otherwise be required to be made will be carried forward and taken
into account in the computation of any subsequent adjustment.
4
Notwithstanding any provision hereof, no securities will be delivered
on conversion of this Security or any portion hereof unless the certification
and other requirements described in the Indenture are satisfied.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of shares of Common Stock issued upon conversion thereof,
the Company will promptly furnish or cause to he furnished Rule 144A Information
(as defined below) to such Holder of Restricted Securities or such holder of
shares of Common Stock issued upon conversion of Restricted Securities, or to a
prospective purchaser of any such security designated by any such Holder or
holder, as the case may be, to the extent required to permit compliance by any
such holder with Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"). "Rule 144A Information" shall be such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto).
If this Security is a Registrable Security, then the Holder of this
Security and the Common Stock of the Company issuable upon conversion thereof is
entitled to the benefits of a Registration Rights Agreement (subject to the
provisions thereof), dated as of November 10, 1997, between the Company and the
Initial Purchaser (the "Registration Rights Agreement"). Pursuant to the
Registration Rights Agreement, the Company has agreed for the benefit of the
Holders from time to time of the Securities and the Common Stock issuable upon
conversion thereof that it will, at its expense, (a) within 90 days after the
first date of original issuance of the Securities, file a shelf registration
statement (the "Shelf Registration Statement") with the Commission with respect
to resales of the Securities and the Common Stock issuable upon conversion
thereof (together, the "Registrable Securities"), (b) use its best efforts to
cause such Shelf Registration Statement to be declared effective by the
Commission as promptly as practicable but no later than 180 days after the first
date of original issuance of the Securities (the "Settlement Date"), and (c) use
its best efforts to maintain such Shelf Registration Statement continuously
effective under the Securities Act, until the second anniversary of the date of
the effectiveness of the Shelf Registration Statement or such earlier date as is
provided in the Registration Rights Agreement.
In the event that the Shelf Registration Statement ceases to be
effective prior to the second annual anniversary of the initial effective date
of the Shelf Registration Statement or such earlier date as is provided in the
Registration Rights Agreement for a period in excess of 60 days, whether or not
consecutive, during any 12-month period, then the interest rate borne by the
Securities shall increase by an additional one-half of one percent (0.50%) per
annum from the 61st day of the applicable 12-month period such Shelf
Registration Statement ceases to be effective to but excluding the day on which
the Shelf Registration Statement again becomes effective.
The Holder of this Security, by its acceptance thereof, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
Securities and the Common Stock issuable upon conversion thereof.
If a Change in Control occurs, the Holder of this Security shall have
the right, at the Holder's option in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is an integral multiple of $1,000) for cash at
a Repurchase Price equal to 100% of the principal amount thereof plus interest
accrued to the Repurchase Date. At the option of the Company, the Repurchase
Price may be paid in cash or, except as otherwise provided in the Indenture, by
delivery of Common Stock having a fair market value equal to
5
the Repurchase Price. Payment may not be made in Common Stock unless the Company
satisfies certain conditions prior to the Repurchase Date as provided in the
Indenture. For purposes of this paragraph, the fair market value of shares of
Common Stock shall be determined by the Company and shall be equal to 95% of the
average of the Closing Prices Per Share for the five consecutive Trading Days
ending on and including the third Trading Day immediately preceding the
Repurchase Date. Whenever in this Security there is a reference, in any context,
to the principal of any Security as of any time, such reference shall be deemed
to include reference to the Repurchase Price payable in respect of such Security
to the extent that such Repurchase Price is, was or would be so payable at such
time, and express mention of the Repurchase Price in any provision of this
Security shall not be construed as excluding the Repurchase Price in those
provisions of this Security when such express mention is not made.
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all amounts then or thereafter to become
due on all Senior Debt of the Company, and this Security is issued subject to
such provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee its attorney-in-fact for any and all such
purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable to the extent, in the manner
and with the effect provided in the Indenture. Upon payment (i) of the amount
of principal so declared due and payable and (ii) of interest on any overdue
principal and overdue interest, all of the Company's obligations in respect of
the payment of the principal of and interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee either (a) with the written consent of
the Holders of a majority in principal amount of the Securities at the time
outstanding, or (b) by the adoption of a resolution, at a meeting of Holders of
the Outstanding Securities at which a quorum is present by the Holders of 66-
2/3% in aggregate principal amount of the Outstanding Securities represented at
such meeting. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Any such consent or waiver
by the Holder of this Security shall be conclusive and binding upon such Holder
and upon all future Holders of this Security and of any Security issued in
exchange herefor or in lieu hereof, whether or not notation of such consent or
waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in aggregate principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default and offered the Trustee indemnity satisfactory to it and
the Trustee shall not have received from the Holders of a majority in principal
amount of the Securities Outstanding a direction inconsistent with such request
and shall have failed to institute any such proceedings for 60 days after
receipt of such notice, request and offer of indemnity. The foregoing shall
6
not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or interest hereon on or after
the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company, which
are absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, places and rate, and in the coin or
currency, herein prescribed or to convert this Security as provided in the
Indenture.
As provided in the Indenture and subject to certain limitations and
satisfaction of certain requirements therein set forth, the transfer of this
Security is registrable on the Security Register upon surrender of this Security
for registration of transfer at the office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
No service charge shall be made to a Holder for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
recover any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this Security for registration of
transfer the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered, as the owner
thereof for all purposes, whether or not such Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA
WITHOUT REGARD TO PRINCIPLES REGARDING CONFLICTS OF LAWS.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
7
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 15.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay
it or _________________________________________ an amount in cash or, at the
Company's election, Common Stock valued as set forth in the Indenture, equal to
100% of the principal amount hereof, plus interest accrued to the Repurchase
Date, as provided in the Indenture.
Dated: _______________________________
______________________________________
Signature
______________________________________
Signature Guaranteed
Principal amount to be repurchased: _______________
Remaining principal amount following such repurchase: _____________________
NOTICES: The signature to the foregoing Election must correspond to
the Name as written upon the face of this Security in every particular, without
alteration or any change whatsoever.
If payment is to be made to a person other than the signatory above,
the signature must be guaranteed by an "Eligible Institution" (banks, stock
brokers, savings and loan associations and credit unions) with membership in an
approved signature guarantee medallion program pursuant to Commission Rule 17Ad-
15.
8
