EXHIBIT 4.2
BAUSCH & LOMB INCORPORATED
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Fifth Supplemental Indenture
Dated as of August 4, 2003
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Citibank, N.A.,
Trustee
Floating Rate Convertible Senior Notes due 2023
ARTICLE 1 FLOATING RATE CONVERTIBLE SENIOR NOTES DUE 2023......................................1
Section 1.01 Establishment.............................................................1
Section 1.02 Definitions...............................................................2
Section 1.03 Payment of Principal and Interest.........................................8
Section 1.04 Denominations............................................................12
Section 1.05 Global Securities........................................................12
Section 1.06 Redemption at the Option of the Company..................................12
Section 1.07 Purchase at the Option of the Holder Upon a Fundamental
Change...................................................................13
Section 1.08 Purchase of Senior Convertible Notes at the Option of the
Holder...................................................................14
Section 1.09 Further Conditions and Procedures for Purchase Upon a
Fundamental Change and Purchase at the Option of the Holder..............15
Section 1.10 Conversion of Senior Convertible Notes...................................20
Section 1.11 Additional Events of Default; Withholding Notice; Rescission.............30
Section 1.12 Amendment; Supplement; and Waiver........................................31
Section 1.13 Register of Securities; Paying Agent; Conversion Agent...................32
Section 1.14 Calculations in Respect of the Senior Convertible Notes..................33
Section 1.15 Tax Treatment............................................................33
Section 1.16 Transfer and Exchange....................................................33
ARTICLE 2 MISCELLANEOUS PROVISIONS............................................................38
Section 2.01 Recitals by the Company..................................................38
Section 2.02 Ratification and Incorporation of Original Indenture.....................39
Section 2.03 Executed in Counterparts.................................................39
Section 2.04 Governing Law............................................................39
Exhibit A Form of Floating Rate Convertible Senior Note
Exhibit B Certificate of Authentication of Floating Rate Convertible Senior Note
Exhibit C Projected Payment Schedule
(1) This Table of Contents does not constitute part of the Indenture or have any
bearing upon the interpretation of any of its terms and provisions.
THIS
FIFTH SUPPLEMENTAL INDENTURE is made as of the 4th day of August 2003,
by and between BAUSCH & LOMB INCORPORATED, a corporation duly organized and
existing under the laws of the State of
New York (herein referred to as the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to) having its principal office at Xxx Xxxxxx & Xxxx Xxxxx,
Xxxxxxxxx, Xxx Xxxx 00000 and CITIBANK, N.A., a national banking association
duly organized and existing under the laws of the United States of America, as
trustee (hereinafter referred to as the "Trustee", which term includes any
successor trustee under the Indenture).
W I T N E S S E T H:
WHEREAS, the Company and the Trustee have heretofore entered into an
Indenture, dated as of September 1, 1991, as amended by Supplemental Indenture
No. 1, dated May 13, 1998, Supplemental Indenture No. 2, dated July 29, 1998,
Supplemental Indenture No. 3, dated November 21, 2002, and Supplemental
Indenture No. 4 dated August 1, 2003 (the "Original Indenture"), with the
Trustee;
WHEREAS, the Original Indenture is incorporated herein by this reference
and the Original Indenture, as may be amended and supplemented to the date
hereof, including by this
Fifth Supplemental Indenture, is herein called the
"Indenture";
WHEREAS, under the Indenture, a new series of Securities may at any time be
established in accordance with the provisions of the Indenture and the terms of
such series may be described by a supplemental indenture executed by the Company
and the Trustee;
WHEREAS, the Company hereby proposes to create under the Indenture a new
series of Securities;
WHEREAS, additional Securities of other series hereafter established,
except as may be limited in the Indenture as at the time supplemented and
modified, may be issued from time to time pursuant to the Indenture as at the
time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery
of this
Fifth Supplemental Indenture and to make it a valid and binding
obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
FLOATING RATE CONVERTIBLE SENIOR NOTES DUE 2023
SECTION 1.01 ESTABLISHMENT. There is hereby established a new series of
Securities to be issued under the Indenture, to be designated as the Company's
Floating Rate Convertible Senior Notes due 2023 (the "Senior Convertible
Notes").
There are to be authenticated and delivered $140,000,000 (or up to
$160,000,000 if and to the extent the Initial Purchasers exercise their option
to purchase up to an additional $20,000,000) principal amount of the Senior
Convertible Notes, and no further Senior Convertible Notes shall be
authenticated and delivered except as provided by Xxxxxxx 000, 000, 000, 000 xx
0000 of the Original Indenture, the last paragraph of Section 301 thereof,
Section 1.09(f) hereof and Section 1.10(c)(iv) hereof. The Senior Convertible
Notes shall be issued in fully registered form without coupons.
The Senior Convertible Notes shall be in substantially the form set out in
Exhibit A hereto, and the form of the Trustee's Certificate of Authentication
for the Senior Convertible Notes shall be in substantially the form set forth in
Exhibit B hereto.
Each Senior Convertible Note shall be dated the date of authentication
thereof and shall bear interest from the date of original issuance thereof or
from the most recent Interest Payment Date to which interest has been paid or
duly provided for.
The Senior Convertible Notes issued on the date hereof will be: (i) offered
and sold by the Company pursuant to the Purchase Agreement, and (ii) resold
initially only to (A) QIBs in reliance on Rule 144A (such resold Senior
Convertible Notes to be referred to herein as the "Rule 144A Securities"), and
(B) Persons other than U.S. Persons (as defined in Regulation S) in reliance on
Regulation S (such resold Senior Convertible Notes to be referred to herein as
the "Regulation S Securities" and, together with the Rule 144A Securities, the
"Transfer Restricted Securities"). Such Transfer Restricted Securities may
thereafter be transferred to, among others, QIBs and purchasers in reliance on
Regulation S.
SECTION 1.02 DEFINITIONS. The following defined terms used herein shall,
unless the context otherwise requires, have the meanings specified below for
purposes of the Senior Convertible Notes. Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the
Original Indenture.
"Accreted Principal Amount" has the meaning provided in Section 1.03(c).
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Regulation S Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Global Security, to the extent
applicable to such transaction and as in effect from time to time.
"Business Day" means, with respect to any security (including the Senior
Convertible Notes), any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which commercial banks are authorized or required by
law, regulation or executive order to close in The City of
New York or a day on
which the Corporate Trust Office of the Trustee is closed.
"Calculation Agent" means Citibank, N.A. and any successor Calculation
Agent hereunder.
"Cash Settlement Averaging Period" means the 10 Trading Day period
beginning on the Trading Day immediately following the final day of the
Conversion Retraction Period.
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"Cash Settlement Notice Period" means any time on or before the date which
is two Business Days immediately following the Conversion Agent's receipt of a
Holder's notice of conversion.
"Change of Control" will be deemed to have occurred when:
(i) any "person" or "group" within the meaning of Section 13(d)
and 14(d) of the Exchange Act other than the Company, its subsidiaries or
its or their employee benefit plans, is or becomes the direct or indirect
ultimate "beneficial owner," as defined in Rule 13d-3 and 13d-5 under the
Exchange Act, of the Company's common equity representing more than 50% of
the combined voting power of the Company's then outstanding common equity
entitled to vote generally in the election of directors;
(ii) consummation of any share exchange, consolidation or merger
of the Company pursuant to which the Common Stock will be reclassified into
or exchanged into cash, securities or other property or any sale,
assignment, conveyance, lease or other transfer in one transaction or a
series of transactions of all or substantially all of the consolidated
assets of the Company and its subsidiaries, taken as a whole, to any person
other than the Company or one or more of its subsidiaries; provided,
however, that a transaction where the Holders of the Company's common
equity immediately prior to such transaction have directly or indirectly,
more than 50% of the combined voting power of all classes of common equity
then outstanding of the continuing or surviving corporation or transferee
entitled to vote generally in the election of directors immediately after
such event, in substantially the same respective proportions as immediately
prior to such transaction, shall not be a Change of Control; or
(iii) any time the Continuing Members of the Company's Board of
Directors do not constitute a majority of the Company's Board of Directors
(or any successor corporation thereto) where a Continuing Member is, as of
any date of determination, any member of the Company's Board of Directors
who: (i) was a member of the Board of Directors as of the date of this
Fifth Supplemental Indenture, or (ii) was nominated for election or elected
to the Board of Directors with the approval of a majority of the Continuing
Members who were members of the Board of Directors at the time of such
nomination or election.
A Change of Control will not be deemed to have occurred in respect of
clauses (i) and (ii) above, however, if either:
(i) the Closing Sale Price of the Common Stock for any five
Trading Days within the 10 consecutive Trading Days ending immediately
after the later of the Change of Control or the public announcement of a
Change of Control (in the case of a Change of Control under clauses (i) and
(iii) above), equals or exceeds 110% of the accreted Conversion Price of
the Senior Convertible Notes in effect on the date of the Change of Control
or the public announcement thereof, or
(ii) at least 90% of the consideration, excluding cash payments
for fractional shares, in the transaction or transactions constituting the
Change of Control consists of
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shares of capital stock traded on the
New York Stock Exchange or quoted on
the Nasdaq National Market or which will be so traded or quoted when issued
or exchanged in connection with a Change of Control (these securities being
referred to as "publicly traded securities") and as a result of this
transaction or transactions the Senior Convertible Notes become convertible
into such publicly traded securities, excluding cash payments for
fractional shares.
For purposes of this
Fifth Supplemental Indenture the term capital stock of
any Person means any and all shares (including ordinary shares or American
Depositary Shares), interests, participations, or other equivalents, however
designated, of corporate stock or other equity participations, including
partnership interests, whether general or limited, of such Person and any rights
(other than debt securities convertible or exchangeable into an equity
interest), warrants or options to acquire an equity interest in such Person.
"Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.
"Closing Sale Price" of the Common Stock on any Trading Day means the last
reported per share sale price (or if the last sale price is not reported, the
average of the high and low sale prices) on such date as reported on the
New
York Stock Exchange or, if the Common Stock is not then listed on the
New York
Stock Exchange, such other U.S. national or regional securities exchange on
which the Common Stock is then listed or, if the Common Stock is not listed on a
U.S. national or regional securities exchange, as reported by the Nasdaq
National Market. If the Common Stock is not listed for trading on a U.S.
national or regional securities exchange and not reported by the Nasdaq National
Market on the relevant date, the "Closing Sale Price" will be the last quoted
bid price for the Common Stock in the over-the-counter market on the relevant
date as reported by the National Quotation Bureau or similar organization. If
the Common Stock is not so quoted, the "Closing Sale Price" will be the average
of the mid-point of the last bid and asked prices for the Common Stock on the
relevant date quoted by each of at least three nationally recognized independent
investment banking firms selected by the Company for this purpose.
"Common Stock" means the common stock, $0.40 par value, of the Company.
"Company Purchase Notice" has the meaning provided in Section 1.09(a)
hereof.
"Company Purchase Notice Date" has the meaning provided in Section 1.09(a)
hereof.
"Contingent Interest" has the meaning provided in Section 1.03(e).
"Conversion Agent" means the Trustee or such other office or agency
designated by the Company where Senior Convertible Notes may be presented for
conversion.
"Conversion Date" has the meaning provided in Section 1.10(c)(i) hereof.
"Conversion Price" means $1,000 divided by the Conversion Rate, initially
$16.2760 per share of Common Stock.
"Conversion Rate" has the meaning provided in Section 1.10(b) hereof.
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"Conversion Retraction Period" means the two Business Day period beginning
on the Business Day immediately following the final day of the Cash Settlement
Notice Period.
"Current Market Price" per share of Common Stock on any day means the
average of the daily Closing Sale Price per share for the ten consecutive
Trading Days ending not later than the earlier of: the day in question
(including upon the occurrence of a Fundamental Change), and the day before the
"ex date" with respect to the distribution requiring such computation. As used
herein, the term "ex date," when used with respect to any distribution, shall
mean the first date on which the Common Stock trades regular way on the exchange
or in the market in which the security trades without the right to receive such
distribution.
"Definitive Securities" has the meaning provided in Section 1.05(a).
"Depository" means DTC, ClearStream or Euroclear, as applicable.
"Determination Date" means the second London Business Day immediately
preceding the applicable Interest Reset Date.
"DTC" means The Depository Trust Company, a limited-purpose trust company
organized under the
New York Banking Law.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear
System.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Expiration Time" has the meaning provided in Section 1.10(g)(vi) hereof.
"Fundamental Change" will be deemed to have occurred at any time after the
Original Issue Date upon a Change of Control or a Termination of Trading.
"Fundamental Change Purchase Date" has the meaning provided in Section
1.07(a) hereof.
"Fundamental Change Purchase Notice" has the meaning provided in Section
1.07(b)(i) hereof.
"Fundamental Change Purchase Price" has the meaning provided in Section
1.07(a) hereof.
"Initial Purchasers" means the several initial purchasers party to the
Purchase Agreement.
"Interest Payment Date" means each February 1 and August 1 of each year,
commencing February 1, 2004.
"interest period" means any six-month period from February 1 to July 31 and
August 1 to January 31, as appropriate, commencing with the six-month period
beginning August 1, 2003.
"Interest Reset Date" has the meaning provided in Section 1.03(a).
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"Liquidated Damages" has the meaning provided in paragraph 16 of the
reverse of the form of Senior Convertible Notes.
"LIBOR Business Day" means any day other than Saturday or Sunday or a day
on which banking institutions or trust companies in the City of
New York are
required or authorized to close and that is also a London Business Day."
"London Business Day" means any day on which dealings in deposits in U.S.
dollars are transacted in the London Interbank market.
"Option Exercise Date" has the meaning provided in Section 1.03(h) hereof.
"Original Issue Date" means August 4, 2003.
"Original Principal Amount" shall mean $140,000,000 (or up to $160,000,000
if and to the extent the Initial Purchasers exercise their option to purchase up
to an additional $20,000,000) principal amount of the Senior Convertible Notes.
"Purchase Agreement" means the Purchase Agreement, dated July 29, 2003,
among the Company and Citigroup Global Markets Inc., as the representatives of
the Initial Purchasers.
"Purchase Price" means an amount equal to the principal amount of the
Senior Convertible Notes to be purchased plus any accrued and unpaid interest to
but excluding the Repurchase Date.
"Purchased Shares" has the meaning provided in Section 1.10(g)(vi).
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Record Date" means, with respect to any dividend, distribution or other
transaction or event in which the Holders of Common Stock have the right to
receive any cash, securities or other property or in which the Common Stock (or
other applicable security) is exchanged for or converted into any combination of
cash, securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by statute, contract or
otherwise).
"Redemption Date" has the meaning provided in Section 1.06(a) hereof.
"Redemption Price" has the meaning provided in Section 1.06(a) hereof.
"Registration Agreement" means the Registration Rights Agreement dated
August 4, 2003, among the Company and the Initial Purchasers.
"Regular Record Date" means, with respect to each Interest Payment Date,
the close of business on January 15 and July 15 immediately preceding such
Interest Payment Date (whether or not a Business Day).
"Regulation S" means Regulation S under the Securities Act.
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"Repurchase Date" has the meaning provided in Section 1.08(a) hereof.
"Repurchase Notice" has the meaning provided in Section 1.08(b)(i) hereof.
"Restated Principal Amount" has the meaning provided in Section 1.03(h)
hereof.
"Restricted Period" with respect to any securities means the period of one
year beginning on and including the later of: (i) the day on which such
securities are first offered to persons other than distributors (as defined in
Regulation S under the Securities Act) in reliance on Regulation S, and (ii) the
Original Issue Date with respect to such securities.
"Restricted Securities Legend" means the legend set forth in Section
1.16(e)(i) herein.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Convertible Notes" has the meaning provided in Section 1.01 hereof.
"Shelf Registration Statement has the meaning provided in paragraph 16 of
the reverse of the Senior Convertible Notes.
"Six Month LIBOR" has the meaning provided in Section 1.03(a) hereof.
"Spin-off Market Price" per share of the capital stock of, or similar
equity interest in, a subsidiary of the Company on any day means the average of
the daily Closing Sale Price for the 10 consecutive Trading Days commencing on
and including the fifth Trading Day after the "ex date" with respect to the
issuance or distribution requiring such computation. As used herein, the term
"ex date," when used with respect to any issuance or distribution, shall mean
the first date on which such capital stock trades regular way on the exchange or
in the market in which the security trades without the right to receive such
issuance or distribution.
"Stated Maturity" means August 1, 2023.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that as a
result of: (a) any amendment to, or change (including any announced prospective
change) in, the laws (or any regulations thereunder) of the United States or any
political subdivision or taxing authority thereof or therein; or (b) any
amendment to, or change in, an interpretation or application of such laws or
regulations by any legislative body, court, governmental agency or regulatory
authority, in each case which amendment or change is enacted, promulgated,
issued or announced or which interpretation is issued or announced or which
action is taken, on or after the date of this
Fifth Supplemental Indenture,
there is more than an insubstantial risk that accruals of Accreted Principal
Amount payable on the Senior Convertible Notes either: (1) would not be
deductible on a current accrual basis; or (2) would not be deductible under any
other method, in either case in whole or in part, by the Company (by reason of
deferral, disallowance, or otherwise) for U.S. federal income tax purposes.
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If any legislative proposal were ever enacted and made applicable to the
Senior Convertible Notes in a manner that would limit the Company's ability to
either: (1) deduct the interest, including the accruals of Accreted Principal
Amount, payable on the Senior Convertible Notes on a current accrual basis; or
(2) deduct the interest, including the accruals of Accreted Principal Amount,
payable on the notes under any other method for U.S. federal income tax
purposes, such enactment would result in a Tax Event.
"Tax Event Date" has the meaning provided in Section 1.03(h) hereof.
"Termination of Trading" shall be deemed to have occurred if the Common
Stock (or other capital stock into which the Senior Convertible Notes are then
convertible) is neither listed for trading on the
New York Stock Exchange nor
approved for trading on the Nasdaq National Market.
"Trading Day" means (a) if the applicable security is listed on the
New
York Stock Exchange or other U.S. national securities exchange or admitted for
quotation on the Nasdaq National Market, a day on which the
New York Stock
Exchange or other U.S. national securities exchange or the Nasdaq National
Market, as applicable, is open for trading, or (b) if the applicable security is
not so listed, admitted for trading or quoted, any Business Day.
"Trading Price" means, on any date, the average of the secondary market bid
quotations for the Senior Convertible Notes obtained by the Trustee for
$5,000,000 Original Principal Amount of Senior Convertible Notes at
approximately 3:30 p.m., New York City time, on such 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 Trustee, but
two 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 Trustee, one bid shall be
used; and provided further that if the Trustee cannot reasonably obtain at least
one bid for $5,000,000 Original Principal Amount of Senior Convertible Notes
from a nationally recognized securities dealer or in the Company's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Senior Convertible Notes, then the Trading Price per $1,000 Original
Principal Amount of Senior Convertible Notes shall be deemed to be less than 97%
of the product of: (a) the number of shares of Common Stock issuable upon
conversion of $1,000 Original Principal Amount of Senior Convertible Notes and
(b) the Closing Sale Price on such date.
"Trustee" has the meaning provided in the preamble hereof.
"Yield Reset Date" means each February 1 and August 1 of each year,
commencing August 1, 2010.
SECTION 1.03 PAYMENT OF PRINCIPAL AND INTEREST. (a) The Accreted
Principal Amount of the Senior Convertible Notes shall be due at Stated
Maturity. The Senior Convertible Notes will bear cash interest on the Original
Principal Amount at the annual rate of Six Month LIBOR plus 0.50% reset
semi-annually on each Interest
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Payment Date (such day being an "Interest Reset Date"); provided that such rate
will never be less than 0%, from the Original Issue Date, or from the most
recent date to which interest has been paid or provided for, until August 1,
2010. During such period, the Company will pay cash interest semi-annually in
arrears on each Interest Payment Date to Holders of record at the close of
business on each Regular Record Date immediately preceding such Interest Payment
Date. The interest rate in effect for the Senior Convertible Notes on any day
will be (a) if that day is an Interest Reset Date, the interest determined as of
the Determination Date immediately preceding such Interest Reset Date, or (b) if
that day is not an Interest Reset Date, the interest rate determined as of the
Determination Date immediately preceding the most recent Interest Reset Date.
Each payment of cash interest on the Senior Convertible Notes will include
interest (including Contingent Interest, if any) and Liquidated Damages, if any,
accrued through the day immediately preceding the most recent Interest Payment
Date (or the Repurchase Date, Redemption Date, Fundamental Change Purchase Date
or, in certain circumstances, the Conversion Date, as the case may be). Any
payment required to be made on any day that is not a Business Day will be made
on the next succeeding Business Day.
LIBOR will be determined by the Calculation Agent as of the applicable
determination date in accordance with the following provisions ("Six-Month
LIBOR"):
(i) the rate for six-month deposits in US dollars commencing on
the related Interest Reset Date, that appears on the Moneyline Telerate
Page 3750 as of 11:00 A.M., London time, on the interest Determination
Date; or
(ii) if no rate appears on the particular interest Determination
Date on the Moneyline Telerate Page 3750, the rate calculated by the
Calculation Agent as the arithmetic mean of at least two offered quotations
obtained by the Calculation Agent after requesting the principal London
offices of each of four major reference banks in the London interbank
market to provide the Calculation Agent with its offered quotation for
deposits in US dollars for the period of six months, commencing on the
related Interest Reset Date, to prime banks in the London interbank market
at approximately 11:00 A.M., London time, on that interest Determination
Date and in a principal amount that is representative for a single
transaction in US dollars in that market at that time; or
(iii) if fewer than two offered quotations referred to in clause
(ii) are provided as requested, the rate calculated by the Calculation
Agent as the arithmetic mean of the rates quoted at approximately 11:00
A.M., New York time, on the particular interest Determination Date by three
major banks in The City of New York selected by the Calculation Agent for
loans in US dollars to leading European banks for a period of six months
and in a principal amount that is representative for a single transaction
in US dollars in that market at that time; or
(iv) if the banks so selected by the Calculation Agent are not
quoting as mentioned in clause (iii), six-month LIBOR determined on the
preceding interest Determination Date.
(v) "Moneyline Telerate Page 3750" means the display on
Moneyline Telerate (or any successor service) on such page (or any other
page as may replace such page on such service) for the purpose of
displaying the London interbank rates of major banks for US dollars.
9
(b) If the Stated Maturity date of the Senior Convertible Notes falls on a
day that is not a LIBOR Business Day, the related payment of principal and
interest will be made on the next LIBOR Business Day as if it were made on the
date such payment was due, and no interest will accrue on the amounts so payable
for the period from and after such Stated Maturity date to the next LIBOR
Business Day. If any Interest Reset Date or Interest Payment Date (other than at
the date of Stated Maturity) would otherwise be a day that is not a LIBOR
Business Day, that Interest Reset Date and Interest Payment Date will be
postponed to the next date that is a LIBOR Business Day, except that if such
LIBOR Business Day is in the next calendar month, such Interest Reset Date and
Interest Payment Date (other than at the date of Stated Maturity) shall be the
immediately preceding LIBOR Business Day.
(c) Until August 1, 2010, the accreted principal amount (the "Accreted
Principal Amount") of a Senior Convertible Note will be equal to the Original
Principal Amount of $1,000. Beginning August 1, 2010, the Senior Convertible
Note shall not bear interest, except as specified in this paragraph. From such
date, the Original Principal Amount shall commence increasing daily by the
annual rate of Six Month LIBOR plus 0.50% reset on each Interest Reset Date;
provided that such rate will never be less than 0%, to produce the Accreted
Principal Amount. The Accreted Principal Amount will compound semi-annually, not
daily. On Stated Maturity, the Holder of this Senior Convertible Note will
receive the fully Accreted Principal Amount of this Senior Convertible Note on
such date, unless the Senior Convertible Note has been earlier redeemed,
repurchased or converted. Unless cash interest is payable as provided in Section
1.03(a) or (h) hereof, the accrued yield shall be added to the Accreted
Principal Amount per Senior Convertible Note as of the day preceding the most
recent Yield Reset Date. The yield will be calculated using the actual number of
days elapsed between the Yield Reset Dates divided by 360.
(d) If the Accreted Principal Amount hereof or any portion of such
Accreted Principal Amount is not paid when due (whether upon acceleration
pursuant to Section 502 of the Original Indenture, upon the date set for payment
of the Redemption Price, upon the date set for payment of the Purchase Price or
Fundamental Change Purchase Price or upon the Stated Maturity of the Senior
Convertible Notes) or if installments of cash interest due hereon as provided in
Section 1.03(a) or (h) are not paid when due in accordance with this Section,
then in each such case, the overdue amount shall, to the extent permitted by
law, bear interest at Six Month LIBOR plus 0.50% reset on each Interest Reset
Date (provided that such rate will never be less than 0%) as such rate is in
effect following the date such overdue amount was originally due to the date
payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand. The accrual of such
interest on overdue amounts shall be in lieu of, and not in addition to, any
subsequent increase in the Accreted Principal Amount.
(e) The Company will pay contingent interest ("Contingent Interest") to
the Holders of the Senior Convertible Notes in respect of any six-month interest
period from February 1 to July 31 and from August 1 to January 31, commencing on
or after August 1, 2010 for which the average Trading Price of a Senior
Convertible Note for the applicable five Trading Day reference period equals or
exceeds 120% of the sum of the Accreted Principal Amount and accrued interest,
if any, for a Senior Convertible Note as of the day immediately preceding the
first day of the applicable six-month interest period. The "five Trading Day
reference period" means the five Trading Days ending on the third Trading Day
immediately preceding the relevant Interest
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Reset Date. For any six-month interest period in respect of which the Contingent
Interest is payable, the Contingent Interest payable on each $1,000 principal
amount of Notes shall be equal to 0.30% of the average Trading Price of a Senior
Convertible Note for the applicable five Trading Day reference period. No
Contingent Interest shall be payable on Senior Convertible Notes redeemed on
August 1, 2010 (or, if August 1, 2010 is not a Business Day, on the next
following Business Day).
Upon determination that Holders will be entitled to receive Contingent
Interest in respect of a six-month interest period, the Company shall notify the
Holders. In connection with providing such notice, the Company will issue a
press release containing information regarding the Contingent Interest
determination or publish such information on the Company's then existing website
or through such other public medium as the Company may use at that time.
(f) Interest, including Contingent Interest, if any, on any Senior
Convertible Note that is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the person in whose name that
Senior Convertible Note is registered at the close of business on the Regular
Record Date for such interest or Contingent Interest, if any, at the office or
agency of the Company maintained for such purpose. Each installment of interest
or Contingent Interest, if any, on any Senior Convertible Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.
(g) The amount of interest, including Contingent Interest, if any, payable
for any period shall be computed on the basis of the actual number of days
elapsed over a 360-day year. The amount of interest, including Contingent
Interest, if any, payable for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the actual number of days elapsed
in any partial month. In the event that any Interest Payment Date on a Senior
Convertible Note is not a Business Day, then a payment of the interest,
including Contingent Interest, if any, payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if made
on the date of the payment was originally payable.
(h) From and after the date (the "Tax Event Date") of the occurrence of a
Tax Event after August 1, 2010, the Company shall have the option to elect by
notice to the Trustee, in lieu of having Accreted Principal Amount increase, to
have interest accrue and be paid in cash at the annual rate equal to Six Month
LIBOR plus 0.50%, reset on each Interest Reset Date; provided that such rate
shall never be less than 0%, on a Restated Principal Amount per $1,000 Original
Principal Amount (the "Restated Principal Amount") equal to the accrued Accreted
Principal Amount through the Tax Event Date or the date the Company exercises
the option provided for in this section, whichever is later (the "Option
Exercise Date"). Such interest shall be payable semi-annually on February 1 and
August 1 of each year to Holders of record at the close of business on January
15 and July 15 immediately preceding such Interest Payment Date. Interest will
accrue from the most recent date on which interest has been paid or, if no
interest has been paid, from the Option Exercise Date. The Trustee shall notify
Holders of Senior Convertible Notes within 15 days after the Option Exercise
Date that the Company has exercised the option provided for in this Section.
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SECTION 1.04 DENOMINATIONS. The Senior Convertible Notes shall be issued
in denominations of $1,000 and any integral multiple thereof.
SECTION 1.05 GLOBAL SECURITIES. (a) The Senior Convertible Notes shall
initially be issued in the form of one or more Global Securities registered in
the name of the Depositary (which initially shall be The Depository Trust
Company) or its nominee. Except under the limited circumstances described below,
Senior Convertible Notes represented by such Global Security or Global
Securities shall not be exchangeable for, and shall not otherwise be issuable
as, Senior Convertible Notes in definitive form ("Definitive Securities"). The
Global Securities described in this Article 1 may not be transferred except by
the Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or to a successor
Depositary or its nominee.
(b) A Global Security shall be exchangeable for Senior Convertible Notes
registered in the names of Persons other than the Depositary or its nominee only
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as a Depositary for such Global Security and no successor Depositary
shall have been appointed by the Company within 90 days of receipt by the
Company of such notification, or if at any time the Depositary ceases to be a
clearing agency registered under the Exchange Act at a time when the Depositary
is required to be so registered to act as such Depositary and no successor
Depositary shall have been appointed by the Company within 90 days after it
becomes aware of such cessation, or (ii) the Company in its sole discretion
determines that such Global Security shall be so exchangeable. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Senior Convertible Notes registered in such names as the
Depositary shall direct.
(c) Transfers, exchanges and forms of the Senior Convertible Notes are
further subject to the provisions of Section 1.16.
SECTION 1.06 REDEMPTION AT THE OPTION OF THE COMPANY. (a) The Senior
Convertible Notes are redeemable as a whole, or from time to time in part, on
any date (a "Redemption Date") at the option of the Company at 100% of the
Accreted Principal Amount of the Senior Convertible Notes, plus any accrued and
unpaid interest and Liquidated Damages to the Redemption Date (the "Redemption
Price"), provided that the Senior Convertible Notes are not redeemable prior to
August 1, 2010. If this Senior Convertible Note has been converted to a
semi-annual cash interest paying note following the occurrence of a Tax Event
and an Option Exercise Date, the Redemption Price will be equal to the Restated
Principal Amount plus accrued and unpaid interest (including Contingent
Interest, if any) and Liquidated Damages, if any, from the date of such
conversion to but not including the Redemption Date; but in no event will this
Senior Convertible Note be redeemable before August 1, 2010.
(b) The Company shall notify each Holder and the Trustee of the redemption
pursuant to Section 1104 of the Original Indenture.
(c) If any Senior Convertible Notes selected for partial redemption are
thereafter surrendered for conversion in part before termination of the
conversion right with respect to the portion of the Senior Convertible Notes so
selected, the converted portion of such Senior Convertible Notes shall be deemed
(so far as may be), solely for purposes of determining the
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aggregate principal amount of Senior Convertible Notes to be redeemed by the
Company, to be the portion selected for redemption. Senior Convertible Notes
which have been converted during a selection of Senior Convertible Notes to be
redeemed may be treated by the Trustee as Outstanding for the purpose of such
selection. Nothing in this Section 1.06(c) shall affect the right of any Holder
to convert any Senior Convertible Notes before the termination of the conversion
right with respect thereto. If the Company decides to redeem fewer than all of
the outstanding Senior Convertible Notes then the Trustee will select the Senior
Convertible Notes to be redeemed (in principal amount of $1,000 or integral
multiples thereof) by lot, or on a pro rata basis or by another method the
Trustee considers fair and appropriate.
(d) In addition to those matters set forth in Section 1104 of the
Indenture, a notice of redemption sent to the Holders of Senior Convertible
Notes shall state:
(i) the name of the Paying Agent and Conversion Agent;
(ii) the then current Conversion Rate;
(iii) that the Senior Convertible Notes called for redemption may
be converted at any time prior to the close of business on the second
Business Day immediately preceding the Redemption Date; and
(iv) that Holders who wish to convert Senior Convertible Notes
must comply with the procedures in Section 1.10 hereof and paragraph 7 of
the reverse of the Senior Convertible Notes.
(e) The Senior Convertible Notes shall not have a sinking fund.
SECTION 1.07 PURCHASE AT THE OPTION OF THE HOLDER UPON A FUNDAMENTAL
CHANGE. (a) Each Holder shall have the right, at such Holder's option, to
require the Company to purchase any or all of such Holder's Senior Convertible
Notes for cash in integral multiples of $1,000 Original Principal Amount held by
such Holder by delivery to the Paying Agent (as hereinafter provided) of a
Fundamental Change Purchase Notice no later than 60 Business Days after the
occurrence of a Fundamental Change of the Company (a "Fundamental Change
Purchase Date") for a Fundamental Change purchase price (the "Fundamental Change
Purchase Price") equal to 100% of the Accreted Principal Amount of such Senior
Convertible Notes plus accrued and unpaid interest, including Contingent
Interest, if any, and Liquidated Damages, if any, to but not including the
Fundamental Change Purchase Price Date, which Fundamental Change Purchase Price
shall be paid in cash. No Senior Convertible Notes may be purchased at the
option of the Holders due to a Fundamental Change if there has occurred and is
continuing an Event of Default (other than an Event of Default that is cured by
the payment of the Fundamental Change Purchase Price of such Senior Convertible
Notes).
(b) EXERCISE OF FUNDAMENTAL CHANGE OPTION. For a Senior Convertible Note
to be so purchased at the option of the Holder pursuant to this Section 1.07,
the Paying Agent must receive, no later than 60 Business Days after the
occurrence of a Fundamental Change:
(i) a written notice of purchase (a "Fundamental Change
Purchase Notice") substantially in the form entitled "Form of Fundamental
Change Purchase Notice" on the
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reverse of the Senior Convertible Note duly completed, on or before the
close of business on the Business Day immediately preceding the Fundamental
Change Purchase Date, subject to extension to comply with applicable law.
The Fundamental Change Purchase Notice shall state:
(1) if certificated, the certificate numbers of the Senior
Convertible Notes which the Holder shall deliver to be purchased;
(2) the portion of the principal amount of the Senior
Convertible Notes which the Holder shall deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof; and
(3) that such Senior Convertible Notes shall be purchased
as of the Fundamental Change Purchase Date pursuant to the terms and
conditions specified in the Senior Convertible Notes and in the
Indenture;
(ii) delivery or book-entry transfer of such Senior Convertible
Notes prior to, on or after the Fundamental Change Purchase Date (together
with all necessary endorsements) at the offices of the Paying Agent, such
delivery or transfer being a condition to receipt by the Holder of the
Fundamental Change Purchase Price therefor; provided, however, that such
Fundamental Change Purchase Price shall be so paid pursuant to this Section
1.07 only if the Senior Convertible Notes so delivered or transferred to
the Paying Agent shall conform in all respects to the description thereof
in the related Fundamental Change Purchase Notice.
SECTION 1.08 PURCHASE OF SENIOR CONVERTIBLE NOTES AT THE OPTION OF THE
HOLDER. (a) On each of August 1, 2010, August 1, 2013 and August 1, 2018 (each,
a "Repurchase Date"), each Holder shall have the right, at such Holder's option,
to require the Company to purchase any or all of such Holder's Senior
Convertible Notes. The Company shall purchase such Senior Convertible Notes at a
price equal to 100% of the Accreted Principal Amount of the Senior Convertible
Notes to be purchased plus any accrued and unpaid interest, including Contingent
Interest, if any, and Liquidated Damages, if any, on the principal amount to be
purchased to but excluding the Repurchase Date.
If prior to a Repurchase Date this Senior Convertible Note has been
converted to a semi-annual coupon note following the occurrence of a Tax Event,
the Purchase Price will be equal to the Restated Principal Amount plus accrued
and unpaid cash interest, including Contingent Interest, if any, and Liquidated
Damages, if any, from the date of conversion to the Repurchase Date but not
including the Repurchase Date.
(b) EXERCISE OF REPURCHASE OPTION. For a Senior Convertible Note to be so
purchased at the option of the Holder, the Paying Agent must receive:
(i) a written notice of purchase (a "Repurchase Notice")
substantially in the form entitled "Form of Repurchase Notice" on the
reverse of the Senior Convertible Note duly completed, at any time from the
opening of business on the date that is 20 Business Days prior to a
Repurchase Date until the close of business on the third Business Day prior
to such Repurchase Date. The Repurchase Notice shall state:
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(1) if certificated, the certificate numbers of the Senior
Convertible Notes which the Holder shall deliver to be purchased;
(2) the portion of the principal amount of the Senior
Convertible Notes which the Holder shall deliver to be purchased,
which portion must be $1,000 or an integral multiple thereof; and
(3) that such Senior Convertible Notes shall be purchased
as of the Repurchase Date pursuant to the terms and conditions
specified in the Senior Convertible Notes and in the Indenture.
(ii) delivery or book-entry transfer of such Senior Convertible
Notes to the Paying Agent prior to, on or after the Repurchase Date
(together with all necessary endorsements) at the offices of the Paying
Agent, such delivery or transfer being a condition to receipt by the Holder
of the Purchase Price therefor; provided, however, that such Purchase Price
shall be so paid pursuant to this Section 1.08 only if the Senior
Convertible Notes so delivered or transferred to the Paying Agent shall
conform in all respects to the description thereof in the related
Repurchase Notice.
SECTION 1.09 FURTHER CONDITIONS AND PROCEDURES FOR PURCHASE UPON A
FUNDAMENTAL CHANGE AND PURCHASE AT THE OPTION OF THE HOLDER.
(a) NOTICE OF REPURCHASE DATE OR FUNDAMENTAL CHANGE. The Company shall
send notices (each, a "Company Purchase Notice") to the Holders (and to
beneficial owners as required by applicable law) at their addresses shown in the
Senior Convertible Note register maintained by the Security Registrar, and shall
deliver a copy of each such notice to the Trustee and Paying Agent, not less
than 20 Business Days prior to each Repurchase Date, or on or before the 20th
day after the occurrence of the Fundamental Change, as the case may be (each
such date of delivery, a "Company Purchase Notice Date"). Any such notice
delivered to the Trustee and the Paying Agent with respect to a Fundamental
Change shall be accompanied by an Officers' Certificate certifying that a
Fundamental Change has occurred and as to the date of the occurrence thereof, on
which Certificate the Trustee and the Paying Agent may conclusively rely. Each
Company Purchase Notice shall include a Form of Repurchase Notice or Fundamental
Change Purchase Notice to be completed by a Holder and shall state:
(i) the applicable Purchase Price or Fundamental Change
Purchase Price, excluding accrued and unpaid interest, the applicable
Conversion Rate at the time of such notice (and any applicable adjustments
to the Conversion Rate) and, to the extent known at the time of such
notice, the amount of interest that will be payable with respect to the
Senior Convertible Notes on the applicable Repurchase Date or Fundamental
Change Purchase Date;
(ii) if the notice relates to a Fundamental Change, the events
causing the Fundamental Change and the date of the Fundamental Change;
(iii) the Repurchase Date or Fundamental Change Purchase Date;
(iv) the last date on which a Holder may exercise its purchase
right;
15
(v) the name and address of the Paying Agent and the Conversion
Agent;
(vi) that Senior Convertible Notes must be surrendered to the
Paying Agent to collect payment of the Purchase Price or Fundamental Change
Purchase Price;
(vii) that Senior Convertible Notes as to which a Repurchase
Notice or Fundamental Change Purchase Notice has been given by the Holder
to the Company may be converted only if the applicable Repurchase Notice or
Fundamental Change Purchase Notice has been withdrawn by the Holder in
accordance with the terms of this
Fifth Supplemental Indenture; provided
that the Senior Convertible Notes are otherwise convertible in accordance
with paragraph 7 of the reverse of the Senior Convertible Notes;
(viii) that the Purchase Price or Fundamental Change Purchase
Price for any Senior Convertible Notes as to which a Repurchase Notice or a
Fundamental Change Purchase Notice, as applicable, has been given and not
withdrawn shall be paid by the Paying Agent promptly following the later of
the Repurchase Date or Fundamental Change Purchase Date, as applicable, or
the time of book-entry transfer or delivery of such Senior Convertible
Notes;
(ix) the procedures the Holder must follow under Sections 1.07
or 1.08, as applicable, and this Section 1.09;
(x) briefly, the conversion rights of the Senior Convertible
Notes and whether, at the time of such notice, the Convertible Senior Notes
are eligible for conversion;
(xi) that, unless the Company defaults in making payment of such
Purchase Price or Fundamental Change Purchase Price on Senior Convertible
Notes covered by any Repurchase Notice or Fundamental Change Purchase
Notice, as applicable, interest will cease to accrue on and after the
Repurchase Date or Fundamental Change Purchase Date, as applicable;
(xii) the CUSIP and, if applicable, the ISIN number of the Senior
Convertible Notes; and
(xiii) the procedures for withdrawing a Repurchase Notice or
Fundamental Change Purchase Notice.
Simultaneously with providing such Company Purchase Notice, the Company
will publish a notice containing the information in such Company Purchase Notice
in a newspaper of general circulation in The City of New York or publish such
information on its then existing web site or through such other public medium as
it may use at the time.
At the Company's request, made at least five Business Days prior to the
date upon which such notice is to be mailed, and at the Company's expense, the
Paying Agent shall give the Company Purchase Notice in the Company's name;
provided, however, that, in all cases, the text of the Company Purchase Notice
shall be prepared by the Company.
16
(b) EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE PURCHASE NOTICE.
Upon receipt by the Paying Agent on behalf of the Company from the Holder of the
Fundamental Change Purchase Notice or the Repurchase Notice specified in Section
1.07(b)(i) or Section 1.08(b)(i), as applicable, the Holder of the Senior
Convertible Notes in respect of which such Fundamental Change Purchase Notice or
the Repurchase Notice, as the case may be, was given shall (unless such
Fundamental Change Purchase Notice or the Repurchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Fundamental Change Purchase Price or the Purchase Price with respect
to such Senior Convertible Notes. Such Fundamental Change Purchase Price or
Purchase Price shall be paid by the Paying Agent to such Holder promptly
following the later of (x) the Fundamental Change Purchase Date or the
Repurchase Date, as the case may be, with respect to such Senior Convertible
Notes (provided the conditions in Section 1.07(b) or Section 1.08(b), as
applicable, have been satisfied), and (y) the time of delivery or book-entry
transfer of such Senior Convertible Notes to the Paying Agent by the Holder
thereof in the manner required by Section 1.07(b)(ii) or Section 1.08(b)(ii), as
applicable. Senior Convertible Notes in respect of which a Fundamental Change
Purchase Notice or Repurchase Notice, as the case may be, has been given by the
Holder thereof may not be converted for shares of Common Stock on or after the
date of the delivery of such Fundamental Change Purchase Notice or Repurchase
Notice, as the case may be, unless such Fundamental Change Purchase Notice or
Repurchase Notice, as the case may be, has first been validly withdrawn or
deemed to have been validly withdrawn as specified in Section 1.09(c); provided
that the Senior Convertible Notes are otherwise convertible in accordance with
paragraph 7 of the reverse of the Senior Convertible Notes.
On or before 10:00 a.m. (New York City time) on the Fundamental Change
Purchase Date or the Repurchase Date, as the case may be, the Company shall
deposit with the Paying Agent (or if the Company or an Affiliate of the Company
is acting as the Paying Agent, shall segregate and hold in trust) the Purchase
Price consideration sufficient to pay the aggregate Fundamental Change Purchase
Price or the aggregate Purchase Price, as the case may be, of the Senior
Convertible Notes to be purchased pursuant to Section 1.07 or Section 1.08, as
applicable. Payment by the Paying Agent of such Fundamental Change Purchase
Price or Purchase Price for such Senior Convertible Notes shall be made promptly
following the later of the Fundamental Change Purchase Date or the Repurchase
Date, as the case may be, or the time of book-entry transfer or delivery of such
Senior Convertible Notes. If the Paying Agent holds money sufficient to pay the
Fundamental Change Purchase Price or Purchase Price, as the case may be, of such
Senior Convertible Notes on the Business Day following the Fundamental Change
Purchase Date or the Repurchase Date, as the case may be, then, on and after
such date, such Senior Convertible Notes shall cease to be outstanding and
interest on such Senior Convertible Notes shall cease to accrue, whether or not
book-entry transfer of such Senior Convertible Notes is made or such Senior
Convertible Notes are delivered to the Paying Agent, and all other rights of the
Holder shall terminate (other than the right to receive the Fundamental Change
Purchase Price or the Purchase Price, as the case may be, upon delivery or
transfer of the Senior Convertible Notes). Nothing herein shall preclude the
Company withholding any tax required by law.
The Company shall require each Paying Agent (other than the Trustee) to
agree in writing that the Paying Agent shall hold in trust for the benefit of
Holders or the Trustee all money held by the Paying Agent for the payment of the
Fundamental Change Purchase Price or the Purchase
17
Price, as the case may be, and shall notify the Trustee of any default by the
Company in making any such payment. If the Company or an Affiliate of the
Company 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 deliver all money held by it pursuant to this Section 1.09 to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
doing so, the Paying Agent shall have no further liability for the money
delivered to the Trustee.
All questions as to the validity, eligibility (including time of receipt)
and acceptance of any Senior Convertible Notes for purchase shall be determined
by the Company, whose determination shall be final and binding, absent manifest
error.
(c) WITHDRAWAL OF A REPURCHASE NOTICE OR FUNDAMENTAL CHANGE PURCHASE
NOTICE. A Repurchase Notice or Fundamental Change Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent at any time prior to 5:00 p.m. New York City time
on the Repurchase Date or the Fundamental Change Purchase Date, as the case may
be, to which it relates specifying:
(i) if certificated, the certificate number of the Senior
Convertible Notes in respect of which such notice of withdrawal is being
submitted;
(ii) the principal amount of the Senior Convertible Notes with
respect to which such notice of withdrawal is being submitted; and
(iii) the principal amount, if any, of such Senior Convertible
Notes which remains subject to the Repurchase Notice or Fundamental Change
Purchase Notice, as the case may be, and which has been or shall be
transferred or delivered for purchase by the Company.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Repurchase Notice or Fundamental Change Purchase Notice or written notice of
withdrawal thereof.
(d) Notwithstanding the requirements of Sections 1.07 or 1.08 and this
Section 1.09, if the Senior Convertible Notes are represented by Global
Securities in book-entry form the appropriate procedures of the Depositary must
be complied with for any purchase upon a Fundamental Change or Repurchase
Option.
(e) EFFECT OF EVENT OF DEFAULT. There shall be no purchase of any Senior
Convertible Notes pursuant to Section 1.07 or Section 1.08 if an Event of
Default has occurred and is continuing (other than a default that is cured by
the payment of the Purchase Price or Fundamental Change Purchase Price, as the
case may be). The Paying Agent shall promptly return to the respective Holders
thereof any Senior Convertible Notes: (x) with respect to which a Repurchase
Notice or Fundamental Change Purchase Notice, as the case may be, has been
withdrawn in compliance with this
Fifth Supplemental Indenture, or (y) held by
it during the continuance of an Event of Default (other than a default that is
cured by the payment of the Purchase Price or Fundamental Change Purchase Price,
as the case may be) in which case, upon such return, the Repurchase Notice or
Fundamental Change Purchase Notice with respect thereto shall be deemed to have
been withdrawn.
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(f) SENIOR CONVERTIBLE NOTES PURCHASED IN PART. Any Senior Convertible
Notes that are 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 or the Authenticating Agent, if any, shall authenticate and deliver to
the Holder of such Senior Convertible Notes, without service charge, a new
Senior Convertible Note or Senior Convertible Notes, of any authorized
denomination, as requested by such Holder in aggregate principal amount equal
to, and in exchange for, the portion of the principal amount of the Senior
Convertible Notes so surrendered which is not purchased.
(g) COVENANT TO COMPLY WITH SECURITIES LAWS UPON PURCHASE OF SENIOR
CONVERTIBLE NOTES. In connection with any offer to purchase Senior Convertible
Notes under Sections 1.07 or 1.08 hereof, the Company shall, to the extent
applicable, (i) comply with Rules 13e-4 and 14e-1 (and any successor provisions
thereto) under the Exchange Act, if applicable, (ii) file the related Schedule
TO (or any successor schedule, form or report) under the Exchange Act, if
applicable and (iii) otherwise comply with all applicable federal and state
securities laws so as to permit the rights and obligations under Sections 1.07,
1.08 or this Section 1.09 to be exercised in the manner specified in Sections
1.07, 1.08 or this Section 1.09; provided, however, that the Company shall not
take any action in violation of any applicable federal or state securities laws.
(h) REPAYMENT TO THE COMPANY. The Trustee and the Paying Agent shall
return to the Company any cash or property that remains unclaimed as provided in
Section 1003 of the Original Indenture, together with any unclaimed interest,
held by them for the payment of a Purchase Price or Fundamental Change Purchase
Price, as the case may be; provided, however, that to the extent that the
aggregate amount of cash deposited by the Company pursuant to Section 1.09(b),
as applicable, exceeds the aggregate Purchase Price or Fundamental Change
Purchase Price, as the case may be, of the Senior Convertible Notes or portions
thereof which the Company is obligated to purchase as of the Repurchase Date or
Fundamental Change Purchase Date, as the case may be, then promptly on and after
the Business Day following the Repurchase Date or Fundamental Change Purchase
Date, as the case may be, the Trustee or the Paying Agent, as the case may be,
shall return any such excess to the Company together with any excess interest
held by them for payment to Holders.
(i) In any case where a Repurchase Date or a Fundamental Change Purchase
Date shall not be a Business Day at any Place of Payment, then (notwithstanding
any other provision of the Indenture or the Senior Convertible Notes) payment of
interest and the Purchase Price or the Fundamental Change Purchase Price, as the
case may be, need not be made at such Place of Payment on such date (provided
that all other conditions therefor have been complied with), but may be made on
the next succeeding Business Day at such Place of Payment (provided that such
conditions have been complied with) with the same force and effect as if made on
the Repurchase Date or the Fundamental Change Purchase Date, as the case may be
(and without any interest or payment in respect of any such delay).
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SECTION 1.10 CONVERSION OF SENIOR CONVERTIBLE NOTES.
(a) RIGHT TO CONVERT. A Holder may convert its Senior Convertible Notes
for Common Stock at any time during the periods specified in paragraph 7 of the
reverse of the Senior Convertible Notes. In lieu of delivery of shares of Common
Stock, the Company shall have the option to satisfy its conversion obligations
in cash as provided herein; provided, however, that the Company shall not have
such option at Stated Maturity or following a notice of redemption pursuant to
Section 1.06 hereof.
(b) THE CONVERSION RATE. The initial Conversion Rate is 16.2760 shares of
Common Stock issuable upon conversion of $1,000 principal amount of a Senior
Convertible Note (the "Conversion Rate"), subject to adjustment as herein set
forth. A Holder may convert a portion of the principal amount of Senior
Convertible Notes if the portion is $1,000 or an integral multiple thereof. If
the Company elects to satisfy its conversion obligations in cash, the Holder
will receive cash (subject to adjustment as herein set forth) equal to the
product of (x) the product of (A) the Original Principal Amount of the Senior
Convertible Notes to be converted divided by 1,000 and (B) the Conversion Rate,
and (y) the average Closing Sale Price of the Common Stock during the Cash
Settlement Averaging Period.
(c) CONVERSION PROCEDURES. To convert Senior Convertible Notes, the
requirements set forth in this Section 1.10(c) and in paragraph 7 of the reverse
of the Senior Convertible Notes must be satisfied.
(i) To convert the Senior Convertible Notes, a Holder must (1)
complete and manually sign the irrevocable conversion notice on the back of
the Senior Convertible Notes (or complete and manually sign a facsimile of
such notice) and deliver such notice to the Conversion Agent at the office
maintained by the Conversion Agent for such purpose, (2) with respect to
Senior Convertible Notes in certificated form, surrender the Senior
Convertible Notes to the Conversion Agent or with respect to Senior
Convertible Notes represented by Global Securities, cause the book-entry
transfer thereof to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent,
the Company or the Trustee and (4) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all such requirements is
the conversion date (the "Conversion Date"). As soon as practicable, but in
no event later than the fifth Business Day following the Conversion Date,
the Company shall deliver to the Holder, through the Conversion Agent, a
certificate (or credit the book-entry transfer of such shares of Common
Stock) for the number of full shares of Common Stock issuable upon the
conversion and cash in lieu of any fractional share determined pursuant to
Section 1.10(d).
(ii) Holders of Senior Convertible Notes at the close of
business on a Regular Record Date will receive payment of interest payable
on the corresponding Interest Payment Date notwithstanding the conversion
of such Senior Convertible Notes at any time after the close of business on
such Regular Record Date. Senior Convertible Notes surrendered for
conversion by a Holder during the period from the close of business on any
Regular Record Date to the opening of business on the corresponding
Interest Payment Date must be accompanied by payment of an amount equal to
the interest that
20
the Holder is to receive on the Senior Convertible Notes; provided,
however, that no such payment need be made with respect to Senior
Convertible Notes in respect of which a Redemption Date or Fundamental
Change Purchase Date has been set that falls within this period or on such
Interest Payment Date or to the extent any overdue interest exists at the
time of such conversion. Except as described above, no payment or
adjustment will be made for accrued interest on converted Senior
Convertible Notes. Upon conversion of Senior Convertible Notes, a Holder
will not receive any cash payment of interest (unless such conversion
occurs between a Regular Record Date and the Interest Payment Date to which
it relates) and the Company will not adjust the Conversion Rate to account
for accrued and unpaid interest.
(iii) The Person in whose name the certificate for such shares of
Common Stock is registered shall be treated as a stockholder of record on
and after the Conversion Date; provided, however, that no surrender of
Senior Convertible Notes 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 Common Stock upon such conversion
as the record Holder or Holders of such shares of Common Stock on such
date, but such surrender shall be effective to constitute the Person or
Persons entitled to receive such shares of Common Stock as the record
Holder or Holders thereof for all purposes at the close of business on the
next succeeding day on which such stock transfer books are open; such
conversion shall be at the Conversion Rate in effect on the date that such
Senior Convertible Notes shall have been surrendered for conversion, as if
the stock transfer books of the Company had not been closed. Upon
conversion of Senior Convertible Notes, such Person shall no longer be a
Holder of such Senior Convertible Notes.
(iv) No payment or adjustment shall be made for dividends on or
other distributions with respect to any Common Stock except as provided in
Section 1.10(g). If a Holder converts more than one Senior Convertible Note
at the same time, the number of shares of Common Stock issuable upon the
conversion shall be based on the total principal amount of the Senior
Convertible Notes converted. Upon surrender of a Senior Convertible Note
that is converted in part, the Company shall execute, and the Trustee or
the Authenticating Agent shall authenticate and deliver to the Holder, a
new Senior Convertible Note in an authorized denomination equal in
principal amount to the unconverted portion of the Senior Convertible Note
surrendered. If the last day on which Senior Convertible Notes may be
converted is not a Business Day in a place where a Conversion Agent is
located, the Senior Convertible Notes may be surrendered to that Conversion
Agent on the next succeeding day that is a Business Day. A Holder of Senior
Convertible Notes is not entitled to any rights of a Holder of Common Stock
until such Holder has converted its Senior Convertible Notes to Common
Stock, and only to the extent such Senior Convertible Notes are deemed to
have been converted into Common Stock pursuant to this Section 1.10.
(v) In the event the Company exercises its option pursuant to
Section 1.03(h) to have, in lieu of having the Accreted Principal Amount
increase, interest accrue on the Senior Convertible Note following a Tax
Event, the Holder will be entitled on conversion to receive the same number
of shares of Common Stock such Holder would have
21
received if the Company had not exercised such option. Increases in the
Accreted Principal Amount and cash interest (including Contingent Interest,
if any, and interest payable upon the occurrence of a Tax Event, if any)
will not be paid on Senior Convertible Notes that are converted, except
accrued cash interest will be payable upon conversion of Senior Convertible
Notes made concurrently with or after acceleration of Senior Convertible
Notes following the Event of Default.
(vi) If a Holder of Senior Convertible Notes has already
delivered a Fundamental Change Purchase Notice or Repurchase Notice with
respect to a Senior Convertible Note, then the Holder may not surrender
such Senior Convertible Note for conversion until the Holder has withdrawn
the applicable Fundamental Change Purchase Notice or Repurchase Notice in
accordance with the provisions hereof.
(vii) On conversion of a Senior Convertible Note, increases in
the Accreted Principal Amount or cash interest (or interest if the Company
has exercised its option provided for in Section 1.03(h) hereof)
attributable to the period from the Original Issue Date (or, if the Company
has exercised the option provided for in Section 1.03(h) hereof, the later
of (x) the date of such exercise and (y) the date on which interest was
last paid) through the Conversion Date shall not be cancelled, extinguished
or forfeited, but rather shall be deemed to be paid in full to the Holder
thereof through the delivery of the Common Stock (together with the cash
payment, if any, in lieu of fractional shares) in exchange for the Senior
Convertible Note being converted pursuant to the terms of the Senior
Convertible Notes, and the fair market value of such shares of Common Stock
(together with any such cash payment in lieu of fractional shares) shall be
treated as issued, to the extent thereof, first in exchange for increases
in the Accreted Principal Amount or cash interest (or interest, if the
Company has exercised its option provided for in Section 1.03(h) hereof)
accrued through the Conversion Date, and the balance, if any, of such fair
market value of such Common Stock (and any such cash payment) shall be
treated as issued in exchange for the Original Principal Amount of the
Senior Convertible Note being converted pursuant to the provisions of the
Senior Convertible Notes.
(viii) If the Company elects to exercise its option to satisfy its
conversion obligation in cash, it shall notify the Conversion Agent of such
election during the Cash Settlement Notice Period. Upon such timely notice,
Holders may retract their conversion notice at any time during the
Conversion Retraction Period (notwithstanding anything contained herein to
the contrary). Unless a conversion notice has been retracted pursuant to
the preceding sentence, settlement in cash through the Conversion Agent
shall occur on the Business Day immediately following the Cash Settlement
Averaging Period.
(d) CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. The Company shall not
issue a fractional share of Common Stock upon conversion of Senior Convertible
Notes. Instead the Company shall deliver cash for the current market value of
the fractional share. The current market value of a fractional share shall be
determined to the nearest 1/10,000th of a share by multiplying the Last Reported
Sale Price of a full share of Common Stock on the Trading Day immediately
preceding the Conversion Date by the fractional amount and rounding the product
to the nearest whole cent.
22
(e) TAXES ON CONVERSION. If a Holder converts Senior Convertible Notes, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax which shall be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude the
Company's withholding any tax required by law.
(f) COVENANTS OF THE COMPANY. The Company shall, prior to issuance of any
Senior Convertible Notes hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Senior Convertible Notes.
All shares of Common Stock delivered upon conversion of the Senior Convertible
Notes shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim. The Company shall endeavor promptly to
comply with all federal and state securities laws regulating the order and
delivery of shares of Common Stock upon the conversion of Senior Convertible
Notes, if any, and shall cause to have listed or quoted all such shares of
Common Stock on the New York Stock Exchange, or, if not listed thereon, on each
United States national securities exchange or over-the-counter or other domestic
market on which the Common Stock is then listed or quoted.
(g) ADJUSTMENTS TO CONVERSION RATE. The Conversion Rate shall be adjusted
from time to time by the Company as follows:
(i) In case the Company shall pay or make a dividend or other
distribution on the Common Stock in Common Stock, the Conversion Rate, as
in effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such dividend or
other distribution, shall be increased by dividing such Conversion Rate by
a fraction of which the numerator shall be the number of shares of Common
Stock outstanding at the close of business on the date fixed for such
determination and the denominator shall be the sum of such number of shares
and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the
opening of business on the day following the date fixed for such
determination. For the purposes of this Section 1.10(g)(i), the number of
shares of Common Stock at any time outstanding shall not include shares
held in treasury by the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company will not pay any dividend or make any
distribution on shares of Common Stock held in treasury by the Company.
(ii) In case the Company shall issue rights, options or warrants
(other than pursuant to any dividend reinvestment or share purchase plans)
to all Holders of its Common Stock (not being available on an equivalent
basis to Holders of the Senior Convertible Notes upon conversion of such
Senior Convertible Notes) entitling them, for a period expiring within 60
days after the record date for the determination of
23
stockholders entitled to receive such rights, options or warrants, to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price per share of the Common Stock on the date
fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan or share purchase plan), the Conversion Rate in effect at the opening
of business on the day following the date fixed for such determination
shall be increased by dividing such Conversion Rate by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding at
the close of business on the date fixed for such determination plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Current Market Price and the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase at such below
Current Market Price, such increase to become effective immediately after
the opening of business on the day following the date fixed for such
determination. For the purposes of this Section 1.10(g)(ii), the number of
shares of Common Stock at any time outstanding shall not include shares
held in treasury by the Company but shall include any shares issuable in
respect of any scrip certificates issued in lieu of fractions of shares of
Common Stock. The Company shall not issue any such rights, options or
warrants in respect of shares of Common Stock held in treasury by the
Company.
(iii) In case outstanding shares of Common Stock shall be
subdivided or split into a greater number of shares of Common Stock, the
Conversion Rate in effect at the opening of business on the day following
the day upon which such subdivision or split becomes effective shall be
proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of
Common Stock, the Conversion Rate in effect at the opening of business on
the day following the day upon which such combination becomes effective
shall be proportionately reduced, such increase or reduction, as the case
may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision, split or combination
becomes effective.
(iv) In case the Company shall, by dividend or otherwise,
distribute to all Holders of its Common Stock evidences of its
indebtedness, shares of capital stock, securities, cash or other property
(but excluding any rights, options or warrants referred to in Section
1.10(g)(ii) of this Section, any dividend or distribution paid exclusively
in cash and any dividend or distribution referred to in Section
1.10(g)(i)), the Conversion Rate shall be adjusted by dividing the
Conversion Rate in effect immediately prior to the close of business on the
date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the date fixed for such
determination less the then fair market value (as determined by the Board
of Directors, whose determination shall be conclusive and described in a
Board Resolution) on such date of the portion of the evidences of
indebtedness, shares of capital stock, securities, cash or other property
so distributed applicable to one share of Common Stock and the denominator
shall be such Current Market Price per share of the Common Stock, such
adjustment to become
24
effective immediately prior to the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive
such distribution; provided, however, that in the event that the Company
makes a distribution to all Holders of its Common Stock consisting of
capital stock of, or similar equity interests in, a subsidiary of the
Company, the Conversion Rate shall be adjusted by dividing the Conversion
Rate in effect immediately prior to the close of business on the date fixed
for the determination of stockholders entitled to receive such distribution
by a fraction of which the numerator shall be the Spin-off Market Price per
share of the Common Stock on the date fixed for such determination less the
Spin-off Market Price per share or similar equity interest of the
subsidiary of the Company on such date and the denominator shall be the
Spin-off Market Price per share of the Common Stock, such adjustment to
become effective 10 trading days after the effective date of such
distribution of capital stock of, or similar equity interest in, a
subsidiary or other business unit of the Company. In any case in which this
Section 1.10(g)(iv) is applicable, Sections 1.10(g)(i) and (ii) shall not
be applicable.
(v) In case the Company shall, (I) by dividend or otherwise,
distribute to all Holders of its Common Stock cash (excluding (i) any cash
that is distributed in an event to which Section 1.10(h)(iv) applies or
(ii) cash that is distributed as part of a distribution referred to in
Section 1.10(g)(iv)) in an aggregate amount that, combined together with
(II) the aggregate amount of any other distributions to all Holders of its
Common Stock made exclusively in cash within the quarterly fiscal period
containing the date of payment of such distribution and in respect of which
no adjustment pursuant to this Section 1.10(g)(v) or Section 1.10(g)(vi)
has been made and (III) the aggregate of any cash plus the fair market
value of any securities or other property, as of the expiration of the
applicable tender or exchange offer referred to below (as determined by the
Board of Directors, whose determination shall be conclusive and described
in a Board Resolution), of consideration payable in respect of any tender
or exchange offer (other than consideration payable in respect of any
odd-lot tender offer) by the Company or any of its subsidiaries for all or
any portion of the Common Stock concluded within the quarterly fiscal
period containing the date of payment of the distribution described in
clause (I) above and in respect of which no adjustment pursuant to this
Section 1.10(g)(v) or Section 1.10(g)(vi) has been made, exceeds the
product of $0.13 (appropriately adjusted from time to time for any stock
dividends on or subdivisions or combinations of Common Stock) multiplied by
the number of shares of Common Stock outstanding on such date, then, and in
each such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be increased so that the same
shall equal the rate determined by dividing the Conversion Rate in effect
immediately prior to the close of business on the date fixed for
determination of the stockholders entitled to receive such distribution by
a fraction (i) the numerator of which shall be equal to the Current Market
Price per share of the Common Stock on the date fixed for such
determination plus $0.13 (appropriately adjusted from time to time for any
stock dividends on or subdivisions or combination of Common Stock) less an
amount equal to the quotient of (x) the combined amount distributed or
payable in the transactions described in clauses (I), (II) and (III) above
and (y) the number of shares of Common Stock outstanding on such date for
determination and (ii) the denominator of which shall be equal to the
Current Market Price per share of the Common Stock on such date for
determination.
25
(vi) In case (I) a tender or exchange offer made by the Company
or any subsidiary of the Company for all or any portion of the Common Stock
(other than consideration payable in respect of any odd-lot tender offer)
shall expire and such tender or exchange offer (as amended upon the
expiration thereof) shall require the payment to stockholders (based on the
acceptance (up to any maximum specified in the terms of the tender or
exchange offer) of Purchased Shares) of an aggregate consideration having a
fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (II) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution), as of the expiration of
such tender or exchange offer, of consideration payable in respect of any
other tender or exchange offer (other than consideration payable in respect
of any odd-lot tender offer) by the Company or any subsidiary of the
Company for all or any portion of the Common Stock expiring within the
quarterly fiscal period containing the expiration of such tender or
exchange offer and in respect of which no adjustment pursuant to Section
1.10(g)(v) or this Section 1.10(g)(vi) has been made and (III) the
aggregate amount of any distributions to all Holders of the Company's
Common Stock made exclusively in cash within the quarterly fiscal period
containing the expiration of such tender or exchange offer and in respect
of which no adjustment pursuant to Section 1.10(g)(v) or this Section
1.10(g)(vi) has been made, exceeds the Current Market Price per share of
Common Stock on the Trading Day next succeeding the last time (the
"Expiration Time") tenders could have been made pursuant to such tender or
exchange offer (as it may be amended), then, and in each such case,
immediately prior to the opening of business on the day after the date of
the Expiration Time, the Conversion Rate shall be adjusted so that the same
shall equal the rate determined by dividing the Conversion Rate immediately
prior to the close of business as of the Expiration Time by a fraction (i)
the numerator of which shall be equal to (A) the product of (1) the Current
Market Price per share of the Common Stock as of the Expiration Time and
(2) the number of shares of Common Stock outstanding (including any
tendered shares) as of the Expiration Time less (B) the amount of cash plus
the fair market value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the transactions described
in clauses (I), (II) and (III) above (assuming in the case of clause (I)
the acceptance, up to any maximum specified in the terms of the tender or
exchange offer, of Purchased Shares), and (ii) the denominator of which
shall be equal to the product of (A) the Current Market Price per share of
the Common Stock as of the Expiration Time and (B) the number of shares of
Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not
withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares").
(vii) All adjustments to the Conversion Rate, shall be calculated
to the nearest 1/10,000th of a share of Common Stock (or if there is not a
nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No
adjustment in the Conversion Rate shall be required unless such adjustment
would require an increase or decrease of at least one percent therein;
provided, however, that any adjustments which by reason of this
subparagraph are not required to be made because they would have required
an increase
26
or decrease of less than one percent shall be carried forward and taken
into account in any subsequent adjustment.
(viii) Notwithstanding the foregoing provisions of Section
1.10(g)(ii) or (iv), no adjustment shall be made thereunder, nor shall an
adjustment be made to the ability of a Holder of a Note to convert, for any
distribution described therein if the Holder will otherwise participate in
the distribution without conversion of such Holder's Senior Convertible
Notes.
(ix) No adjustment pursuant to the Conversion Rate or a Holder's
ability to convert pursuant to this Section 1.10(g) shall be made in
connection with the issuance of rights, the distribution of separate
certificates representing rights or the exercise, redemption, termination
or invalidation of rights pursuant to any stockholder rights plan
implemented by the Company which provides that, upon conversion of the
Senior Convertible Notes, the Holders shall receive, in addition to the
Common Stock issuable upon such conversion, the rights issued under such
stockholder rights plan (notwithstanding the occurrence of an event causing
such rights to separate from the Common Stock at or prior to the time of
conversion).
(h) MISCELLANEOUS PROVISIONS RELATING TO CONVERSION.
(i) WHEN NO ADJUSTMENT REQUIRED. No adjustment to the
Conversion Rate need be made:
(1) upon the issuance of any shares of Common Stock
pursuant to any present or future plan providing for the reinvestment
of dividends or interest payable on securities of the Company and the
investment of additional optional amounts in shares of Common Stock
under any plan;
(2) upon the issuance of any shares of Common Stock or
options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of or
assumed by the Company or any of its Subsidiaries;
(3) upon the issuance of any shares of Common Stock
pursuant to any option, warrant, right, or exercisable, exchangeable
or convertible security not described in (2) above and outstanding as
of the date the Senior Convertible Notes were first issued;
(4) for a change in the par value of the Common Stock; or
(5) for accrued and unpaid interest.
To the extent the Senior Convertible Notes become convertible into cash,
assets or property (other than capital stock of the Company or securities
to which Section 1.10(h)(iv) applies), no adjustment shall be made
thereafter as to the cash, assets or property. Interest shall not accrue on
such cash, assets or property.
27
(ii) NOTICE OF ADJUSTMENT. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to Holders a notice of the
adjustment. The Company shall file with the Trustee and the Conversion
Agent such notice. The certificate shall, absent manifest error, be
conclusive evidence that the adjustment is correct. Neither the Trustee nor
any Conversion Agent shall be under any duty or responsibility with respect
to any such certificate except to exhibit the same to any Holder desiring
inspection thereof.
(iii) VOLUNTARY INCREASE. The Company may make such increases in
the Conversion Rate, in addition to those required by Section 1.10(g), as
the Board of Directors considers to be advisable to avoid or diminish any
income tax to Holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
Common Stock) or from any event treated as such for income tax purposes. To
the extent permitted by applicable law, the Company may from time to time
increase the Conversion Rate by any amount for any period of time if the
period is at least 20 days, the increase is irrevocable during the period
and the Board of Directors shall have made a determination that such
increase would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Rate is so increased, the
Company shall mail to Holders and file with the Trustee and the Conversion
Agent a notice of such increase. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
notice except to exhibit the same to any Holder desiring inspection
thereof. The Company shall mail the notice at least 15 days before the date
the increased Conversion Rate takes affect. The notice shall state the
increased Conversion Rate and the period it shall be in effect.
(iv) EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER, BINDING
SHARE EXCHANGE OR SALE. If any of the following events occur, namely (a)
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),
(b) any consolidation, merger or binding share exchange of the Company with
another corporation as a result of which Holders of Common Stock shall be
entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock or
(c) any sale or conveyance of all or substantially all of the assets of the
Company to any other corporation as a result of which Holders of Common
Stock shall be entitled to receive stock, securities or other property or
assets (including cash) with respect to or in exchange for such Common
Stock, then the Conversion Rate will not be adjusted. If any of the events
described in the preceding sentence occur, the Company or the successor or
purchasing corporation, as the case may be, shall execute with the Trustee
a supplemental indenture or otherwise amend the terms of the Senior
Convertible Notes, to provide that each Senior Convertible Note shall be
convertible into the kind and amount of shares of stock, other securities
or property or assets (including cash) that the Holder of the Senior
Convertible Note would have received upon such reclassification, change,
consolidation, merger, binding share exchange, sale or conveyance if such
Holder had converted such Senior Convertible Note into the number of shares
of Common Stock issuable upon conversion of such Senior Convertible Note
immediately prior to such reclassification, change, consolidation, merger,
combination, binding share exchange, sale or conveyance. Such supplemental
28
indenture or other amendment to the Senior Convertible Notes shall provide
for adjustments which shall be as nearly equivalent as may be practicable
to the adjustments provided for in this Section 1.10(h)(iv). The Company
shall cause notice of the execution of such supplemental indenture or
amendment of the Senior Convertible Notes to be mailed to each Holder, at
its address appearing on the Senior Convertible Note register, within 20
days after execution thereof. Failure to deliver such notice shall not
affect the legality or validity of such supplemental indenture. The above
provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, binding
share exchanges, sales and conveyances. If this Section 1.10(h)(iv) applies
to any event or occurrence, Section 1.10(g) shall not apply.
(v) RESPONSIBILITY OF TRUSTEE. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility
to any Holder to determine whether any facts exist which may require any
adjustment of the Conversion Rate and shall be protected in relying upon an
Officers' Certificate with respect to the same. The Trustee and any other
Conversion Agent shall not be accountable with respect to the validity or
value (or the kind or amount) of any shares of Common Stock, or of any
securities or property, which may at any time be issued or delivered upon
the conversion of any Senior Convertible Notes and the Trustee and any
other Conversion Agent make no representations with respect thereto.
Neither the Trustee nor any Conversion Agent shall be responsible for any
failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon
the surrender of any Senior Convertible Notes for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the
Company contained in this Section 1.10. Without limiting the generality of
the foregoing, neither the Trustee nor any Conversion Agent shall be under
any responsibility to determine the correctness of any provisions contained
in any supplemental indenture entered into pursuant to Section 1.10(h)(iv)
relating either to the kind or amount of shares of stock or securities or
other property or assets (including cash) receivable by Holders upon the
conversion of their Senior Convertible Notes after any event referred to in
such Section 1.10(h)(iv) or to any adjustment to be made with respect
thereto, but, subject to the provisions of Article Six of the Indenture,
may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers'
Certificate (which the Company shall be obligated to file with the Trustee
prior to the execution of any such supplemental indenture) with respect
thereto. Neither the Trustee nor the Conversion Agent shall be responsible
for determining whether any event contemplated by the paragraph 7 of the
reverse of the Senior Convertible Notes has occurred which makes the Senior
Convertible Notes eligible for conversion or no longer eligible therefor
until the Company has delivered to the Trustee and the Conversion Agent an
Officers' Certificate stating that such event has occurred, on which
Certificate the Trustee and the Conversion Agent may conclusively rely, and
the Company agrees to deliver such Officers' Certificate to the Trustee and
the Conversion Agent immediately after the occurrence of any such event.
In no event shall the Trustee or the Conversion Agent be liable for any
indirect, special, punitive or consequential loss or damage of any kind
whatsoever, including, but not limited to,
29
lost profits, even if the Trustee or the Conversion Agent have been advised of
the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustee or the Conversion Agent be liable for any
failure or delay in the performance of its obligations hereunder because of
circumstances beyond its control, including, but not limited to, acts of God,
flood, war (whether declared or undeclared), terrorism, fire, riot, embargo,
government action, including any laws, ordinances, regulations, governmental
action or the like which delay, restrict or prohibit the providing of the
services contemplated by this Indenture.
(vi) SUCCESSIVE ADJUSTMENTS. After an adjustment to the
Conversion Rate under Section 1.10(g), any subsequent event requiring an
adjustment under Section 1.10(g) shall cause an adjustment to the
Conversion Rate as so adjusted.
(vii) GENERAL CONSIDERATIONS. Whenever successive adjustments to
the Conversion Rate are called for pursuant to Sections 1.10(g) or 1.10(h),
such adjustments shall be made to the Current Market Price as may be
necessary or appropriate to effectuate the intent of 1.10(g) or 1.10(h) and
to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
(i) On conversion of a Senior Convertible Note, a Holder shall receive no
payment for that portion of accrued and unpaid interest on the converted Senior
Convertible Note attributable to the period from the most recent Interest
Payment Date (or, if no Interest Payment Date has occurred, from the Original
Issue Date) through the Conversion Date with respect to the converted Senior
Convertible Note.
SECTION 1.11 ADDITIONAL EVENTS OF DEFAULT; WITHHOLDING NOTICE;
RESCISSION. (a) In addition to those matters set forth in Section 501 of the
Original Indenture, an "Event of Default" with respect to the Senior Convertible
Notes shall also mean any of the following events:
(i) default in the Company's obligation to repurchase Senior
Convertible Notes upon the Company's exercise of its repurchase option pursuant
to Section 1.06, upon the occurrence of a Fundamental Change pursuant to Section
1.07 or upon the exercise by a Holder of its option to require the Company to
repurchase such Holder's Senior Convertible Notes pursuant to Section 1.08; or
(ii) default in the Company's obligation to convert the Senior
Convertible Notes upon exercise of a Holder's conversion rights pursuant to
Section 1.10 hereof; or
(iii) default by the Company in its obligation to provide notice
of a Fundamental Change.
(b) The Trustee may withhold from the Holders notice of any continuing
default or Event of Default (except a default or Event of Default in the payment
of principal of, interest or Liquidated Damages, if any, on the Senior
Convertible Notes) if it determines in good faith that withholding notice is in
the Holders' interest.
30
(c) The Holders of a majority in aggregate principal amount of the Senior
Convertible Notes then outstanding by notice to the Trustee may rescind any
acceleration of the Senior Convertible Notes and its consequences if all
existing Events of Default (other than the nonpayment of principal of, interest,
Contingent Interest and Liquidated Damages, if any, on the Senior Convertible
Notes that has become due solely by virtue of such acceleration) have been cured
or waived and if the rescission would not conflict with any judgment or decree
of any court of competent jurisdiction. No such rescission will affect any
subsequent default or Event of Default or impair any right consequent thereto.
SECTION 1.12 AMENDMENT; SUPPLEMENT; AND WAIVER. In addition to those
matters set forth in Section 902 of the Original Indenture, with respect to the
Senior Convertible Notes, no amendment or supplemental indenture shall without
the consent of the Holder of each Senior Convertible Note affected thereby:
(a) reduce the percentage of the Original Principal Amount of Senior
Convertible Notes whose Holders must consent to an amendment, supplement or
waiver;
(b) reduce the principal of, or premium on, or change the fixed Stated
Maturity of any Senior Convertible Note or, except as permitted pursuant to
clause (s), (v), (y) or (z) of the immediately following paragraph, alter the
provisions with respect to the redemption or repurchase of the Senior
Convertible Notes;
(c) reduce the rate of or change the time for payment of interest,
including Contingent Interest, defaulted interest, or Liquidated Damages, on any
Senior Convertible Notes;
(d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest (including Contingent Interest, if any) or
Liquidated Damages, if any, on the Senior Convertible Notes (except a rescission
of acceleration of the Senior Convertible Notes by the Holders of at least a
majority in aggregate Accreted Principal Amount of the Senior Convertible Notes
and a waiver of the payment default that resulted from such acceleration);
(e) make the principal of, or premium, if any, or interest (including
Contingent Interest, if any) or Liquidated Damages, if any, on, any Senior
Convertible Note payable in money other than as provided for in the Indenture
and in the Senior Convertible Notes;
(f) make any change in the provisions of the Indenture relating to waivers
of past Defaults or the rights of Holders of Senior Convertible Notes to receive
payments of principal of, premium, if any, or interest (including Contingent
Interest, if any) or Liquidated Damages, if any, on the Senior Convertible
Notes;
(g) waive a redemption or repurchase payment with respect to any Senior
Convertible Note;
(h) except as permitted by the Indenture, increase the Conversion Price or
modify the provisions of the Indenture relating to conversion of the Senior
Convertible Notes in a manner adverse to the Holders;
31
(i) make any change to the abilities of Holders of Senior Convertible Notes
to enforce their rights under the Indenture or the foregoing provisions of this
Section 1.12 or this provision;
(j) reduce the Redemption Price, Purchase Price or Fundamental Change
Purchase Price of the Senior Convertible Notes; or
(k) make any change that adversely affects the right to convert the Senior
Convertible Notes.
Notwithstanding the foregoing, without the consent of any Holder, the
Company and the Trustee may amend or supplement the Indenture or the Senior
Convertible Notes to:
(s) cure any ambiguity, defect or inconsistency or make any other changes
in the provisions of the Indenture which they may deem necessary or desirable,
provided such amendment does not materially and adversely affect the Senior
Convertible Notes;
(t) provide for uncertificated Senior Convertible Notes in addition to or
in place of certificated Senior Convertible Notes;
(u) provide for the assumption of the Company's obligations to Holders of
Senior Convertible Notes in the circumstances required under the Indenture;
(v) provide for exchange rights of Holders of Senior Convertible Notes in
certain events;
(w) reduce the Conversion Price;
(x) evidence and provide for the acceptance of the appointment under the
Indenture of a successor Trustee;
(y) make any change that would provide any additional rights or benefits to
the Holders of Senior Convertible Notes or that does not adversely affect the
legal rights under the Indenture of any such Holder; or
(z) comply with requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act of 1939.
In addition, with respect to the Senior Convertible Notes, to the extent
set forth in Section 513 of the Original Indenture, the Holders of at least a
majority in aggregate principal amount of the Outstanding Senior Convertible
Notes may waive an existing default other than: (a) any default by the Company
in any payment of the Redemption Price, Purchase Price or Fundamental Change
Purchase Price with respect to any Senior Convertible Notes, or (b) any default
which constitutes a failure to convert any Senior Convertible Note in accordance
with its terms and the Indenture.
SECTION 1.13 REGISTER OF SECURITIES; PAYING AGENT; CONVERSION AGENT.
Initially, the Trustee shall act as Paying Agent, Conversion Agent and Security
Registrar with respect to the Senior Convertible Notes with the Place of Payment
for the Senior Convertible Notes initially being the Corporate Trust Office. The
Company may appoint and change any Paying Agent,
32
Conversion Agent, Security Registrar or co-registrar or approve a change in the
office through which any Paying Agent acts without notice, other than notice to
the Trustee. The Company or any of its Subsidiaries or any of their Affiliates
may act as Paying Agent, Conversion Agent, Security Registrar or co-registrar.
SECTION 1.14 CALCULATIONS IN RESPECT OF THE SENIOR CONVERTIBLE NOTES.
The Trustee will act as Calculation Agent and will be responsible for making all
calculations called for under the Senior Convertible Notes other than
calculations of interest. These calculations include, but are not limited to,
determination of the Trading Price, Current Market Price, Closing Sale Price,
interest rate on the Senior Convertible Notes and Conversion Rate of the Senior
Convertible Notes. The Trustee will make these calculations in good faith and,
absent manifest error, these calculations will be final and binding on the
Holders. The Trustee will forward its calculations to any Holder upon the
request of such Holder.
SECTION 1.15 TAX TREATMENT. The Company hereby agrees, and by purchasing
a beneficial ownership interest in the Senior Convertible Notes each Holder, and
any person (including an entity) that acquires a direct or indirect beneficial
interest in the Senior Convertible Notes, will be deemed to have agreed (i) for
United States Federal income tax purposes to treat the Senior Convertible Notes
as indebtedness of the Company that is subject to Treas. Reg. Sec. 1.1275-4 (the
"Contingent Payment Regulations"), (ii) for all tax purposes to treat the Senior
Convertible Notes as indebtedness of the Company (iii) for purposes of the
Contingent Payment Regulations to treat the fair market value of any Common
Stock beneficially received by a beneficial Holder upon any conversion of the
Senior Convertible Notes (or cash in lieu of Common Stock) as a contingent
payment, and (iv) to be bound by the Company's projected payment schedule with
respect to the Senior Convertible Notes. The provisions of this Indenture shall
be interpreted to further this intention and agreement of the parties. The
comparable yield and the schedule of projected payments are not determined for
any purpose other than for the determination of interest accruals and adjustment
thereof in respect of the Senior Convertible Notes for United States Federal
income tax purposes. The comparable yield and the schedule of projected payments
do not constitute a projection or representation regarding the future stock
price or the amounts payable on the Senior Convertible Notes. For purposes of
the foregoing, the Company's determination of the "comparable yield" is 8.28%
per annum, compounded semiannually. A Holder of Senior Convertible Notes may
obtain the Yield to Maturity, Issue Date, Comparable Yield and Projected Payment
Schedule (which Schedule is attached hereto as Exhibit C) by submitting a
written request to Bausch & Lomb Incorporated, Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000, Attention: Chief Financial Officer.
SECTION 1.16 TRANSFER AND EXCHANGE.
(a) TRANSFER AND EXCHANGE OF DEFINITIVE SECURITIES. When Definitive
Securities are presented to the Registrar with a request:
(i) to register the transfer of such Definitive Securities; or
(ii) to exchange such Definitive Securities for an equal
principal amount of Definitive Securities of other authorized
denominations, the Registrar shall register the transfer or make the
exchange as requested if its reasonable requirements for such
33
transaction are met; provided, however, that the Definitive Securities
surrendered for transfer or exchange:
(A) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company
and the Registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing; and
(B) are accompanied by the following additional
information and documents, as applicable, if such Definitive
Securities are Transfer Restricted Securities:
(x) if such Definitive Securities are being delivered
to the Registrar by a Holder for registration in the name
of such Holder, without transfer, a certification from such
Holder to that effect (in the form set forth on the reverse
side of the Transfer Restricted Security); or
(y) if such Definitive Securities are being
transferred to the Company, a certification to that effect
(in the form set forth on the reverse side of the Transfer
Restricted Security); or
(C) if such Definitive Securities are being transferred
pursuant to an exemption from registration in accordance with Rule 144
under the Securities Act or in reliance upon another exemption from
the registration requirements of the Securities Act, (i) a
certification to that effect (in the form set forth on the reverse
side of the Transfer Restricted Security) and (ii) if the Company so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions set
forth in the legend set forth in Section 1.16(e)(i).
In case of redemption, the Registrar will not be required to register the
transfer or exchange of any Senior Convertible Notes: (i) during a period of 15
days before any selection of Senior Convertible Notes for redemption; (ii) if
the Senior Convertible Notes have been called for redemption in whole or in
part, except the unredeemed portion of any Senior Convertible Notes being
redeemed in part; or (iii) in respect of which a Fundamental Change Purchase
Notice or Repurchase Notice has been given and not withdrawn, except the portion
of the Senior Convertible Note not purchased of any Senior Convertible Note
being purchased in part.
(b) RESTRICTIONS ON TRANSFER OF A DEFINITIVE SECURITY FOR A BENEFICIAL
INTEREST IN A GLOBAL SECURITY. A Definitive Security may not be exchanged for a
beneficial interest in a Global Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a Definitive
Security, duly endorsed or accompanied by a written instrument of transfer in
form reasonably satisfactory to the Company and the Registrar, together with:
(i) certification (in the form set forth on the reverse side of
the Transfer Restricted Security) that such Definitive Security is being
transferred (A) to a QIB in accordance with Rule 144A or (B) outside the
United States in an offshore transaction within the meaning of Regulation S
and in compliance with Rule 904 under the Securities Act; and
34
(ii) written instructions directing the Trustee to make, or to
direct the securities custodian to make, an adjustment on its books and
records with respect to such Global Security to reflect an increase in the
aggregate principal amount of the securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase, then the Trustee shall cancel
such Definitive Security and cause, or direct the securities custodian to
cause, in accordance with the standing instructions and procedures existing
between the Depositary and the securities custodian, the aggregate
principal amount of securities represented by the Global Security to be
increased by the aggregate principal amount of the Definitive Security to
be exchanged and shall credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the Global
Security equal to the principal amount of the Definitive Security so
canceled. If no Global Securities are then outstanding and the Global
Security has not been previously exchanged for certificated securities
pursuant to Section 1.05(b), the Company shall issue and the Trustee shall
authenticate, upon written order of the Company in the form of an Officers'
Certificate, a new Global Security in the appropriate principal amount.
(c) TRANSFER AND EXCHANGE OF GLOBAL SECURITIES.
(i) The transfer and exchange of Global Securities or
beneficial interests therein shall be effected through the Depositary, in
accordance with this Supplemental Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of
the Depositary therefor. A transferor of a beneficial interest in a Global
Security shall deliver a written order given in accordance with the
Depositary's procedures containing information regarding the participant
account of the Depositary to be credited with a beneficial interest in such
Global Security or another Global Security and such account shall be
credited in accordance with such order with a beneficial interest in the
applicable Global Security and the account of the Person making the
transfer shall be debited by an amount equal to the beneficial interest in
the Global Security being transferred. Transfers by an owner of a
beneficial interest in a Rule 144A Global Security to a transferee who
takes delivery of such interest through a Regulation S Global Security,
whether before or after the expiration of the Restricted Period, shall be
made only upon receipt by the Trustee of a certification (in the form set
forth on the reverse side of the Transfer Restricted Security) from the
transferor to the effect that such transfer is being made in accordance
with Regulation S or (if available) Rule 144 under the Securities Act and
that, if such transfer is being made prior to the expiration of the
Restricted Period, the interest transferred shall be held immediately
thereafter through Euroclear or Clearstream.
(ii) If the proposed transfer is a transfer of a beneficial
interest in one Global Security to a beneficial interest in another Global
Security, the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Global Security to which such
interest is being transferred in an amount equal to the principal amount of
the interest to be so transferred, and the Registrar shall reflect on its
books and records the date and a corresponding decrease in the principal
amount of Global Security from which such interest is being transferred.
35
(iii) Notwithstanding any other provisions of this
Fifth
Supplemental Indenture (other than the provisions set forth in Section
1.05), a Global Security may not be transferred as a whole except by the
Depositary to a nominee of the Depositary or by a nominee of the Depositary
to the Depositary or another nominee of the Depositary or by the Depositary
or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
(iv) In the event that a Global Security is exchanged for
Definitive Securities pursuant to Section 1.05(b) prior to the
effectiveness of a Shelf Registration Statement with respect to such
securities, such securities may be exchanged only in accordance with such
procedures as are substantially consistent with the provisions of this
Section 1.16 (including the certification requirements set forth on the
reverse of the Transfer Restricted Security intended to ensure that such
transfers comply with Rule 144A, Regulation S or such other applicable
exemption from registration under the Securities Act, as the case may be)
and such other procedures as may from time to time be adopted by the
Company.
(d) RESTRICTIONS ON TRANSFER OF REGULATION S GLOBAL SECURITY.
(i) Prior to the expiration of the Restricted Period, interests
in a Regulation S Global Security may only be held through Euroclear or
Clearstream. During the Restricted Period, beneficial ownership interests
in a Regulation S Global Security may only be sold, pledged or transferred
through Euroclear or Clearstream in accordance with the Applicable
Procedures and only (A) to the Company, (B) so long as such security is
eligible for resale pursuant to Rule 144A, to a person whom the selling
Holder reasonably believes is a QIB that purchases for its own account or
for the account of a QIB to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, (C) in an offshore
transaction in accordance with Regulation S, (D) pursuant to an exemption
from registration under the Securities Act provided by Rule 144 (if
applicable) under the Securities Act, or (E) pursuant to an effective
registration statement under the Securities Act, in each case in accordance
with any applicable securities laws of any state of the United States.
Prior to the expiration of the Restricted Period, transfers by an owner of
a beneficial interest in a Regulation S Global Security to a transferee who
takes delivery of such interest through a Rule 144A Global Security shall
be made only in accordance with the Applicable Procedures and upon receipt
by the Trustee of a written certification from the transferor of the
beneficial interest in the form provided on the reverse of the Transfer
Restricted Security to the effect that such transfer is being made to (i) a
person whom the transferor reasonably believes is a QIB within the meaning
of Rule 144A in a transaction meeting the requirements of Rule 144A. Such
written certification shall no longer be required after the expiration of
the Restricted Period.
(ii) Upon the expiration of the Restricted Period, beneficial
ownership interests in a Regulation S Global Security shall be transferable
in accordance with applicable law and the other terms of the Indenture.
36
(e) LEGENDS FOR SECURITIES.
(i) Except as permitted by the following paragraphs (ii),
(iii), or (iv), each security certificate evidencing the Global Securities
and the Definitive Securities (and all securities issued in exchange
therefor or in substitution thereof) shall bear a legend in substantially
the following form (each defined term in the legend being defined as such
for purposes of the legend only):
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF BAUSCH & LOMB
INCORPORATED THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY APPLICABLE PREDECESSOR SECURITY HERETO) OR (Y)
BY ANY HOLDER THAT WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144
UNDER THE SECURITIES ACT) OF BAUSCH & LOMB INCORPORATED AT ANY TIME
DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER
CASE OTHER THAN (1) TO BAUSCH & LOMB INCORPORATED, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE
144A, PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR
OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (3) IN AN
OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE SECURITIES
ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF BAUSCH & LOMB
INCORPORATED THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR (2) NOT
A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
(OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE
902 UNDER) REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE
HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING
TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON STOCK ISSUABLE
UPON EXCHANGE OF THIS SECURITY EXCEPT AS PERMITTED BY THE SECURITIES
ACT.
37
Each security evidencing a Global Security offered and sold to QIBs
pursuant to Rule 144A shall bear a legend in substantially the following
form:
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.
Each Definitive Security shall bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION
AS SUCH TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Security
that is a Definitive Security, the Registrar shall permit the Holder
thereof to exchange such Transfer Restricted Security for a Definitive
Security that does not bear the legends set forth above and rescind any
restriction on the transfer of such Transfer Restricted Security if the
Holder certifies in writing to the Registrar that its request for such
exchange was made in reliance on Rule 144 (such certification to be in the
form set forth on the reverse of the Transfer Restricted Security).
(iii) After a transfer of any Transfer Restricted Securities
during the period of the effectiveness of a Shelf Registration Statement
with respect to such Transfer Restricted Securities, as the case may be,
all requirements pertaining to the Restricted Securities Legend on such
Transfer Restricted Securities shall cease to apply and the requirements
that any such Transfer Restricted Securities be issued in global form shall
continue to apply.
(iv) Upon a sale or transfer after the expiration of the
Restricted Period of any Transfer Restricted Security acquired pursuant to
Regulation S, all requirements that such Transfer Restricted Security bear
the Restricted Securities Legend shall cease to apply and the requirements
requiring any such Transfer Restricted Security be issued in global form
shall continue to apply.
ARTICLE 2
MISCELLANEOUS PROVISIONS
SECTION 2.01 RECITALS BY THE COMPANY. The recitals in this Fifth
Supplemental Indenture are made by the Company only and not by the Trustee, and
all of the provisions contained in the Original Indenture in respect of the
rights, privileges, immunities, powers and duties of the Trustee shall be
applicable in respect of the Senior Convertible Notes and of this Fifth
Supplemental Indenture as fully and with like effect as if set forth herein in
full.
38
SECTION 2.02 RATIFICATION AND INCORPORATION OF ORIGINAL INDENTURE. As
supplemented hereby, the Original Indenture is in all respects ratified and
confirmed, and the Original Indenture and this Fifth Supplemental Indenture
shall be read, taken and construed as one and the same instrument.
SECTION 2.03 EXECUTED IN COUNTERPARTS. This Fifth Supplemental Indenture
may be executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts shall together constitute but one and the same
instrument.
SECTION 2.04 GOVERNING LAW. THIS SUPPLEMENTAL INDENTURE AND THE SENIOR
CONVERTIBLE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
39
IN WITNESS WHEREOF, each party hereto has caused this instrument to be
signed in its name and behalf by its duly authorized officers, all as of the day
and year first above written.
BAUSCH & LOMB INCORPORATED
By:
-------------------------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
CITIBANK, N.A.,
as Trustee
By:
-------------------------------------------
Name:
Title:
Attest:
--------------------------
Name:
Title:
S-1
EXHIBIT A
FORM OF
FLOATING RATE SENIOR CONVERTIBLE NOTE DUE 2023
FOR PURPOSES OF SECTIONS 1272,1273 AND 1275 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED, THIS SECURITY IS A CONTINGENT PAYMENT DEBT INSTRUMENT AND WILL
ACCRUE ORIGINAL ISSUE DISCOUNT AT THE ISSUER'S "COMPARABLE YIELD" FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES. PURSUANT TO SECTION 1.15 OF THE INDENTURE,
THE COMPANY AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN THE
SENIOR CONVERTIBLE NOTES EACH HOLDER, AND ANY PERSON (INCLUDING AN ENTITY) THAT
ACQUIRES A DIRECT OR INDIRECT BENEFICIAL INTEREST IN THE SENIOR CONVERTIBLE
NOTES, WILL BE DEEMED TO HAVE AGREED (I) FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES TO TREAT THE SENIOR CONVERTIBLE NOTES AS INDEBTEDNESS OF THE COMPANY
THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT
REGULATIONS"), (II) FOR ALL TAX PURPOSES TO TREAT THE SENIOR CONVERTIBLE NOTES
AS INDEBTEDNESS OF THE COMPANY, (III) FOR PURPOSES OF THE CONTINGENT PAYMENT
REGULATIONS, TO TREAT THE FAIR MARKET VALUE OF ANY COMMON STOCK BENEFICIALLY
RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE SENIOR CONVERTIBLE
NOTES (OR CASH IN LIEU OF COMMON STOCK) AS A CONTINGENT PAYMENT, AND (IV) TO BE
BOUND BY THE COMPANY'S PROJECTED PAYMENT SCHEDULE WITH RESPECT TO THE SENIOR
CONVERTIBLE NOTES. THE PROVISIONS OF THIS INDENTURE SHALL BE INTERPRETED TO
FURTHER THIS INTENTION AND AGREEMENT OF THE PARTIES. THE COMPARABLE YIELD AND
THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT DETERMINED FOR ANY PURPOSE OTHER THAN
FOR THE DETERMINATION OF INTEREST ACCRUALS AND ADJUSTMENT THEREOF IN RESPECT OF
THE SENIOR CONVERTIBLE NOTES FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE
COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS DO NOT CONSTITUTE A
PROJECTION OR REPRESENTATION REGARDING THE FUTURE STOCK PRICE OR THE AMOUNTS
PAYABLE ON THE SENIOR CONVERTIBLE NOTES. FOR PURPOSES OF THE FOREGOING, THE
COMPANY'S DETERMINATION OF THE "COMPARABLE YIELD" IS 8.28% PER ANNUM, COMPOUNDED
SEMIANNUALLY. A HOLDER OF SENIOR CONVERTIBLE NOTES MAY OBTAIN THE YIELD TO
MATURITY, ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE (WHICH
SCHEDULE IS ATTACHED AS EXHIBIT C TO THE INDENTURE) BY SUBMITTING A WRITTEN
REQUEST TO: BAUSCH & LOMB INCORPORATED, XXX XXXXXX & XXXX XXXXX, XXXXXXXXX, XXX
XXXX 00000, ATTENTION: CHIEF FINANCIAL OFFICER.
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR
EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE
DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT
IN
A-1
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY
AUTHENTICATED AND DELIVERED UPON REGISTRATION OR TRANSFER OF, OR IN EXCHANGE FOR
OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE
FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR ANY PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT
WAS AN "AFFILIATE" (WITHIN THE MEANING OF RULE 144 UNDER THE SECURITIES ACT) OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A, PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS
GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (3) IN AN OFFSHORE TRANSACTION (AS DEFINED IN REGULATION S UNDER THE
SECURITIES ACT) IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES ACT, (4)
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY
RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (5) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH CASE IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND AGREES
FOR THE BENEFIT OF THE COMPANY THAT IT IS (1) A QUALIFIED INSTITUTIONAL BUYER OR
(2) NOT A U.S. PERSON AND IS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF (OR
AN ACCOUNT SATISFYING THE REQUIREMENTS OF PARAGRAPH (k)(2) OF RULE 902 UNDER)
REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE THE HOLDER HEREOF WILL NOT,
DIRECTLY OR INDIRECTLY,
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ENGAGE IN ANY HEDGING TRANSACT10N WITH REGARD TO THIS SECURITY OR ANY COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY EXCEPT AS PERMITTED BY THE
SECURITIES ACT.
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BAUSCH & LOMB INCORPORATED
FLOATING RATE SENIOR CONVERTIBLE NOTE DUE 2023
No. 1 CUSIP: _____________
Issue Date: August ___, 2003 Original Principal Amount: $______
Issue Price: $_________
(for each $1,000
Original Principal Amount)
BAUSCH & LOMB INCORPORATED, a New York corporation (the "Company"),
promises to pay to CEDE & CO. or registered assigns, on August 1, 2023, the
Accreted Principal Amount of this Senior Convertible Note on such date. This
Senior Convertible Note is issued with an Original Principal Amount of
_______________________DOLLARS ($_________).
This Senior Convertible Note shall not bear interest except as specified on
the other side of this Senior Convertible Note. The Accreted Principal Amount of
this Senior Convertible Note will accrue as specified on the other side of this
Senior Convertible Note. This Senior Convertible Note may be called for
redemption at the option of the Company as specified on the other side of this
Senior Convertible Note. This Senior Convertible Note may be subject to
repurchase by the Company at the option of the Holder as specified on the other
side of this Senior Convertible Note. This Senior Convertible Note is
convertible as specified on the other side of this Senior Convertible Note.
Additional provisions of this Senior Convertible Note are set forth on the
other side of this Senior Convertible Note.
IN WITNESS WHEREOF, the Company has caused this Senior Convertible Note to
be duly executed.
Dated:
BAUSCH & LOMB INCORPORATED
By:
-------------------------------------------
Name:
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
CITIBANK, N.A.
as Trustee, certifies that this
is one of the Senior Convertible Notes referred
to in the within-mentioned Indenture.
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By:
--------------------------------------
Authorized Officer
Dated:
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(BACK OF SECURITY)
BAUSCH & LOMB INCORPORATED
FLOATING RATE CONVERTIBLE NOTE DUE 2023
1. Interest and Contingent Interest.
(a) The Senior Convertible Notes will bear cash interest on the
Original Principal Amount at the annual rate of Six Month LIBOR plus 0.50%,
reset semi-annually on each Interest Payment Date (such day being an "Interest
Reset Date"); provided that such rate will never be less than 0%, from the
Original Issue Date, or from the most recent date to which interest has been
paid or provided for, until August 1, 2010. During such period, the Company will
pay cash interest semi-annually in arrears on each Interest Payment Date to
Holders of record at the close of business on each Regular Record Date
immediately preceding such Interest Payment Date. The interest rate in effect
for the Senior Convertible Notes on any day will be (a) if that day is an
Interest Reset Date, the interest determined as of the Determination Date
immediately preceding such Interest Reset Date or (b) if that day is not an
Interest Reset Date, the interest rate determined as of the Determination Date
immediately preceding the most recent Interest Reset Date. Each payment of cash
interest on the Senior Convertible Notes will include interest (including
Contingent Interest, if any) and Liquidated Damages, if any, accrued through the
day immediately preceding the most recent Interest Payment Date (or the
Repurchase Date, Redemption Date, Fundamental Change Date or, in certain
circumstances, the Conversion Date, as the case may be). Any payment required to
be made on any day that is not a Business Day will be made on the next
succeeding Business Day.
LIBOR will be determined by the Calculation Agent as of the applicable
determination date in accordance with the following provisions ("Six-Month
LIBOR"):
(i) the rate for six-month deposits in US dollars commencing on the
related Interest Reset Date, that appears on the Moneyline Telerate Page 3750 as
of 11:00 A.M., London time, on the interest Determination Date; or
(ii) if no rate appears on the particular interest Determination Date on
the Moneyline Telerate Page 3750, the rate calculated by the Calculation Agent
as the arithmetic mean of at least two offered quotations obtained by the
Calculation Agent after requesting the principal London offices of each of four
major reference banks in the London interbank market to provide the Calculation
Agent with its offered quotation for deposits in US dollars for the period of
six months, commencing on the related Interest Reset Date, to prime banks in the
London interbank market at approximately 11:00 A.M., London time, on that
interest Determination Date and in a principal amount that is representative for
a single transaction in US dollars in that market at that time; or
(iii) if fewer than two offered quotations referred to in clause (ii) are
provided as requested, the rate calculated by the Calculation Agent as the
arithmetic mean of the rates quoted at approximately 11:00 A.M., New York time,
on the particular interest Determination Date by three major banks in The City
of New York selected by the Calculation Agent for loans in US
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dollars to leading European banks for a period of six months and in a principal
amount that is representative for a single transaction in US dollars in that
market at that time; or
(iv) if the banks so selected by the Calculation Agent are not quoting
as mentioned in clause (iii), six-month LIBOR determined on the preceding
interest Determination Date.
"Moneyline Telerate Page 3750" means the display on Moneyline Telerate (or
any successor service) on such page (or any other page as may replace such page
on such service) for the purpose of displaying the London interbank rates of
major banks for US dollars.
If the Stated Maturity date of the Senior Convertible Notes falls on a day
that is not a LIBOR Business Day, the related payment of principal and interest
will be made on the next LIBOR Business Day as if it were made on the date such
payment was due, and no interest will accrue on the amounts so payable for the
period from and after such Stated Maturity date to the next LIBOR Business Day.
If any Interest Reset Date or Interest Payment Date (other than at the date of
Stated Maturity) would otherwise be a day that is not a LIBOR Business Day, that
Interest Reset Date and Interest Payment Date will be postponed to the next date
that is a LIBOR Business Day, except that if such LIBOR Business Day is in the
next calendar month, such Interest Reset Date and Interest Payment Date (other
than at the date of Stated Maturity) shall be the immediately preceding LIBOR
Business Day.
(b) Until August 1, 2010, the Accreted Principal Amount of a Senior
Convertible Note will be equal to the Original Principal Amount of $1,000.
Beginning August 1, 2010, the Senior Convertible Note shall not bear interest,
except as specified in this paragraph of the Indenture. From such date, the
Original Principal Amount shall commence increasing daily by the annual rate of
Six Month LIBOR plus 0.50% reset on each Interest Reset Date; provided that such
rate will never be less than 0%, to produce the Accreted Principal Amount. The
Accreted Principal Amount will compound semi-annually, not daily. On the Stated
Maturity, the Holder of this Senior Convertible Note will receive the fully
Accreted Principal Amount of this Senior Convertible Note on such date, unless
the Senior Convertible Note has been earlier redeemed, repurchased or converted.
Unless cash interest is payable as provided in Section 1.03(a) or (h) hereof,
the accrued yield shall be added to the Accreted Principal Amount per Senior
Convertible Note as of the day preceding the most recent Yield Reset Date. The
yield will be calculated using the actual number of days elapsed between the
Yield Reset Dates divided by 360.
(c) If the Accreted Principal Amount hereof or any portion of such
Accreted Principal Amount is not paid when due (whether upon acceleration
pursuant to Section 502 of the Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment
of the Purchase Price or Fundamental Change Purchase Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Senior Convertible Note) or if
installments of cash interest due hereon are not paid when due in accordance
with this paragraph, then in each such case the overdue amount shall, to the
extent permitted by law, bear interest at Six Month LIBOR plus 0.50% reset on
each Interest Reset Date (provided that such rate will never be less than 0%) as
such rate is in effect following the date such overdue amount was due,
compounded quarterly, 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
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overdue amounts shall be in lieu of, and not in addition to, any subsequent
increase in the Accreted Principal Amount.
(d) The Company will pay Contingent Interest to the Holders of the
Senior Convertible Notes in respect of any six-month interest period from
February 1 to July 31 and August 1 to January 31, commencing on or after August
1, 2010 for which the average Trading Price of a Senior Convertible Note for the
applicable five Trading Day reference period equals or exceeds 120% of the sum
of the Accreted Principal Amount and accrued interest, if any, for a Senior
Convertible Note as of the day immediately preceding the first day of the
applicable six-month interest period. The "five Trading Day reference period"
means the five Trading Days ending on the third Trading Day immediately
preceding the relevant six-month interest period. For any six-month interest
period in respect of which Contingent Interest is payable, the Contingent
Interest payable on each $1,000 principal amount of Notes shall be equal to
0.30% of the average Trading Price of a Senior Convertible Note for the
applicable five Trading Day reference period. No Contingent Interest shall be
payable on Senior Convertible Notes redeemed pursuant to this paragraph 6 on
August 1, 2010 (or, if August 1, 2010 is not a Business Day, on the next
following Business Day).
Upon determination that Holders will be entitled to receive Contingent
Interest in respect of a six-month interest period, the Company shall notify the
Holders. In connection with providing such notice, the Company will issue a
press release containing information regarding the Contingent Interest
determination or publish such information on the Company's then existing website
or through such other public medium as the Company may use at that time.
(e) Interest, including Contingent Interest, if any, on any Senior
Convertible Note that is payable, and is punctually paid or duly provided for,
on any Interest Payment Date shall be paid to the person in whose name that
Senior Convertible Note is registered at the close of business on the Regular
Record Date for such interest or Contingent Interest, if any, at the office or
agency of the Company maintained for such purpose. Each installment of interest
or Contingent Interest, if any, on any Senior Convertible Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.
(f) The amount of interest, including Contingent Interest, if any,
payable for any period shall be computed on the basis of the actual number of
days elapsed over a 360-day year. The amount of interest, including Contingent
Interest, if any, payable for any partial period shall be computed on the basis
of a 360-day year of twelve 30-day months and the actual number of days elapsed
in any partial month. In the event that any Interest Payment Date on a Senior
Convertible Note is not a Business Day, then a payment of the interest,
including Contingent Interest, if any, payable on such date will be made on the
next succeeding day which is a Business Day (and without any interest or other
payment in respect of any such delay) with the same force and effect as if made
on the date the payment was originally payable.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will make
payments in respect of Accreted Principal Amount, Redemption Prices, Purchase
Prices, Fundamental Change Purchase Prices and on Stated Maturity to Holders who
surrender Senior Convertible
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Notes to a Paying Agent to collect such payments in respect of the Senior
Convertible Notes. In addition, the Company will pay cash interest beginning
November 1, 2003 until August 1, 2010, as more fully described in paragraph 1
hereof. The Company will pay any cash amounts in money of the United States that
at the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, Citibank, N.A. (the "Trustee") will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent and Registrar or co-registrar without notice, other than
notice to the Trustee except that the Company will maintain at least one Paying
Agent in the State of New York, City of New York, Borough of Manhattan, which
shall initially be an office or agency of the Trustee. The Company or any of its
Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.
4. Indenture.
The Company issued the Senior Convertible Notes pursuant to an Indenture
dated as of September 1, 1991, as subsequently supplemented including by the
Fifth Supplemental Indenture thereto dated August 4, 2003 (the "Indenture"),
between the Company and the Trustee. The terms of the Senior Convertible Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Senior Convertible Notes themselves and 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 Senior Convertible Notes are subject to all such terms, and
Senior Convertible Note Holders are referred to the Indenture and the TIA for a
statement of those terms. In the event of any inconsistency between the terms
hereof and the terms of the Indenture, the terms of the Indenture shall prevail.
The Senior Convertible Notes are unsecured and unsubordinated obligations
of the Company limited to $140,000,000 aggregate Original Principal Amount (plus
up to $20,000,000 aggregate Original Principal Amount that may be sold by the
Company to the Initial Purchasers pursuant to the option granted to the Initial
Purchasers pursuant to the Purchase Agreement) (subject to the applicable
provisions of the Indenture). 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 Senior Convertible Notes. The Senior
Convertible Notes are redeemable as a whole, or from time to time in part, at
any time at the option of the Company in accordance with the Indenture at 100%
of the Accreted Principal Amount of the Senior Convertible Notes, plus any
accrued and unpaid interest and Liquidated Damages to the Redemption Date,
provided that the Senior Convertible Notes are not redeemable prior to August 1,
2010.
If less than all of the outstanding Senior Convertible Notes are to be
redeemed, the Trustee will select the Senior Convertible Notes to be redeemed in
Original Principal Amounts
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of $1,000 or integral multiples of $1,000 Original Principal Amount. In this
case, the Trustee may select the Senior Convertible Notes by lot, pro rata or by
any other method the Trustee considers fair and appropriate. If a portion of a
Holder's Senior Convertible Notes is selected for partial redemption and the
Holder converts a portion of the Senior Convertible Notes, the converted portion
will be deemed to be the portion selected for redemption.
If this Senior Convertible Note has been converted to a semi-annual cash
interest paying note following the occurrence of a Tax Event, the Redemption
Price will be equal to the Restated Principal Amount plus accrued and unpaid
interest (including Contingent Interest, if any) and Liquidated Damages, if any,
from the date of such conversion to but not including the Redemption Date; but
in no event will this Senior Convertible Note be redeemable before August 1,
2010.
No Contingent Interest shall be payable on Senior Convertible Notes
redeemed pursuant to this paragraph 5 on August 1, 2010 (or if August 1, 2010 is
not a Business Day, on the following Business Day).
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, the Senior
Convertible Notes held by such Holder on August 1 of 2010, 2013 and 2018 at a
Purchase Price equal to 100% of the Accreted Principal Amount of such Senior
Convertible Notes on the applicable Repurchase Date plus accrued and unpaid
interest, including Contingent Interest, if any, and Liquidated Damages, if any,
to but not including the Repurchase Date, upon delivery of a Repurchase Notice
containing the information set forth in the Indenture, at any time from the
opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the third Business Day prior to
such Repurchase Date and upon delivery of the Senior Convertible Notes to the
Paying Agent by the Holder as set forth in the Indenture.
If prior to a Repurchase Date this Senior Convertible Note has been
converted to a semi-annual cash interest paying note following the occurrence of
a Tax Event, the Purchase Price will be equal to the Restated Principal Amount
plus accrued and unpaid cash interest, including Contingent Interest, if any,
and Liquidated Damages, if any, from the date of conversion to the Repurchase
Date but not including the Repurchase Date as provided 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 in cash all or a
portion of the Senior Convertible Notes in integral multiples of $1,000 Original
Principal Amount held by such Holder no later than 60 Business Days after the
occurrence of a Fundamental Change of the Company for a Fundamental Change
Purchase Price equal to 100% of the Accreted Principal Amount of such Senior
Convertible Notes plus accrued and unpaid interest, including Contingent
Interest, if any, and Liquidated Damages, if any, to but not including the
Fundamental Change Purchase Price Date, which Fundamental Change Purchase Price
shall be paid in cash.
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Holders have the right to withdraw any Repurchase Notice or Fundamental
Change 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.
Payment of the Purchase Price for a Senior Convertible Note for which a
Repurchase Notice has been delivered and not withdrawn is conditioned upon
book-entry transfer or delivery of such Senior Convertible Note, together with
any necessary endorsements, to the Paying Agent at its office in the Borough of
Manhattan, The City of New York, or any other office or the Paying Agent, at any
time after delivery of the Repurchase Notice.
If cash sufficient to pay the Purchase Price or Fundamental Change Purchase
Price, as the case may be, of all Senior Convertible Notes or portions thereof
to be purchased as of the Repurchase Date or the Fundamental Change Purchase
Price Date, as the case may be, is deposited with the Paying Agent on the
Business Day immediately following to the Repurchase Date or on the Fundamental
Change Purchase Price Date, as the case may be, such Senior Convertible Notes
(or portions thereof) will cease to be outstanding, the Accreted Principal
Amount shall cease to increase, and cash interest, including Contingent
Interest, if any, and Liquidated Damages, if any, shall cease to accrue on such
Senior Convertible Notes (or portions thereof) on such Repurchase Date or
Fundamental Change Purchase Price Date, as the case may be, and the Holder
thereof shall have no other rights as such (other than the right to receive the
Purchase Price or Fundamental Change Purchase Price, as the case may be, if any,
upon surrender of such Senior Convertible Notes). This will be the case whether
or not book-entry transfer of the Senior Convertible Note has been made or the
Senior Convertible Note has been delivered to the Paying Agent.
7. Conversion.
CONVERSION BASED ON COMMON STOCK PRICE. Subject to the provisions of this
paragraph 7 and notwithstanding the fact that any other condition to conversion
described below has not been satisfied, Holders may convert the Senior
Convertible Notes into Common Stock on a Conversion Date at any time starting
with the first day of any calendar quarter commencing after September 30, 2003
if the Closing Sale Price of the Common Stock for at least 20 Trading Days in a
period of 30 consecutive Trading Days ending on the last Trading Day of such
preceding calendar quarter is greater than the conversion trigger price per
share. The "conversion trigger price" for any calendar quarter shall be 120% of
the accreted Conversion Price per share (as defined below) of Common Stock on
the last Trading Day of such preceding calendar quarter. If the foregoing
condition is satisfied, then the Senior Convertible Notes will be convertible at
any time of the option of the Holder, through their maturity.
The "ACCRETED CONVERSION PRICE" per share of Common Stock as of any day
equals the quotient of:
- the Accreted Principal Amount on that day, divided by
- the number of shares of Common Stock issuable upon conversion of
$1,000 Original Principal Amount of Senior Convertible Notes on that
day, subject to any adjustments to the Conversion Rate through that
day.
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Beginning August 1, 2010, the accreted principal amount of a Senior
Convertible Note will be equal to the Original Principal Amount of $ 1,000
increased daily by the annual rate of Six Month LIBOR plus 0.50%, reset on each
Interest Reset Date.
CONVERSION BASED ON TRADING PRICE OF SENIOR CONVERTIBLE NOTES. Subject to
the provisions of this paragraph 7 and notwithstanding the fact that any other
condition to conversion described below has not been satisfied, Holders may
convert the Senior Convertible Notes, prior to August 1, 2020, into Common Stock
during each of the five Business Day periods after any ten consecutive Trading
Day period in which the Trading Price per $1,000 Original Principal Amount of
the Senior Convertible Notes was less than 97% of the product of (i) the Closing
Sale Price over the same ten day Trading Day period, and (ii) the number of
shares of Common Stock issuable upon conversion of $1,000 Original Principal
Amount of the Senior Convertible Notes. Upon conversion, the Company has the
right to deliver cash or Common Stock.
The "Trading Price" means, on any date, the average of the secondary market
bid quotations for the Senior Convertible Notes obtained by the Trustee for
$5,000,000 Original Principal Amount of Senior Convertible Notes at
approximately 3:30 p.m., New York City time, on such 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 Trustee, but
two 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 Trustee, one bid shall be
used; and provided further that if the Trustee cannot reasonably obtain at least
one bid for $5,000,000 Original Principal Amount of Senior Convertible Notes
from a nationally recognized securities dealer or in the Company's reasonable
judgment, the bid quotations are not indicative of the secondary market value of
the Senior Convertible Notes, then the Trading Price per $1,000 Original
Principal Amount of Senior Convertible Notes shall be deemed to be less than 97%
of the product of: (a) the number of shares of Common Stock issuable upon
conversion of $1,000 Original Principal Amount of Senior Convertible Notes, and
(b) the Closing Sale Price on such date.
The Trustee (or other conversion agent appointed by the Company) shall have
no obligation to determine the Trading Price unless the Company has requested
such a determination; and the Company shall have no obligation to make such
request unless a Holder provides it with reasonable evidence that the Trading
Price per $1,000 Original Principal Amount of Senior Convertible Notes would be
less than 97% of the product of the Closing Sale Price of Common Stock over the
same ten Trading Day period and the number of shares of Common Stock issuable
upon conversion of $1,000 Original Principal Amount of Senior Convertible Notes.
If such evidence is provided, the Company shall instruct the Trustee (or other
conversion agent) to determine the Trading Price of the Senior Convertible Notes
beginning on the next Trading Day and on each successive Trading Day until the
Trading Price per $1,000 Original Principal Amount of Senior Convertible Notes
is greater than 97% of the product of the Closing Sale Price and the number of
shares issuable upon conversion of $ 1,000 Original Principal Amount of the
Senior Convertible Notes.
CONVERSION UPON REDEMPTION. Subject to the provisions of this paragraph 7
and notwithstanding the fact that any other condition described herein to
conversion has not been satisfied, a Holder may convert into Common Stock a
Senior Convertible Note or portion of a Senior Convertible Note which has been
called for redemption pursuant to paragraph 5 hereof,
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provided such Senior Convertible Notes are surrendered for conversion prior to
the close of business on the Business Day immediately preceding the Redemption
Date.
CONVERSION UPON OCCURRENCE OF CERTAIN CORPORATE TRANSACTIONS. (a) Subject
to the provisions of this paragraph 7 and notwithstanding the fact that any
other condition described herein to conversion has not been satisfied, in the
event the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of the Company's assets
pursuant to which the Common Stock would be converted into cash, securities or
other property as set forth in of the Indenture, the Senior Convertible Notes
may be surrendered for conversion at any time from and after the date which is
15 days prior to the date announced by the Company as the anticipated effective
time until 15 days after the actual effective date of such transaction, and at
the effective time of such transaction the right to convert a Senior Convertible
Note into Common Stock will be deemed to have changed into a right to convert it
into the kind and amount of cash, securities or other assets of the Company or
another person which the Holder would have received if the Holder had converted
its Senior Convertible Note into Common Stock immediately prior to the
transaction. If such transaction also constitutes a Fundamental Change, a Holder
will be able to require the Company to purchase all or a portion of such
Holder's Senior Convertible Notes pursuant to Paragraph 6 and of the Indenture.
(a) Subject to the provisions of this paragraph 7 and notwithstanding
the fact that any other condition to conversion has not been satisfied, in the
event that the Company declares a dividend or distribution described in Section
1.10(g)(ii) of the Indenture, or a dividend or a distribution described in
Section 1.10(g)(iv) of the Indenture where, the fair market value, per share, of
such dividend or distribution per share of Common Stock, as determined in the
Indenture, exceeds 10% of the Closing Sale Price of the Common Stock on the
Business Day immediately preceding the date of declaration for such dividend or
distribution or a Fundamental Change occurs other than pursuant to a transaction
described in clause (a) hereof, the Senior Convertible Notes may be surrendered
for conversion beginning on the date the Company gives notice to the Holders of
such right, which shall not be less than 20 days prior to the Ex-Dividend Date
for such dividend or distribution or which shall be within 20 days after the
occurrence of such Fundamental Change, as the case may be, and Senior
Convertible Notes may be surrendered 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 until the Company announces that such dividend or
distribution will not take place, with respect to a dividend or distribution, or
within 30 days of such Fundamental Change Purchase Notice, in the case of such a
Fundamental Change. No adjustment to the Conversion Rate or the ability of the
Holders to convert this Senior Convertible Note will be made if the Company
provides, as permitted in the Indenture, for Holders to participate in the
transaction without conversion or in other cases specified in the Indenture.
A Senior Convertible Note in respect of which a Holder has delivered a
Repurchase Notice or Fundamental Change Purchase Notice exercising the option of
such Holder to require the Company to purchase such Senior Convertible Note may
be converted only if such notice of exercise is withdrawn in accordance with the
terms of the Indenture.
The initial Conversion Rate is 16.2760 shares of Common Stock per $1,000
Original Principal Amount of each Senior Convertible Note, subject to adjustment
for certain events
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described in the Indenture. The Company will deliver cash or a check in lieu of
any fractional share of Common Stock. The ability to surrender Senior
Convertible Notes for conversion will expire at the close of business on July
31, 2023.
In the event the Company exercises its option pursuant to Section 1.03(h)
of the Indenture to have, in lieu of having the Accreted Principal Amount
increase, interest accrue on the Senior Convertible Note following a Tax Event,
the Holder will be entitled on conversion to receive the same number of shares
of Common Stock such Holder would have received if the Company had not exercised
such option.
Increases in the Accreted Principal Amount and cash interest (including
Contingent Interest, if any, and interest payable upon the occurrence of a Tax
Event, if any) will not be paid on Senior Convertible Notes that are converted,
except accrued cash interest will be payable upon conversion of Senior
Convertible Notes made concurrently with or after acceleration of Senior
Convertible Notes following an Event of Default. Senior Convertible Notes
surrendered for conversion during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date shall be entitled to receive such
interest payable on such Senior Convertible Notes on the corresponding Interest
Payment Date and, except Senior Convertible Notes to be redeemed within this
period, Senior Convertible Notes surrendered for conversion during such periods
must be accompanied by payment of an amount equal to the interest, including
Contingent Interest, with respect thereto that the registered Holder is to
receive.
To exercise its conversion right, a Holder must (1) complete and manually
sign the conversion notice (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Senior Convertible Note to the Conversion Agent, (3) furnish appropriate
endorsements and transfer documents if required by the Conversion Agent, the
Company or the Trustee and (4) pay any transfer or similar taxes, if required.
A Holder may convert a portion of a Senior Convertible Note if the Original
Principal Amount of such portion is $1,000 or an integral multiple of $1,000. No
payment or adjustment will be made for dividends on the Common Stock except as
provided in the Indenture. On conversion of a Senior Convertible Note, increases
in the Accreted Principal Amount or cash interest (or interest if the Company
has exercised its option provided for in paragraph 9 hereof) attributable to the
period from the Issue Date (or, if the Company has exercised the option referred
to in paragraph 9 hereof, the later of (x) the date of such exercise and (y) the
date on which interest was last paid) through the Conversion Date shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through the delivery of the Common Stock (together
with the cash payment, if any, in lieu of fractional shares) in exchange for the
Senior Convertible Note being converted pursuant to the terms hereof, and the
fair market value of such shares of Common Stock (together with any such cash
payment in lieu of fractional shares) shall be treated as issued, to the extent
thereof, first in exchange for increases in the Accreted Principal Amount or
cash interest (or interest, if the Company has exercised its option provided for
in paragraph 9 hereof) accrued through the Conversion Date, and the balance, if
any, of such fair market value of such Common Stock (and any such cash
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payment) shall be treated as issued in exchange for the Issue Price of the
Senior Convertible Note being converted pursuant to the provisions hereof.
The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock of the Company;
subdivisions, combinations or certain reclassifications of Common Stock;
distributions to all Holders of Common Stock of certain rights to purchase
Common Stock for a period expiring within 60 days of the record date for such
distribution at less than the current market price of the Common Stock at the
time of the announcement of the distribution, distributions to such Holders of
assets or debt securities of the Company or certain rights to purchase
securities of the Company (including cash dividends or distributions) and
payments in respect of a tender offer or exchange offer for Common Stock to the
extent that the cash and value of any other consideration included in the
payment per share of Common Stock exceed the current market price per share of
Common Stock on the Trading Day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or exchange offer. However, no
adjustment need be made if Senior Convertible Note Holders may participate in
the transaction or in certain other cases. The Company from time to time may
voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a Senior
Convertible Note into Common Stock may be changed into a right to convert it
into securities, cash or other assets of the Company or another person.
The Conversion Rate will not be adjusted for increases in the Accreted
Principal Amount or accrued cash interest, Contingent Interest or Liquidated
Damages, if any.
If a Holder elects to convert all or a portion of a Senior Convertible Note
into shares of Common Stock as set forth above, the Company may choose to
satisfy all or any portion of its conversion obligations in cash as set forth in
the Indenture.
8. Conversion Arrangement on Call for Redemption.
Any Senior Convertible Notes called for redemption, unless surrendered for
conversion before the close of business on the Redemption Date, may be deemed to
be purchased from the Holders of such Senior Convertible Notes at an amount not
less than the Redemption Price, by one or more investment bankers or other
purchasers who may agree with the Company to purchase such Senior Convertible
Notes from the Holders, to convert them into Common Stock of the Company and to
make payment for such Senior Convertible Notes to the Trustee in trust for such
Holders.
9. Tax Event.
From and after the date (the "Tax Event Date") of the occurrence of a Tax
Event after August 1, 2010, the Company shall have the option to elect, by
notice to the Trustee, in lieu of having Accreted Principal Amount increase, to
have interest accrue and be paid in cash at the annual rate equal to Six Month
LIBOR plus 0.50% reset on each Interest Reset Date; provided that such rate
shall never be less than 0%, on a Restated Principal Amount per $1,000 Original
Principal Amount (the "Restated Principal Amount") equal to the accrued Accreted
Principal
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Amount through the Tax Event Date or the date the Company exercises the option
provided for in this paragraph 9, whichever is later (the "Option Exercise
Date"). Such interest shall be payable semi-annually on February 1 and August 1
of each year to Holders of record at the close of business on January 15 and
July 15 immediately preceding such interest payment date. Interest will accrue
from the most recent date on which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.
The Trustee shall notify Holders of Senior Convertible Notes within 15 days
after the Option Exercise Date that the Company has exercised the option
provided for in this paragraph.
10. Defaulted Interest.
Except as otherwise specified with respect to the Senior Convertible Notes,
any defaulted interest on any Senior Convertible Note shall forthwith cease to
be payable to the registered Holder thereof on the relevant Regular Record Date
or accrual date, as the case may be, by virtue of having been such Holder, and
such defaulted interest may be paid by the Company as provided for in the
Indenture.
11. Denominations; Transfer; Exchange.
The Senior Convertible Notes are in fully registered form, without coupons,
in denominations of $1,000 of Original Principal Amount and integral multiples
of $1,000. A Holder may transfer or exchange Senior Convertible Notes in
accordance with the Indenture. The Registrar may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and to pay
any taxes and fees required by law or permitted by the Indenture. The Registrar
need not transfer or exchange any Senior Convertible Notes selected for
redemption (except, in the case of a Senior Convertible Note to be redeemed in
part, the portion of the Senior Convertible Note not to be redeemed) or any
Senior Convertible Notes in respect of which a Repurchase Notice or Designated
Event notice has been given and not withdrawn (except, in the case of a Senior
Convertible Note to be purchased in part, the portion of the Senior Convertible
Note not to be purchased) or any Senior Convertible Notes for a period of 15
days before the mailing of a notice of redemption of Senior Convertible Notes to
be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Senior Convertible Note may be treated as the
owner of this Senior Convertible Note for all purposes.
13. 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 Senior Convertible Notes that remains unclaimed for two years,
subject to applicable unclaimed property laws. 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.
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14. Amendment; Waiver.
Subject to certain exceptions, the Indenture or the Senior Convertible
Notes may be amended or supplemented with the consent of the Holders of at least
a majority in principal amount of the then outstanding Senior Convertible Notes,
and any existing default may be waived with the consent of the Holders of a
majority in aggregate Accreted Principal Amount of the then outstanding Senior
Convertible Notes.
Without the consent of any Holder, the Indenture or the Senior Convertible
Notes may be amended to: (s) cure any ambiguity or correct or supplement any
defective or inconsistent provision contained in the Indenture, or make any
other changes in the provisions of the Indenture which the Company and the
Trustee may deem necessary or desirable provided such amendment does not
materially and adversely affect the legal rights under the Indenture of the
Holders of Senior Convertible Notes; (t) provide for uncertificated Senior
Convertible Notes in addition to or in place of certificated Senior Convertible
Notes; (u) provide for the assumption of the Company's obligations to Holders of
Senior Convertible Notes in circumstances required under the Indenture; (v)
provide for exchange rights of Holders of Senior Convertible Notes in certain
circumstances; (w) reduce the Conversion Price; (x) evidence and provide for the
acceptance of the appointment under the Indenture of a successor Trustee; (y)
make any change that would provide any additional rights or benefits to the
Holders of Senior Convertible Notes or that does not adversely affect the legal
rights under the Indenture of any such Holder; or (z) comply with the
requirements of the Commission in order to effect or maintain the qualification
of the Indenture under the TIA.
Without the consent of each Holder affected, an amendment or waiver may not
(with respect to any Senior Convertible Notes held by a non-consenting Holder):
(a) reduce the percentage of Original Principal Amount of Senior Convertible
Notes whose Holders must consent to an amendment, supplement or waiver; (b)
reduce the principal of, or premium on, or change the Stated Maturity of any
Senior Convertible Note or, except as permitted pursuant to clause (s), (v), (y)
or (z) of the immediately preceding paragraph, alter the provisions with respect
to the redemption or repurchase of the Senior Convertible Notes; (c) reduce the
rate of or change the time for payment of interest, including Contingent
Interest, defaulted interest, or Liquidated Damages, on any Senior Convertible
Notes; (d) waive a Default or Event of Default in the payment of principal of or
premium, if any, or interest (including Contingent Interest, if any) or
Liquidated Damages, if any, on the Senior Convertible Notes (except a rescission
of acceleration of the Senior Convertible Notes by the Holders of at least a
majority in aggregate Accreted Principal Amount of the Senior Convertible Notes
and a waiver of the payment default that resulted from such acceleration); (e)
make the principal of, or premium, if any, or interest (including Contingent
Interest, if any) or Liquidated Damages, if any, on, any Senior Convertible Note
payable in money other than as provided for in the Indenture and in the Senior
Convertible Notes; (f) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of Holders of Senior
Convertible Notes to receive payments of principal of, premium, if any, or
interest (including Contingent Interest, if any) or Liquidated Damages, if any,
on the Senior Convertible Notes; (g) waive a redemption or repurchase payment
with respect to any Senior Convertible Note; (h) except as permitted by the
Indenture, increase the Conversion Price or modify the provisions of the
Indenture relating to conversion of the Senior Convertible Notes in a manner
adverse to the Holders; (i) make any change to the abilities of
A-12
Holders of Senior Convertible Notes to enforce their rights under the Indenture
or the foregoing provisions of this paragraph 14 or this provision; (j) reduce
the Redemption Price, Purchase Price or Fundamental Change Purchase Price of the
Senior Convertible Notes; or (k) make any change that adversely affects the
right to convert the Senior Convertible Notes.
15. Defaults and Remedies.
An Event of Default is: (a) default for 30 days or more in payment of any
installment of interest (including contingent interest, if any) or Liquidated
Damages, if any, on the Senior Convertible Notes; (b) default in payment of the
principal of, or premium, if any, on the Senior Convertible Notes, when due at
maturity, upon repurchase, upon acceleration or otherwise; (c) default in the
Company's obligation to repurchase Senior Convertible Notes upon the Company's
exercise of its repurchase option pursuant to Section 1.06 of the Indenture,
upon the occurrence of a Fundamental Change pursuant to Section 1.07 of the
Indenture or upon the exercise by a Holder of its option to require the Company
to repurchase such Holder's Senior Convertible Notes pursuant to Section 1.08 of
the Indenture; (d) default by the Company in its obligation to provide notice of
a Fundamental Change.; (e) default in the Company's obligation to convert the
Senior Convertible Notes upon exercise of a Holder's conversion rights pursuant
to Section 1.10 of the Indenture; (f) default by the Company for 60 days or more
after notice as provided in the Indenture in the observance or performance of
any other covenants in the Indenture; (g) default by the Company under any
mortgage, indenture or instrument under which there may be issued, or by which
there may be secured or evidenced, any indebtedness of the Company for money
borrowed which and shall result in more than $20,000,000 in principal amount of
such indebtedness becoming declared due and payable, and such acceleration shall
not have been rescinded, annulled or discharged within 30 days after notice is
given as specified in the Indenture; or (h) certain events involving bankruptcy,
insolvency or reorganization of the Company or any Material Subsidiary.
If an Event of Default occurs and is continuing, the Trustee or the Holders
of at least 25% in aggregate Accreted Principal Amount of the then outstanding
Senior Convertible Notes may declare the unpaid principal of, premium, if any,
and accrued and unpaid interest (including Contingent Interest, if any) and
Liquidated Damages, if any, on all Senior Convertible Notes then outstanding to
be due and payable immediately, except that in the case of an Event of Default
arising from certain events of bankruptcy, insolvency, or reorganization with
respect to the Company or any of its Material Subsidiaries, all outstanding
Senior Convertible Notes become due and payable without further action or
notice. Holders of Senior Convertible Notes may not enforce the Indenture or the
Senior Convertible Notes except as provided in the Indenture. The Trustee may
require an indemnity satisfactory to it before it enforces the Indenture or the
Senior Convertible Notes. Subject to certain limitations, Holders of a majority
in principal amount of the then outstanding Senior Convertible Notes may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders notice of any continuing default (except a default in payment of
principal, premium, if any, or interest (including Contingent Interest, if any)
or Liquidated Damages, if applicable) if it determines that withholding notice
is in their interests. The Company must furnish annual compliance certificates
to the Trustee.
A-13
16. Registration Rights Agreement.
The Holder of this Senior Convertible Note is entitled to the benefits of a
Registration Rights Agreement, dated August 4, 2003, between the Company and the
Initial Purchasers (the "Registration Rights Agreement"). Pursuant to the
Registration Rights Agreement the Company has agreed for the benefit of the
Holders of the Senior Convertible Notes and the Common Stock issued and issuable
upon conversion of the Senior Convertible Notes, that (i) the Company will, at
its cost, within 90 days after the Issue Date, file a shelf registration
statement (the "Shelf Registration Statement") with the Securities and Exchange
Commission (the "Commission") with respect to resales of the Senior Convertible
Notes and the Common Stock issuable upon conversion thereof, (ii) the Company
will use its reasonable best efforts to cause such Shelf Registration Statement
to be declared effective by the Commission under the Securities Act within 180
days after the Issue Date and (iii) the Company will use its reasonable best
efforts to keep such Shelf Registration Statement continuously effective under
the Securities Act until the earliest of (a) the second anniversary of the Issue
Date or, if later, the second anniversary of the last date on which any Senior
Convertible Notes are issued upon exercise of the Initial Purchasers'
over-allotment option or, if later, the second anniversary of the last date on
which any unregistered Common Stock is issued or issuable upon conversion of the
Senior Convertible Notes, (b) the date on which the Senior Convertible Notes or
the Common Stock issuable upon conversion thereof may be sold by persons who are
not "affiliates" (as defined in Rule 144) of the Company pursuant to paragraph
(k) of Rule 144 (or any successor provision) promulgated by the Commission under
the Securities Act, (c) the date as of which the Senior Convertible Notes or the
Common Stock issuable upon conversion thereof have been transferred pursuant to
Rule 144 under the Securities Act (or any similar provision then in force) and
(d) the date as of which all the Senior Convertible Notes or the Common Stock
issuable upon conversion thereof have been sold pursuant to such Shelf
Registration Statement.
If the Shelf Registration Statement (i) is not filed with the Commission on
or prior to 90 days, or (ii) has not been declared effective by the Commission
within 180 days, after the Issue Date or (iii) is filed and declared effective
but shall thereafter cease to be effective (without being succeeded immediately
by a replacement shelf registration statement filed and declared effective) or
cease to be usable (including, without limitation, as a result of a Suspension
Period as defined below) for the offer and sale of Transfer Restricted
Securities (as defined below) for a period of time (including any Suspension
Period) which shall exceed 60 days in the aggregate in any 12-month period
during the period beginning on the Issue Date and ending on or prior to the
second anniversary of the Issue Date or, if later, the second anniversary of the
last date on which any Senior Convertible Notes are issued upon exercise of the
Initial Purchasers' overallotment option or, if later, the second anniversary of
the last date on which any unregistered Common Stock is issued or issuable upon
conversion of the Senior Convertible Notes (each such event referred to in
clauses (i), (ii) and (iii) being referred to herein as a "Registration
Default"), the Company will pay liquidated damages ("Liquidated Damages") to
each Holder of Transfer Restricted Securities which has complied with its
obligations under the Registration Rights Agreement. The amount of Liquidated
Damages payable during any period in which a Registration Default shall have
occurred and be continuing is that amount which is equal to one-quarter of one
percent (25 basis points) per annum per $ 1,000 Original Principal Amount of
Senior Convertible Notes constituting Transfer Restricted Securities for the
first 90 days during which a Registration Default has occurred and is continuing
and one-half of one percent (50
A-14
basis points) per annum per $1,000 Original Principal Amount of Senior
Convertible Notes constituting Transfer Restricted Securities for any additional
days during which such Registration Default has occurred and is continuing. The
Company will pay all accrued Liquidated Damages by wire transfer of immediately
available funds or by federal funds check on each Damages Payment Date (as
defined in the Registration Rights Agreement), and Liquidated Damages will be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
Following the cure of a Registration Default, Liquidated Damages will cease to
accrue with respect to such Registration Default.
"Transfer Restricted Securities" means each Senior Convertible Note and
each share of Common Stock issued on conversion thereof until the date on which
such Senior Convertible Note or share, as the case may be, (i) has been
transferred pursuant to the Shelf Registration Statement or another registration
statement covering such Senior Convertible Note or share which has been filed
with the Commission pursuant to the Securities Act, in either case after such
registration statement has become and while such registration statement is
effective under the Securities Act, (ii) has been transferred pursuant to Rule
144 under the Securities Act (or any similar provision then in force), or (iii)
may be sold or transferred pursuant to Rule 144(k) under the Securities Act (or
any similar provision then in force).
Pursuant to the Registration Rights Agreement, the Company may suspend the
use of the prospectus which is a part of the Shelf Registration Statement for a
period not to exceed 30 days in any three-month period or for three periods not
to exceed an aggregate of 90 days in any twelve-month period under certain
circumstances (each, a "Suspension Period"); provided that the existence of a
Suspension Period will not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Liquidated Damages.
The above description of certain provisions of the Registration Rights
Agreement is qualified by reference to, and is subject in its entirety to, the
more complete description thereof contained in the Registration Rights
Agreement.
17. 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 Senior Convertible Notes 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.
18. No Recourse Against Others.
A director, officer, employee, agent, representative, stockholder or equity
Holder, as such, of the Company shall not have any liability for any obligations
of the Company under the Senior Convertible Notes or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Senior Convertible Note, each Senior Convertible Note
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Senior Convertible Notes.
A-15
19. Authentication.
This Senior Convertible Note 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 Senior Convertible Note.
20. Abbreviations.
Customary abbreviations may be used in the name of a Senior Convertible
Note Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
21. GOVERNING LAW.
THIS SENIOR CONVERTIBLE NOTE AND THE INDENTURE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
THE CHOICE OF LAW PRINCIPLES THEREOF.
A-16
The Company will furnish to any Senior Convertible Note Holder upon written
request and without charge a copy of the Indenture that has in it the text of
this Senior Convertible Note in larger type. Requests may be made to:
Bausch & Lomb Incorporated
Xxx Xxxxxx & Xxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Chief Financial Officer
A-17
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of
this instrument, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-- as tenants in common
UNIF GIFT MIN ACT- ______ Custodian ______
(Cust) (Minor)
under Uniform Gifts to Minors Act
TEN ENT-- as tenants by the entireties
JT TEN-- as joint tenants with rights of survivorship and not as
tenants in common ________________ (State)
Additional abbreviations may also be used though not on the above list.
A-18
CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES
This Certificate relates to $_____________ principal amount of securities
held in (check applicable space) ___ book-entry or ___ definitive form by
_________________________ (the "Transferor").
The Transferor (check one box below):
/ / has requested the Trustee by written order to deliver, in
exchange for its beneficial interest in the Global Security held by
the Depositary, a security or securities in definitive, registered
form of authorized denominations in an aggregate principal amount
equal to its beneficial interest in such Global Security (or the
portion thereof indicated above); or
/ / has requested the Trustee by written order to exchange or
register the transfer of a security or securities.
In connection with any transfer of any of the securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act of 1933, the undersigned confirms that such
securities are being transferred in accordance with its terms:
CHECK ONE BOX BELOW
(1) / / to the Company; or
(2) / / pursuant to an effective registration statement under the
Securities Act of 1933; or
(3) / / inside the United States to a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act
of 1933) that purchases for its own account or for the
account of a qualified institutional buyer to whom notice
is given that such transfer is being made in reliance on
Rule 144A, in each case pursuant to and in compliance
with Rule 144A under the Securities Act of 1933; or
(4) / / outside the United States in an offshore transaction
within the meaning of Regulation S under the Securities
Act in compliance with Rule 904 under the Securities Act
of 1933; or
(5) / / pursuant to another available exemption from registration
provided by Rule 144 under the Securities Act of 1933.
Prior to the expiration of the period referred to in Rule 144(k), unless
one of the boxes is checked, the Trustee will refuse to register any of the
securities evidenced by this certificate in the name of any Person other than
the registered Holder thereof; provided, however, that if box
A-19
(4) or (5) is checked, the Trustee may require, prior to registering any such
transfer of the securities, such legal opinions, certifications and other
information satisfactory to the Company and the Trustee to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933.
----------------------------------------
[INSERT NAME OF TRANSFEROR]
Dated:
----------------------------
By:
----------------------------------------
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Security Registrar, which requirements include
membership or participation in the Security Transfer Agent Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Security Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-20
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The following increases or decreases in Principal Amount represented by this
Global Security have been made:
Principal Amount of Signature of
Amount of decrease in Amount of increase in this Global Security authorized signatory
Principal Amount of Principal Amount of following such decrease of Trustee or
Date this Global Security this Global Security or increase Securities Custodian
------------- --------------------- --------------------- ------------------------ --------------------
A-21
ASSIGNMENT FORM
To assign this security, fill in the form below:
I or we assign and transfer this security to
-------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
-------------------------------------------------------------------------
(Insert assignee's social security or tax I.D. No.)
and irrevocably appoint _____________________________________agent to transfer
this security on the books of the Company. The agent may substitute another to
act for him.
Date: Your Signature:
-------------------- ------------------------------------
--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this security.
A-22
FORM OF CONVERSION NOTICE
To: Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby exercises the
option to convert this security, or portion hereof (which is $1,000 principal
amount or an integral multiple thereof) designated below, for shares of Common
Stock of Bausch & Lomb Incorporated in accordance with the terms of the
Indenture referred to in this security, and directs that the shares, if any,
issuable and deliverable upon such conversion, together with any check for cash
deliverable upon such conversion in lieu of fractional shares, and any
securities representing any unconverted principal amount hereof, be issued and
delivered to the registered Holder hereof unless a different name has been
indicated below. If shares or any portion of this security not converted are to
be issued in the name of a Person other than the undersigned, the undersigned
shall pay all transfer taxes payable with respect thereto.
This notice shall be deemed to be an irrevocable exercise of the option to
convert this security.
Dated:
-----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if shares of
Common Stock are to be issued, or securities
to be delivered, other than to or in the name
of the registered Holder.
-----------------------------------------------
Signature Guarantee
Fill in for registration of
shares if to be delivered, and
securities if to be issued
other than to and in the name
of registered Holder:
--------------------------------- Certificate No(s) of securities (not
(Name) required for Global Securities) _________
--------------------------------- Principal amount to be converted
(Street Address) (if less than all): $______,000
--------------------------------- ---------------------------------------------
(City state and zip code) Social Security or Other Taxpayer I.D. Number
Please print name and address
A-23
FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE
To: Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby acknowledges
receipt of a notice from Bausch & Lomb Incorporated (the "Company") as to the
occurrence of a Fundamental Change with respect to the Company and requests and
instructs the Company to repurchase this security, or the portion hereof (which
is $1,000 principal amount or a integral multiple thereof) designated below, in
accordance with the terms and conditions specified in this security and the
Indenture referred to in this security and directs that the check in payment for
this security or the portion thereof and any securities representing any
unrepurchased principal amount hereof, be issued and delivered to the registered
Holder hereof unless a different name has been indicated below. If any portion
of this security not repurchased is to be issued in the name of a Person other
than the undersigned, the undersigned shall pay all transfer taxes payable with
respect thereto.
Dated:
-----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if securities
are to be delivered, other than to or in the
name of the registered Holder.
-----------------------------------------------
Signature Guarantee
Fill in for registration of shares if to be delivered, and securities if to be
issued other than to and in the name of registered Holder:
--------------------------------- Certificate No(s) of securities (not required
(Name) for Global Securities) ____________________
--------------------------------- Principal amount to be purchased
(Street Address) (if less than all): $______,000
--------------------------------- ---------------------------------------------
(City state and zip code) Social Security or Other Taxpayer Number
Please print name and address
A-24
FORM OF REPURCHASE NOTICE
To: Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby acknowledges
receipt of a notice from Bausch & Lomb Incorporated (the "Company") as to the
Holder's option to require the Company to repurchase this security and requests
and instructs the Company to repurchase this security, or the portion hereof
(which is $1,000 principal amount or a integral multiple thereof) designated
below, in accordance with the terms and conditions specified in this security
and the Indenture referred to in this security and directs that the
consideration in payment for this security or the portion thereof and any
securities representing any unrepurchased principal amount hereof, be issued and
delivered to the registered Holder hereof unless a different name has been
indicated below. The Senior Convertible Notes shall be purchased as of the
Repurchase Date pursuant to the terms and conditions specified in the Senior
Convertible Notes and in the Indenture. In the event the Company elected,
pursuant to the notice that it is required to give, to pay the Purchase Price in
shares of Common Stock, but the Purchase Price is ultimately paid to the Holder
entirely in cash because any of the conditions to payment of the Purchase Price,
or any portion of the Purchase Price, in shares of Common Stock is not satisfied
prior to the close of business on the last Business Day prior to the Repurchase
Date, the undersigned elects1 [strike out the inapplicable election]: (A) to
withdraw the purchase notice as to $_________ in aggregate principal amount of
the Senior Convertible Notes to which it relates; or (B) to receive cash in
respect of the entire Purchase Price for all Senior Convertible Notes subject to
the purchase notice. If any portion of this security not repurchased is to be
issued in the name of a Person other than the undersigned, the undersigned shall
pay all transfer taxes payable with respect thereto. The term "consideration" as
used within this paragraph shall mean cash or Common Stock.
Dated:
-----------------------------------------------
-----------------------------------------------
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if securities
are to be delivered, other than to or in the
name of the registered Holder.
-----------------------------------------------
Signature Guarantee
Fill in for registration of securities if to be issued other than to and in the
name of registered Holder:
--------------------------------- Certificate No(s) of securities (not required
(Name) for Global Securities) ____________________
--------------------------------- Principal amount to be purchased
(Street Address) (if less than all): $______,000
--------------------------------- ---------------------------------------------
(City state and zip code) Social Security or Other Taxpayer Number
Please print name and address
----------
(1) If a Holder fails to indicate its choice with respect to this election, such
Holder will be deemed to have elected to receive cash in respect of the entire
Purchase Price for all Senior Convertible Notes subject to the Company Purchase
Notice in these circumstances.
A-25
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the securities of the series designated therein referred to
in the within-mentioned Indenture.
CITIBANK, N.A.,
as Trustee
By:
---------------------------------------------
Authorized Officer
B-1
EXHIBIT C
PROJECTED PAYMENT SCHEDULE
MARKET
VALUE OF
PROJECTED ACCRETED BOND PRINCIPAL COVERT
STOCK PRICE PROJECTED PRINCIPAL ACCRETED AT FEATURE
ACTUAL/360 (BASED ON 6 MONTHS LIBOR VALUE OF COMPARABLE (BASED ON NON CONTINGENT
DATE FACTOR RETURN) (ANNUAL RATE) CONVERTIBLE YIELD PARITY) PAYMENT
---------------------------------------------------------------------------------------------------------------------------------
08/04/2003 $ 40.96 1.10% $ 1,000.00 $ 1,000.00 $ 666.66 --
02/01/2004 0.503 $ 42.78 1.17% $ 1,000.00 $ 1,033.59 $ 696.31 $ 8.04
08/01/2004 0.506 $ 44.69 1.65% $ 1,000.00 $ 1,068.39 $ 727.45 $ 8.46
02/01/2005 0.511 $ 46.71 2.01% $ 1,000.00 $ 1,102.59 $ 760.33 $ 11.01
08/01/2005 0.503 $ 48.79 2.75% $ 1,000.00 $ 1,135.87 $ 794.14 $ 12.63
02/01/2006 0.511 $ 51.00 3.24% $ 1,000.00 $ 1,167.31 $ 830.04 $ 16.62
08/01/2006 0.503 $ 53.27 3.74% $ 1,000.00 $ 1,197.10 $ 866.96 $ 18.81
02/01/2007 0.511 $ 55.67 4.18% $ 1,000.00 $ 1,226.11 $ 906.15 $ 21.65
08/01/2007 0.503 $ 58.15 4.42% $ 1,000.00 $ 1,253.62 $ 946.44 $ 23.53
02/01/2008 0.511 $ 60.78 4.78% $ 1,000.00 $ 1,281.53 $ 989.23 $ 25.14
08/01/2008 0.506 $ 63.50 4.88% $ 1,000.00 $ 1,308.50 $ 1,033.46 $ 26.67
02/01/2009 0.511 $ 66.37 5.15% $ 1,000.00 $ 1,336.38 $ 1,080.18 $ 27.50
08/01/2009 0.503 $ 69.32 5.28% $ 1,000.00 $ 1,363.61 $ 1,128.22 $ 28.40
02/01/2010 0.511 $ 72.45 5.49% $ 1,000.00 $ 1,391.79 $ 1,179.22 $ 29.53
08/01/2010 0.503 $ 75.67 5.54% $ 1,000.00 $ 1,419.62 $ 1,231.66 $ 30.11
02/01/2011 0.511 $ 79.09 5.70% $ 1,030.85 $ 1,475.92 $ 1,287.34 $ 0.00
08/01/2011 0.503 $ 82.61 5.69% $ 1,062.97 $ 1,533.48 $ 1,344.58 $ 0.00
02/01/2012 0.511 $ 86.35 5.81% $ 1,096.61 $ 1,594.25 $ 1,405.37 $ 0.00
08/01/2012 0.506 $ 90.21 5.97% $ 1,131.58 $ 1,656.72 $ 1,468.21 $ 0.00
02/01/2013 0.511 $ 94.29 6.06% $ 1,168.98 $ 1,722.33 $ 1,534.58 $ 0.00
08/01/2013 0.503 $ 98.48 6.03% $ 1,207.53 $ 1,789.40 $ 1,602.82 $ 0.00
02/01/2014 0.511 $ 102.93 6.09% $ 1,247.80 $ 1,860.21 $ 1,675.28 $ 0.00
08/01/2014 0.503 $ 107.51 6.12% $ 1,289.11 $ 1,932.60 $ 1,749.78 $ 0.00
02/01/2015 0.511 $ 112.37 6.16% $ 1,332.72 $ 2,009.02 $ 1,828.88 $ 0.00
08/01/2015 0.503 $ 117.36 6.33% $ 1,377.31 $ 2,087.14 $ 1,901.21 $ 0.00
02/01/2016 0.511 $ 122.67 6.36% $ 1,425.42 $ 2,169.61 $ 1996.57 $ 0.00
08/01/2016 0.506 $ 128.15 6.38% $ 1,474.84 $ 2,254.38 $ 2,085.84 $ 0.00
02/01/2017 0.511 $ 133.95 6.38% $ 1,526.67 $ 2,343.38 $ 2,180.14 $ 0.00
08/01/2017 0.503 $ 139.90 6.39% $ 1,579.49 $ 2,434.36 $ 2,277.09 $ 0.00
02/01/2018 0.511 $ 146.23 6.38% $ 1,635.07 $ 2,530.40 $ 2,380.03 $ 0.00
08/01/2018 0.503 $ 152.73 6.47% $ 1,691.62 $ 2,628.56 $ 2,485.86 $ 0.00
02/01/2019 0.511 $ 159.64 6.45% $ 1,751.86 $ 2,732.18 $ 2,598.24 $ 0.00
08/01/2019 0.503 $ 166.74 6.43% $ 1,813.06 $ 2,838.08 $ 2,713.78 $ 0.00
02/01/2020 0.511 $ 174.27 6.40% $ 1,877.27 $ 2,949.87 $ 2,836.46 $ 0.00
08/01/2020 0.506 $ 182.07 6.37% $ 1,942.77 $ 3,064.75 $ 2,963.30 $ 0.00
02/01/2021 0.511 $ 190.30 6.34% $ 2,011.02 $ 3,185.36 $ 3,097.26 $ 0.00
08/01/2021 0.503 $ 198.76 6.30% $ 2,080.17 $ 3,308.62 $ 3,234.99 $ 0.00
02/01/2022 0.511 $ 207.74 6.265 $ 2,152.51 $ 3,438.72 $ 3,381.23 $ 0.00
08/01/2022 0.503 $ 216.98 6.22% $ 2,225.71 $ 3,571.67 $ 3,531.59 $ 0.00
02/01/2023 0.511 $ 226.79 6.18% $ 2,302.19 $ 3,712.00 $ 3,691.25 $ 0.00
08/01/2023 0.503 $ 236.88 6.06% $ 2,379.48 $ 3,855.39 $ 3,855.39 $ 0.00
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288.12
-------------------
PRESENT
DISCOUNT FACTOR PRESENT VALUE VALUE OF
PAYMENT UPON TOTAL USING OF TOTAL
CONTINGENT CONVERSION PRI PROJECTED COMPARABLE CONTINGENT PROJECTED
DATE PAYMENT TAX DEDUCTION TO MATURITY PAYMENTS YIELD PAYMENT PAYMENTS
---------------------------------------------------------------------------------------------------------------------------
08/04/2003 -- - - - -
02/01/2004 $ 0.00 $ 41.63 - $ 8.04 0.9600 $ 0.00 $ 7.72
08/01/2004 $ 0.00 $ 43.27 - $ 8.46 0.9215 $ 0.00 $ 7.80
02/01/2005 $ 0.00 $ 45.21 - $ 11.01 0.8840 $ 0.00 $ 9.74
08/01/2005 $ 0.00 $ 45.90 - $ 12.63 0.8487 $ 0.00 $ 10.72
02/01/2006 $ 0.00 $ 48.07 - $ 16.62 0.8143 $ 0.00 $ 13.54
08/01/2006 $ 0.00 $ 48.60 - $ 18.81 0.7817 $ 0.00 $ 14.70
02/01/2007 $ 0.00 $ 50.66 - $ 21.65 0.7500 $ 0.00 $ 16.23
08/01/2007 $ 0.00 $ 51.04 - $ 23.53 0.7200 $ 0.00 $ 16.94
02/01/2008 $ 0.00 $ 53.05 $ 25.14 0.6908 $ 0.00 $ 17.37
08/01/2008 $ 0.00 $ 53.64 - $ 26.67 0.6630 $ 0.00 $ 17.68
02/01/2009 $ 0.00 $ 55.38 - $ 27.50 0.6361 $ 0.00 $ 17.49
08/01/2009 $ 0.00 $ 55.63 - $ 28.40 0.6107 $ 0.00 $ 17.35
02/01/2010 $ 0.00 $ 57.71 - $ 29.53 0.5859 $ 0.00 $ 17.30
08/01/2010 $ 0.00 57.94 - $ 30.11 0.5625 $ 0.00 $ 16.94
02/01/2011 $ 3.78 $ 60.08 - $ 3.78 0.5396 $ 2.04 $ 2.04
08/01/2011 $ 3.88 $ 61.44 - $ 3.88 0.5181 $ 2.01 $ 2.01
02/01/2012 $ 4.12 $ 64.90 - $ 4.12 0.4970 $ 2.05 $ 2.05
08/01/2012 $ 4.26 $ 66.74 - $ 4.26 0.4771 $ 2.03 $ 2.03
02/01/2013 $ 4.50 $ 70.11 - $ 4.50 0.4577 $ 2.06 $ 2.06
08/01/2013 $ 4.63 $ 71.70 - $ 4.63 0.4394 $ 2.03 $ 2.03
02/01/2014 $ 4.92 $ 75.73 - $ 4.92 0.4216 $ 2.07 $ 2.07
08/01/2014 $ 5.05 $ 77.44 - $ 5.05 0.4047 $ 2.05 $ 2.05
02/01/2015 $ 5.37 $ 81.79 - $ 5.37 0.3883 $ 2.08 $ 2.08
08/01/2015 $ 5.52 $ 83.64 - $ 5.52 0.3728 $ 2.06 $ 2.06
02/01/2016 $ 5.86 $ 88.33 - $ 5.86 0.3576 $ 2.09 $ 2.09
08/01/2016 $ 6.06 $ 90.82 - $ 6.06 0.3433 $ 2.08 $ 2.08
02/01/2017 $ 6.40 $ 95.41 - $ 6.40 0.3293 $ 2.11 $ 2.11
08/01/2017 $ 6.58 $ 97.56 - $ 6.58 0.3162 $ 2.08 $ 2.08
02/01/2018 $ 6.98 $ 103.02 - $ 6.98 0.3033 $ 2.12 $ 2.12
08/01/2018 $ 7.18 $ 105.34 - $ 7.18 0.2912 $ 2.09 $ 2.09
02/01/2019 $ 7.62 $ 111.14 - $ 7.62 0.2794 $ 2.13 $ 2.13
08/01/2019 $ 7.84 $ 113.74 - $ 7.84 0.2682 $ 2.10 $ 2.10
02/01/2020 $ 8.32 $ 120.11 - $ 8.32 0.2573 $ 2.14 $ 2.14
08/01/2020 $ 8.60 $ 123.48 - $ 8.60 0.2470 $ 2.12 $ 2.12
02/01/2021 $ 9.09 $ 129.70 - $ 9.09 0.2370 $ 2.15 $ 2.15
08/01/2021 $ 9.34 $ 132.61 - $ 9.34 0.2275 $ 2.13 $ 2.13
02/01/2022 $ 9.92 $ 140.02 - $ 9.92 0.2182 $ 2.17 $ 2.17
08/01/2022 $ 10.20 $ 143.15 - $ 10.20 0.2095 $ 2.14 $ 2.14
02/01/2023 $ 10.83 $ 151.15 - $ 10.83 0.2010 $ 2.18 $ 2.18
08/01/2023 $ 11.14 $ 154.53 $ 3,855.39 $ 3,866.53 0.1930 $ 2.15 $ 746.17
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$ 177.99 $ 3,321.50 $ 3,855.39 $ 4,321.50 TOTAL PV $ 54.46 $1,000.00
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C-1
