EXHIBIT 4.1
EXECUTION COPY
K-V PHARMACEUTICAL COMPANY
2.5% Contingent Convertible Subordinated Notes Due 2033
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INDENTURE
Dated as of May 16, 2003
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Deutsche Bank Trust Company Americas
TRUSTEE
CROSS-REFERENCE TABLE*
Indenture
Trust Indenture Act Section Section
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310 (a)(1)....................................................................................... 7.10
(a)(2)........................................................................................... 7.10
(a)(3)........................................................................................... N.A.
(a)(4)........................................................................................... N.A.
(a)(5)........................................................................................... N.A.
(b).............................................................................................. 7.08, 7.10
(c).............................................................................................. N.A.
311(a)........................................................................................... 7.11
(b).............................................................................................. 7.11
(c).............................................................................................. N.A.
312 (a).......................................................................................... 2.05
(b).............................................................................................. 12.03
(c).............................................................................................. 12.03
313(a)........................................................................................... 7.06
(b)(1)........................................................................................... 7.06
(b)(2)........................................................................................... 7.06
(c).............................................................................................. 7.06
(d).............................................................................................. 7.06
314(a)........................................................................................... 4.02, 4.03
(b).............................................................................................. N.A.
(c)(1)........................................................................................... 12.04
(c)(2)........................................................................................... 12.04
(c)(3)........................................................................................... N.A.
(d).............................................................................................. N.A.
(e).............................................................................................. 12.05
(f).............................................................................................. N.A.
315 (a).......................................................................................... 7.01(b)
(b).............................................................................................. 7.05
(c).............................................................................................. 7.01
(d).............................................................................................. 7.01(c)
(e).............................................................................................. 6.11
316(a)(1)(A)..................................................................................... 6.05
(a)(1)(B)........................................................................................ 6.04
(a)(2)........................................................................................... N.A.
(b).............................................................................................. 6.07
(c).............................................................................................. 1.05(e)
317 (a)(1)....................................................................................... 6.08
(a)(2)........................................................................................... 6.09
(b).............................................................................................. 2.04
318 (a).......................................................................................... N.A.
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
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TABLE OF CONTENTS
Article I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions....................................................................................1
Section 1.02. Other Definitions..............................................................................6
Section 1.03. Incorporation by Reference of Trust Indenture Act..............................................7
Section 1.04. Rules of Construction..........................................................................8
Section 1.05. Acts of Holders................................................................................8
Article II
THE SECURITIES
Section 2.01. Form and Dating................................................................................9
Section 2.02. Execution and Authentication..................................................................11
Section 2.03. Registrar, Paying Agent and Conversion Agent..................................................11
Section 2.04. Paying Agent to Hold Money in Trust...........................................................12
Section 2.05. Securityholder Lists..........................................................................12
Section 2.06. Transfer and Exchange.........................................................................12
Section 2.07. Replacement Securities........................................................................14
Section 2.08. Outstanding Securities; Determinations of Holders' Action.....................................14
Section 2.09. Temporary Securities..........................................................................15
Section 2.10. Cancellation..................................................................................15
Section 2.11. Persons Deemed Owners.........................................................................16
Section 2.12. Global Securities.............................................................................16
Section 2.13. CUSIP Numbers.................................................................................18
Article III
REDEMPTION AND PURCHASES
Section 3.01. Right To Redeem; Notices To Trustee...........................................................18
Section 3.02. Selection of Securities to Be Redeemed........................................................19
Section 3.03. Notice of Redemption..........................................................................19
Section 3.04. Effect of Notice of Redemption................................................................20
Section 3.05. Deposit of Redemption Price...................................................................20
Section 3.06. Securities Redeemed in Part...................................................................20
Section 3.07. Reserved......................................................................................20
Section 3.08. Purchase of Securities at Option of the Holder................................................20
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Section 3.09. Purchase of Securities at Option of the Holder upon Change in Control.........................23
Section 3.10. Effect of Purchase Notice or Change in Control Purchase Notice................................26
Section 3.11. Deposit of Purchase Price or Change in Control Purchase Price.................................27
Section 3.12. Securities Purchased in Part..................................................................27
Section 3.13. Covenant to Comply with Securities Laws upon Purchase of Securities...........................27
Section 3.14. Repayment to the Company......................................................................27
Article IV
COVENANTS
Section 4.01. Payment of Securities.........................................................................28
Section 4.02. SEC and Other Reports.........................................................................28
Section 4.03. Compliance Certificate........................................................................29
Section 4.04. Further Instruments and Acts..................................................................29
Section 4.05. Maintenance of Office or Agency...............................................................29
Section 4.06. Delivery of Certain Information...............................................................29
Section 4.07. Tax Treatment of Securities...................................................................30
Section 4.08. Liquidated Damages............................................................................30
Article V
SUCCESSOR CORPORATION
Section 5.01. When the Company May Merge or Transfer Assets.................................................30
Article VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.............................................................................31
Section 6.02. Defaults and Remedies.........................................................................33
Section 6.03. Other Remedies................................................................................33
Section 6.04. Waiver of Past Defaults.......................................................................33
Section 6.05. Control by Majority...........................................................................34
Section 6.06. Limitation on Suits...........................................................................34
Section 6.07. Rights of Holders to Receive Payment..........................................................34
Section 6.08. Collection Suit by Trustee....................................................................35
Section 6.09. Trustee May File Proofs of Claim..............................................................35
Section 6.10. Priorities....................................................................................36
Section 6.11. Undertaking for Costs.........................................................................36
Section 6.12. Waiver of Stay, Extension or Usury Laws.......................................................36
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Article VII
TRUSTEE
Section 7.01. Duties of Trustee.............................................................................37
Section 7.02. Rights of Trustee.............................................................................38
Section 7.03. Individual Rights of Trustee..................................................................39
Section 7.04. Trustee's Disclaimer..........................................................................40
Section 7.05. Notice of Defaults............................................................................40
Section 7.06. Reports by Trustee to Holders.................................................................40
Section 7.07. Compensation and Indemnity....................................................................40
Section 7.08. Replacement of Trustee........................................................................41
Section 7.09. Successor Trustee by Merger...................................................................42
Section 7.10. Eligibility; Disqualification.................................................................42
Section 7.11. Preferential Collection of Claims Against Company.............................................42
Article VIII
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities..........................................................42
Section 8.02. Repayment to the Company......................................................................43
Article IX
AMENDMENTS
Section 9.01. Without Consent of Holders....................................................................43
Section 9.02. With Consent of Holders.......................................................................43
Section 9.03. Compliance with Trust Indenture Act...........................................................45
Section 9.04. Revocation and Effect of Consents.............................................................45
Section 9.05. Notation on or Exchange of Securities.........................................................45
Section 9.06. Trustee to Sign Supplemental Indentures.......................................................45
Section 9.07. Effect of Supplemental Indentures.............................................................45
Article X
CONVERSIONS
Section 10.01. Conversion Privilege..........................................................................46
Section 10.02. Conversion Procedure..........................................................................48
Section 10.03. Adjustments Below Par Value...................................................................50
Section 10.04. Taxes on Conversion...........................................................................50
Section 10.05. Company to Provide Stock......................................................................51
Section 10.06. Adjustment of Conversion Price................................................................52
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Section 10.07. No Adjustment.................................................................................56
Section 10.08. Equivalent Adjustments........................................................................57
Section 10.09. Adjustment for Tax Purposes...................................................................57
Section 10.10. Notice of Adjustment..........................................................................57
Section 10.11. Notice of Certain Transactions................................................................57
Section 10.12. Effect of Reclassification, Consolidation, Merger, Share Exchange or Sale on
Conversion Privilege..........................................................................58
Section 10.13. Trustee's Disclaimer..........................................................................59
Section 10.14. Voluntary Reduction...........................................................................59
Section 10.15. Simultaneous Adjustments......................................................................60
Article XI
SUBORDINATION
Section 11.01. Terms and Conditions of Subordination.........................................................60
Section 11.02. Distribution on Acceleration of Securities; Dissolution and Reorganization....................61
Section 11.03. Notice to Lender Under the Credit Facility....................................................65
Article XII
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls..................................................................65
Section 12.02. Notices.......................................................................................65
Section 12.03. Communication by Holders with Other Holders...................................................66
Section 12.04. Certificate and Opinion as to Conditions Precedent............................................66
Section 12.05. Statements Required in Certificate or Opinion.................................................67
Section 12.06. Separability Clause...........................................................................67
Section 12.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar................................68
Section 12.08. Legal Holidays................................................................................68
Section 12.09. Governing Law.................................................................................68
Section 12.10. No Recourse Against Others....................................................................68
Section 12.11. Successors....................................................................................68
Section 12.12. Multiple Originals............................................................................68
Exhibit A-1 - Form of Global Security
Exhibit A-2 - Form of Certificated Security
Exhibit B - Transfer Certificate
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INDENTURE dated as of May 16, 2003 between K-V
PHARMACEUTICAL COMPANY, a Delaware corporation (the "Company"), and Deutsche
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Bank Trust Company Americas, a New York banking corporation duly organized
and existing under the laws of the State of New York (the "Trustee").
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Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Company's
2.5% Contingent Convertible Subordinated Notes Due 2033 ("Notes"):
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ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
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"144A Global Security" means a Global Security in the form
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of the Security attached hereto as Exhibit A-1 that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"Affiliate" of any specified person means any other person
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directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "Control" when used with respect to any specified person means
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the power to direct or cause the direction of the management and policies of
such person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "Controlling" and
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"Controlled" have meanings correlative to the foregoing.
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"Applicable Procedures" means, with respect to any
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transfer or transaction involving a Global Security or beneficial interest
therein, the rules and procedures of the Depositary for such Security, in
each case to the extent applicable to such transaction and as in effect from
time to time.
"Board of Directors" means either the board of directors
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of the Company or any duly authorized committee of such board.
"Board Resolution" means a copy of one or more
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resolutions, certified by an Officer of the Company to have been duly
adopted or consented to by the applicable Board of Directors and to be in
full force and effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day
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that in the City of New York is not a day on which banking institutions are
authorized by law or regulation to close.
"Capital Stock" for any corporation means any and all
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shares, interests, rights to purchase, warrants, options, participations or
other equivalents of or interests in (however designated) stock issued by
that corporation.
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"Certificated Securities" means Securities that are in the
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form of the Securities attached hereto as Exhibit A-2.
"Class A Common Stock" shall mean shares of the Company's
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Class A Common Stock, $0.01 par value per share, as they exist on the date
of this Indenture or any other shares of Capital Stock of the Company into
which the Class A Common Stock shall be reclassified or changed.
"Class B Common Stock" shall mean shares of the Company's
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Class B Common Stock, $0.01 par value per share, as they exist on the date
of this Indenture or any other shares of Capital Stock of the Company into
which the Class B Common Stock shall be reclassified or changed.
"Common Stock" shall mean shares of the Company's Class A
------------
Common Stock and Class B Common Stock.
"Company" means the party named as the "Company" in the
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first paragraph of this Indenture until a successor replaces it pursuant to
the applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent
such successor or successors.
"Company Order" means a written request or order signed in
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the name of the Company by any two Officers and delivered to the Trustee.
"Corporate Trust Office" means the office of the Trustee
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at which at any time the trust created by this Indenture shall be
administered, which office at the date hereof is located at 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Corporate Trust and Agency Services, or
such other address as the Trustee may designate from time to time by notice
to the Holders and the Company, or the principal corporate trust office of
any successor Trustee (or such other address as a successor Trustee may
designate from time to time by notice to the Holders and the Company).
"Credit Facility" means that certain Loan Agreement dated
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as of June 18, 1997, as amended, among the Company, certain subsidiaries of
the Company and LaSalle Bank National Association, including all related
notes, guarantees, collateral documents, instruments and agreements executed
in connection therewith, as each may be amended, modified, restated,
renewed, replaced, refinanced or restructured (including, without
limitation, any amendment increasing the amount of available borrowing) from
time to time.
"Default" means any event which is, or after notice or
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passage of time or both would be, an Event of Default.
"Designated Senior Indebtedness" means the Credit Facility
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and any other Senior Indebtedness in which the instrument creating or
evidencing the Indebtedness, or any related agreements or documents to which
the Company is a party, expressly provides that such Indebtedness is
"Designated Senior Indebtedness" for purposes of this Indenture, provided
that the instrument, agreement or other document may place limitations and
conditions on the right of the Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness.
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"Exchange Act" means the Securities Exchange Act of 1934,
------------
as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time.
"Global Securities" means Securities that are in the form
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of the Securities attached hereto as Exhibit A-1, and to the extent that
such Securities are required to bear the Legend required by Section 2.06
such Securities will be in the form of a 144A Global Security.
"Holder" or "Securityholder" means a person in whose name
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a Security is registered on the Registrar's books.
"Indebtedness" means, without duplication,:
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(1) all of the Company's indebtedness, obligations and
other liabilities (A) for borrowed money, including overdrafts,
foreign exchange contracts, currency exchange agreements, interest
rate protection agreements, and any loans or advances from banks,
whether or not evidenced by notes or similar instruments, or (B)
evidenced by credit or loan, agreements, bonds, debentures, notes
or similar instruments, whether or not the recourse of the lender
is to the whole of the Company's assets or to only a portion
thereof, other than any account payable or other accrued current
liability or obligation incurred in the ordinary course of business
in connection with the obtaining of materials or services;
(2) all of the Company's reimbursement obligations and
other liabilities with respect to letters of credit, bank
guarantees or bankers' acceptances;
(3) all of the Company's obligations and liabilities in
respect of leases required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease
obligations on its balance sheet;
(4) all of the Company's obligations and other liabilities
under any lease or related document, including a purchase
agreement, conditional sale or other title retention agreement, in
connection with the lease of real property or improvements thereon
(or any personal property included as part of any such lease) which
provides that the Company is contractually obligated to purchase or
cause a third party to purchase the leased property or pay an
agreed upon residual value of the leased property, including the
Company's obligations under such lease or related document to
purchase or cause a third party to purchase such leased property or
pay an agreed upon residual value of the leased property to the
lessor (whether or not such lease transaction is characterized as
an operating lease or a capitalized lease in accordance with
generally accepted accounting principles);
(5) all of the Company's obligations with respect to an
interest rate or other swap, cap, floor or collar agreement or
hedge agreement, forward contract or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar
instrument or agreement;
(6) all of the Company's direct or indirect guaranties or
similar agreements by the Company in respect of,
3
and all of the Company's obligations or liabilities to purchase or
otherwise acquire or otherwise assure a creditor against loss in
respect of, indebtedness, obligations or liabilities of another
person of the kinds described in clauses (1) through (5); and
(7) any and all deferrals, renewals, extensions,
refinancings and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the
kinds described in clauses (1) through (6); provided, however,
Indebtedness shall not include obligations of any person (A)
arising from the honoring by a bank or other financial institution
of a check, draft or similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business, provided
that such obligations are extinguished within two business days of
their incurrence, (B) resulting from the endorsement of negotiable
instruments for collection in the ordinary course of business and
consistent with past business practices and (C) in respect of
stand-by letters of credit to the extent collaterallized by cash or
cash equivalents.
"Indenture" means this Indenture, as amended or
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supplemented from time to time in accordance with the terms hereof,
including the provisions of the TIA that are deemed to be a part hereof.
"Initial Purchasers" shall mean Deutsche Bank Securities
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Inc., Banc of America Securities LLC, Credit Suisse First Boston LLC, CIBC
World Markets Corp., Citigroup Global Markets Inc. and LaSalle Debt Capital
Markets, a division of ABN AMRO Financial Services, Inc.
"Issue Date" of any Security means the date on which the
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Security was originally issued or deemed issued as set forth on the face of
the Security.
"Liquidated Damages" has the meaning set forth in the
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Registration Rights Agreement dated as of May 16, 2003 between the Company
and the Initial Purchasers.
"Officer" means the Vice Chairman and Chief Executive
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Officer, any Executive Vice President, any Senior Vice President, any Vice
President, the Chief Financial Officer, the Treasurer, the Secretary or any
Assistant Secretary of the Company.
"Officers' Certificate" means a written certificate
---------------------
containing the information specified in Sections 12.04 and 12.05, signed in
the name of the Company by any two Officers, and delivered to the Trustee.
An Officers' Certificate given pursuant to Section 4.03 shall be signed by
the Treasurer or Chief Financial Officer of the Company but need not contain
the information specified in Sections 12.04 and 12.05.
"Opinion of Counsel" means a written opinion containing
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the information specified in Section 12.04 and 12.05, from legal counsel who
is acceptable to the Trustee in its reasonable discretion. The counsel may
be an employee of, or counsel to, the Company or the Trustee.
"Person" or "person" means any individual, corporation,
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limited liability company, partnership, joint venture, association,
joint-stock company, trust, unincorporated organization, government or any
agency or political subdivision thereof or other entity.
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"Principal Amount" or "principal amount" of a Security
---------------- ----------------
means the Principal Amount as set forth on the face of the Security.
"Redemption Date" shall mean the date specified for
---------------
redemption of the Securities in accordance with the terms of the Securities
and this Indenture.
"Redemption Price" shall have the meaning set forth in
----------------
paragraph 5 of the Securities.
"Responsible Officer" means, when used with respect to the
-------------------
Trustee, any managing director, director, vice president, assistant vice
president, assistant treasurer, assistant secretary, associate or any other
officer within the corporate trust department of the Trustee customarily
performing functions similar to those performed by any of the above
designated officers and also shall mean, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of his knowledge and familiarity with the particular subject.
"Restricted Security" means a Security required to bear
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the restrictive legend set forth in the form of Security set forth in
Exhibits A-1 and A-2 of this Indenture.
"Rule 144A" means Rule 144A under the Securities Act (or
---------
any successor provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
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"Security" or "Securities" means any of the Company's 2.5%
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Contingent Convertible Subordinated Notes Due 2033, as amended or
supplemented from time to time, issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as
--------------
amended, and the rules and regulations promulgated thereunder, as in effect
from time to time.
"Securityholder" or "Holder" means a person in whose name
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a Security is registered on the Registrar's books.
"Senior Indebtedness" means the principal of, premium, if
-------------------
any, interest, including, with respect to the Credit Facility, all interest
accrued subsequent to the commencement of any bankruptcy or similar
proceeding, whether or not a claim for post-petition interest is allowable
as a claim in any such proceeding, and rent payable on or in connection
with, and all fees, costs, expenses and other amounts accrued or due on or
in connection with, the Company's Indebtedness whether secured or unsecured,
absolute or contingent, due or to become due, outstanding on the date of
this Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company, including all deferrals, renewals,
extensions or refundings of, or amendments, modifications or supplements to,
the foregoing other than:
(1) any Indebtedness or obligation whose terms expressly
provide that such Indebtedness or obligation shall not be senior in
right of payment to the Securities or expressly provides that such
Indebtedness is on the same basis or junior to the Securities;
5
(2) the Company's Indebtedness to an Affiliate; and
(3) the Notes.
"Stated Maturity" when used with respect to any Security,
---------------
means the date specified in such Security as the fixed date on which an
amount equal to the Principal Amount of such Security is due and payable.
"Subsidiary" means any person of which at least a majority
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of the outstanding Voting Stock shall at the time directly or indirectly be
owned or controlled by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries.
"TIA" means the Trust Indenture Act of 1939 as in effect
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on the date of this Indenture, provided, however, that in the event the TIA
is amended after such date, TIA means, to the extent required by any such
amendment, the TIA as so amended.
"Trading Day" means a day during which trading in
-----------
securities generally occurs on the New York Stock Exchange or, if the Class
A Common Stock is not listed on the New York Stock Exchange, on the
principal other national or regional securities exchange on which the Class
A Common Stock is then listed or, if the Class A Common Stock is not listed
on a national or regional securities exchange, on the National Association
of Securities Dealers Automated Quotation System or, if the Class A Common
Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Class
A Common Stock is then traded.
"Trustee" means the party named as the "Trustee" in the
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first paragraph of this Indenture until a successor replaces it pursuant to
the applicable provisions of this Indenture and, thereafter, shall mean such
successor. The foregoing sentence shall likewise apply to any subsequent
such successor or successors.
"Voting Stock" of a person means Capital Stock of such
------------
person of the class or classes pursuant to which the holders thereof have
the general voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of such person
(irrespective of whether or not at the time Capital Stock of any other class
or classes shall have or might have voting power by reason of the happening
of any contingency).
SECTION 1.02. Other Definitions.
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Defined in
Term: Section:
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95% Trading Condition............................................................................ 10.01(c)
Act.............................................................................................. 1.05(a)
Agent Members.................................................................................... 2.12(e)(v)
Aggregate Market Premium......................................................................... 10.06(d)
Beneficial owner................................................................................. 3.09(a)
Cash............................................................................................. 3.08(b)
6
Change in Control................................................................................ 3.09(a)
Change in Control Purchase Date.................................................................. 3.09(a)
Change in Control Purchase Notice................................................................ 3.09(c)
Change in Control Purchase Price................................................................. 3.09(a)
Class A Market Capitalization.................................................................... 10.06(e)
Closing Price.................................................................................... 10.06(e)
Company Notice................................................................................... 3.08(c)
Company Notice Date.............................................................................. 3.08(c)
Continuing Directors............................................................................. 3.09(a)
Conversion Agent................................................................................. 2.03
Conversion Date.................................................................................. 10.02
Conversion Price................................................................................. 10.06
Conversion Shares................................................................................ 10.01
Depositary....................................................................................... 2.01(a)
DTC.............................................................................................. 2.01(a)
Event of Default................................................................................. 6.01
Ex-Dividend Date................................................................................. 10.01
Group............................................................................................ 3.09(a)(i)
Legal Holiday.................................................................................... 12.08
Legend........................................................................................... 2.06(f)
Nonpayment Default............................................................................... 11.01(b)
Notice of Default................................................................................ 6.01
Paying Agent..................................................................................... 2.03
Payment Blockage Period.......................................................................... 11.01(b)
Payment Blockage Notice.......................................................................... 11.01(b)
Payment Default.................................................................................. 11.01(b)
Principal Value Conversion....................................................................... 10.02
Principal Value Conversion Notice................................................................ 10.02
Purchase Date.................................................................................... 3.08(a)
Purchase Notice.................................................................................. 3.08(a)
Purchase Price................................................................................... 3.08(a)
QIBS............................................................................................. 2.01(a)
Quarter.......................................................................................... 10.01(a)
Registrar........................................................................................ 2.03
Rule 144A Information............................................................................ 4.06
Security Trading Price........................................................................... 10.01
SECTION 1.03. Incorporation by Reference of Trust
-----------------------------------
Indenture Act. Whenever this Indenture refers to a provision of the TIA, the
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provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
----------
"indenture securities" means the Securities.
--------------------
"indenture security holder" means a Securityholder.
-------------------------
7
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the
----------------- ---------------------
Trustee.
"obligor" on the indenture securities means the Company.
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All other TIA terms used in this Indenture that are
defined by the TIA, defined by a TIA reference to another statute or defined
by an SEC rule have the meanings assigned to them by such definitions.
SECTION 1.04. Rules of Construction. Unless the context
---------------------
otherwise requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(c) "or" is not exclusive;
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(d) "including" means including, without limitation; and
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(e) words in the singular include the plural, and words in
the plural include the singular.
SECTION 1.05. Acts of Holders. (a) Any request, demand,
---------------
authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed
by such Holders 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 and, where
it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are
herein sometimes referred to as the "Act" of Holders signing such instrument
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or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and conclusive in favor of the Trustee and the Company, if made in
the manner provided in this Section.
(b) The fact and date of the execution by any Person of
any such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to such officer the execution thereof. Where such
execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall
also constitute sufficient proof of such signer's authority.
The fact and date of the execution of any such instrument
or writing, or the authority of the Person executing the same, may also be
proved in any other manner which the Trustee deems sufficient.
8
(c) The ownership of Registered Securities shall be proved
by the register maintained by the Registrar.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall
bind every future Holder of the same Security and the Holder of
every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything
done, omitted or suffered to be done by the Trustee or the Company
in reliance thereon, whether or not notation of such action is made
upon such Security.
(e) If the Company shall solicit from the Holders any
request, demand, authorization, direction, notice, consent, waiver
or other Act, the Company may, at its option, by or pursuant to a
Board Resolution, fix in advance a record date for the
determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but
the Company shall have no obligation to do so. If such a record
date is fixed, such request, demand, authorization, direction,
notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion
of outstanding Securities have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the outstanding
Securities shall be computed as of such record date; provided that
no such authorization, agreement or consent by the Holders on such
record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later
than six months after the record date.
ARTICLE II
THE SECURITIES
SECTION 2.01. Form and Dating. The Securities and the
---------------
Trustee's certificate of authentication shall be substantially in the forms
set forth on Exhibits A-1 and A-2, which are a part of this Indenture and
incorporated by reference herein. The Securities may have notations, legends
or endorsements required by law, stock exchange rule or usage; provided that
any such notation, legend or endorsement required by usage is in a form
acceptable to the Company. The Company shall provide any such notations,
legends or endorsements to the Trustee in a Company Order. Each Security
shall be dated the date of its authentication.
(a) 144A Global Securities. Securities offered and sold to
qualified institutional buyers as defined in Rule 144A ("QIBS") in
----
reliance on Rule 144A shall be issued, initially in the form of a
144A Global Security, which shall be deposited with the Trustee at
its Corporate Trust Office, as custodian for the Depositary and
registered in the name of The Depository Trust Company ("DTC") or
---
the nominee thereof (such depositary, or any successor thereto, and
any such nominee being hereinafter referred to as the
"Depositary"), duly executed by the Company and authenticated by
----------
the Trustee as hereinafter provided. The aggregate principal amount
of the 144A Global Securities may
9
from time to time be increased or decreased by adjustments made on
the records of the Trustee and the Depositary as hereinafter
provided.
(b) Global Securities in General. Each Global Security
shall represent such of the outstanding Securities as shall be
specified therein and each shall provide that it shall represent
the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or
increased, as appropriate, to reflect exchanges, redemptions and
conversions.
Any adjustment of the aggregate principal amount of a
Global Security to reflect the amount of any increase or decrease in the
amount of outstanding Securities represented thereby shall be made by the
Trustee in accordance with instructions given by the Holder thereof as
required by Section 2.12 hereof and shall be made on the records of the
Trustee and the Depositary.
(c) Book-Entry Provisions. The Company shall execute and
---------------------
the Trustee shall, in accordance with this Section 2.01(c),
authenticate and deliver initially one or more Global Securities
that (a) shall be registered in the name of the Depositary, (b)
shall be delivered by the Trustee to the Depositary or pursuant to
the Depositary's instructions and (c) shall bear legends
substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO K-V
PHARMACEUTICAL COMPANY (THE "COMPANY") OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE
DEPOSITORY TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO
OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF."
(d) Certificated Securities. Securities not issued as
-----------------------
interests in the Global Securities will be issued in certificated
form substantially in the form of Exhibit A-2 attached hereto.
10
SECTION 2.02. Execution and Authentication. The Securities
----------------------------
shall be executed on behalf of the Company by any Officer. The signature of
the Officer of the Company on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at the time of the execution of the Securities the
proper Officers of the Company shall bind the Company, notwithstanding that
such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Securities or did not hold such
offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this
Indenture or be valid or obligatory for any purpose unless there appears on
such Security a certificate of authentication substantially in the form
provided for herein duly executed by the Trustee by manual signature of a
Responsible Officer, and such certificate upon any Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder.
The Trustee shall authenticate and deliver Securities for
original issue in an aggregate Principal Amount of up to $200,000,000 (which
shall include the Initial Purchasers' option to purchase $25,000,000 of
additional Securities) upon a Company Order without any further action by
the Company. The aggregate Principal Amount of Securities outstanding at any
time may not exceed the amount set forth in the foregoing sentence, except
as provided in Section 2.07.
The Securities shall be issued only in registered form
without coupons and only in denominations of $1,000 of Principal Amount and
any integral multiple thereof.
SECTION 2.03. Registrar, Paying Agent and Conversion
--------------------------------------
Agent. The Company shall maintain an office or agency where Securities may
-----
be presented for registration of transfer or for exchange ("Registrar"), an
---------
office or agency where Securities may be presented for purchase or payment
("Paying Agent") and an office or agency where Securities may be presented
------------
for conversion ("Conversion Agent"). The Registrar shall keep a register of
----------------
the Securities and of their transfer and exchange. The Company may have one
or more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent, including any named pursuant to Section 4.05. The term
Conversion Agent includes any additional conversion agent, including any
named pursuant to Section 4.05.
The Company shall enter into an appropriate agency
agreement with any Registrar, Paying Agent, Conversion Agent or co-registrar
(other than the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the
Trustee by a Company Order of the name and address of any such agent. If the
Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent or co-registrar.
11
The Company initially appoints the Trustee as Registrar,
Conversion Agent and Paying Agent in connection with the Securities.
SECTION 2.04. Paying Agent to Hold Money in Trust. Except
-----------------------------------
as otherwise provided herein, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a
sum of money (in immediately available funds if deposited on the due date)
sufficient to make such payments when so becoming due. The Company shall
require each Paying Agent (other than the Trustee) to agree in writing that
the Paying Agent shall hold in trust for the benefit of Securityholders or
the Trustee all money held by the Paying Agent for the making of payments in
respect of the Securities and shall notify the Trustee of any Default by the
Company in making any such payment. At any time during the continuance of
any such Default, the Paying Agent shall, upon the written request of the
Trustee, forthwith pay to the Trustee all money so held in trust. If the
Company, a Subsidiary or an Affiliate of either of them acts as Paying
Agent, it shall segregate the money held by it as Paying Agent and hold it
as a separate trust fund. The Company at any time may require a Paying Agent
to pay all money held by it to the Trustee and to account for any funds
disbursed by it. Upon doing so, the Paying Agent shall have no further
liability for the money.
SECTION 2.05. Securityholder Lists. The Trustee shall
--------------------
preserve in as current a form as is reasonably practicable the most recent
list available to it of the names and addresses of Securityholders. If the
Trustee is not the Registrar, the Company shall cause to be furnished to the
Trustee at least semiannually on May 1 and November 1 a listing of
Securityholders dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a
list in such form and as of such date as the Trustee may reasonably require
of the names and addresses of Securityholders.
SECTION 2.06. Transfer and Exchange. (a) Subject to
---------------------
Section 2.12 hereof, upon surrender for registration of transfer of any
Securities, together with a written instrument of transfer satisfactory to
the Registrar duly executed by the Securityholder or such Securityholder's
attorney duly authorized in writing, at the office or agency of the Company
designated as Registrar or co-registrar pursuant to Section 2.03, the
Company shall execute and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities
of any authorized denomination or denominations, of a like aggregate
Principal Amount. The Company shall not charge a service charge for any
registration of transfer or exchange, but the Company may require payment of
a sum sufficient to pay all taxes, assessments or other governmental charges
that may be imposed in connection with the transfer or exchange of the
Securities from the Securityholder requesting such transfer or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like
aggregate Principal Amount, upon surrender of the Securities to be
exchanged, together with a written instrument of transfer satisfactory to
the Registrar duly executed by the Securityholder or such Securityholder's
attorney duly authorized in writing, at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and
the Trustee shall authenticate and deliver, the Securities that the Holder
making the exchange is entitled to receive.
12
The Company shall not be required to make, and the Registrar need
not register, transfers or exchanges of Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion
thereof not to be redeemed) or any Securities in respect of which a Purchase
Notice or Change in Control Purchase Notice has been given and not withdrawn
by the Holder thereof in accordance with the terms of this Indenture
(except, in the case of Securities to be purchased in part, the portion
thereof not to be purchased) or any Securities for a period of 15 days
before the mailing of a notice of redemption of Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein,
so long as a Global Security remains outstanding and is held by or
on behalf of the Depositary, transfers of a Global Security, in
whole or in part, shall be made only in accordance with Section
2.12 and this Section 2.06(b). Transfers of a Global Security shall
be limited to transfers of such Global Security in whole, or in
part, to nominees of the Depositary or to a successor of the
Depositary or such successor's nominee.
(c) Successive registrations and registrations of
transfers and exchanges as aforesaid may be made from time to time
as desired, and each such registration shall be noted on the
register for the Securities.
(d) Any Registrar appointed pursuant to Section 2.03
hereof shall provide to the Trustee such information as the Trustee
may reasonably require in connection with the delivery by such
Registrar of Securities upon transfer or exchange of Securities.
(e) No Registrar shall be required to make registrations
of transfer or exchange of Securities during any periods designated
in the text of the Securities or in this Indenture as periods
during which such registration of transfers and exchanges need not
be made.
(f) If Securities are issued upon the transfer, exchange
or replacement of Securities subject to restrictions on transfer
and bearing the legends set forth on the forms of Securities
attached hereto as Exhibits A-1 and A-2 setting forth such
restrictions (collectively, the "Legend"), or if a request is made
------
to remove the Legend on a Security, the Securities so issued shall
bear the Legend, or the Legend shall not be removed, as the case
may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an Opinion of
Counsel, as may be reasonably required by the Company and the
Registrar, that neither the Legend nor the restrictions on transfer
set forth therein are required to ensure that transfers thereof
comply with the provisions of Rule 144A or Rule 144 under the
Securities Act or that such Securities are not "restricted" within
the meaning of Rule 144 under the Securities Act. Upon (i)
provision of such satisfactory evidence, or (ii) notification by
the Company to the Trustee and registrar of the sale of such
Security pursuant to a registration statement that is effective at
the time of such sale, the Trustee, at the written direction of the
Company, shall authenticate and deliver a Security that does not
bear the Legend. If the Legend is removed from the face of a
Security and the Security is subsequently held by an Affiliate of
the Company, the Legend shall be reinstated.
13
SECTION 2.07. Replacement Securities. If any mutilated
----------------------
Security is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of
any Security, and there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each of them
harmless, then, in the absence of actual knowledge by the Company or the
Trustee that such Security has been acquired by a protected purchaser
(within the meaning of Section 8-303 of the Uniform Commercial Code), the
Company shall execute, and upon the Company's written request the Trustee
shall authenticate and deliver, in exchange for any such mutilated Security
or in lieu of any such destroyed, lost or stolen Security, a new Security of
like tenor and Principal Amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen
Security has become or is about to become due and payable, or is about to be
purchased by the Company pursuant to Article III hereof, the Company in its
discretion may, instead of issuing a new Security, pay or purchase such
Security, as the case may be.
Upon the issuance of any new Securities under this
Section, 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)
connected therewith.
Every new Security issued pursuant to this Section in lieu
of any mutilated, destroyed, lost or stolen Security shall constitute an
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 2.08. Outstanding Securities; Determinations of
-----------------------------------------
Holders' Action. Securities outstanding at any time are all the Securities
---------------
authenticated by the Trustee, except for those cancelled by it, those paid
pursuant to Section 2.07 delivered to it for cancellation and those
described in this Section 2.08 as not outstanding. A Security does not cease
to be outstanding because the Company or an Affiliate thereof holds the
Security; provided, however, that in determining whether the Holders of the
requisite Principal Amount of Securities have given or concurred in any
request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request,
demand, authorization, direction, notice, consent or waiver, only Securities
of which a Responsible Officer of the Trustee has actual knowledge to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any
such determination (including, without limitation, determinations pursuant
to Articles VI and IX).
14
If a Security is replaced pursuant to Section 2.07, it
ceases to be outstanding unless the Trustee receives proof satisfactory to
it that the replaced Security is held by a protected purchaser.
If the Paying Agent holds, in accordance with this
Indenture, on a Redemption Date, or on the Business Day following a Purchase
Date or a Change in Control Purchase Date, or on Stated Maturity, money
sufficient to pay amounts owed with respect to Securities payable on that
date, then immediately after such Redemption Date, Purchase Date, Change in
Control Purchase Date or Stated Maturity, as the case may be, such
Securities shall cease to be outstanding and interest, if any (including
contingent interest, if any), and Liquidated Damages, if any, on such
Securities shall cease to accrue; provided that if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article X,
then from and after the time of conversion on the Conversion Date, such
Security shall cease to be outstanding and interest, if any (including
contingent interest, if any), shall cease to accrue on such Security.
SECTION 2.09. Temporary Securities. Pending the
--------------------
preparation of definitive Securities, the Company may execute, and upon
Company Order the Trustee shall authenticate and deliver, temporary
Securities that are printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations
as the officers executing such Securities may determine, as conclusively
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such
purpose pursuant to Section 2.03, without charge to the Holder. Upon
surrender for cancellation of any one or more temporary Securities, the
Company shall execute and the Trustee shall authenticate and deliver in
exchange therefor a like Principal Amount of definitive Securities of
authorized denominations. Until so exchanged, the temporary Securities shall
in all respects be entitled to the same benefits under this Indenture as
definitive Securities.
SECTION 2.10. Cancellation. All Securities surrendered for
------------
payment or purchase by the Company pursuant to Article III, conversion,
redemption or registration of transfer or exchange (other than Securities
exchanged pursuant to Section 10.02), shall, if surrendered to any person
other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
that the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the Trustee. The
Company may not issue new Securities to replace Securities it has paid or
delivered to the Trustee for cancellation or that any Holder has converted
pursuant to Article X. No Securities shall be authenticated in lieu of or in
exchange for any Securities cancelled as provided in this Section, except as
expressly permitted by this Indenture. All cancelled Securities
15
held by the Trustee shall be disposed of by the Trustee in accordance with
the Trustee's customary procedure.
SECTION 2.11. Persons Deemed Owners. Prior to due
---------------------
presentment of a 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 of such Security for the
purpose of receiving payment of the Principal Amount of the Security or the
payment of any Redemption Price, Purchase Price or Change in Control
Purchase Price in respect thereof, and accrued and unpaid interest thereon,
for the purpose of conversion and for all other purposes whatsoever, whether
or not such Security be overdue, and neither the Company, the Trustee nor
any agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 2.12. Global Securities. (a) A Global Security may
-----------------
not be transferred, in whole or in part, to any Person other than the
Depositary or a nominee or any successor thereof, and no such transfer to
any such other Person may be registered; provided that the foregoing shall
not prohibit any transfer of a Security that is issued in exchange for a
Global Security but is not itself a Global Security. No transfer of a
Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 2.06 and this Section 2.12.
(b) Subject to the succeeding paragraph, every Security
shall be subject to the restrictions on transfer provided in the
Legend including the delivery of an Opinion of Counsel, if so
provided. Whenever any Restricted Security is presented or
surrendered for registration of transfer or for exchange for a
Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the
form set forth in Exhibit B, dated the date of such surrender and
signed by the Holder of such Security, as to compliance with such
restrictions on transfer. The Registrar shall not be required to
accept for such registration of transfer or exchange any Security
not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the
transferability of any Security shall cease and terminate when such
Security has been sold pursuant to an effective registration
statement under the Securities Act or transferred in compliance
with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities
Act (or any successor provision). Any Security as to which such
restrictions on transfer shall have expired in accordance with
their terms or shall have terminated may, upon a surrender of such
Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that
such restrictions on transfer have terminated by reason of a
transfer in compliance with Rule 144 or any successor provision, by
an Opinion of Counsel having substantial experience in practice
under the Securities Act and otherwise reasonably acceptable to the
Company, addressed to the Company and in form acceptable to the
Company, to the effect that the transfer of such Security has been
made in compliance with Rule 144 or such successor
16
provision), be exchanged for a new Security, of like tenor and
aggregate Principal Amount, which shall not bear the Legend. The
Company shall inform the Trustee of the effective date of any
registration statement registering the Securities under the
Securities Act. The Trustee shall not be liable for any action
taken or omitted to be taken by it in good faith in accordance with
the aforementioned Opinion of Counsel or registration statement.
(d) As used in the preceding two paragraphs of this
Section 2.12, the term "transfer" encompasses any sale, pledge,
--------
transfer, hypothecation or other disposition of any Security.
(e) The provisions of clauses (i), (ii), (iii) and (iv)
below shall apply only to Global Securities:
(i) Notwithstanding any other provisions of this Indenture
or the Securities, a Global Security shall not be exchanged in
whole or in part for a Security registered in the name of any
Person other than the Depositary or one or more nominees thereof;
provided that a Global Security may be exchanged for Securities
registered in the names of any person designated by the Depositary
in the event that (x) the Depositary has notified the Company that
it is unwilling or unable to continue as Depositary for such Global
Security or such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary is
not appointed by the Company within 90 days, (y) the Company has
provided the Depositary with written notice that it has decided to
discontinue use of the system of book-entry transfer through the
Depositary or any successor Depositary or (z) an Event of Default
has occurred and is continuing with respect to the Securities. Any
Global Security exchanged pursuant to clause (x) or (y) above shall
be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clause (z) above may be exchanged in whole or
from time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any portion
thereof shall be a Global Security; provided that any such Security
so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Security.
(ii) Securities issued in exchange for a Global Security
or any portion thereof shall be issued in definitive, fully
registered form, without interest coupons, shall have an aggregate
Principal Amount equal to that of such Global Security or portion
thereof to be so exchanged, shall be registered in such names and
be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for
herein. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Registrar. With
regard to any Global Security to be exchanged in part, either such
Global Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its nominee
with respect to such Global Security, the Principal Amount thereof
shall be reduced, by an amount equal to the portion thereof to be
so exchanged, by means of an appropriate adjustment made on the
records of the Trustee. Upon any such surrender or adjustment, the
Trustee shall authenticate and deliver the Security issuable on
such exchange to or upon the order of the Depositary or an
authorized representative thereof.
17
(iii) Subject to the provisions of clause (v) below, the
registered Holder may grant proxies and otherwise authorize any
Person, including Agent Members (as defined below) and persons that
may hold interests through Agent Members, to take any action which
a holder is entitled to take under this Indenture or the
Securities.
(iv) In the event of the occurrence of any of the events
specified in clause (i) above, the Company will promptly make
available to the Trustee a reasonable supply of Certificated
Securities in definitive, fully registered form, without interest
coupons.
(v) Neither any members of, or participants in, the
Depositary (collectively, the "Agent Members") nor any other
-------------
Persons on whose behalf Agent Members may act shall have any rights
under this Indenture with respect to any Global Security registered
in the name of the Depositary or any nominee thereof, or under any
such Global Security, and the Depositary or such nominee, as the
case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and
holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the
Company, the Trustee or any agent of the Company or the Trustee
from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or such nominee, as the
case may be, or impair, as between the Depositary, its Agent
Members and any other person on whose behalf an Agent Member may
act, the operation of customary practices of such Persons governing
the exercise of the rights of a holder of any Security.
SECTION 2.13. CUSIP Numbers. The Company may issue the
-------------
Securities with one or more "CUSIP" numbers (if then generally in use), and,
if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a
convenience to Holders; provided that any such notice may state that no
representation is made as to the correctness of such numbers either as
printed on the Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any
defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION AND PURCHASES
SECTION 3.01. Right To Redeem; Notices To Trustee. (a)
-----------------------------------
Optional Redemption. The Company, at its option, may redeem the Securities
in accordance with the provisions of paragraphs 5 and 7 of the Securities
and at the Redemption Price specified in paragraph 5 of the Securities,
together with accrued and unpaid interest (including contingent interest, if
any) and Liquidated Damages, if any, thereon up to but not including the
Redemption Date; provided that if the Redemption Date is on or after an
interest record date, but on or prior to the related interest payment date,
interest will be payable to the Holders in whose names the Securities are
registered at the close of business on the relevant record date for payment
of such interest.
18
(b) Notice to Trustee. If the Company elects to redeem
Securities pursuant to this Section 3.01, it shall notify the
Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price. The Company
shall give the notice to the Trustee provided for in this Section
3.01(b) by a Company Order at least 45 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the
Trustee).
SECTION 3.02. Selection of Securities to Be Redeemed. If
--------------------------------------
less than all the Securities are to be redeemed, unless the procedures of
the Depositary provide otherwise, the Trustee shall select the Securities to
be redeemed on a pro rata basis. The Trustee may select for redemption
portions of the Principal Amount of Securities that have denominations of
$1,000 and integral multiples thereof.
Securities and portions of them the Trustee selects shall
be in Principal Amounts of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption. The Trustee
shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
If any Security selected for partial redemption is
converted in part before termination of the conversion right with respect to
the portion of the Security so selected, the converted portion of such
Security shall be deemed (so far as possible) to be the portion selected for
redemption. Securities that have been converted during a selection of
Securities to be redeemed may be treated by the Trustee as outstanding for
the purpose of such selection.
SECTION 3.03. Notice of Redemption. At least 20 days but
--------------------
not more than 60 days before a Redemption Date, the Company shall mail a
notice of redemption by first-class mail, postage prepaid, to each Holder of
Securities to be redeemed.
The notice shall identify the Securities to be redeemed
and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Price;
(d) the name and address of the Paying Agent and
Conversion Agent;
(e) that Securities called for redemption may be converted
at any time before the close of business on the second Business Day
immediately preceding the Redemption Date;
(f) that Holders who want to convert Securities must
satisfy the requirements set forth in paragraph 8 of the
Securities;
(g) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price
therefor, together with all accrued and unpaid interest;
19
(h) if fewer than all the outstanding Securities are to be
redeemed, the certificate numbers, if any, and Principal Amounts of
the particular Securities to be redeemed;
(i) that, unless the Company defaults in making payment of
such Redemption Price, interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, on Securities
called for redemption will cease to accrue on and after the
Redemption Date and the Securities will cease to be convertible;
and
(j) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give the
notice of redemption in the Company's name and at the Company's expense;
provided that the Company makes such request prior to the date by which such
notice of redemption must be given to Holders in accordance with this
Section 3.03 and the Company provides the Trustee with all information
required for such notice of redemption.
SECTION 3.04. Effect of Notice of Redemption. Once notice
------------------------------
of redemption is given, Securities called for redemption become due and
payable on the Redemption Date and at the Redemption Price stated in the
notice, except for Securities which are converted in accordance with the
terms of this Indenture. Upon surrender to the Paying Agent, such Securities
shall be paid at the Redemption Xxxxx stated in the notice, together with
accrued and unpaid interest, if any (including contingent interest, if any),
and Liquidated Damages, if any, thereon, up to but not including the
Redemption Date.
SECTION 3.05. Deposit of Redemption Price. Prior to 10:00
---------------------------
a.m. (New York City time) on the Redemption Date the Company shall deposit
with the Paying Agent (or if the Company or a Subsidiary or an Affiliate of
either of them is the Paying Agent, shall segregate and hold in trust) an
amount of money in immediately available funds sufficient to pay the
Redemption Price of all Securities to be redeemed on that date, together
with accrued and unpaid interest, if any (including contingent interest, if
any), and Liquidated Damages, if any, thereon, up to but not including the
Redemption Date other than Securities or portions of Securities called for
redemption that on or prior thereto have been delivered by the Company to
the Trustee for cancellation or have been converted. The Paying Agent shall
as promptly as practicable return to the Company any money not required for
that purpose because of conversion of Securities pursuant to Article X. If
such money is then held by the Company in trust and is not required for such
purpose it shall be discharged from such trust.
SECTION 3.06. Securities Redeemed in Part. Upon surrender
---------------------------
of a Security that is redeemed in part, the Company shall execute and the
Trustee shall authenticate and deliver to the Holder, without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate Principal Amount equal to, and in
exchange for, the unredeemed portion of the Principal Amount of the Security
surrendered.
SECTION 3.07. Reserved.
--------
SECTION 3.08. Purchase of Securities at Option of the
---------------------------------------
Holder. (a) General. Securities shall be purchased by the Company in
------
accordance with the provisions of paragraph 6
20
of the Securities on May 16, 2008, May 16, 2013, May 16, 2018, May 16, 2023
and May 16, 2028 (each, a "Purchase Date") at a purchase price per Security
-------------
equal to 100% of the aggregate Principal Amount of the Security (the
"Purchase Price"), together with accrued and unpaid interest (including
--------------
contingent interest, if any) and Liquidated Damages, if any, thereon, up to
but not including the Purchase Date; provided that if the Purchase Date is
on or after an interest record date but on or prior to the related interest
payment date, interest and Liquidated Damages, if any, will be payable to
the Holders in whose names the Securities are registered at the close of
business on the relevant record date.
Purchases of Securities hereunder shall be made, at the
option of the Holder thereof, upon:
(i) delivery to the Company and the Paying Agent by the
Holder of a written notice of purchase (a "Purchase Notice") at any
---------------
time from the opening of business on the date that is 20 Business
Days prior to the Purchase Date until the close of business on the
Business Day prior to such Purchase Date stating:
(A) the certificate number of the Security which the
Holder will deliver to be purchased;
(B) the portion of the Principal Amount of the Security
which the Holder will deliver to be purchased, which portion must
be in principal amounts at maturity of $1,000 or an integral
multiple thereof;
(C) that such Security shall be purchased as of the
Purchase Date pursuant to the terms and conditions specified in
paragraph 6 of the Securities and in this Indenture; and
(ii) delivery of such Security to the Paying Agent prior
to, on or after the Purchase Date (together with all necessary
endorsements) at the offices of the Paying Agent, such delivery
being a condition to receipt by the Holder of the Purchase Price
therefor, together with accrued and unpaid interest, if any
(including contingent interest, if any), and Liquidated Damages, if
any; provided, however, that such Purchase Price, together with
accrued and unpaid interest, if any (including contingent interest,
if any), and Liquidated Damages, if any, shall be so paid pursuant
to this Section 3.08 only if the Security so delivered to the
Paying Agent shall conform in all respects to the description
thereof in the related Purchase Notice, as determined by the
Company in its sole discretion.
The Company shall purchase from the Holder thereof,
pursuant to this Section 3.08, a portion of a Security if the Principal
Amount of such portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to the purchase of all of a Security
also apply to the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.08 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of
the Purchase Date and the time of delivery of the Security.
21
Notwithstanding anything herein to the contrary, any
Holder delivering to the Paying Agent the Purchase Notice contemplated by
this Section 3.08(a) shall have the right to withdraw such Purchase Notice
at any time prior to the close of business on the Business Day prior to the
Purchase Date by delivery of a written notice of withdrawal to the Paying
Agent at the principal office of the Paying Agent in accordance with Section
3.10.
The Paying Agent shall promptly notify the Company of the
receipt by it of any Purchase Notice or written notice of withdrawal
thereof.
(b) Manner of Payment of Purchase Price. The Purchase
Price of Securities in respect of which a Purchase Notice pursuant
to Section 3.08 has been given shall be paid in U.S. legal tender
("Cash").
----
(c) Company Notice. In connection with any purchase of
Securities pursuant to Section 3.08, the Company shall give written
notice of the Purchase Date to the Holders (the "Company Notice").
--------------
The Company Notice shall be sent by first-class mail to the Trustee
and to each Holder not less than 20 Business Days prior to any
Purchase Date (the "Company Notice Date"). Each Company Notice
-------------------
shall include a form of Purchase Notice to be completed by a
Securityholder and shall state:
(i) the Purchase Price and the Conversion Price;
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Purchase Notice has
been given may be converted if they are otherwise convertible only
in accordance with Article X hereof and paragraph 8 of the
Securities if the applicable Purchase Notice has been withdrawn in
accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying
Agent to collect payment;
(v) that the Purchase Price for, and any accrued and
unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, on, any Security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly
following the later of the Purchase Date and the time of surrender
of such Security as described in subclause (iv) above;
(vi) the procedures the Holder must follow to exercise
rights under Section 3.08 and a brief description of those rights;
(vii) briefly, the conversion rights of the Securities;
(viii) the procedures for withdrawing a Purchase Notice
(as specified in Section 3.10);
(ix) that, unless the Company defaults in making payment
on Securities for which a Purchase Notice has been submitted,
interest, if any (including contingent
22
interest), and Liquidated Damages, if any, on such Securities will
cease to accrue on the Purchase Date; and
(x) the CUSIP number of the Securities.
At the Company's request, the Trustee shall give such
Company Notice in the Company's name and at the Company's expense; provided,
however, that the Company makes such request at least three (3) Business
Days prior to the date by which such Company Notice must be given to the
Holders and that, in all cases, the text of such Company Notice shall be
prepared by the Company.
SECTION 3.09. Purchase of Securities at Option of the
---------------------------------------
Holder upon Change in Control. (a) If at any time that Securities remain
-----------------------------
outstanding there shall have occurred a Change in Control (as hereinafter
defined), Securities shall be repurchased by the Company, at the option of
the Holder thereof, at a purchase price (the "Change in Control Purchase
--------------------------
Price") equal to the principal amount thereof plus accrued and unpaid
-----
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, thereon, up to and including the date (the "Change in
---------
Control Purchase Date") fixed by the Company that is not less than 45 days
---------------------
nor more than 60 days after the date of the Company Notice, subject to
satisfaction by or on behalf of the Holder of the requirements set forth in
Section 3.09(c).
Whenever in this Indenture there is a reference to the
principal of any Security as of any time, such reference shall be deemed to
include reference to the Change in Control Purchase Price payable in respect
of such Security to the extent that such Change in Control Purchase Price
is, was or would be payable at such time, and express mention of the Change
in Control Purchase Price in any provision of this Indenture shall not be
construed as excluding the Change in Control Purchase Price in those
provisions of this Indenture when such express mention is not made.
A "Change in Control" shall be deemed to have occurred at
-----------------
such time after the original issuance of the Securities as any of the
following occur:
(i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company and its
subsidiaries, taken as a whole, to any person or group of related
persons, as defined in Section 13(d) of the Exchange Act (a
"Group");
-----
(ii) the approval by the holders of Capital Stock of the
Company of any plan or proposal for the liquidation or dissolution
of the Company (whether or not otherwise in compliance with the
provisions of this Indenture);
(iii) any person or Group (other than Xxxxxx X. Xxxxxxxx
or any of his direct descendants) shall become the beneficial owner
of shares representing more than 50% of the aggregate ordinary
voting power represented by the Company's issued and outstanding
Voting Stock; or
(iv) the first day of which a majority of the members of
the Company's Board of Directors are not Continuing Directors (as
hereinafter defined).
23
"Beneficial Owner" shall be determined in accordance with
----------------
Rule 13d-3 promulgated by the SEC under the Exchange Act or any successor
provision, except that a Person shall be deemed to have "beneficial
ownership" of all securities that such Person has the right to acquire,
whether exercisable immediately or only after the passage of time.
"Continuing Directors" means, as of any date of
--------------------
determination, any member of the Board of Directors of the Company who (i)
was a member of such Board of Directors on the date of the original issuance
of the Securities or (ii) was nominated for election or elected to the Board
of Directors with the approval of a majority of the Continuing Directors who
were members of such Board of Directors at the time of such nomination or
election.
(b) Within 30 days after the occurrence of a Change in Control, the
Company shall mail a written notice of the Change in Control by first-class
mail to the Trustee and to each Holder (and to beneficial owners as required
by applicable law). The notice shall include a form of Change in Control
Purchase Notice to be completed by the Securityholder and shall state:
(i) briefly, the events causing a Change in Control and
the date of such Change in Control;
(ii) the date by which the Change in Control Purchase
Notice pursuant to this Section 3.09 must be given;
(iii) the Change in Control Purchase Date;
(iv) the Change in Control Purchase Price;
(v) the name and address of the Paying Agent and the
Conversion Agent;
(vi) the Conversion Price and any adjustments thereto;
(vii) that Securities as to which a Change in Control
Purchase Notice has been given may be converted pursuant to Article
X hereof only if the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(viii) that Securities must be surrendered to the Paying
Agent to collect payment;
(ix) that the Change in Control Purchase Price for any
Security as to which a Change in Control Purchase Notice has been
duly given and not withdrawn will be paid promptly following the
later of the Change in Control Purchase Date and the time of
surrender of such Security as described in clause (viii);
(x) briefly, the procedures the Holder must follow to
exercise rights under this Section 3.09;
(xi) briefly, the conversion rights of the Securities;
24
(xii) the procedures for withdrawing a Change in Control
Purchase Notice (as specified in Section 3.10);
(xiii) that, unless the Company defaults in making payment
of such Change in Control Purchase Price, interest (including
contingent interest, if any) and Liquidated Damages, if any, on
Securities surrendered for purchase by the Company will cease to
accrue on and after the Change in Control Purchase Date; and
(xiv) the CUSIP number of the Securities.
(c) A Holder may exercise its rights specified in Section 3.09(a)
upon delivery of a written notice of purchase (a "Change in Control Purchase
--------------------------
Notice"), together with the Securities subject thereto, to the Company and
------
the Paying Agent at any time prior to the close of business on the third
Business Day prior to the Change in Control Purchase Date, stating:
(i) the certificate number of the Security that the Holder
will deliver to be purchased;
(ii) the portion of the Principal Amount of the Security
which the Holder will deliver to be purchased, which portion must
be $1,000 or an integral multiple thereof; and
(iii) that such Security shall be purchased pursuant to
the terms and conditions specified in paragraph 6 of the
Securities.
The delivery of such Security to the Paying Agent prior
to, on or after the Change in Control Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent shall be a
condition to the receipt by the Holder of the Change in Control Purchase
Price therefor; provided, however, that such Change in Control Purchase
Price shall be so paid pursuant to this Section 3.09 only if the Security so
delivered to the Paying Agent shall conform in all respects to the
description thereof set forth in the related Change in Control Purchase
Notice.
The Company shall purchase from the Holder thereof,
pursuant to this Section 3.09, a portion of a Security if the Principal
Amount of such portion is $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to the purchase of all of a Security
also apply to the purchase of such portion of such Security.
Any purchase by the Company contemplated pursuant to the
provisions of this Section 3.09 shall be consummated by the delivery of the
consideration to be received by the Holder promptly following the later of
the Change in Control Purchase Date and the time of delivery of the Security
to the Paying Agent in accordance with this Section 3.09.
Notwithstanding anything herein to the contrary, any
Holder delivering to the Paying Agent the Change in Control Purchase Notice
contemplated by this Section 3.09(c) shall have the right to withdraw such
Change in Control Purchase Notice at any time prior to the close of business
on the Business Day preceding the Change in Control Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.10.
25
The Paying Agent shall promptly notify the Company of the
receipt by it of any Change in Control Purchase Notice or written withdrawal
thereof.
Notwithstanding anything herein to the contrary, the
Company's obligations pursuant to this Section 3.09 shall be satisfied if a
third party makes a Change of Control offer in the manner and at the times
and otherwise in compliance in all material respects with the requirements
of this Section 3.09 and purchases all Securities properly tendered and not
withdrawn pursuant to the requirements of this Section 3.09.
SECTION 3.10. Effect of Purchase Notice or Change in
--------------------------------------
Control Purchase Notice. Upon receipt by the Paying Agent of the Purchase
-----------------------
Notice or Change in Control Purchase Notice specified in Section 3.08 or
Section 3.09(c), as applicable, the Holder of the Security in respect of
which such Purchase Notice or Change in Control Purchase Notice, as the case
may be, was given shall (unless such Purchase Notice or Change in Control
Purchase Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price, together with
all accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon, to but not including the Purchase Date
or Change in Control Purchase Price, as the case may be, with respect to
such Security. Such Purchase Price, together with accrued and unpaid
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, thereon, to but not including the Purchase Date or Change
in Control Purchase Price, as the case may be, shall be paid to such Holder,
subject to receipt of funds and/or securities by the Paying Agent, promptly
following the later of (x) the Purchase Date or the Change in Control
Purchase Date, as the case may be, with respect to such Security (provided
that the conditions in Section 3.08 or Section 3.09(c), as applicable, have
been satisfied) and (y) the time of delivery of such Security to the Paying
Agent by the Holder thereof in the manner required by Section 3.08 or
Section 3.09(c), as applicable. Securities in respect of which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
given by the Holder thereof may not be converted pursuant to Article X
hereof on or after the date of the delivery of such Purchase Notice or
Change in Control Purchase Notice, as the case may be, unless such Purchase
Notice or Change in Control Purchase Notice, as the case may be, has first
been validly withdrawn as specified in the following paragraph.
A Purchase Notice or Change in Control Purchase Notice, as
the case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the Paying Agent in accordance with the Purchase
Notice or Change in Control Purchase Notice, as the case may be, at any time
prior to the close of business on the Business Day prior to the Purchase
Date or prior to the close of business on the Change in Control Purchase
Date, as the case may be, specifying:
(i) the certificate number, if any, of the Security in
respect of which such notice of withdrawal is being submitted,
(ii) the Principal Amount of the Security with respect to
which such notice of withdrawal is being submitted, and
26
(iii) the Principal Amount, if any, of such Security which
remains subject to the original Purchase Notice or Change in
Control Purchase Notice, as the case may be, and which has been or
will be delivered for purchase by the Company.
SECTION 3.11. Deposit of Purchase Price or Change in
--------------------------------------
Control Purchase Price. Prior to 10:00 a.m. (New York City time) on the
----------------------
Business Day following the Purchase Date or the Change in Control Purchase
Date, as the case may be, the Company shall deposit with the Trustee or with
the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of
either of them is acting as the Paying Agent, shall segregate and hold in
trust as provided in Section 2.04) an amount of money (in immediately
available funds if deposited on such Business Day) sufficient to pay the
aggregate Purchase Price, together with all accrued and unpaid interest
(including contingent interest, if any) and Liquidated Damages, if any,
thereon, to but not including the Purchase Date or Change in Control
Purchase Price, as the case may be, of all the Securities or portions
thereof which are to be purchased as of the Purchase Date or Change in
Control Purchase Date, as the case may be.
SECTION 3.12. Securities Purchased in Part. Any
----------------------------
Certificated Security that is to be purchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder in
aggregate Principal Amount equal to, and in exchange for, the portion of the
Principal Amount of the Security so surrendered which is not purchased.
SECTION 3.13. Covenant to Comply with Securities Laws upon
--------------------------------------------
Purchase of Securities. When complying with the provisions of Section 3.08
----------------------
or 3.09 hereof (provided that such offer or purchase constitutes an "issuer
tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act at the time
of such offer or purchase), the Company shall (i) comply in all material
respects with Rule 13e-4 and Rule 14e-1 under the Exchange Act, (ii) file
the related Schedule TO (or any successor schedule, form or report) under
the Exchange Act, and (iii) otherwise comply in all material respects with
all Federal and state securities laws so as to permit the rights and
obligations under Section 3.08 or 3.09 to be exercised in the time and in
the manner specified in Section 3.08 or 3.09.
SECTION 3.14. Repayment to the Company. The Trustee and
------------------------
the Paying Agent shall return to the Company any cash that remains unclaimed
as provided in paragraph 11 of the Securities, together with interest or
dividends, if any, thereon (subject to the provisions of Section 7.01(f)),
held by them for the payment of the Purchase Price or Change in Control
Purchase Price, as the case may be, and accrued and unpaid interest, if any
(including contingent interest, if any), and Liquidated Damages, if any;
provided, however, that to the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.11 exceeds the aggregate
Purchase Price or Change in Control Purchase Price, as the case may be, of
the Securities or portions thereof which the Company is obligated to
purchase as of the Purchase Date or Change in Control Purchase Date, as the
case may be, and accrued and unpaid interest
27
thereon, if any (including contingent interest, if any), and Liquidated
Damages, if any then, unless otherwise agreed in writing with the Company,
promptly after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any such
excess to the Company together with interest or dividends, if any, thereon
(subject to the provisions of Section 7.01(f)).
ARTICLE IV
COVENANTS
SECTION 4.01. Payment of Securities. The Company shall
---------------------
promptly make all payments in respect of the Securities on the dates and in
the manner provided in the Securities or pursuant to this Indenture. Any
amounts to be given to the Trustee or Paying Agent, as the case may be,
shall be deposited with the Trustee or Paying Agent, as the case may be, in
immediately available funds by 10:00 a.m. (New York City time) by the
Company. Interest installments, Liquidated Damages, Principal Amount,
Redemption Price, Purchase Price, Change in Control Purchase Price and
interest, if any, due on overdue amounts shall be considered paid on the
applicable date due if at 10:00 a.m. (New York City time) on such date (or,
in the case of a Purchase Price or Change in Control Purchase Price, on the
Business Day following the applicable Purchase Date or Change in Control
Purchase Date, as the case may be) the Trustee or the Paying Agent, as the
case may be, holds, in accordance with this Indenture, money sufficient to
pay all such amounts then due.
The Company shall, to the extent permitted by law, pay
interest on overdue amounts at the rate per annum set forth in paragraph 1
of the Securities, compounded semiannually, which interest shall accrue from
the date such overdue amount was originally due to the date payment of such
amount, including interest thereon, has been made or duly provided for. All
such interest shall be payable on demand. The accrual of such interest on
overdue amounts shall be in addition to the continued accrual of interest on
the Securities.
SECTION 4.02. SEC and Other Reports. The Company shall
---------------------
file with the Trustee, within 15 days after it files such annual and
quarterly reports, information, documents and other reports with the SEC,
copies of its annual report and of the information, documents and other
reports (or copies of such portions of any of the foregoing as the SEC may
by rules and regulations prescribe) which the Company is required to file
with the SEC pursuant to Section 13 or 15(d) of the Exchange Act. In the
event the Company is at any time no longer subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act, it shall continue
to provide the Trustee with reports containing substantially the same
information as would have been required to be filed with the SEC had the
Company continued to have been subject to such reporting requirements. In
such event, such reports shall be provided to the Trustee at the times the
Company would have been required to provide reports had it continued to have
been subject to such reporting requirements. Delivery of such reports,
information and documents is for informational purposes only and the
Trustee's receipt of such shall not constitute notice or constructive notice
of any information contained therein or determinable from information
contained therein.
28
In addition, the Company shall comply with the other
provisions of TIA Section 314(a).
SECTION 4.03. Compliance Certificate. The Company shall
----------------------
deliver to the Trustee within 120 days after the end of each fiscal year of
the Company (beginning with the fiscal year ended March 31, 2003) an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder)
and if the Company shall be in default, specifying all such Defaults and the
nature and status thereof of which they may have knowledge.
SECTION 4.04. Further Instruments and Acts. Upon request
----------------------------
of the Trustee, the Company will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
SECTION 4.05. Maintenance of Office or Agency. The Company
-------------------------------
will maintain in the Borough of Manhattan, The City of New York, an office
or agency of the Trustee, Registrar, Paying Agent and Conversion Agent where
Securities may be presented or surrendered for payment, where Securities may
be surrendered for registration of transfer, exchange, purchase, redemption
or conversion and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Corporate
Trust Office of the Trustee shall initially be such office or agency for all
of the aforesaid purposes. The Company shall give prompt written notice to
the Trustee of the location, and of any change in the location, of any such
office or agency (other than a change in the location of the office of the
Trustee). If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be
made or served at the address of the Trustee set forth in Section 12.02.
The Company may also from time to time designate one or
more other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to maintain an
office or agency in the Borough of Manhattan, the City of New York, for such
purposes.
SECTION 4.06. Delivery of Certain Information. At any time
-------------------------------
when the Company is not subject to Section 13 or 15(d) of the Exchange Act,
upon the request of a Holder or any beneficial owner of Securities or holder
or beneficial owner of Class A Common Stock delivered upon conversion
thereof, the Company will promptly furnish or cause to be furnished Rule
144A Information (as defined below) to such Holder or any beneficial owner
of Securities or holder or beneficial owner of Class A Common Stock, or to a
prospective purchaser of any such security designated by any such holder, as
the case may be, to the extent required to permit compliance by such Holder
or holder with Rule 144A under the Securities Act in connection with the
resale of any such security. "Rule 144A Information" shall be such
---------------------
information as is specified pursuant to Rule 144A(d)(4) under the Securities
Act or any successor provisions. Whether a person is a beneficial owner
shall be determined by the Company to the Company's reasonable satisfaction.
29
SECTION 4.07. Tax Treatment of Securities. The Company and
---------------------------
the Holders, by purchasing the Securities, agree that (i) the Securities are
contingent payment debt instruments as described in Treasury Regulations
Section 1.1275-4, (ii) each Holder shall be bound by the Company's
application of the Treasury Regulations to the Securities, including the
Company's determination that the rate at which interest will be deemed to
accrue on the Securities for United States federal income tax purposes, will
be 9.5% compounded semi-annually, which is the rate comparable to the rate
at which the Company would borrow on a noncontingent, nonconvertible
borrowing with no contingent payments, but with terms and conditions
otherwise comparable to the Securities, (iii) each Holder shall use the
projected payment schedule with respect to the Securities provided by the
Company to the Holder, as provided in Treasury Regulations Section
1.1275-4(b)(4), to determine its interest accruals and adjustments as
provided in Treasury Regulations Section 1.1275-4(b)(4)(iv), (iv) for
purposes of Treasury Regulations Section 1.1275-4, to treat the fair market
value of any Common Stock received upon any conversion of the Securities as
a contingent payment, and (v) the Company and each Holder will not take any
position on a tax return inconsistent with (i), (ii), or (iii), unless
required by applicable law.
On conversion of the Securities, that portion of accrued interest
including accrued contingent interest with respect to the converted
Securities shall not be canceled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through delivery of
the Class A Common Stock (together with the cash payment, if any, in lieu of
fractional shares) in exchange for the Securities being converted pursuant
to the provisions hereof, and the fair market value of such shares of Class
A Common Stock (together with any such cash payment in lieu of fractional
shares) shall be treated as issued, to the extent thereof, first in exchange
for interest accrued and unpaid through the conversion date and accrued and
unpaid contingent interest, and the balance, if any, of such fair market
value of such Class A Common Stock (and any such cash payment) shall be
treated as issued in exchange for the principal amount of the Securities
being converted pursuant to the provisions hereof.
SECTION 4.08. Liquidated Damages. If at any time
------------------
Liquidated Damages become payable by the Company pursuant to the
Registration Rights Agreement, the Company shall promptly deliver to the
Trustee an Officer's Certificate to that effect and stating (i) the amount
of such Liquidated Damages that are payable and (ii) the date on which such
damages are payable pursuant to the terms of the Registration Rights
Agreement. Unless and until a Responsible Officer of the Trustee receives
such Officer's Certificate, the Trustee may assume without inquiry that no
Liquidated Damages are payable. If the Company has paid Liquidated Damages
directly to the persons entitled to them, the Company shall deliver to the
Trustee a certificate setting forth the particulars of such payment.
ARTICLE V
SUCCESSOR CORPORATION
SECTION 5.01. When the Company May Merge or Transfer
--------------------------------------
Assets. The Company shall not consolidate with or merge with or into any
------
other person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, unless:
30
(i) (1) the Company shall be the resulting or surviving
corporation or (2) the person (if other than the Company) formed by
such consolidation or into which the Company is merged or the
person which acquires by conveyance, transfer or lease the
properties and assets of the Company substantially as an entirety
(i) shall be a corporation organized and validly existing under the
laws of the United States or any State thereof or the District of
Columbia, and (ii) shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, all of the obligations of the Company
under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing; and
(iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that
such consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this Article
V and that all conditions precedent herein provided for relating to
such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise) of the properties and assets of one or more
Subsidiaries (other than to the Company or another Subsidiary), which, if
such assets were owned by the Company would constitute all or substantially
all of the properties and assets of the Company shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.
The successor person formed by such consolidation or into
which the Company is merged or the successor person to which such
conveyance, transfer or lease is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor had been named as the
Company herein; and thereafter, except in the case of a lease and
obligations the Company may have under a supplemental indenture pursuant to
Section 10.12, the Company shall be discharged from all obligations and
covenants under this Indenture and the Securities. Subject to Section 9.06,
the Company, the Trustee and the successor person shall enter into a
supplemental indenture to evidence the succession and substitution of such
successor person and such discharge and release of the Company.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. Subject to the provisions
-----------------
set forth below in this Section 6.01, an "Event of Default" occurs if:
----------------
(a) the Company defaults in the payment of interest, if
any (including contingent interest, if any), and Liquidated
Damages, if any, payable on any Security when the same becomes due
and payable, whether or not prohibited by Article XI;
(b) the Company defaults in the payment of the Principal
Amount, Redemption Price, Purchase Price or Change in Control
Purchase Price on any Security
31
when the same becomes due and payable at its Stated Maturity, upon
redemption, upon declaration, when due for purchase by the Company
or otherwise, whether or not prohibited by Article XI;
(c) the Company fails to comply with any of its agreements
in the Securities or this Indenture and such failure continues for
30 days;
(d) the Company or a Subsidiary of the Company defaults in
the payment of Indebtedness in excess of $750,000;
(e) the Company or a Subsidiary of the Company fails to
pay when due any final, non-appealable judgments (other than any
judgment as to which a reputable insurance company has accepted
full liability) aggregating in excess of $750,000, which judgments
are not stayed, bonded or discharged within 60 days of after their
entry;
(f) the Company fails to issue Class A Common Stock upon
conversion of Securities by a Holder in accordance with the
provisions of this Indenture;
(g) the Company fails to give notice to Holders of their
right to require the Company to repurchase Securities upon a Change
in Control or fails to make a payment to purchase Securities
tendered following a Change in Control;
(h) if a material portion of the Company's assets is
attached, seized or subjected to a write or distress warrant or is
levied upon, or comes within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the
same is not terminated or dismissed within 30 days thereafter.
(i) a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company or any
Subsidiary of the Company in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee or sequestrator (or similar official)
of the Company or for any substantial part of its property or
ordering the winding up or liquidation of its affairs and such
decree or order shall remain unstayed and in effect for a period of
45 days; or
(j) the Company or any Subsidiary of the Company shall
commence a voluntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case
under any such law, or consent to the appointment of or taking
possession by a receiver, liquidator, assignee, custodian, trustee
or sequestrator (or similar official) of the Company or any
Subsidiary of the Company or for any substantial part of its
property or make any general assignment for the benefit of
creditors.
The Company shall deliver to the Trustee, within 30 days
after it becomes aware of the occurrence thereof, written notice of any
event which with the giving of notice or the lapse of time, or both, would
become an Event of Default under clause (c) or (d) above, its status and
what action the Company is taking or proposes to take with respect thereto.
32
SECTION 6.02. Defaults and Remedies. If an Event of
---------------------
Default (other than an Event of Default specified in Section 6.01(i) or
6.01(j)) occurs and is continuing, the Trustee by notice to the Company, or
the Holders of at least 25% in aggregate Principal Amount of the Securities
at the time outstanding by notice to the Company and the Trustee, may
declare the Principal Amount of all the Securities plus accrued and unpaid
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, thereon, through the date of declaration to be immediately
due and payable. Upon such a declaration, such Principal Amount plus accrued
and unpaid interest, if any (including contingent interest, if any), and
Liquidated Damages, if any, shall become and be immediately due and payable
subject to the provisions of Article XI. If an Event of Default specified in
Section 6.01(i) or 6.01(j) occurs and is continuing, the Principal Amount of
all the Securities plus accrued and unpaid interest, if any (including
contingent interest, if any), and Liquidated Damages, if any, thereon, shall
become and be immediately due and payable without any declaration or other
act on the part of the Trustee or any Securityholder.
The Holders of a majority in principal amount of the
Securities then outstanding by notice to the Trustee may rescind an
acceleration and its consequences if (a) all existing Events of Default,
other than the nonpayment of the principal of and accrued and unpaid
interest, if any (including contingent interest, if any), and Liquidated
Damages, if any, on the Securities which has become due solely by such
declaration of acceleration, have been cured or waived; (b) the Company has
paid or deposited with the Trustee a sum in immediately available funds
sufficient to pay (i) all overdue interest (including contingent interest,
if any) and Liquidated Damages, if any, on the Securities, (ii) the
principal of any Security which has become due otherwise then by such
declaration of acceleration, and (iii) to the extent the payment of such
interest is lawful, interest on overdue installments of interest and
Liquidated Damages, if any, and overdue principal, which has become due
otherwise than by such declaration of acceleration; (c) the rescission would
not conflict with any judgment or decree of a court of competent
jurisdiction; and (d) all payments due to the Trustee and any predecessor
Trustee under Section 7.07 have been made. No such rescission shall affect
any subsequent Default or Event of Default or impair any right consequent
thereon.
SECTION 6.03. Other Remedies. If an Event of Default
--------------
occurs and is continuing, the Trustee may pursue any available remedy to
collect the payment of the Principal Amount of all the Securities plus all
accrued and unpaid interest (including contingent interest, if any) and
Liquidated Damages, if any, thereon or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee
does not possess any of the Securities or does not produce any of the
Securities in the proceeding. A delay or omission by the Trustee or any
Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by
law.
SECTION 6.04. Waiver of Past Defaults. The Holders of a
-----------------------
majority in aggregate Principal Amount of the Securities at the time
outstanding, by notice in writing to the Trustee (and without notice to any
other Securityholder), may waive an existing Default and its
33
consequences, except (a) an Event of Default described in Section 6.01(a) or
6.01(b), (b) a Default in respect of a provision that under Section 9.02
cannot be amended without the consent of each Securityholder affected or (c)
a Default which constitutes a failure to convert any Security in accordance
with the terms of Article X. When a Default is waived, it is deemed cured,
but no such waiver shall extend to any subsequent or other Default or impair
any consequent right. This Section 6.04 shall be in lieu of Section
316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
SECTION 6.05. Control by Majority. The Holders of a
-------------------
majority in aggregate Principal Amount of the Securities at the time
outstanding may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or of exercising any
trust or power conferred on the Trustee. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture or that the
Trustee determines in good faith is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability
unless the Trustee is offered indemnity satisfactory to it. This Section
6.05 shall be in lieu of Section 316(a)1(A) of the TIA and such Section
316(a)1(A) is hereby expressly excluded from this Indenture, as permitted by
the TIA.
SECTION 6.06. Limitation on Suits. A Securityholder may
-------------------
not pursue any remedy with respect to this Indenture or the Securities
unless:
(a) the Holder gives to the Trustee written notice
stating that an Event of Default is continuing;
(b) the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time
outstanding make a written request to the Trustee
to pursue the remedy;
(c) such Holder or Holders offer to the Trustee
security or indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request
within 60 days after receipt of such notice,
request and offer of security or indemnity; and
(e) the Holders of a majority in aggregate Principal
Amount of the Securities at the time outstanding
do not give the Trustee a direction inconsistent
with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice
the rights of any other Securityholder or to obtain a preference or priority
over any other Securityholder.
SECTION 6.07. Rights of Holders to Receive Payment.
------------------------------------
Subject to the provisions of Article XI hereof, notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
interest installments (including contingent interest, if any), Liquidated
Damages, if any, the Principal Amount, Redemption Price, Purchase Price,
Change in Control Purchase Price or interest, if any, due on overdue amounts
in respect of the Securities held by such Holder, on or after the respective
due dates expressed in the Securities, and to convert the Securities in
accordance with Article X, or to bring suit for the enforcement of any
34
such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of such
Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of
--------------------------
Default described in Section 6.01(a), 6.01(b) or 6.01(g) occurs and is
continuing, the Trustee may recover judgment in its own name and as trustee
of an express trust against the Company for the whole amount owing with
respect to the Securities and the amounts provided for in Section 7.07.
SECTION 6.09. Trustee May File Proofs of Claim. In case of
--------------------------------
the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Company or any other obligor upon the Securities
or the property of the Company or of such other obligor or their creditors,
the Trustee (irrespective of whether interest installments (including
contingent interest, if any), Liquidated Damages, if any, the Principal
Amount, Redemption Price, Purchase Price, Change in Control Purchase Price
or interest, if any, due on overdue amounts in respect of the Securities
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
on the Company for the payment of any such amount) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(a) to file and prove a claim for any accrued and
unpaid interest installments (including
contingent interest, if any), Liquidated Damages,
if any, the whole amount of the Principal Amount,
Redemption Price, Purchase Price, Change in
Control Purchase Price or interest, if any, due
on overdue amounts in respect of the Securities,
and to file such other papers or documents as may
be necessary or advisable in order to have the
claims of the Trustee (including any claim for
the reasonable compensation, expenses,
disbursements and advances of the Trustee, its
agents and counsel or any other amounts due the
Trustee under Section 7.07) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other
property payable or deliverable on any such
claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
7.07.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
35
SECTION 6.10. Priorities. If the Trustee collects any
----------
money pursuant to this Article VI, it shall pay out the money in the
following order:
FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to holders of Senior Indebtedness to the extent
required by Article XI;
THIRD: to Securityholders for amounts due and unpaid on
the Securities for any accrued and unpaid interest
installments (including contingent interest, if any), the
Principal Amount, Redemption Price, Purchase Price, Change
in Control Purchase Price or interest, if any, due on
overdue amounts in respect of the Securities, as the case
may be, ratably, without preference or priority of any
kind, according to such amounts due and payable on the
Securities; and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any
payment to Securityholders pursuant to this Section 6.10. At least 15 days
before such record date, the Trustee shall mail to each Securityholder and
the Company a notice that states the record date, the payment date and the
amount to be paid.
SECTION 6.11. Undertaking for Costs. In any suit for the
---------------------
enforcement of any right or remedy under this Indenture or in any suit
against the Trustee for any action taken or omitted by it as Trustee, a
court in its discretion may require the filing by any party litigant (other
than the Trustee) in the suit of an undertaking to pay the costs of the
suit, and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or
defenses made by the party litigant. This Section 6.11 does not apply to a
suit by the Trustee, a suit by a Holder pursuant to Section 6.07 or a suit
by Holders of more than 10% in aggregate Principal Amount of the Securities
at the time outstanding. This Section 6.11 shall be in lieu of Section
315(e) of the TIA and such Section 315(e) is hereby expressly excluded from
this Indenture, as permitted by the TIA.
SECTION 6.12. Waiver of Stay, Extension or Usury Laws. The
---------------------------------------
Company covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury or
other law wherever enacted, now or at any time hereafter in force, which
would prohibit or forgive the Company from paying all or any portion of any
interest installment (including contingent interest, if any), Liquidated
Damages, if any, the Principal Amount, Redemption Price, Purchase Price,
Change in Control Purchase Price or interest, if any, due on overdue amounts
in respect of the securities, as contemplated herein, or which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law
had been enacted.
36
ARTICLE VII
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of
-----------------
Default has occurred and is continuing, 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 such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(ii) in the absence of bad faith on its part, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture, but in case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the certificates and opinions to determine whether or
not they conform to the requirements of this Indenture, but need
not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein.
This Section 7.01(b) shall be in lieu of Section 3.15(a)
of the TIA and such Section 315(a) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph (c) does not limit the effect of
paragraph (b) of this Section 7.01;
(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 6.05.
Sections 7.01(c)(i), (ii) and (iii) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315 (d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2)
and 315 (d) (3) are hereby expressly excluded from this Indenture, as
permitted by the TIA.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to Sections 7.01(a), (b), (c) and (e).
37
(e) The Trustee may refuse to perform any duty or exercise
any right or power or expend 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 (acting in any capacity hereunder) shall be under no liability for
interest on any money received by it hereunder unless otherwise agreed in
writing with the Company.
SECTION 7.02. Rights of Trustee. Subject to its duties and
-----------------
responsibilities under the TIA,
(a) the Trustee may conclusively rely and shall be
protected in acting or refraining from acting
upon any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document reasonably believed by it to be genuine
and to have been signed or presented by the
proper party or parties;
(b) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter
be proved or established prior to taking,
suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein
specifically prescribed) may obtain and, in the
absence of bad faith or negligence on its part,
conclusively rely upon an Officers' Certificate
and/or an Opinion of Counsel;
(c) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder
either directly or by or through agents,
attorneys, custodians or nominees and the Trustee
shall not be responsible for any misconduct or
negligence on the part of any agent, attorney,
custodian or nominee appointed with due care by
it hereunder;
(d) the Trustee shall not be liable for any action
taken, suffered, or omitted to be taken by it in
good faith which it reasonably believes to be
authorized or within its rights or powers
conferred under this Indenture;
(e) the Trustee may consult with counsel selected by
it and any advice or opinion of such counsel
shall be full and complete authorization and
protection in respect of any action taken or
suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion of
such counsel;
(f) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it
by this Indenture at the request, order or
direction of any of the Holders, pursuant to the
provisions of this Indenture, unless such Holders
shall have offered to the Trustee security or
indemnity satisfactory to it against the costs,
expenses and liabilities which may be incurred
therein or thereby;
38
(g) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a
Company Order and any resolution of the Board of
Directors be sufficiently evidenced by a Board
Resolution;
(h) the Trustee shall not be bound to make any
investigation into the facts or matters stated in
any resolution, certificate, statement,
instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may
make such further inquiry or investigation into
such facts or matters as it may see fit, and, if
the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled,
during normal business hours, to examine the
books, records and premises of the Company,
personally or by agent or attorney at the sole
cost of the Company and shall incur no liability
or additional liability of any kind by reason of
such inquiry or investigation;
(i) the Trustee shall not be deemed to have notice of
any Default or Event of Default unless a
Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any
event which is in fact such a Default is received
by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the
Securities and this Indenture;
(j) the rights, privileges, protections, immunities
and benefits given to the Trustee, including its
right to be indemnified, are extended to, and
shall be enforceable by, the Trustee in each of
its capacities hereunder, and to each agent,
custodian and other Person employed to act
hereunder;
(k) the Trustee may request that the Company deliver
an Officers' Certificate setting forth the names
of individuals and/or titles of officers
authorized at such time to take specified actions
pursuant to this Indenture, which Officers'
Certificate may be signed by any person
authorized to sign an Officers' Certificate,
including any person specified as so authorized
in any such certificate previously delivered and
not superseded; and
(l) neither the Trustee nor any of its officers,
directors, employees or agents shall be liable
for any action taken or omitted under this
Indenture or in connection therewith except to
the extent caused by the Trustee's gross
negligence, bad faith or willful misconduct, as
determined by the final judgment of a court of
competent jurisdiction, no longer subject to
appeal or review. Anything in this Indenture to
the contrary notwithstanding, in no event shall
the Trustee be liable for special, indirect or
consequential loss or damage of any kind
whatsoever (including but no limited to lost
profits), even if the Trustee has been advised of
the likelihood of such loss or damage and
regardless of the form of action.
SECTION 7.03. Individual Rights of Trustee. The Trustee in
----------------------------
its individual or any other capacity may become the owner or pledgee of
Securities and may otherwise deal with
39
the Company or its Affiliates with the same rights it would have if it were
not Trustee. Any Paying Agent, Registrar, Conversion Agent or co-registrar
may do the same with like rights. However, the Trustee must comply with
Sections 7.10 and 7.11.
SECTION 7.04. Trustee's Disclaimer. The Trustee makes no
--------------------
representation as to the validity or adequacy of this Indenture or the
Securities, it shall not be accountable for the Company's use or application
of the proceeds from the Securities, it shall not be responsible for any
statement in any registration statement for the Securities under the
Securities Act or in any offering document for the Securities, the Indenture
or the Securities (other than its certificate of authentication), or the
determination as to which beneficial owners are entitled to receive any
notices hereunder.
SECTION 7.05. Notice of Defaults. If a Default occurs and
------------------
if it is known to the Trustee, the Trustee shall give to each Securityholder
notice of all current Defaults known to it within 90 days after any such
Default occurs or, if later, within 15 days after it is known to the
Trustee, unless such Default shall have been cured or waived before the
giving of such notice. Notwithstanding the preceding sentence, except in the
case of a Default described in Sections 6.01(a) and 6.01(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
interests of Securityholders. The second sentence of this Section 7.05 shall
be in lieu of the proviso to Section 315(b) of the TIA and such proviso is
hereby expressly excluded from this Indenture, as permitted by the TIA.
SECTION 7.06. 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 Securityholder a brief report
dated as of such May 15 that complies with TIA Section 313(a), if required
by such Section 313(a). The Trustee also shall comply with TIA Section
313(b).
A copy of each report at the time of its mailing to
Securityholders shall be filed with the SEC and each securities exchange, if
any, on which the Securities are listed. The Company agrees to notify the
Trustee promptly whenever the securities become listed on any securities
exchange and of any delisting thereof.
SECTION 7.07. Compensation and Indemnity. The Company
--------------------------
agrees:
(a) to pay to the Trustee from time to time, and the
Trustee shall be entitled to, such compensation
as the Company and the Trustee shall from time to
time agree in writing for all services rendered
by it hereunder (which compensation shall not be
limited (to the extent permitted by law) 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
incurred or made by the Trustee in accordance
with any provision of this Indenture or any
documents executed in connection herewith
(including the reasonable compensation
40
and the expenses, advances and disbursements of
its agents and counsel), except any such expense,
disbursement or advance as may be attributable to
its negligence, bad faith or willful misconduct;
and
(c) to indemnify the Trustee or any predecessor
Trustee and their agents, officers, directors and
employees for, and to hold them harmless against,
any loss, damage, claim, liability, cost or
expense (including attorneys' fees and expenses
and taxes (other than taxes based upon, measured
by or determined by the income of the Trustee))
incurred without negligence, misconduct or bad
faith on its part, arising out of or in
connection with the acceptance or administration
of this trust, including the costs and expenses
of defending itself against any claim (whether
asserted by the Company or any Holder or any
other Person) or liability in connection with the
exercise or performance of any of its powers or
duties hereunder.
To secure the Company's payment obligations in this
Section 7.07, the Trustee shall have a lien prior to the Securities on all
money or property held or collected by the Trustee, except that held in
trust to pay interest installments (including contingent interest, if any),
Liquidated Damages, if any, the Principal Amount, Redemption Price, Purchase
Price, Change in Control Purchase Price or interest, if any, due on overdue
amounts, as the case may be, in respect of any particular Securities.
The Company's payment obligations pursuant to this Section
7.07 shall survive the discharge of this Indenture or the earlier
termination or resignation of the Trustee. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(e) or Section
6.01(f), the expenses, including the reasonable charges and expenses of its
counsel, are intended to constitute expenses of administration under any
bankruptcy law.
SECTION 7.08. Replacement of Trustee. The Trustee may
----------------------
resign by so notifying the Company; provided, however, that no such
resignation shall be effective until a successor Trustee has accepted its
appointment pursuant to this Section 7.08. The Holders of a majority in
aggregate Principal Amount of the Securities at the time outstanding may
remove the Trustee by so notifying the Trustee and the Company. The Company
shall remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or public officer takes charge of the
Trustee or its property; or
(d) 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, the Company shall promptly
appoint, by resolution of its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of
its appointment to the retiring Trustee and to the Company satisfactory in
form and substance to the retiring Trustee
41
and the Company. Thereupon the resignation or removal of the retiring
Trustee shall become effective, and the successor Trustee shall have all the
rights, powers and duties of the Trustee under this Indenture. The successor
Trustee shall mail a notice of its succession to Securityholders. 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 7.07.
If a successor Trustee does not take office within 30 days
after the retiring Trustee gives its notice of resignation or is removed,
the retiring Trustee, the Company or the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding may petition any
court of competent jurisdiction at the expense of the Company for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.10, any
Securityholder may petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
SECTION 7.09. Successor Trustee by Xxxxxx. If the Trustee
---------------------------
consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets (including the
administration of the trust created by this Indenture) to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.
SECTION 7.10. Eligibility; Disqualification. The Trustee
-----------------------------
shall at all times satisfy the requirements of TIA Section 310(a)(1). The
Trustee (or its parent holding company) shall have a combined capital and
surplus of at least $50,000,000 as set forth in its most recent published
annual report of condition. Nothing herein contained shall prevent the
Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b). The Trustee shall comply with
TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities or certificates of interest or participation in other
securities of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 7.11. Preferential Collection of Claims Against
-----------------------------------------
Company. The Trustee shall comply with TIA Section 311(a), excluding any
-------
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein.
ARTICLE VIII
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Securities. When
------------------------------------
(i) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (ii)
all outstanding Securities have become due and payable and the Company
deposits with the Trustee Cash, in immediately available funds, sufficient
to pay all amounts due and owing on all outstanding Securities (other than
Securities replaced pursuant to
42
Section 2.07), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section
7.07, cease to be of further effect. The Trustee shall join in the execution
of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand at the cost and expense of the Company
and accompanied by an Officers' Certificate and Opinion of Counsel.
SECTION 8.02. Repayment to the Company. The Trustee and
------------------------
the Paying Agent shall return to the Company upon written request any money
held by them for the payment of any amount with respect to the Securities
that remains unclaimed for two years, subject to applicable unclaimed
property law. After return to the Company, as applicable, Holders entitled
to the money must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person and
the Trustee and the Paying Agent shall have no further liability to the
Securityholders with respect to such money or securities for that period
commencing after the return thereof.
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Holders. The Company and
--------------------------
the Trustee may amend or supplement this Indenture or the Securities without
notice to or consent of any Securityholder:
(a) to comply with Article V or Section 10.12;
(b) to cure any ambiguity, omission, defect or
inconsistency;
(c) to make provisions with respect to the conversion
right of the Holders pursuant to the requirements
of Section 10.12 and Section 10.01;
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with
respect to the Securities;
(e) to reduce the Conversion Price;
(f) to make any changes that would provide the
holders of Securities with any additional rights
or benefits;
(g) to make any change that does not adversely affect
the rights of any Holder; or
(h) to comply with the provisions of the TIA, or with
any requirement of the SEC arising as a result of
the qualification of this Indenture under the
TIA.
SECTION 9.02. With Consent of Holders.
-----------------------
The Company and the Trustee may amend or supplement this
Indenture or the Securities without notice to any Securityholder but with
the written consent of the Holders of a
43
majority in aggregate Principal Amount of the Securities then outstanding.
The Holders of a majority in aggregate Principal Amount of the Securities
then outstanding may waive compliance by the Company with restrictive
provisions of this Indenture other than as set forth in this Section 9.02
below, and waive any past Default under this Indenture and its consequences,
except a Default in the payment of the principal of or interest on any
Security or in respect of a provision which under this Indenture cannot be
modified or amended without the consent of the Holder of each outstanding
Security affected.
Subject to Section 9.04, without the written consent of
each Securityholder affected, however, an amendment, supplement or waiver,
including a waiver pursuant to Section 6.04, may not:
(a) change the Stated Maturity of the principal of,
or any payment date of any installment of
interest (including contingent interest, if any)
or Liquidated Damages, if any, on, any Security;
(b) reduce the principal amount of, or the rate of
interest (including contingent interest, if any)
or Liquidated Damages, if any, on, any Security,
whether upon acceleration, redemption or
otherwise, or alter the manner of calculation of
interest or Liquidated Damages, if any, or the
rate of accrual thereof on any Security;
(c) change the currency for payment of principal of,
or interest (including contingent interest, if
any) or Liquidated Damages, if any, on any
Security;
(d) impair the right to institute suit for the
enforcement of any payment of principal of, or
interest (including contingent interest, if any)
or Liquidated Damages, if any, on, any Security
when due;
(e) adversely affect the conversion rights provided
in Article X;
(f) modify Article XI in a manner adverse to the
rights of the Holders of the Securities;
(g) modify the provisions of this Indenture requiring
the Company to make an offer to repurchase
Securities upon a Change in Control or to
repurchase the Securities at the option of the
Holders pursuant to Section 3.08 in any case in a
manner adverse to the Holders of the Securities;
(h) reduce the percentage of principal amount of the
outstanding Securities necessary to modify or
amend this Indenture or to consent to any waiver
provided for in this Indenture;
(i) waive a Default in the payment of the principal
amount of, or interest (including contingent
interest, if any) or Liquidated Damages, if any,
on, any Security (except as provided in Section
6.02); or
44
(j) make any changes in Section 6.04, Section 6.07 or
this paragraph.
It shall not be necessary for the consent of the Holders
under this Section 9.02 to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment under this Section 9.02 becomes
effective, the Company shall mail to each Holder a notice briefly describing
the amendment. Failure to mail the notice or a defect in the notice shall
not effect the validity of the amendment.
SECTION 9.03. Compliance with Trust Indenture Act. Every
-----------------------------------
supplemental indenture executed pursuant to this Article IX shall comply
with the TIA.
SECTION 9.04. Revocation and Effect of Consents. Until an
---------------------------------
amendment, waiver or other action by Holders becomes effective, a consent
thereto by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent, waiver or action as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the date
the amendment, waiver or action becomes effective. After an amendment,
waiver or action becomes effective, it shall bind every Securityholder.
SECTION 9.05. Notation on or Exchange of Securities.
-------------------------------------
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article IX may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company
shall so determine, new Securities so modified as to conform, in the opinion
of the Trustee and the Board of Directors of the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.
SECTION 9.06. Trustee to Sign Supplemental Indentures. The
---------------------------------------
Trustee shall sign any supplemental indenture authorized pursuant to this
Article IX if the amendment contained therein does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
supplemental indenture the Trustee shall receive, and (subject to the
provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment
is authorized or permitted by this Indenture.
SECTION 9.07. Effect of Supplemental Indentures. Upon the
---------------------------------
execution of any supplemental indenture under this Article IX, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes, and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
45
ARTICLE X
CONVERSIONS
SECTION 10.01. Conversion Privilege. Subject to the
--------------------
provisions of this Article X, a Holder of a Security may convert such
Security into Class A Common Stock (the shares of Class A Common Stock
issuable upon such conversion, the "Conversion Shares"), at the Conversion
-----------------
Price then in effect, together with those rights, warrants or options
specified in Section 10.06(f) hereof, to the extent applicable, if any of
the following conditions is satisfied:
(a) during any calendar quarter (the "Quarter")
-------
commencing after June 30, 2003, if the Closing
Price (as defined hereinafter) per share of Class
A Common Stock for at least 20 Trading Days in
the period of 30 consecutive Trading Days ending
on the last Trading Day of the Quarter preceding
the Quarter in which the conversion of such
Security occurs is more than 120% of the
Conversion Price on such thirtieth Trading Day;
(b) the Security has been called for redemption by
the Company pursuant to Section 3.01;
(c) the conversion of such Security occurs during the
five Trading Day period immediately following a
period of nine consecutive Trading Days in which
the Security Trading Price (as determined
following a request by a Holder of the Securities
in accordance with the procedures set forth below
in this Section 10.01) for each Trading Day in
such period was less than 95% of the product of
the Closing Price per share of Class A Common
Stock on such Trading Day multiplied by the
number of shares of Class A Common Stock issuable
(assuming satisfaction of conditions to
conversion) upon conversion of $1,000 in
principal amount of the Securities (the condition
specified in this clause (e) being the "95%
---
Trading Condition");
-----------------
(d) (i) an issuance of rights, warrants or options
referred to in Section 10.06(b) occurs or (ii) a
distribution referred to in Section 10.06(c)
occurs where the fair market value of such
distribution per share of Class A Common Stock
(as determined by the Board of Directors of the
Company, which determination shall be conclusive
evidence of such fair market value) exceeds 5% of
the Closing Price per share of Class A Common
Stock on the Trading Day immediately preceding
the date of declaration of such distribution; or
(e) (x) the Company is party to a consolidation,
merger, share exchange, sale of all or
substantially all of its assets or other similar
transaction pursuant to which the Class A Common
Stock is subject to conversion into shares of
stock, other securities or property (including
cash) pursuant to Section 10.12 and (y) the
conversion of such Security occurs at any time
from and after the date that is 15 days prior to
the date of the anticipated effective
46
time of such transaction until and including the
date that is 15 days after the actual effective
date of such transaction.
In connection with the foregoing clause (a), at the end of
each Quarter the Conversion Agent shall, on the Company's behalf, determine
whether the Securities are convertible in the subsequent Quarter pursuant to
such Clause (a), and promptly notify the Holders if the Securities are
convertible.
In the case of the foregoing clauses (d)(i) and (ii), the
Company must notify the Holders at least 20 days prior to the ex-dividend
date for such issuance or distribution. Once the Company has given such
notice, Holders may surrender their Securities for conversion at any time
thereafter until the earlier of the close of business on the Business Day
prior to the ex-dividend date or the Company's announcement that such
issuance or distribution will not take place. This provision shall not apply
if the Holder of a Security otherwise participates in the distribution
without conversion.
The "Ex-Dividend Date" for any such issuance or
----------------
distribution means the date immediately prior to the commencement of
"ex-dividend" trading for such issuance or distribution on The New York
Stock Exchange or such other national securities exchange or The NASDAQ
Stock Market or similar system of automated dissemination of quotations of
securities prices on which the Class A Common Stock is then listed or
quoted.
The number of shares of Class A Common Stock issuable upon
conversion of a Security shall be determined by dividing the principal
amount of the Security or portion thereof surrendered for conversion by the
Conversion Price in effect on the Conversion Date. The initial Conversion
Price is set forth in paragraph 8 of the Securities and is subject to
adjustment as provided in this Article X.
A Holder may convert a portion of a Security equal to
$1,000 or any integral multiple thereof. Provisions of this Indenture that
apply to conversion of all of a Security also apply to conversion of a
portion of a Security.
If a Security is called for redemption pursuant to Article
III, the right to convert such Security shall terminate at the close of
business on the second Business Day before the Redemption Date for such
Security (unless the Company shall default in making the redemption payment
then due, in which case the conversion right shall terminate on the date
such Default is cured and such Security is redeemed). A Security in respect
of which a Holder has delivered a Purchase Notice pursuant to Section 3.08
or a Change in Control Purchase Notice pursuant to Section 3.09 exercising
the option of such Holder to require the Company to repurchase such Security
may be converted only if such Purchase Notice or Change in Control Purchase
Notice, as the case may be, is withdrawn by a written notice of withdrawal
delivered to the Paying Agent prior to the close of business on the Business
Day prior to the Purchase Date or prior to the close of business on the
Change in Control Purchase Date, as the case may be, in accordance with
Section 3.10.
A Holder of Securities is not entitled to any rights of a
holder of Class A Common Stock until such Holder has converted its
Securities into Class A Common Stock and, upon such
47
conversion, only to the extent such Securities are deemed to have been
converted into Class A Common Stock pursuant to this Article X.
The "Security Trading Price" per $1,000 in principal
----------------------
amount of Securities on any date of determination means the average of the
secondary market bid quotations per $1,000 in principal amount of Securities
obtained by the Conversion Agent for $5,000,000 in principal amount of
Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers selected by the Company; provided that if at least three such bids
cannot reasonably be obtained by the Conversion Agent, but two such bids are
obtained, then the average of the two bids shall be used, and if only one
such bid can reasonably be obtained by the Conversion Agent, such one bid
shall be used. If the Conversion Agent cannot reasonably obtain at least one
bid for $5,000,000 in principal amount of Securities from a nationally
recognized securities dealer or, in the reasonable judgment of the Company,
the bid quotations are not indicative of the secondary market value of the
Securities, then the Security Trading Price will be determined in good faith
by the calculation agent (which shall initially be the Trustee unless the
Trustee shall have appointed a calculation agent, which may be any
investment bank with a national or international reputation with experience
in such matters, including an Initial Purchaser or its successors) taking
into account in such determination such factors as it, in its sole
discretion after consultation with the Company, deems appropriate. Other
than in connection with a determination of whether contingent interest shall
be payable, the Conversion Agent shall have no obligation to determine the
Security Trading Price unless the Company has requested such determination;
and the Company shall have no obligation to make such request unless a
Holder of the Securities provides the Company with reasonable evidence that
the Security Trading Price would be less than 95% of the product of the
Closing Price per share of the Class A Common Stock and the number of shares
of Class A Common Stock issuable upon conversion of $1,000 in principal
amount of Securities (assuming satisfaction of conditions to such
conversion); at which time the Company shall instruct the Conversion Agent
to determine the Security Trading Price beginning on the next Trading Day
and on each successive Trading Day until the Security Trading Price is
greater than or equal to 95% of the product of the Closing Price per share
of Class A Common Stock and the number of shares of Class A Common Stock
issuable upon conversion of $1,000 in principal amount of Securities
(assuming satisfaction of conditions to such conversion).
SECTION 10.02. Conversion Procedure. To convert a
--------------------
Security, a Holder must satisfy the requirements in paragraph 8 of the
Securities and (i) complete and manually sign the conversion notice on the
back of the Security and deliver such notice to the Conversion Agent, (ii)
surrender the Security to the Conversion Agent, (iii) furnish appropriate
endorsements and transfer documents if required by the Registrar or the
Conversion Agent, (iv) pay any transfer or other tax, if required by Section
10.04 and (v) if the Security is held in book-entry form, complete and
deliver to the Depositary appropriate instructions pursuant to the
Depositary's book-entry conversion programs. The date on which the Holder
satisfies all of the foregoing requirements is the "Conversion Date". As
---------------
soon as practicable after the Conversion Date, the Company shall deliver to
the Holder through the Conversion Agent either (i) a certificate for or (ii)
a book-entry notation of the number of whole shares of Class A Common Stock
issuable upon the conversion and cash in lieu of any fractional shares
pursuant to Section 10.05; provided, however, that in the event of a
Principal Value Conversion referred to below in this Section 10.02, the
Company shall deliver to the Holder through the Conversion Agent such cash
48
and/or Class A Common Stock as shall be specified in the Principal Value
Conversion Notice pertaining to such Principal Value Conversion.
The person in whose name the certificate is registered
shall be deemed to be a stockholder of record on the Conversion Date;
provided, however, that no surrender of a Security on any date when the
stock transfer books of the Company shall be closed shall be effective to
constitute the person or persons entitled to receive the shares of Class A
Common Stock upon such conversion as the record holder or holders of such
shares of Class A Common Stock on such date, but such surrender shall be
effective to constitute the person or persons entitled to receive such
shares of Class A Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; provided, further, that such conversion
shall be at the Conversion Price in effect on the date that such Security
shall have been surrendered for conversion, as if the stock transfer books
of the Company had not been closed. Upon conversion of a Security, such
person shall no longer be a Holder of such Security.
No payment or adjustment will be made for accrued
interest, if any (including contingent interest, if any), or Liquidated
Damages, if any, on a converted Security or for dividends or distributions
on shares of Class A Common Stock issued upon conversion of a Security
(provided that the shares of Class A Common Stock received upon conversion
of Securities shall continue to accrue Liquidated Damages, as applicable, in
accordance with the Registration Rights Agreement and shall be entitled to
receive, at the next interest payment date, any accrued and unpaid
Liquidated Damages with respect to the converted Securities), but if any
Holder surrenders a Security for conversion between the record date for the
payment of an installment of interest and the next interest payment date,
then, notwithstanding such conversion, the interest (including contingent
interest, if any) or Liquidated Damages, if any, payable on such interest
payment date shall be paid to the Holder of such Security on such record
date. In such event, such Security, when surrendered for conversion, must be
accompanied by delivery of a check payable to the Conversion Agent in an
amount equal to the interest (including contingent interest, if any) or
Liquidated Damages, if any, payable on such interest payment date on the
portion so converted. If such payment does not accompany such Security, the
Security shall not be converted; provided, however, that no such check shall
be required if such Security has been called for redemption on a Redemption
Date within the period between and including such record date and such
interest payment date, or if such Security is surrendered for conversion on
the interest payment date. If the Company defaults in the payment of
interest (including contingent interest, if any) or Liquidated Damages, if
any, payable on the interest payment date, the Conversion Agent shall repay
such funds to the Holder.
If a Holder converts more than one Security at the same
time, the number of shares of Class A Common Stock issuable upon the
conversion shall be based on the aggregate principal amount of Securities
converted.
Upon surrender of a Security that is converted in part,
the Company shall execute, and the Trustee shall authenticate and deliver to
the Holder, a new Security equal in principal amount to the unconverted
portion of the Security surrendered.
49
If on the date of conversion of a Security pursuant to the
95% Trading Condition the Closing Price per share of Class A Common Stock is
greater than the Conversion Price, the Company may elect to pay to the
Holder of such Security, in lieu of issuance of Conversion Shares based on
the Conversion Price, cash or Class A Common Stock or a combination of cash
and Class A Common Stock, at the Company's option, with a value equal to the
principal amount of the Security surrendered for conversion as of such
Conversion Date (a "Principal Value Conversion"). The Company shall notify
--------------------------
the surrendering Holder of any Security whose conversion is a Principal
Value Conversion and the Trustee (such notice being a "Principal Value
---------------
Conversion Notice") of such Principal Value Conversion by the second Trading
-----------------
Day following the Conversion Date for such conversion whether the Company
shall pay to such Holder all or a portion of the principal amount of such
Security in cash, Class A Common Stock or a combination of cash and Class A
Common Stock and, if a combination, the percentages of the principal amount
in respect of which it will pay in cash or Class A Common Stock. The Company
may not change its election with respect to the consideration (or components
or percentages of components thereof) to be paid upon a Principal Value
Conversion once the Company has given its Principal Value Conversion Notice
to the Holder surrendering such Security whose conversion is a Principal
Value Conversion. Any Class A Common Stock to be delivered upon a Principal
Value Conversion shall be valued at the greater of (x) the Conversion Price
on the Conversion Date for such conversion and (y) the Closing Price per
share of Class A Common Stock on the third Trading Day after such Conversion
Date. The Company shall pay any portion of the principal amount to be paid
in cash in a Principal Value Conversion on the third Trading Day after the
Conversion Date for such conversion. With respect to any portion of the
principal amount to be paid in Class A Common Stock in a Principal Value
Conversion, the Company shall deliver the Class A Common Stock to the Holder
of the Security surrendered for conversion in such Principal Value
Conversion on the fourth Trading Day following the Conversion Date for such
conversion.
SECTION 10.03. Adjustments Below Par Value. Before taking
---------------------------
any action which would cause an adjustment decreasing the Conversion Price
so that the shares of Class A Common Stock issuable upon conversion of the
Securities would be issued for less than the par value of such Class A
Common Stock, the Company will take all corporate action which may be
necessary in order that the Company may validly and legally issue fully paid
and nonassessable shares of such Class A Common Stock at such adjusted
Conversion Price.
SECTION 10.04. Taxes on Conversion. If a Holder converts a
-------------------
Security, the Company shall pay any documentary, stamp or similar issue or
transfer tax due on the issue of shares of Class A Common Stock upon such
conversion. However, the Holder shall pay any such tax which is due because
the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificates
representing the Class A Common Stock being issued in a name other than the
Holder's name until the Conversion Agent receives a sum sufficient to pay
any tax which will be due because the shares are to be issued in a name
other than the Holder's name. Nothing herein shall preclude any tax
withholding required by law or regulations.
50
SECTION 10.05. Company to Provide Stock.
------------------------
The Company shall, prior to issuance of any Securities
hereunder, and from time to time as may be necessary, reserve, out of its
authorized but unissued Class A Common Stock a sufficient number of shares
of Class A Common Stock to permit the conversion of all outstanding
Securities for shares of Class A Common Stock. The shares of Class A Common
Stock or other securities issued upon conversion of Securities bearing a
Legend as provided in Section 2.06(f) shall bear a legend substantially in
the following form:
"THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION
OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF
THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF THIS
SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
IN EACH OF CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN
(A) ABOVE."
No fractional shares of Class A Common Stock shall be
issued upon conversion of Securities. If more than one Security shall be
surrendered for conversion at one time by the same holder, the number of
full shares which shall be issuable upon conversion shall be computed on the
basis of the aggregate principal amount of the Securities (or specified
portions thereof to the extent permitted hereby) so surrendered. If any
fractional share of Class A Common Stock would be issuable upon the
conversion of any Security or Securities, the Company shall make an
adjustment thereof in cash at the current market value thereof. For these
purposes, the current market value of a share of Class A Common Stock shall
be the Closing Price per share of Class A Common Stock on the first Business
Day immediately preceding the day on which the Securities (or specified
portions thereof) are deemed to have been converted.
51
The Company covenants that all shares of Class A Common
Stock delivered upon conversion of the Securities shall be newly issued
shares or treasury shares, shall be duly authorized, validly issued, fully
paid and non-assessable and shall be free from preemptive rights and free of
any lien or adverse claim.
The Company will endeavor promptly to comply with all
federal and state securities laws regulating the offer and delivery of
shares of Class A Common Stock upon conversion of Securities, if any, and
will list or cause to have quoted such shares of Class A Common Stock on
each national securities exchange or in the over-the-counter market or such
other market on which the Class A Common Stock is then listed or quoted.
SECTION 10.06. Adjustment of Conversion Price. The
------------------------------
conversion price (the "Conversion Price") shall be that price set forth in
----------------
paragraph 8 of the form of Security attached hereto as Exhibit A and shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend or
other distribution in shares of Class A Common
Stock or other Capital Stock to all or
substantially all holders of Class A Common
Stock, (ii) subdivide its outstanding Class A
Common Stock into a greater number of shares,
(iii) combine its outstanding Class A Common
Stock into a smaller number of shares or (iv)
reclassify its outstanding Class A Common Stock,
the Conversion Price in effect immediately prior
thereto shall be adjusted so that the Holder of
any Security thereafter surrendered for
conversion shall be entitled to receive the
number of shares of Capital Stock which it would
have owned or have been entitled to receive had
such Security been converted immediately prior to
the happening of such event. An adjustment made
pursuant to this subsection (a) shall become
effective immediately after the record date in
the case of a dividend or distribution and shall
become effective immediately after the effective
date in the case of subdivision, combination or
reclassification.
(b) In case the Company shall issue to all or
substantially all holders of its Class A Common
Stock, rights, warrants or options entitling such
holders (for a period commencing no earlier than
the record date described below and expiring not
more than 60 days after such record date) to
subscribe for or purchase shares of Common Stock
(or securities convertible into Common Stock) at
a price per share less than the current market
price per share of Common Stock (as determined in
accordance with subsection (e) below) at the
record date for the determination of stockholders
entitled to receive such rights, warrants or
options, the Conversion Price in effect
immediately prior thereto shall be adjusted so
that the Conversion Price shall equal the price
determined by multiplying the Conversion Price in
effect immediately prior to such record date by a
fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on
such record date, plus the number of shares which
the aggregate subscription or purchase price for
the total number of shares of Common Stock
offered by the rights, warrants or options so
issued (or the aggregate
52
conversion price of the convertible securities
offered by such rights, warrants or options)
would purchase at such current market price, and
the denominator of which shall be the number of
shares of Common Stock outstanding on such record
date plus the number of additional shares of
Common Stock offered by such rights, warrants or
options (or into which the convertible securities
so offered by such rights, warrants or options
are convertible). Such adjustment shall be made
successively whenever any such rights, warrants
or options are issued, and shall become effective
immediately after such record date. If at the end
of the period during which such rights, warrants
or options are exercisable not all rights,
warrants or options shall have been exercised,
the adjusted Conversion Price shall be
immediately readjusted to what it would have been
upon application of the foregoing adjustment
substituting the number of additional shares of
Common Stock actually issued (or the number of
shares of Common Stock issuable upon conversion
of convertible securities actually issued) for
the total number of shares of Common Stock
offered (or the convertible securities offered).
(c) In case the Company shall distribute to all or
substantially all holders of its Class A Common
Stock any shares of Capital Stock of the Company
(other than Common Stock) or evidences of its
indebtedness, cash, other securities or other
assets, or shall distribute to all or
substantially all holders of its Class A Common
Stock, rights, warrants or options to subscribe
for or purchase any of its securities (excluding
(i) rights, options and warrants referred to in
Section 10.06(b) above; (ii) those dividends,
distributions, subdivisions and combinations
referred to in Section 10.06(a) above; and (iii)
dividends and distributions paid in cash in an
aggregate amount that, combined together with (A)
all other such cash distributions made within the
preceding 12 months in respect of which no
adjustment has been made under this Section 10.06
and (B) the fair market value of consideration
payable in respect of any repurchases (including
by way of tender offers) by the Company or any of
its Subsidiaries or Affiliates, of Class A Common
Stock concluded within the preceding 12 months,
in each case in respect of which no adjustment
has been made under this Section 10.06, does not
exceed 5% of Class A Market Capitalization as of
the record date for such distribution), then in
each such case the Conversion Price shall be
adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in
effect immediately prior to the date of such
distribution by a fraction, the numerator of
which shall be the current market price per share
(as defined in Section 10.06(e) below) of the
Class A Common Stock on the record date mentioned
below less the fair market value on such record
date (as determined by the Board of Directors of
the Company, whose determination shall be
conclusive evidence of such fair market value) of
the portion of the Capital Stock or evidences of
indebtedness, securities or assets so distributed
or of such rights, warrants or options, in each
case as applicable, to one share of Class A
Common Stock, and the denominator
53
of which shall be the current market price per
share (as defined in Section 10.06(e) below) of
the Class A Common Stock on such record date.
Such adjustment shall become effective
immediately after the record date for the
determination of stockholders entitled to receive
such distribution.
(d) In case the Company or any of its Subsidiaries
shall repurchase (including by way of tender
offer, but excluding shares purchased in
connection with the initial offering of the
Securities) shares of Class A Common Stock, and
the fair market value of the sum of (i) the
aggregate consideration paid for such Class A
Common Stock, (ii) the aggregate fair market
value of cash dividends and distributions of the
type described in clause (iii) of the preceding
paragraph (c) paid within the 12 months preceding
the date of purchase of such shares of Class A
Common Stock in respect of which no adjustment
pursuant to this Section 10.06 previously has
been made, and (iii) the aggregate fair market
value of any amounts previously paid for the
repurchase of Class A Common Stock of a type
described in this paragraph (d) within the 12
months preceding the date of purchase of such
shares of Common Stock in respect of which no
adjustment pursuant to this Section 10.06
previously has been made, exceeds 5% of Class A
Market Capitalization on the date of, and after
giving effect to, such repurchase, then the
Conversion Price shall be adjusted so that the
same shall equal the price determined by
multiplying the Conversion Price in effect
immediately prior to the date of such purchase by
a fraction, the numerator of which shall be the
current market price per share (as defined in
Section 10.06(e) below) of the Class A Common
Stock on the date of such repurchase, less the
quotient obtained by dividing the Aggregate
Market Premium involved in such repurchase (as
defined hereinafter) by the difference between
the number of shares of Common Stock outstanding
before such repurchase and the number of shares
of Common Stock the subject of such repurchase,
and the denominator of which shall be the current
market price per share (as defined in Section
10.06(e) below) of the Class A Common Stock on
the date of such repurchase. Such adjustment
shall become effective immediately after the date
of such repurchase. For purposes of this
subsection (d), the "Aggregate Market Premium" is
------------------------
the excess, if any, of the aggregate repurchase
price paid for all such Class A Common Stock over
the aggregate current market value per share (as
defined in subsection (e) below) of all such
repurchased stock, determined with respect to
each share involved in each such repurchase as of
the date of repurchase with respect to such
share.
(e) In case someone other than the Company or one of
its Subsidiaries makes a payment in respect of a
tender offer or exchange offer for shares of
Common Stock in which, as of the closing date of
the offer, the Company's Board of Directors is
not recommending rejection of the offer, the
Conversion Price will be adjusted as provided in
subsection (d) above. The adjustment referred to
in this clause will only be made if:
54
(i) the tender offer or exchange offer is
for an amount that increases the
offeror's ownership of common stock to
more than 25% of the aggregate ordinary
voting power represented by the
Company's issued and outstanding Voting
Stock; and
(ii) cash and value of any other
consideration included in the payment
per share of Common Stock exceeds the
current market price per share of Common
Stock on the Business Day next
succeeding the last date on which
tenders or exchanges may be made
pursuant to the tender or exchange
offer.
However, the adjustment referred to in this
subsection (e) will not be made if as of the
closing of the offer, the offering documents
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 Company's assets.
For the purpose of any computation under Sections
10.06(b), (c) and (d) above and this Section
10.06(e), the current market price per share of
Common Stock on any date shall be deemed to be
the average of the Closing Prices per share of
Class A Common Stock for 20 consecutive Trading
Days commencing 30 Trading Days before the record
date with respect to any distribution, issuance
or other event requiring such computation. The
"Closing Price" with respect to the Class A
-------------
Common Stock for any day shall mean the closing
sale price, regular way, per share of Class A
Common Stock on such day or, in case no such sale
of Class A Common Stock takes place on such day,
the average of the reported closing bid and asked
prices, regular way, per share of Class A Common
Stock in each case on the New York Stock
Exchange, the NASDAQ Stock Market or principal
national securities exchange or other quotation
system on which the Class A Common Stock is
quoted or listed or admitted to trading on such
day, or, if the Class A Common Stock is not so
quoted or listed or admitted to trading on any
national securities exchange or quotation system,
the average of the closing bid and asked prices
per share of Class A Common Stock on 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 such average is not so
available, determined in such manner as furnished
by any New York Stock Exchange member firm
selected from time to time by the Board of
Directors for that purpose, or if not so
determinable as provided under any applicable
alternative above, a price per share of Class A
Common Stock determined in good faith by the
Board of Directors or, to the extent permitted by
applicable law, a duly authorized committee
thereof, whose determination shall be conclusive.
"Class A Market Capitalization" means, as of any
-----------------------------
date of calculation, the Closing Price of the
Class A Common Stock on the Trading Day
immediately prior to such date of calculation
multiplied by the aggregate number of shares of
Class A Common Stock
55
outstanding on the Trading Day immediately prior
to such date of calculation.
(f) To the extent that the Company adopts any future
rights plan, upon conversion of the Securities
into Class A Common Stock, Securityholders will
receive, in addition to Class A Common Stock, the
rights under the future rights plan whether or
not the rights have separated from the Class A
Common Stock at the time of conversion and no
adjustment to the Conversion Price will be made
in accordance with paragraph (c).
In any case in which this Section 10.06 shall require that
an adjustment be made immediately following a record date established for
purposes of Section 10.06, the Company may elect to defer (but only until
five Business Days following the filing by the Company with the Trustee of
the certificate described in Section 10.06) issuing to the holder of any
Security converted after such record date the shares of Class A Common Stock
and other Capital Stock of the Company issuable upon such conversion over
and above the shares of Class A Common Stock and other Capital Stock of the
Company issuable upon such conversion only on the basis of the Conversion
Price prior to adjustment; and, in lieu of the shares the issuance of which
is so deferred, the Company shall issue or cause its transfer agents to
issue due bills or other appropriate evidence of the right to receive such
shares.
If after an adjustment a Holder of a Security upon
conversion of such Security may receive shares of two or more classes of
Capital Stock of the Company, the Conversion Price shall thereafter be
subject to adjustment upon the occurrence of an action taken with respect to
any such class of Capital Stock as is contemplated by this Article X with
respect to the Class A Common Stock, on terms comparable to those applicable
to Class A Common Stock in this Article X.
SECTION 10.07. No Adjustment. No adjustment in the
-------------
Conversion Price shall be required unless the adjustment would require an
increase or decrease of at least 1% in the Conversion Price as last
adjusted; provided, however, that any adjustments which by reason of this
Section 10.07 are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this
Article X shall be made to the nearest cent or to the nearest one-hundredth
of a share, as the case may be.
No adjustment need be made for a transaction referred to
in Section 10.06 if Holders are to participate in the transaction on a basis
and with notice that the Board of Directors determines to be fair and
appropriate in light of the basis and notice on which holders of Class A
Common Stock participate in the transaction. Such participation by Holders
may include participation upon conversion; provided that an adjustment shall
be made at such time as the Holders are no longer entitled to participate.
No adjustment need be made for rights to purchase Class A
Common Stock or issuances of Class A Common Stock pursuant to a Company plan
for reinvestment of dividends or interest.
56
No adjustment need be made for a change in the par value
or a change to no par value of the Class A Common Stock.
To the extent that the Securities become convertible into
cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
SECTION 10.08. Equivalent Adjustments. In the event that,
----------------------
as a result of an adjustment made pursuant to Section 10.06 above, the
Holder of any Security thereafter surrendered for conversion shall become
entitled to receive any shares of Capital Stock of the Company other than
shares of its Class A Common Stock, thereafter the Conversion Price of such
other shares so receivable upon conversion of any Securities shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to Class A Common
Stock contained in this Article X.
SECTION 10.09. Adjustment for Tax Purposes. The Company
---------------------------
shall be entitled to make such reductions in the Conversion Price, in
addition to those required by Section 10.06, as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivision of
shares, distribution of rights to purchase stock or securities, or a
distribution or securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
SECTION 10.10. Notice of Adjustment. Whenever the
--------------------
Conversion Price is adjusted, or Securityholders become entitled to other
securities or due bills, the Company shall promptly mail to Securityholders
a notice of the adjustment and file with the Trustee an Officers'
Certificate briefly stating the facts requiring the adjustment and the
manner of computing it. The certificate shall be conclusive evidence of the
correctness of such adjustment and the Trustee may conclusively assume that,
unless and until such certificate is received by it, no such adjustment is
required.
SECTION 10.11. Notice of Certain Transactions. In case:
------------------------------
(a) the Company shall declare a dividend (or any
other distribution) on its Class A Common Stock
(other than in cash out of retained earnings); or
(b) the Company shall authorize the granting to the
holders of its Class A Common Stock of rights,
warrants or options to subscribe for or purchase
any share of any class or any other rights,
warrants or options; or
(c) of any reclassification of the Common Stock of
the Company (other than a subdivision or
combination of its outstanding Common Stock, or a
change in par value, or from par value to no par
value, or from no par value to par value, or a
conversion or reclassification of its Class B
Common Stock solely into Class A Common Stock),
or of any consolidation, merger, or share
exchange to which the Company is a party and for
which approval of any stockholders of the Company
is required, or of the sale or transfer of all or
substantially all of the assets of the Company;
or
57
(d) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Trustee and the Conversion
Agent and to be mailed to each Holder of Securities at its address appearing
on the list provided for in Section 2.05, as promptly as possible but in any
event at least ten days prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the
purpose of such dividend, distribution or rights, warrants or options, or,
if a record is not to be taken, the date as of which the holders of Class A
Common Stock of record to be entitled to such dividend, distribution or
rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution,
liquidation or winding-up is expected to become effective or occur, and the
date as of which it is expected that holders of Class A Common Stock of
record shall be entitled to exchange their Class A Common Stock for
securities or other property deliverable upon such reclassification,
consolidation, merger, share exchange, sale, transfer, dissolution,
liquidation or winding-up. Failure to give such notice, or any defect
therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, share exchange,
transfer, dissolution, liquidation or winding-up.
SECTION 10.12. Effect of Reclassification, Consolidation,
------------------------------------------
Merger, Share Exchange or Sale on Conversion Privilege.
------------------------------------------------------
If any of the following shall occur, namely: (i) any
reclassification or change of outstanding shares of Common Stock (other than
a change in par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or combination, or a
conversion or reclassification of its Class B Common Stock solely into Class
A Common Stock); (ii) any consolidation, combination, merger or share
exchange to which the Company is a party other than a merger in which the
Company is the continuing corporation and which does not result in any
reclassification of, or change (other than a change in name, or par value,
or from par value to no par value, or from no par value to par value, or as
a result of a subdivision or combination, or a conversion or
reclassification of its Class B Common Stock solely into Class A Common
Stock) in, outstanding shares of Class A Common Stock; or (iii) any sale or
conveyance of all or substantially all of the assets of the Company, then
the Company, or such successor or purchasing corporation, as the case may
be, shall, as a condition precedent to such reclassification, change,
consolidation, merger, share exchange, sale or conveyance, execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then outstanding shall have the right to convert such Security
into the kind and amount of shares of Capital Stock and other securities and
property (including cash) receivable upon such reclassification, change,
consolidation, merger, share exchange, sale or conveyance by a holder of the
number of shares of Class A Common Stock deliverable upon conversion of such
Security immediately prior to such reclassification, change, consolidation,
merger, share exchange, sale or conveyance. Such supplemental indenture
shall provide for adjustments of the Conversion Price which shall be as
nearly equivalent as may be practicable to the adjustments of the Conversion
Price provided for in this Article X. If, in the case of any such
consolidation, merger, share exchange, sale or conveyance, the stock or
other securities and property (including cash) receivable thereupon by a
holder of Class A Common Stock includes shares of Capital Stock or other
securities and property of a corporation other than the successor or
purchasing corporation,
58
as the case may be, in such consolidation, merger, share exchange, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect
the interests of the Holders of the Securities as the Board of Directors of
the Company shall reasonably consider necessary by reason of the foregoing.
The provision of this Section 10.12 shall similarly apply to successive
consolidations, mergers, share exchanges, sales or conveyances.
Notwithstanding the foregoing, a distribution by the Company to all or
substantially all holders of its Class A Common Stock for which an
adjustment to the Conversion Price or provision for conversion of the
Securities may be made pursuant to Section 10.06 shall not be deemed to be a
sale or conveyance of all or substantially all of the assets of the Company
for purposes of this Section 10.12.
In the event the Company shall execute a supplemental
indenture pursuant to this Section 10.12, the Company shall promptly file
with the Trustee an Opinion of Counsel stating that such supplemental
indenture is authorized or permitted by this Indenture and an Officers'
Certificate briefly stating the reasons therefor, the kind or amount of
shares of stock or securities or property (including cash) receivable by
Holders of the Securities upon the conversion of their Securities after any
such reclassification, change, consolidation, merger, share exchange, sale
or conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with.
SECTION 10.13. Trustee's Disclaimer.
--------------------
The Trustee has no duty to determine when an adjustment
under this Article X should be made, how it should be made or what such
adjustment should be made, but may accept as conclusive evidence of the
correctness of any such adjustment, and shall be protected in relying upon,
the Officers' Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 10.10. The Trustee
shall not be accountable for and makes no representation as to the validity
or value of any securities or assets issued upon conversion of Securities,
and the Trustee shall not be responsible for the Company's failure to comply
with any provisions of this Article X. Each Conversion Agent (other than the
Company or an Affiliate of the Company) shall have the same protection under
this Section 10.13 as the Trustee.
The Trustee shall not be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture executed pursuant to Section 10.12, but may accept as conclusive
evidence of the correctness thereof, and shall be protected in relying upon,
the Officers' Certificate with respect thereto which the Company is
obligated to file with the Trustee pursuant to Section 10.12.
SECTION 10.14. Voluntary Reduction.
-------------------
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 20
Trading Days or such longer period as may be required by law and if the
reduction is irrevocable during the period; provided that in no event may
the Conversion Price be less than the par value of a share of Class A Common
Stock.
59
SECTION 10.15. Simultaneous Adjustments.
------------------------
In the event that this Article X requires adjustments to
the Conversion Price under more than one of Sections 10.06(c), (d) and (e),
and the record dates for the distributions giving rise to such adjustments
shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06(d) or (e), as applicable,
and, second, the provisions of Section 10.06(c). If more than one event
requiring adjustment pursuant to Section 10.06 shall occur before completing
the determination of the Conversion Price for the first event requiring such
adjustment, then the Board of Directors (whose determination shall, if made
in good faith, be conclusive) shall make such adjustments to the Conversion
Price (and the calculation thereof) after giving effect to all such events
as shall preserve for Securityholders the Conversion Price protection
provided in Section 10.06.
ARTICLE XI
SUBORDINATION
SECTION 11.01. Terms and Conditions of Subordination. The
-------------------------------------
Company, for itself and its successors, and each Holder, by its acceptance
of Securities, agree that the payment of the principal of or interest on or
any other amounts due on the Securities is subordinated in right of payment,
in cash or cash equivalent, to the extent and in the manner stated in this
Article XI, to the prior payment in full when due of all existing and future
Senior Indebtedness of the Company. The Securities shall rank pari passu
with, and shall not be senior in right of payment to such other Indebtedness
of the Company whether outstanding on the date of this Indenture or
hereafter created, incurred, issued or guaranteed by the Company, where the
instrument creating or evidencing such Indebtedness expressly provides that
such Indebtedness ranks pari passu with, or junior to, the Securities.
The Securities shall be subordinate in right of payment to all
existing and future Senior Indebtedness of the Company. The payment of the
principal of, interest on or any other amounts due on the Securities is
subordinated in right of payment to the prior payment in full of all
existing and future Senior Indebtedness when due. No payment on account of
principal of, redemption of, interest on or any other amounts due on the
Securities, and no redemption, purchase or other acquisition of the
Securities may be made, including a purchase on a Purchase Date pursuant to
Article III hereof, if:
(a) a default in the payment of any Designated Senior
Indebtedness occurs and is continuing beyond any applicable period
of grace (for purposes of this Article XI, "Payment Default"); or
---------------
(b) any other default on any Designated Senior
Indebtedness occurs and is continuing that permits the holders of
Designated Senior Indebtedness to accelerate its maturity, and the
Trustee receives a notice of such default (a "Payment Blockage
----------------
Notice") from the Company or from any holder of Designated Senior
------
Indebtedness or such holder's representative (a "Nonpayment
----------
Default"), but only for the period (the "Payment Blockage Period")
------- -----------------------
commencing on the date of receipt by the Trustee of the Payment
Blockage Notice and ending (unless earlier terminated by notice
given to the
60
Trustee by the holders of such Designated Senior Indebtedness) (a)
in the case of a Payment Default, upon the date on which such
Payment Default is cured or waived or ceases to exist, and (b) in
the case of a Nonpayment Default, upon the earlier of the date on
which such Nonpayment Default is cured or waived or ceases to exist
or 179 days after the date on which the Payment Blockage Notice is
received. Upon termination of the Payment Blockage Period, payments
on account of principal of or interest on the Securities (other
than, subject to Section 11.2 hereof, amounts due and payable by
reason of the acceleration of the maturity of the Securities) and
redemptions, purchases or other acquisitions shall be made by or on
behalf of the Company.
Notwithstanding the foregoing, only one Payment Blockage Notice
with respect to a Nonpayment Default may be given and no new Payment
Blockage Period may be commenced for a default unless at least 365
consecutive days have elapsed since the effectiveness of the immediately
prior Payment Blockage Notice and all scheduled payments of the Securities
that have come due have been paid in full in cash. No Nonpayment Default
that existed or was continuing on the date of delivery of any Payment
Blockage Notice shall be the basis for a subsequent Payment Blockage notice.
For the avoidance of doubt, any Default that occurs after the date of
delivery of a Payment Blockage Notice may be the basis for a subsequent
Payment Blockage Notice, if such Default exists or is continuing on the date
of delivery of the subsequent Payment Blockage Notice.
If the Trustee or any Holder of Securities receives any payment or
distribution of the Company's assets of any kind in contravention of any of
the terms hereof, whether in cash, property or securities, in respect of the
Securities before all Senior Indebtedness is paid in full in cash or cash
equivalent, then the payment or distribution will be held by the recipient
in trust for the benefit of holders of Senior Indebtedness, and will be
immediately paid over or delivered to the holders of Senior Indebtedness or
their representative or representatives to the extent necessary to make
payment in full of all Senior Indebtedness remaining unpaid, after giving
effect to any concurrent payment or distribution, or provision therefor, to
or for the holders of Senior Indebtedness.
SECTION 11.02. Distribution on Acceleration of Securities;
-------------------------------------------
Dissolution and Reorganization.
------------------------------
(a) If the Securities are declared due and payable because of the
occurrence of an Event of Default, the Company or the Trustee shall give
prompt written notice to the holders of all Senior Indebtedness or to the
trustee(s) for such Senior Indebtedness of such acceleration.
(b) Upon (i) any acceleration of the principal amount due on the
Securities because of an Event of Default or (ii) any distribution of assets
of the Company upon any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors
or any other dissolution, winding up, liquidation or reorganization of the
Company):
(i) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full, in cash or cash equivalent, of
the principal thereof, the interest thereon and any other amounts
then due thereon before the Holders are entitled to receive
61
payment on account of the principal of or interest on or any other
amounts due on the Securities;
(ii) any payment or distribution of assets of the Company
of any kind or character, whether in cash, property or securities,
to which the Holders or the Trustee would be entitled except for
the provisions of this Article XI, shall be paid by the liquidating
trustee or agent or other person making such a payment or
distribution, directly to the holders of Senior Indebtedness (or
their representatives(s) or trustee(s) acting on their behalf),
ratably according to the aggregate amounts remaining unpaid on
account of the principal of or interest on and other amounts due on
the Senior Indebtedness held or represented by each, to the extent
necessary to make payment in full, in cash or cash equivalent, of
all Senior Indebtedness remaining unpaid, after giving effect to
any concurrent payment or distribution to the holders of such
Senior Indebtedness, provided, however, the Trustee's rights to
compensation, reimbursement of expenses and indemnification under
Sections 6.10 and 7.07 are not subordinated;
(iii) 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, shall be
received by the Trustee or the Holders before all Senior
Indebtedness is paid in full, such payment or distribution shall be
held in trust for the benefit of, and be paid over to upon request
by a holder of the Senior Indebtedness, the holders of the Senior
Indebtedness remaining unpaid (or their representatives) or
trustee(s) acting on their behalf, ratably as aforesaid, for
application to the payment of such Senior Indebtedness until all
such Senior Indebtedness shall have been paid in full, after giving
effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness; and
(iv) to the extent any payment of Senior Indebtedness
(whether by or on behalf of the Company, as proceeds of security or
enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential set aside or required to be paid to any
receiver, trustee in bankruptcy, liquidating trustee, agent or
other similar person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then if such
payment is recovered by, or paid over to, such receiver, trustee in
bankruptcy, liquidation trustee, agent or other similar person, the
Senior Indebtedness or part thereof originally intended to be
satisfied shall be deemed to be reinstated and outstanding as if
such payment had not occurred.
Subject to the payment in full, in cash or cash equivalent, of all
Senior Indebtedness, the Holders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the principal of and interest on the Securities shall be paid in full
and, for purposes of such subrogation, no such payments or distributions to
the holders of Senior Indebtedness of cash, property or securities which
otherwise would have been payable or distributable to Holders shall, as
between the Company, its creditors other than the holders of Senior
Indebtedness, and the Holders, be deemed to be a payment by the Company to
or on account of the Senior Indebtedness, it being understood that the
provisions of this Article XI are
62
and are intended solely for the purpose of defining the relative rights of
the Holders, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
Nothing contained in this Article XI or elsewhere in this Indenture
or in the Securities is intended to or shall (i) impair, as between the
Company and its creditors other than the holders of Senior Indebtedness, the
obligation of the Company, which is absolute and unconditional, to pay to
the Holders the principal of and interest on the Securities as and when the
same shall become due and payable in accordance with the terms of the
Securities or (ii) affect the relative rights of the Holders and creditors
of the Company other than holders of Senior Indebtedness or, as between the
Company and the Trustee, the obligations of the Company to the Trustee, or
(iii) prevent the Trustee or the Holders from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture,
subject to the rights, if any, under this Article XI of the holders of
Senior Indebtedness in respect of cash, property and securities of the
Company received upon the exercise of any such remedy.
Upon distribution of assets of the Company referred to in this
Article XI, the Trustee and the Holders shall be entitled to rely upon a
certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or to the Holders for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XI. The Trustee, however, shall not be deemed to owe any fiduciary duty to
the holders of Senior Indebtedness. Nothing contained in this Article XI or
elsewhere in this Indenture or in any of the Securities shall prevent the
good faith application by the Trustee of any moneys which were deposited
with it hereunder, prior to its receipt of written notice of facts which
would prohibit such application, for the purpose of the payment of or on
account of the principal of or interest on, the Securities unless, prior to
the date on which such application is made by the Trustee, the Trustee shall
be charged with notice under Section 11.02(d) hereof of the facts which
would prohibit the making of such application.
(c) The provisions of this Article XI shall not be applicable to
any cash, properties or securities received by the Trustee or by any Holder
when received as a holder of Senior Indebtedness and nothing in the
Indenture or this Indenture shall deprive the Trustee or such Holder of any
of its rights as such holder.
(d) The Company shall give prompt written notice to the Trustee of
any fact known to the Company which would prohibit the making of any payment
of money to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article XI. The Trustee shall be entitled to assume that
no such fact exists unless the Company or any holder of Senior Indebtedness
or any trustee therefor has given such notice to the Trustee.
Notwithstanding the provisions of this Article XI or any other provisions of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any fact which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions in this Article XI, unless, and until three Business Days after,
the Trustee shall have received written notice thereof from the Company or
any holder or holders of Senior Indebtedness or from any trustee therefor;
and, prior to the receipt of any such written notice, the Trustee shall be
entitled in all respects conclusively to assume that no such facts exist;
provided that if on a date
63
not less than three Business Days immediately preceding the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the principal of or interest on any
Security), the Trustee shall not have received with respect to such monies
the notice provided for in this Section 11.02(d), then anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
The Trustee shall be entitled to rely on the delivery to it of a
written notice by a person representing himself to be a holder of Senior
Indebtedness (or a trustee on behalf of such holder) to establish that such
notice has been given by a holder of Senior Indebtedness (or a trustee on
behalf of any such holder or holders). In the event that the Trustee
determines in good faith that further evidence is required with respect to
the right of any person as a holder of Senior Indebtedness to participate in
any payment or distribution pursuant to this Article XI, 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 XI, and, if such evidence is not furnished, the Trustee
may defer any payment to such person pending judicial determination as to
the right of such person to receive such payment; nor shall the Trustee be
charged with knowledge of the curing or waiving of any default of the
character specified in Section 11.01 or that any event or any condition
preventing any payment in respect of the Securities shall have ceased to
exist, unless and until the Trustee shall have received an Officers'
Certificate to such effect.
(e) The provisions of this Section 11.02 applicable to the
Trustee shall also apply to any Paying Agent for the Company.
(f) Each Holder of a Security, by its acceptance thereof,
authorizes and directs the Trustee on its behalf to take such
action as may be necessary or appropriate to effectuate the
subordination provided in this Article XI and appoints the Trustee
its attorney-in-fact for any and all such purposes, including, in
the event of any dissolution, winding up or liquidation or
reorganization under any applicable bankruptcy law of the Company
(whether in bankruptcy, insolvency or receivership proceedings or
otherwise), the timely filing of a claim for the unpaid balance of
such Xxxxxx's Securities in the form required in such proceedings
and the causing of such claim to be approved. If the Trustee does
not file a claim or proof of debt in the form required in such
proceedings prior to 30 days before the expiration of the time to
file such claims or proofs, then any holder or holders of Senior
Indebtedness or their representative or representatives shall have
the right to demand, sue for, collect, receive and receipt for the
payments and distributions in respect of the Securities which are
required to be paid or delivered to the holders of Senior
Indebtedness as provided in this Article XI and to file and prove
all claims therefor and to take all such other action in the name
of the holders or otherwise, as such holders of Senior Indebtedness
or representative thereof may determine to be necessary or
appropriate for the enforcement of the provisions of this Article
XI.
64
SECTION 11.03. Notice to Lender Under the Credit Facility.
------------------------------------------
The Company and the Trustee shall promptly notify the lender under the
Credit Facility upon any amendment to the provisions of this Article XI.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
----------------------------
If any provision of this Indenture limits, qualifies, or
conflicts with another provision which is required to be included in this
Indenture by the TIA, the required provision shall control.
SECTION 12.02. Notices.
-------
Any request, demand, authorization, notice, waiver,
consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows, or
transmitted by facsimile transmission (confirmed orally) to the following
facsimile numbers:
if to the Company, to:
0000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
in either case, with a copy to:
Xxxxxxxx Xxxxxx LLP
Xxx X.X. Xxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Xxxxxxxxx No.: (000) 000-0000
if to the Trustee, to:
Deutsche Bank Trust Company Americas
Corporate Trust and Agency Services
00 Xxxx Xxxxxx
XX XXX 00-0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
65
with a copy to:
Xxxxx & Singer LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
The Company or the Trustee by notice given to the other in
the manner provided above may designate additional or different addresses
for subsequent notices or communications.
Any notice or communication given to a Securityholder
shall be mailed to the Securityholder, by first-class mail, postage prepaid,
at the Securityholder's address as it appears on the registration books of
the Registrar and shall be sufficiently given if so mailed within the time
prescribed.
Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with
respect to other Securityholders. If a notice or communication is mailed in
the manner provided above, it is duly given, whether or not received by the
addressee.
If the Company mails a notice or communication to the
Securityholders, it shall mail a copy to the Trustee and each Registrar,
Paying Agent, Conversion Agent or co-registrar.
SECTION 12.03. Communication by Holders with Other
-----------------------------------
Holders.
-------
Securityholders may communicate pursuant to TIA Section
312(b) with other Securityholders with respect to their rights under this
Indenture or the Securities. The Company, the Trustee, the Registrar, the
Paying Agent, the Conversion Agent and anyone else shall have the protection
of TIA Section 312(c).
SECTION 12.04. Certificate and Opinion as to Conditions
----------------------------------------
Precedent.
---------
Upon any request or application by the Company to the
Trustee to take any action under this Indenture, the Company shall furnish
to the Trustee:
(a) an Officers' Certificate stating that, in the
opinion of the signers, all conditions precedent,
if any, provided for in this Indenture relating
to the proposed action have been complied with;
and
(b) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions
precedent have been complied with.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person, it is not
necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only
one document, but one such Person may certify or give an opinion with
respect to some matters
66
and one or more other such eligible and qualified Persons as to other
matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an Officer of the Company
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such Officer knows, or in
the exercise of reasonable case should know, that the certificate or opinion
or representations with respect to the matters upon which his or her
certificate or opinion is based are erroneous. Any such certificate or
opinion of counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating the information on which counsel is relying
unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or execute two
or more applications, requests, consents, certificates, statements, opinions
or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
SECTION 12.05. Statements Required in Certificate or
-------------------------------------
Opinion.
-------
Each Officers' Certificate or Opinion of Counsel with
respect to compliance with a covenant or condition provided for in this
Indenture shall include:
(a) a statement that each person making such
Officers' Certificate or Opinion of Counsel has
read such covenant or condition;
(b) a brief statement as to the nature and scope of
the examination or investigation upon which the
statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are
based;
(c) a statement that, in the opinion of each such
person, he has made such examination or
investigation as is necessary to enable such
person to express an informed opinion as to
whether or not such covenant or condition has
been complied with; and
(d) a statement that, in the opinion of such person,
such covenant or condition has been complied
with.
SECTION 12.06. Separability Clause.
-------------------
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
67
SECTION 12.07. Rules by Trustee, Paying Agent, Conversion
------------------------------------------
Agent and Registrar.
-------------------
The Trustee may make reasonable rules for action by or a
meeting of Securityholders. The Registrar, the Conversion Agent and the
Paying Agent may make reasonable rules for their functions.
SECTION 12.08. Legal Holidays.
--------------
A "Legal Holiday" is any day other than a Business Day. If
-------------
any specified date (including a date for giving notice) is a Legal Holiday,
the action shall be taken on the next succeeding day that is not a Legal
Holiday, and, if the action to be taken on such date is a payment in respect
of the Securities, no interest (including contingent interest, if any) or
Liquidated Damages, if any, shall accrue for the intervening period.
SECTION 12.09. Governing Law.
-------------
THIS INDENTURE AND EACH NOTE SHALL BE DEEMED TO BE A
CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 12.10. No Recourse Against Others.
--------------------------
A director, officer, employee or stockholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or for any claim based on, in respect of or by reason
of such obligations or their creation. By accepting a Security, each
Securityholder shall waive and release all such liability. The waiver and
release shall be part of the consideration for the issue of the Securities.
SECTION 12.11. Successors.
----------
All agreements of the Company in this Indenture and the
Securities shall bind its successor. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.12. Multiple Originals.
------------------
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.
68
IN WITNESS WHEREOF, the undersigned, being duly
authorized, have executed this Indenture on behalf of the respective parties
hereto as of the date first above written.
K-V PHARMACEUTICAL COMPANY
By: /s/ Xxxxxx X. Xxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Vice President, Treasurer
and Chief Financial Officer
DEUTSCHE BANK TRUST COMPANY
AMERICAS
By: /s/ Xxxxxxx Xxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
69
EXHIBIT A-1
[FORM OF FACE OF GLOBAL SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR
U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF
THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER
$1000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS MAY 16, 2003 AND THE COMPARABLE
YIELD IS 9.5% PER ANNUM. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: K-V PHARMACEUTICAL COMPANY, 0000 XXXXX XXXXXX XXXX,
XX. LOUIS, MISSOURI 63144, ATTN.: CHIEF FINANCIAL OFFICER, SUCH INFORMATION
TO BE MADE AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE,
PROMPTLY UPON REQUEST.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY TO K-V PHARMACEUTICAL COMPANY
(THE "COMPANY") OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS TO NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE
REVERSE HEREOF.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY, AND THE
CLASS A COMMON STOCK DELIVERABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
A-1-1
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-1-2
K-V PHARMACEUTICAL COMPANY
2.5% Contingent Convertible Subordinated Notes Due 2033
No.: A-1 CUSIP: 482 740 AB3
Issue Date: May 16, 2003 Principal
Amount:
K-V PHARMACEUTICAL COMPANY, a Delaware corporation,
promises to pay to Cede & Co. or registered assigns, the Principal Amount as
set forth on Schedule I hereto, on May 16, 2033, subject to the further
provisions of this Note set forth on the reverse hereof, which further
provisions shall for all purposes have the same effect as if set forth at
this place. This Security is convertible as specified on the other side of
this Security.
Interest Payment Dates: May 16 and November 16, commencing
November 16, 2003
Record Dates: May 1 and November 1
Dated:
K-V PHARMACEUTICAL COMPANY
By:
------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Deutsche Bank Trust Company Americas, as Trustee, certifies that this is one
of the Securities referred to in the within-mentioned Indenture.
By:
--------------------------
Authorized Signatory
Dated:
A-1-3
[FORM OF REVERSE SIDE OF NOTE]
K-V PHARMACEUTICAL COMPANY
2.5% Contingent Convertible Subordinated Notes Due 2033
1. Interest.
This Security shall accrue interest at an initial rate of
2.5% per annum. The Company promises to pay interest on the Securities in
cash semiannually on each May 16 and November 16, commencing November 16,
2003, to Holders of record on the immediately preceding May 1 and November
1, respectively, whether or not such day is a Business Day. Interest on the
Securities will accrue from the most recent date to which interest has been
paid, or if no interest has been paid, from May 16, 2003, until the
Principal Amount is paid or duly made available for payment. The Company
will pay interest on any overdue Principal Amount at the interest rate borne
by the Securities at the time such interest on the overdue Principal Amount
accrues, compounded semiannually, and it shall pay interest on overdue
installments of interest and Liquidated Damages, if any (without regard to
any applicable grace period), at the same interest rate compounded
semiannually. Interest (including contingent interest, if any) on the
Securities will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
The Company shall pay contingent interest to the Holders
during any six-month period (a "Contingent Interest Period") from May 16 to
--------------------------
November 15 and from November 16 to May 15, with the initial six-month
period commencing May 16, 2006, if the average Security Trading Price for
the five Trading Day period ending on the third Trading Day immediately
preceding the first day of the applicable Contingent Interest Period equals
$1,200 or more. The amount of contingent interest payable per $1,000
principal amount of Securities in respect of any Contingent Interest Period
shall equal 0.5% per annum. The Company will pay contingent interest, if
any, in the same manner as it will pay interest as described above.
2. Method of Payment.
The Company will pay interest (including contingent
interest, if any) and Liquidated Damages, if any, on this Security (except
defaulted interest) to the Person who is the registered Holder of this
Security at the close of business on May 1 or November 1, as the case may
be, next preceding the related interest payment date. Subject to the terms
and conditions of the Indenture, the Company will make payments in respect
of the Redemption Price, Purchase Price, Change in Control Purchase Price
and the Principal Amount at Stated Maturity, as the case may be, to the
Holder who surrenders a Security to a Paying Agent to collect such payments
in respect of the Security. The Company will pay cash amounts in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. However, the Company may pay interest (including
contingent interest, if any), Liquidated Damages, if any, the Redemption
Price, Purchase Price, Change in Control Purchase Price and the Principal
Amount at Stated Maturity, as the case may be, by check or wire payable in
such money; provided, however, that a Holder holding Securities with an
aggregate Principal Amount in excess of $1,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder. The
Company may mail an interest check to the Holder's registered address.
A-1-4
Notwithstanding the foregoing, so long as this Security is registered in the
name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the
Depositary or its nominee.
3. Paying Agent, Conversion Agent and Registrar.
Initially, Deutsche Bank Trust Company Americas (the
"Trustee") will act as Paying Agent, Conversion Agent and Registrar. The
-------
Company may appoint and change any Paying Agent, Conversion Agent or
Registrar without notice, other than notice to the Trustee; provided that
the Company will maintain at least one Paying Agent in the State of New
York, City of New York, Borough of Manhattan, which shall initially be an
office or agency of the Trustee. The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent or
Registrar.
4. Indenture; Ranking.
The Company issued the Securities under an Indenture dated
as of May 16, 2003 (the "Indenture"), between the Company and the Trustee.
---------
The terms of the Securities include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act of 1939,
as in effect from time to time (the "TIA"). Capitalized terms used herein
---
and not defined herein have the meanings ascribed thereto in the Indenture.
The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the TIA for a statement of those terms.
The Securities are limited to $200,000,000 aggregate
Principal Amount (which shall include the Initial Purchasers' option to
purchase up to $25,000,000 of additional Securities) (subject to Section
2.07 of the Indenture). The Securities are the Company's unsecured
obligations and will be subordinated in right of payment to all of the
Company's existing and future Senior Indebtedness and effectively
subordinated to all existing and future Indebtedness and other liabilities
of the Subsidiaries. The Securities will rank equally in right of payment to
any of the Company's existing and future subordinated indebtedness. The
Indenture does not limit other indebtedness of the Company, secured or
unsecured.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Securities. The
Securities are not redeemable prior to May 21, 2006. Beginning on May 21,
2006 and during the periods thereafter to maturity, the Securities are
redeemable as a whole, or from time to time in part, in any integral
multiple of $1,000, at any time at the option of the Company at a Redemption
Price equal to 100% of the Principal Amount), together with accrued and
unpaid interest (including contingent interest, if any) and Liquidated
Damages, if any, thereon, up to but not including the Redemption Date;
provided that, if the Redemption Date is on or after an interest record date
but on or prior to the related interest payment date, interest and
Liquidated Damages, if any, will be payable to the Holders in whose names
the Securities are registered at the close of business on the relevant
record date.
A-1-5
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the
Company shall become obligated to purchase, at the option of the Holder, all
or any portion of the Securities held by such Holder, in any integral
multiple of $1,000, on May 16, 2008, May 16, 2013, May 16, 2018, May 16,
2023 and May 16, 2028 (each, a "Purchase Date") at a purchase price per
-------------
Security equal to 100% of the aggregate Principal Amount of the Security
(the "Purchase Price"), together with accrued and unpaid interest (including
--------------
contingent interest, if any) and Liquidated Damages, if any, thereon, up to
but not including the Purchase Date (provided that, if the Purchase Date is
on or after an interest record date but on or prior to the related interest
payment date, accrued and unpaid interest, if any (including contingent
interest, if any), and Liquidated Damages, if any, will be payable to the
Holders in whose names the Securities are registered at the close of
business on the relevant record date) upon delivery of a Purchase Notice
containing the information set forth in the Indenture, together with the
Securities subject thereto, at any time from the opening of business on the
date that is 20 Business Days prior to such Purchase Date until the close of
business on the Business Day prior to such Purchase Date, and upon delivery
of the Securities to the Paying Agent by the Holder as set forth in the
Indenture.
At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase
the Securities held by such Holder after the occurrence of a Change in
Control of the Company for a Change in Control Purchase Price equal to 100%
of the Principal Amount thereof plus accrued and unpaid interest (including
contingent interest, if any) and Liquidated Damages, if any, thereon, up to
but not including the Change in Control Purchase Date which Change in
Control Purchase Price shall be paid in cash. Holders have the right to
withdraw any Purchase Notice or Change in Control Purchase Notice, as the
case may be, by delivering to the Paying Agent a written notice of
withdrawal in accordance with the provisions of the Indenture.
If cash sufficient to pay the Purchase Price or Change in
Control Purchase Price, as the case may be, and accrued and unpaid interest
(including contingent interest, if any) and Liquidated Damages, if any, of
all Securities or portions thereof to be purchased as of the Purchase Date
or the Change in Control Purchase Date, as the case may be, is deposited
with the Paying Agent on the Business Day following the Purchase Date or the
Change in Control Purchase Date, interest (including contingent interest, if
any) and Liquidated Damages, if any, cease to accrue on such Securities (or
portions thereof) immediately after such Purchase Date or Change in Control
Purchase Date, and the Holder thereof shall have no other rights as such
other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, upon surrender of such Security.
7. Notice of Redemption.
Notice of redemption pursuant to paragraph 5 of this
Security will be mailed at least 20 days but not more than 60 days before
the Redemption Date to each Holder of Securities to be redeemed at the
Holder's registered address. If money sufficient to pay the Redemption Price
of all Securities (or portions thereof) to be redeemed on the Redemption
Date is deposited with the Paying Agent prior to or on the Redemption Date,
immediately after such Redemption Date interest (including contingent
interest, if any) and Liquidated Damages, if any, cease to
A-1-6
accrue on such Securities or portions thereof. Securities in denominations
larger than $1,000 of Principal Amount may be redeemed in part but only in
integral multiples of $1,000 of Principal Amount.
8. Conversion.
Subject to the provisions of Article X of the Indenture, a
Holder of a Note may convert such Note into shares of Class A Common Stock
of the Company if any of the conditions specified in paragraphs (a) through
(e) of Section 10.01 of the Indenture is satisfied; provided, however, that
if such Note is called for redemption, the conversion right will terminate
at the close of business on the second Business Day before the Redemption
Date of such Note (unless the Company shall default in making the redemption
payment when due, in which case the conversion right shall terminate at the
close of business on the date such Default is cured and such Note is
redeemed). The initial conversion price is $34.51 per share, subject to
adjustment under certain circumstances as described in the Indenture (the
"Conversion Price"). The number of shares issuable upon conversion of a Note
----------------
is determined by dividing the principal amount converted by the Conversion
Price in effect on the Conversion Date. In the event of a conversion of a
Note in a Principal Value Conversion, the Company has the option to deliver
cash and/or Class A Common Stock to the Holder of the Note surrendered for
such conversion as provided in Section 10.02 of the Indenture. Upon
conversion, no adjustment for interest, if any (including contingent
interest, if any), or dividends will be made. No fractional shares will be
issued upon conversion; in lieu thereof, an amount will be paid in cash
based upon the current market price (as defined in the Indenture) of the
Common Stock on the last Trading Day prior to the date of conversion.
To convert a Note, a Holder must (a) complete and sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Note to the Conversion Agent, (c) furnish
appropriate endorsements and transfer documents if required by the Registrar
or the Conversion Agent, (d) pay any transfer or similar tax, if required
and (e) if the Note is held in book-entry form, complete and deliver to the
Depositary appropriate instructions pursuant to the Depositary's book-entry
conversion programs. If a Holder surrenders a Note for conversion between
the record date for the payment of an installment of interest and the next
interest payment date, the Note must be accompanied by payment of an amount
equal to the interest (including contingent interest, if any) and Liquidated
Damages, if any, payable on such interest payment date on the principal
amount of the Note or portion thereof then converted; provided, however,
that no such payment shall be required if such Note has been called for
redemption on a Redemption Date within the period between and including such
record date and such interest payment date, or if such Note is surrendered
for conversion on the interest payment date. A Holder may convert a portion
of a Note equal to $1,000 or any integral multiple thereof.
A Note in respect of which a Holder has delivered a
Purchase Notice or a Change of Control Repurchase Notice exercising the
option of such Holder to require the Company to repurchase such Note as
provided in Section 3.08 or Section 3.09, respectively, of the Indenture may
be converted only if such notice of exercise is withdrawn as provided above
and in accordance with the terms of the Indenture.
A-1-7
9. Denominations; Transfer; Exchange.
The Securities are in fully registered form, without
coupons, in denominations of $1,000 of Principal Amount and integral
multiples of $1,000. A Holder may transfer or exchange Securities in
accordance with the Indenture. The Registrar may require a Holder, among
other things, to furnish appropriate endorsements and transfer documents and
to pay any taxes and fees required by law or permitted by the Indenture. The
Registrar need not transfer or exchange any Securities selected for
redemption (except, in the case of a Security to be redeemed in part, the
portion of the Security not to be redeemed) or any Securities in respect of
which a Purchase Notice or a Change in Control Purchase Notice has been
given and not withdrawn (except, in the case of a Security to be purchased
in part, the portion of the Security not to be purchased) or any Securities
for a period of 15 days before the mailing of a notice of redemption of
Securities to be redeemed.
10. Persons Deemed Owners.
The registered Holder of this Security may be treated as
the owner of this Security for all purposes.
11. Unclaimed Money or Securities.
The Trustee and the Paying Agent shall return to the
Company upon written request any money or securities held by them for the
payment of any amount with respect to the Securities that remains unclaimed
for two years, subject to applicable unclaimed property law. After return to
the Company, Holders entitled to the money or securities must look to the
Company, for payment as general creditors unless an applicable abandoned
property law designates another person.
12. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture,
(i) the Indenture or the Securities may be amended with the written consent
of the Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding and (ii) certain Defaults may be waived
with the written consent of the Holders of a majority in aggregate Principal
Amount of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities so long as such changes, other than those in clause (ii), do not
adversely affect the interest of Securityholders (i) to cure any ambiguity,
omission, defect or inconsistency, (ii) to comply with Article V or Section
10.01(e) or Section 10.12 of the Indenture, (iii) to evidence and provide
for the acceptance of appointment under the Indenture by a successor
Trustee, or (iv) to comply with any requirement of the SEC in connection
with the qualification of the Indenture under the TIA.
A-1-8
13. Defaults and Remedies.
Under the Indenture, Events of Default include, in summary
form, (i) default in the payment of any interest (including contingent
interest, if any) or Liquidated Damages, if any, on any Securities after
receipt by the Company of a Notice of Default, whether or not prohibited by
the subordination provisions of the Indenture; (ii) default in payment of
the Principal Amount, Redemption Price, Purchase Price or Change in Control
Purchase Price, as the case may be, in respect of the Securities when the
same becomes due and payable, whether or not prohibited by the subordination
provisions of the Indenture; (iii) failure by the Company in the
performance, or breach, of any of the Company's other covenants in the
Indenture which are not remedied within 30 days; (iv) defaults by the
Company or a Subsidiary in the payment of Indebtedness in excess of
$750,000; (v) the Company or a Subsidiary fails to pay when due any final,
non-appealable judgment (other than any judgment as to which a reputable
insurance company has accepted full liability) aggregating in excess of
$750,000, which judgments are not stayed, bonded or discharged within 60
days of after its entry; (vi) failure by the Company to issue Class A Common
Stock upon conversion of Securities by a Holder in accordance with the
provisions of the Indenture; (vii) failure by the Company to give notice to
Holders of their right to require the Company to repurchase Securities upon
a Change in Control or fails to make a payment to purchase Securities
tendered following a Change in Control; (viii) if a material portion of the
Company's assets is attached, seized or subjected to a write or distress
warrant or is levied upon, or come within the possession of any receiver,
trustee, custodian or assignee for the benefit of creditors and the same is
not terminated or dismissed within 30 days thereafter; and (ix) certain
events of bankruptcy or insolvency.
Securityholders may not enforce the Indenture or the
Securities except as provided in the Indenture. The Trustee may refuse to
enforce the Indenture or the Securities unless it receives reasonable
indemnity or security. Subject to certain limitations, Holders of a majority
in aggregate Principal Amount of the Securities at the time outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing Default (except a
Default in payment of amounts specified in clause (i) or (ii) above) if it
determines that withholding notice is in their interests.
14. Trustee Dealings with the Company.
Subject to certain limitations imposed by the TIA, the
Trustee under the Indenture, in its individual or any other capacity, may
become the owner or pledgee of Securities and may otherwise deal with and
collect obligations owed to it by the Company or its Affiliates and may
otherwise deal with the Company or its Affiliates with the same rights it
would have if it were not Trustee.
15. No Recourse Against Others.
A director, officer, employee or shareholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect
of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The
waiver and release are part of the consideration for the issue of the
Securities.
A-1-9
16. Authentication.
This Security shall not be valid until an authorized
signatory of the Trustee manually signs the Trustee's Certificate of
Authentication on the other side of this Security.
17. Abbreviations.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM ("tenants in common"), TEN
-----------------
ENT ("tenants by the entireties"), JT TEN ("Joint tenants with right of
------------------------- ---------------------------
survivorship and not as tenants in common"), CUST ("custodian") and U/G/M/A
----------------------------------------- ---------
("Uniform Gift to Minors Act").
--------------------------
18. Governing Law.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE
INDENTURE AND THIS SECURITY.
The Company will furnish to any Securityholder upon
written request and without charge a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:
K-V Pharmaceutical Company
0000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attn.: Chief Financial Officer
A-1-10
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I or we assign and transfer this Security to
(Insert assignee's soc. sec. or tax ID no.)
(Print or type assignee's name, address and zip code)
and irrevocably appoint agent to transfer
-------------------
this Security on the books of the Company. The agent may substitute another
to act for him.
CONVERSION NOTICE
To convert this Security into Class A Common Stock of the Company, check the
box [ ]
To convert only part of this Security, state the Principal Amount to be
converted (which must be $1,000 or an integral multiple of $1,000):
If you want the stock certificate made out in another person's name fill in
the form below:
------------------------------------
------------------------------------
(Insert the other person's soc. sec. tax ID no.)
------------------------------------
------------------------------------
------------------------------------
------------------------------------
(Print or type other person's name, address and zip code)
-------------------------------------------------------------------------------
Your Signature: Date:
(Sign exactly as your name
appears on the other side
of this Security)
Signature Guaranteed
-------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
By:
---------------------------
Authorized Signatory
A-1-11
SCHEDULE I
K-V PHARMACEUTICAL COMPANY
2.5% Contingent Convertible Subordinated Notes Due 2033
Date Principal Amount Notation
A-1-12
EXHIBIT A-2
[FORM OF CERTIFICATED SECURITY]
THIS SECURITY WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR
U.S. FEDERAL INCOME TAX PURPOSES. FOR PURPOSES OF SECTIONS 1273 AND 1275 OF
THE INTERNAL REVENUE CODE, THE ISSUE PRICE OF EACH SECURITY IS $1000 PER
$1000 OF PRINCIPAL AMOUNT, THE ISSUE DATE IS MAY 16, 2003 AND THE COMPARABLE
YIELD IS 9.5% PER ANNUM. HOLDERS OF THIS SECURITY MAY OBTAIN INFORMATION
REGARDING THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, YIELD TO MATURITY AND THE
PROJECTED PAYMENT SCHEDULE FOR THIS SECURITY BY SUBMITTING A WRITTEN REQUEST
FOR SUCH INFORMATION TO: K-V PHARMACEUTICAL COMPANY, 0000 XXXXX XXXXXX XXXX,
XX. LOUIS, MISSOURI 63144, ATTN.: CHIEF FINANCIAL OFFICER, SUCH INFORMATION
TO BE MADE AVAILABLE, BEGINNING NO LATER THAN 10 DAYS AFTER THE ISSUE DATE,
PROMPTLY UPON REQUEST.
THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED
IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THIS SECURITY AND THE
CLASS A COMMON STOCK DELIVERABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED,
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY
NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION
FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A
THEREUNDER.
THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE
COMPANY THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED, ONLY (I) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE
144 THEREUNDER (IF AVAILABLE) OR (III) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (III) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY ON
SATISFACTION OF THE CONDITIONS SPECIFIED IN THE INDENTURE.
A-2-1
K-V PHARMACEUTICAL COMPANY
2.5% Contingent Convertible Subordinated Notes Due 2033
No.: CUSIP:
Issue Date: Principal Amount:
K-V PHARMACEUTICAL COMPANY, a Delaware corporation,
promises to pay to or
----------------------------------------------------
registered assigns, the Principal Amount of , on
May 16, 2033, subject to the further provisions of this Note set forth on
the reverse hereof, which further provisions shall for all purposes have the
same effect as if set forth at this place. This Security is convertible as
specified on the other side of this Security.
Interest Payment Dates: May 16 and November 16, commencing
November 16, 2003
Record Dates: May 1 and November 1
Dated:
K-V PHARMACEUTICAL CORPORATION
By:
-------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Deutsche Bank Trust Company Americas, as Trustee, certifies that this is one
of the Securities referred to in the within-mentioned Indenture.
By:
--------------------------
Authorized Signatory
Dated:
A-2-2
[FORM OF REVERSE SIDE IS IDENTICAL TO EXHIBIT A-1]
A-2-3
EXHIBIT B
TRANSFER CERTIFICATE
In connection with any transfer of any of the Securities
within the period prior to the expiration of the holding period applicable
to the sales thereof under Rule 144(k) under the Securities Act of 1933, as
amended (the "Securities Act") (or any successor provision), the undersigned
--------------
registered owner of this Security hereby certifies with respect to $[ ]
Principal Amount of the above-captioned Securities presented or surrendered
on the date hereof (the "Surrendered Securities") for registration of
----------------------
transfer, or for exchange or conversion where the securities deliverable
upon such exchange or conversion are to be registered in a name other than
that of the undersigned registered owner (each such transaction being a
"transfer"), that such transfer complies with the restrictive legend set
forth on the face of the Surrendered Securities for the reason checked
below:
[_] A transfer of the Surrendered Securities is made
to the Company or any subsidiaries; or
[_] The transfer of the Surrendered Securities
complies with Rule 144A under the U.S. Securities
Act of 1933, as amended (the "Securities Act");
--------------
or
[_] The transfer of the Surrendered Securities is
pursuant to an effective registration statement
under the Securities Act; or
[_] The transfer of the Surrendered Securities is
pursuant to another available exemption from the
registration requirement of the Securities Act;
and unless the box below is checked, the undersigned
confirms that, to the undersigned's knowledge, such Securities are not being
transferred to an "affiliate" of the Company as defined in Rule 144 under
the Securities Act (an "Affiliate").
---------
[_] The transferee is an Affiliate of the Company.
DATE:
-------------------------------
Signature(s)
(If the registered owner is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of such registered
owner must be stated.)
Signature Guaranteed
---------------------------------------
Participant in a Recognized Signature
Guarantee Medallion Program
By:
------------------------------------
Authorized Signatory
B-1
