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WELLPOINT HEALTH NETWORKS INC.,
as Issuer,
$260,000,000
ZERO COUPON CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2019
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INDENTURE
Dated as of July 2, 1999
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The Bank of New York,
as Trustee
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CROSS REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
------- -------
310 (a)(1)..................................................................................... 7.10
(a)(2)..................................................................................... 7.10
(a)(3)..................................................................................... N.A.**
(a)(4)..................................................................................... N.A.
(b)........................................................................................ 7.08; 7.10
(c)........................................................................................ N.A.
3.11 (a)........................................................................................ 7.11
(b)........................................................................................ 7.11
(c)........................................................................................ N.A.
3.12 (a)........................................................................................ 2.05
(b)........................................................................................ 13.03
(c)........................................................................................ 13.03
(d)........................................................................................ 7.06
3.13 (a)........................................................................................ 7.06
(b)(1)..................................................................................... N.A.
(b)(2)..................................................................................... 7.06
(c)........................................................................................ 13.02
(d)........................................................................................ 7.06
3.14 (a)........................................................................................ 4.02; 13.02
(b)........................................................................................ N.A.
(c)(1)..................................................................................... 13.04
(c)(2)..................................................................................... 13.04
(c)(3)..................................................................................... N.A.
(d)........................................................................................ N.A.
(e)........................................................................................ 13.05
(f)........................................................................................ 4.03
3.15 (a)........................................................................................ 7.01
(b)........................................................................................ 7.05; 13.02
(c)........................................................................................ 7.01
(d)........................................................................................ 7.01
(e)........................................................................................ 6.11
3.16 (a) (last sentence)........................................................................ 2.08
(a)(1)(A).................................................................................. 6.05
(a)(1)(B).................................................................................. 6.04
(a)(2)..................................................................................... N.A.
(b)........................................................................................ 6.07
3.17 (a)(1)..................................................................................... 6.08
(a)(2)..................................................................................... 6.09
(b)........................................................................................ 2.04
3.18 (a)........................................................................................ 13.01
* Note: This Cross Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
** Note: N.A. means Not Applicable.
TABLE OF CONTENTS
PAGE
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ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.01. DEFINITIONS......................................................................................1
SECTION 1.02. OTHER DEFINITIONS................................................................................7
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT................................................8
SECTION 1.04. RULES OF CONSTRUCTION............................................................................8
ARTICLE 2. THE SECURITIES.........................................................................................9
SECTION 2.01. FORM AND DATING..................................................................................9
SECTION 2.02. EXECUTION AND AUTHENTICATION.....................................................................9
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT....................................................10
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST..............................................10
SECTION 2.05. HOLDER LISTS....................................................................................11
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES; RESTRICTIONS ON TRANSFERS;
DEPOSITARY.................................................................................11
SECTION 2.07. REPLACEMENT SECURITIES..........................................................................13
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.......................................14
SECTION 2.09. TEMPORARY SECURITIES............................................................................14
SECTION 2.10. CANCELLATION....................................................................................15
SECTION 2.11. PERSONS DEEMED OWNERS...........................................................................15
SECTION 2.12. CUSIP NUMBERS...................................................................................15
SECTION 2.13. RESTRICTIONS ON TRANSFER........................................................................16
ARTICLE 3. REDEMPTION AND REPURCHASES............................................................................17
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.............................................................17
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED..........................................................18
SECTION 3.03. NOTICE OF REDEMPTION............................................................................18
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION..................................................................19
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.....................................................................19
SECTION 3.06. SECURITIES REDEEMED IN PART.....................................................................20
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION...................................................20
SECTION 3.08. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER................................................20
SECTION 3.09. REPURCHASE AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE....................................26
SECTION 3.10. EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE REPURCHASE NOTICE.............................26
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE PURCHASE PRICE..................................28
SECTION 3.12. SECURITIES REPURCHASED IN PART..................................................................28
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE OF SECURITIES...........................28
SECTION 3.14. REPAYMENT TO THE COMPANY........................................................................28
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ARTICLE 4. COVENANTS.............................................................................................29
SECTION 4.01. PAYMENT OF SECURITIES...........................................................................29
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS..............................................................29
SECTION 4.03. COMPLIANCE CERTIFICATE..........................................................................30
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS....................................................................30
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY.................................................................30
SECTION 4.06. EXISTENCE.......................................................................................31
SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT..........................................................31
ARTICLE 5. SUCCESSOR CORPORATION.................................................................................31
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS...................................................31
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................32
SECTION 6.01. EVENTS OF DEFAULT...............................................................................32
SECTION 6.02. ACCELERATION....................................................................................33
SECTION 6.03. OTHER REMEDIES..................................................................................34
SECTION 6.04. WAIVER OF PAST DEFAULTS.........................................................................34
SECTION 6.05. CONTROL BY MAJORITY.............................................................................34
SECTION 6.06. LIMITATION ON SUITS.............................................................................34
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT............................................................35
SECTION 6.08. COLLECTION SUIT BY TRUSTEE......................................................................35
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM................................................................35
SECTION 6.10. PRIORITIES......................................................................................36
SECTION 6.11. UNDERTAKING FOR COSTS...........................................................................37
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS.........................................................37
ARTICLE 7. TRUSTEE...............................................................................................37
SECTION 7.01. DUTIES OF TRUSTEE...............................................................................37
SECTION 7.02. RIGHTS OF TRUSTEE...............................................................................39
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE....................................................................40
SECTION 7.04. TRUSTEE'S DISCLAIMER............................................................................40
SECTION 7.05. NOTICE OF DEFAULTS..............................................................................40
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS...................................................................40
SECTION 7.07. COMPENSATION AND INDEMNITY......................................................................41
SECTION 7.08. REPLACEMENT OF TRUSTEE..........................................................................41
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.....................................................................43
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION...................................................................43
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY...............................................43
ARTICLE 8. DISCHARGE OF INDENTURE................................................................................43
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES............................................................43
SECTION 8.02. REPAYMENT TO THE COMPANY........................................................................44
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ARTICLE 9. AMENDMENTS............................................................................................44
SECTION 9.01. WITHOUT CONSENT OF HOLDERS......................................................................44
SECTION 9.02. WITH CONSENT OF HOLDERS.........................................................................44
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.............................................................46
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS..........................................46
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES...........................................................46
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.........................................................46
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES...............................................................46
ARTICLE 10. SUBORDINATION........................................................................................47
SECTION 10.01. AGREEMENT OF SUBORDINATION.....................................................................47
SECTION 10.02. PAYMENTS TO HOLDERS............................................................................47
SECTION 10.03. SUBROGATION OF SECURITIES......................................................................50
SECTION 10.04. AUTHORIZATION BY HOLDERS.......................................................................51
SECTION 10.05. NOTICE TO TRUSTEE..............................................................................51
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS......................................................52
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION.................................................................52
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON SUBORDINATION PROVISIONS.........................52
SECTION 10.09. REINSTATEMENT OF SUBORDINATION.................................................................53
SECTION 10.10. PERMITTED PAYMENTS.............................................................................53
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS............................................................53
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS...............................................................53
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT.................................54
ARTICLE 11. CONVERSION...........................................................................................54
SECTION 11.01. CONVERSION PRIVILEGE...........................................................................54
SECTION 11.02. CONVERSION PROCEDURE...........................................................................55
SECTION 11.03. FRACTIONAL SHARES..............................................................................56
SECTION 11.04. TAXES ON CONVERSION............................................................................56
SECTION 11.05. COMPANY TO PROVIDE STOCK.......................................................................57
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.........................................................57
SECTION 11.07. ADJUSTMENT FOR RIGHTS OR WARRANTS..............................................................58
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.............................................................58
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED................................................................61
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED....................................................................62
SECTION 11.11. NOTICE OF ADJUSTMENT...........................................................................62
SECTION 11.12. VOLUNTARY INCREASE.............................................................................62
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS.................................................................62
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE......................................63
SECTION 11.15. COMPANY DETERMINATION FINAL....................................................................63
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER................................................................63
SECTION 11.17. SIMULTANEOUS ADJUSTMENTS.......................................................................64
SECTION 11.18. SUCCESSIVE ADJUSTMENTS.........................................................................64
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SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON CONVERSION................................64
SECTION 11.20. GENERAL CONSIDERATIONS.........................................................................65
ARTICLE 12. SPECIAL TAX EVENT....................................................................................65
SECTION 12.01. OPTIONAL CONVERSION TO SEMIANNUAL COUPON DEBENTURE UPON TAX EVENT..............................65
SECTION 12.02. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.................................................65
ARTICLE 13. MISCELLANEOUS........................................................................................67
SECTION 13.01. TRUST INDENTURE ACT............................................................................67
SECTION 13.02. NOTICES........................................................................................67
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS....................................................68
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.............................................68
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..................................................68
SECTION 13.06. SEPARABILITY CLAUSE............................................................................69
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND REGISTRAR.................................69
SECTION 13.08. GOVERNING LAW..................................................................................69
SECTION 13.09. NO RECOURSE AGAINST OTHERS.....................................................................69
SECTION 13.10. SUCCESSORS.....................................................................................69
SECTION 13.11. MULTIPLE ORIGINALS.............................................................................69
EXHIBIT A--Form of Security
-iv-
INDENTURE, dated as of July 2, 1999, between WellPoint Health Networks
Inc., a Delaware corporation (the "COMPANY"), and The Bank of New York, a New
York banking corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Subordinated Debentures due 2019:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
control, when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms controlling and controlled have meanings
correlative to the foregoing.
"BANKRUPTCY LAW" means Xxxxx 00, Xxxxxx Xxxxxx Code, or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BUSINESS DAY" means each day of the year on which banking institutions
are not required or authorized to close in The City of New York or the city in
which the Corporate Trust Office is located.
"COMMON STOCK" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 11.14 hereof, however, shares issuable upon conversion of the
Securities shall include only shares of Common Stock, par value of $.01 per
share, of the Company as such shares exist on the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; PROVIDED that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
"COMPANY" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall likewise
apply to any subsequent such successor or successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice Chairman,
its President or a Vice President, and by its Treasurer, an Assistant Treasurer,
its Secretary or an Assistant Secretary, and delivered to the Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be principally
administered, which office is, at the date as of which this Indenture is dated,
located at 000 Xxxxxxx Xxxxxx, 00X, Xxx Xxxx, XX 00000, Attention: Corporate
Trust Trustee Administration.
"CUSTODIAN" shall mean The Bank of New York, as custodian with respect
to the Securities in global form, or any successor entity thereto.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Securities issuable or
issued in whole or in part in global form, the Person specified in Section
2.06 as the Depositary with respect to the Securities, until a successor
shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depositary" shall mean or
include such successor.
"DESIGNATED SENIOR INDEBTEDNESS" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which
the Company is a party) expressly provides that such Senior Indebtedness
shall be "Designated Senior Indebtedness" for purposes of this Indenture;
PROVIDED that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event
in connection with which all or substantially all Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) consideration which is not all or substantially all common stock
listed (or, upon consummation of or immediately following such transaction or
event, which will be listed) on a United States national securities exchange or
approved for quotation on the NYSE or any similar United States system of
automated dissemination of quotations of securities prices.
"HOLDER" means a Person in whose name a Security is registered on
the Registrar's books.
2
"INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of the
Company in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), (b) all reimbursement obligations and other liabilities (contingent or
otherwise) of such Person with respect to letters of credit, bank guarantees or
bankers' acceptances, (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person (i) required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person, or (ii) required, in
conformity with generally accepted accounting principles, to be accounted for as
an operating lease, provided either (A) such operating lease requires, at the
end of the term thereof, that such Person make any payment other than accrued
periodic rent in the event that such Person does not acquire the leased real
property and related fixtures subject to such lease, or (B) such Person has an
option to acquire the leased real property and related fixtures, whether such
option is exercisable at any time or under specific circumstances, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate swap, cap or collar agreement or other similar instrument or agreement, (e)
all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (a) through (d), (f) any indebtedness or other
obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
issued as set forth on the face of the Security.
"LEGAL HOLIDAY" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action shall
be taken on the next succeeding date that is not a Legal Holiday, and to the
extent applicable no Original Issue Discount or interest, if any, shall accrue
for the intervening period.
"MARKET PRICE" means, as of any Repurchase Date or date of
determination, the average of the Sale Prices of the Common Stock for the five
Trading Day period ending on the third
3
Business Day prior to the applicable Repurchase Date or date of determination
(if the third Business Day prior to the applicable Repurchase Date or date of
determination is a Trading Day or, if it is not a Trading Day, then on the
last Trading Day prior to such third Business Day), appropriately adjusted to
take into account the occurrence, during the period commencing on the first
of such Trading Days during such five Trading Day period and ending on such
Repurchase Date or date of determination, of any event described in Sections
11.06, 11.07 or 11.08 hereof; subject, however, to the conditions set forth
in Sections 11.09 and 11.10 hereof.
"NASDAQ NATIONAL MARKET" means the electronic inter-dealer quotation
system operated by NASDAQ Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc.
"NYSE" means The New York Stock Exchange, Inc.
"OFFICER" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary or any Assistant
Treasurer or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 13.04 and 13.05, from legal counsel who is acceptable to
the Trustee. The counsel may be an employee of, or counsel to, the Company or
the Trustee.
"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between
the Principal Amount and the Issue Price of the Security as set forth on the
face of the Security. For purposes of this Indenture and the Securities, accrual
of Original Issue Discount shall be calculated on the basis of a 360-day year of
twelve 30-day months.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the principal
amount at Stated Maturity as set forth on the face of such Security, or on
Schedule A thereto in the case of a Security in global form.
"REDEMPTION DATE" means a date specified for redemption of the
Securities in accordance with the terms of the Securities and Section 3.01 of
this Indenture.
"REDEMPTION PRICE" shall have the meaning set forth in paragraph 5
of the Securities.
"REPRESENTATIVE" means the (a) indenture trustee or other trustee,
agent or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued
4
pursuant to an agreement providing for voting arrangements as among the
holders or owners of such Senior Indebtedness, any holder or owner of such
Senior Indebtedness acting with the consent of the required Persons necessary
to bind such holders or owners of such Senior Indebtedness and (ii) in the
case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
"SALE PRICE OF THE COMMON STOCK" means, on any date, the closing per
share sale price, or if no closing sale price is reported, the average bid and
ask prices or, if more than one, in either case, the average of the average bid
and average ask prices, on such date as reported in the composite transactions
for the principal United States securities exchange on which the common stock is
traded or, if the common stock is not listed on a United States national or
regional stock exchange, as reported by The NASDAQ National Market.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Company's Zero Coupon Convertible Subordinated
Debentures due 2019; PROVIDED, HOWEVER, that if the Company exercises the option
provided for in Section 12.01 hereof, on and after the Option Exercise Date all
references herein to Securities shall be deemed to mean the Semiannual Coupon
Debentures, unless the context otherwise indicates.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding), rent and end of term
payments payable on or in connection with, and, to the extent not included in
the foregoing, all amounts payable as fees, costs, expenses, liquidated damages,
indemnities, repurchase and other put obligations and other amounts to the
extent accrued or due on or in connection with, Indebtedness of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing). Notwithstanding the foregoing,
the term Senior Indebtedness shall not include (i) Indebtedness evidenced by the
Securities, (ii) Indebtedness of the Company to any subsidiary of the Company, a
majority of the voting stock of which is owned, directly or indirectly, by the
Company, (iii) accounts payable or other indebtedness to trade creditors created
or assumed by the Company in the ordinary course of business and (iv) any
particular Indebtedness in which the instrument creating or evidencing the same
or the assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to, or is PARI PASSU with, or is
subordinated or junior to, the Securities.
"SIGNIFICANT SUBSIDIARY" means, with respect to any Person, a
Subsidiary of such Person organized under the laws of the United States of
America, any state thereof, or the District of Columbia that would constitute a
"significant subsidiary" as such term is defined under Rule 1-02 of Regulation
S-X of the SEC.
5
"STATED MATURITY," when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal of such Security is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more of the other subsidiaries of that Person (or a combination
thereof) and (ii) any partnership (a) the sole general partner or managing
general partner of which is such Person or a subsidiary of such Person or (b)
the only general partners of which are such Person or one or more subsidiaries
of such Person (or any combination thereof).
"TAX EVENT" means that the Company has received an opinion from
independent tax counsel experienced in such matters to the effect that, as a
result of: (1) an amendment to, or change or announced prospective change in,
the laws or regulations of the U.S. or any political subdivision or taxing
authority thereof or therein; or (2) 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 hereof, there is more than an insubstantial risk that interest, including
original issue discount, payable on the Securities either (a) would not be
deductible on a current accrual basis or (b) 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.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect
on the date of this Indenture, except as provided in Section 9.03.
"TRADING DAY" means a day during which trading in securities generally
occurs on the NYSE or, if the applicable security is not listed on the NYSE, on
the NASDAQ National Market, or if the applicable security is not quoted on the
NASDAQ National Market, on the principal other national or regional securities
exchange on which the applicable security is then listed or, if the applicable
security is not listed on a national or regional securities exchange, on the
principal other market on which the applicable security is then traded.
"TRUST OFFICER" means any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistance secretary, assistant treasurer, trust officer or any other officer of
the Trustee who customarily performs functions similar to those performed by the
Persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of such person's knowledge of and
familiarity with the particular subject and who shall have direct responsibility
for the administration of this Indenture.
"TRUSTEE" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter,
6
shall mean such successor. The foregoing sentence shall likewise apply to any
subsequent such successor or successors.
"VOTING STOCK" means stock of any class or classes, however designated,
having ordinary voting power for the election of a majority of the board of
directors of a corporation, other than stock having such power only by reason of
the occurrence of a contingency.
SECTION 1.02. OTHER DEFINITIONS.
Defined
Term in Section
---- ----------
"BCBSA" .................................................................... 2.13(a)
"CASH"...................................................................... 3.08(b)
"CERTIFICATE OF INCORPORATION............................................... 2.13(a)
"COMPANY NOTICE"............................................................ 3.08(e)
"COMPANY NOTICE DATE"....................................................... 3.08(c)
"CONVERSION AGENT".......................................................... 2.03
"CONVERSION DATE" .......................................................... 11.02
"CONVERSION RATE" .......................................................... 11.01
"DEFAULTED INTEREST"........................................................ 12.02(b)
"DISTRIBUTED SECURITIES".................................................... 11.08(a)
"EXPIRATION TIME"........................................................... 11.08(c)
"EXTRAPOLATED PURCHASE PRICE" .............................................. 2.13(a)
"EVENT OF DEFAULT".......................................................... 6.01
"FUNDAMENTAL CHANGE PURCHASE PRICE"......................................... 3.09(a)
"FUNDAMENTAL CHANGE REPURCHASE DATE"........................................ 3.09(a)
"FUNDAMENTAL CHANGE REPURCHASE NOTICE"...................................... 3.09(a)
"INTEREST PAYMENT DATE"..................................................... 12.01
"LICENSE ADDENDUM" ......................................................... 2.13(a)
"LICENSE AGREEMENT" ........................................................ 2.13(a)
"NOTICE OF DEFAULT"......................................................... 6.01
"OPTION EXERCISE DATE"...................................................... 12.01
"OVER-ALLOTMENT OPTION"..................................................... 2.02
"OWNERSHIP LIMIT" .......................................................... 2.13(a)
"PAYING AGENT".............................................................. 2.03
"PAYMENT BLOCKAGE NOTICE" .................................................. 10.02
"PURCHASE PRICE"............................................................ 3.08(a)
"PURCHASED SHARES".......................................................... 11.08(c)
"REGISTRAR"................................................................. 2.03
"REGULAR RECORD DATE"....................................................... 12.01
"REPURCHASE DATE"........................................................... 3.08(a)
"REPURCHASE NOTICE"......................................................... 3.08(a)
"RESTATED PRINCIPAL AMOUNT"................................................. 12.01
"SEMIANNUAL COUPON DEBENTURE"............................................... 12.01
"SPECIAL RECORD DATE"....................................................... 12.02(a)
7
Defined
Term in Section
---- ----------
"TAX EVENT DATE"............................................................ 12.01
"TENDER EXPIRATION TIME".................................................... 11.08(d)
"TENDER PURCHASED SHARES"................................................... 11.08(d)
"TRIGGER EVENT"............................................................. 11.19
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
"Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words
in the plural include the singular.
8
ARTICLE 2.
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Securities and the Trustee's certificate of authentication for the
Securities shall be substantially in the form of EXHIBIT A, which is a part of
this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, PROVIDED that any such notation,
legend or endorsement required by usage is in a form acceptable to the Company.
The Company shall provide any such notations, legends or endorsements to the
Trustee in writing. Each Security shall be dated the date of its authentication.
Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Security in global
form to reflect the amount of any increase or decrease in the amount of
outstanding Security represented thereby shall be made by the Trustee or the
Custodian, at the direction of the Trustee, in such manner and upon instructions
given by the Holder of such Security in accordance with this Indenture. Payment
of Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest, if any, on
any Security in global form shall be made to the Holder of such Security.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, and attested by its Treasurer or Secretary or one of its
Assistant Treasurers or one of its Assistant Secretaries. The signature of any
of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original
issue in an aggregate Principal Amount of $260,000,000 upon a Company Order
without any further action by the Company (or an aggregate Principal Amount not
to exceed $299,000,000 if the over-allotment option ("OVER-ALLOTMENT OPTION")
set forth in Section 2 of the Underwriting Agreement dated
9
June 28, 1999 (as amended from time to time by the parties thereto) by and
between the Company and the Underwriters is exercised in full). The aggregate
Principal Amount of Securities outstanding at any time may not exceed the
amount set forth in the foregoing sentence, except as provided in Section
2.07 hereof.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR"), an office
or agency where Securities may be presented for purchase or payment ("PAYING
AGENT") and an office or agency where Securities may be presented for conversion
into Common Stock ("CONVERSION AGENT"). The Registrar shall keep a register of
the Securities and of their transfer and exchange. The Company may have one or
more co-registrars, one or more additional paying agents and one or more
additional conversion agents. The term Paying Agent includes any additional
paying agent. The term Conversion Agent includes any additional conversion
agent, including any named pursuant to Section 4.05 hereof.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee or
an Affiliate of the Trustee). The agreement shall implement the provisions of
this Indenture that relate to such agent and the relevant Security. The Company
shall notify the Trustee of the name and address of any such agent. If the
Company fails to maintain a Registrar, Paying Agent or Conversion Agent, the
Trustee shall act as such and shall be entitled to appropriate compensation
therefor pursuant to Section 7.07 hereof. The Company or an Affiliate of the
Company may act as Paying Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.
Except as otherwise provided herein, prior to or on each due date of
payments in respect of any Security, the Company shall deposit with the Paying
Agent a sum of money or securities sufficient to make such payments when such
payments are due. The Company shall require the Paying Agent (if not the
Trustee) to agree in writing that the Paying Agent shall hold in trust for the
benefit of Holders or the Trustee all money and securities held by the Paying
Agent for the making of payments in respect of the Securities and shall notify
the Trustee of any default by the Company in making any such payment. At any
time during the continuance of any such default, the Paying Agent shall, upon
the written request of the Trustee, forthwith pay to the Trustee all money and
securities so held in trust. If the Company or an Affiliate of the Company acts
as Paying Agent, it shall segregate the money and securities held by it as
Paying Agent and hold it as a separate trust fund. The Company at any time may
require the Paying Agent to pay all money and securities held by it to the
Trustee and to account for any funds and securities disbursed by it. Upon doing
so, the Paying Agent shall have no further liability for such money or
securities.
10
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Holders. If the Trustee is not the Registrar, the Company shall cause to be
furnished to the Trustee at least semiannually on February 10 and August 10 a
listing of Holders dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a list,
in such form and as of such date as the Trustee may reasonably require, of the
names and addresses of Holders.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF
SECURITIES; RESTRICTIONS ON TRANSFERS; DEPOSITARY.
(a) Upon surrender for registration of transfer of any
Security at any office or agency of the Company designated as Registrar or
co-registrar pursuant to Section 2.03 hereof and satisfaction of the
requirements for such transfer set forth in this Section 2.06, the Company shall
execute, and the Trustee shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate Principal Amount and bearing
such restrictive legends as may be required by this Indenture.
Securities may be exchanged for a like aggregate Principal Amount of
Securities of other authorized denominations. Securities to be exchanged shall
be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 hereof and the
Company shall execute and register, and the Trustee shall authenticate and
deliver in exchange therefor, the Security or Securities which the Holder making
the exchange shall be entitled to receive, bearing registration numbers not
contemporaneously outstanding.
All Securities presented for registration of transfer or for exchange
into like Securities, repurchase, redemption or conversion into Common Stock or
payment shall (if so required by the Company, the Trustee, the Registrar or any
co-registrar) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company and the Trustee,
duly executed by the Holder or such Holder's attorney duly authorized in
writing.
No service charge shall be charged to the Holder for any exchange for
like Securities or registration of transfer of Securities, but the Company may
require payment of a sum sufficient to cover any tax, assessments or other
governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar
shall be required to exchange for like Securities or register a transfer of (a)
any Securities for a period of 15 days next preceding the mailing of notice of
Securities to be redeemed, or (b) any Securities or portions thereof selected or
called for redemption, or (c) any Securities or portion thereof surrendered for
conversion into Common Stock, or (d) any Securities or portion thereof
surrendered for repurchase or redemption (and not withdrawn) pursuant to
Sections 3.08 or 3.09 hereof, respectively.
11
All Securities issued upon any transfer or exchange for like
Securities shall be valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture as the
Securities surrendered upon such exchange or transfer.
(b) So long as the Securities are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Securities that are so eligible may be represented by a Security in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in such Security in global form shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.
Transfers of interests in a Security in global form will be made in
accordance with the standing instructions and procedures of the Depositary and
its participants. The Trustee shall make appropriate endorsements to reflect
increases or decreases in the Principal Amounts of such Securities in global
form as set forth on the face of the Security in global form to reflect any such
transfers.
Except as provided below, beneficial owners of a Security in global
form shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Securities in global
form.
(c) Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.06(c)), a Security in
global form 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 or to a successor Depositary or a nominee of such successor
Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Securities in global form. Initially, a Security
in global form shall be issued to the Depositary, registered in the name of Cede
& Co., as the nominee of the Depositary, and deposited with the Custodian for
Cede & Co.
If at any time the Depositary for a Security in global form notifies
the Company that it is unwilling or unable to continue as Depositary for such
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary for the Security is not appointed by the
Company within 90 days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for
authentication and delivery of Securities, will authenticate and deliver,
Securities in certificated form, in an aggregate Principal Amount equal to the
Principal Amount of the Security in global form, in exchange for such Security
in global form.
Securities in certificated form issued in exchange for all or a part of
a Security in global form pursuant to this Section 2.06 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
12
deliver such Securities in certificated form to the Persons in whose names such
Securities in certificated form are so registered.
At such time as all interests in a Security in global form have been
redeemed, converted, exchanged, repurchased or canceled for Securities in
certificated form, or transferred to a transferee who receives Securities in
certificated form, such Security in global form shall be, upon receipt thereof,
canceled by the Trustee in accordance with the standing procedures and
instructions existing between the Custodian and Depositary. At any time prior to
such cancellation, if any interest in a Security in global form is exchanged for
Securities in certificated form, redeemed, converted, exchanged, repurchased by
the Company or canceled, or transferred for part of a Security in global form,
the Principal Amount of such Security in global form shall, in accordance with
the standing procedures and instructions existing between the Custodian and the
Depositary, be reduced or increased, as the case may be, and an endorsement
shall be made on such Security in global form, by the Trustee or the Custodian,
at the direction of the Trustee, to reflect such reduction or increase.
SECTION 2.07. REPLACEMENT SECURITIES.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Company or the
Trustee that such Security has been acquired by a bona fide purchaser, the
Company shall execute and, upon its written request, the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a new Security of like tenor and
Principal Amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be repurchased or
redeemed by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, repurchase or redeem
such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
13
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF
HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those paid pursuant to Section 4.01 hereof, those replaced or paid
pursuant to Section 2.07 hereof and those described in this Section 2.08 as not
outstanding. A Security does not cease to be outstanding because the Company or
an Affiliate thereof holds the Security; PROVIDED, HOWEVER, that in determining
whether the Holders of the requisite Principal Amount of Securities have given
or concurred in any request, demand, authorization, direction, notice, consent
or waiver hereunder, Securities owned by the Company or any Affiliate of the
Company shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only
Securities which the Trust Officer actually knows to be so owned shall be so
disregarded unless written notice of such ownership is received by the Trustee
at the Corporate Trust Office of the Trustee in accordance with Section 13.02
hereof and such notice references the Securities and this Indenture. Subject to
the foregoing, only Securities outstanding at the time of such determination
shall be considered in any such determination (including, without limitation,
determinations pursuant to Articles 6 and 9 hereof).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Repurchase Date or a
Fundamental Change Repurchase Date, or on Stated Maturity, money or securities,
if permitted hereunder, sufficient to pay Securities payable on that date, then
on and after that date such Securities shall cease to be outstanding and
Original Issue Discount and interest, if any, on such Securities shall cease to
accrue; PROVIDED, that, if such Securities are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 11 hereof, then
from and after such conversion such Security shall cease to be outstanding and
Original Issue Discount and interest, if any, shall cease to accrue on such
Security.
SECTION 2.09. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as conclusively evidenced
by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the
14
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for such purpose pursuant to Section 2.03 hereof, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like Principal Amount of definitive Securities
of authorized denominations. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture
as definitive Securities.
SECTION 2.10. CANCELLATION.
All Securities surrendered for payment, purchase, conversion,
redemption or registration of transfer or exchange for the Securities shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to the
Trustee for cancellation any Securities previously authenticated and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly canceled by the Trustee. The Company
may not issue new Securities to replace Securities it has paid for or delivered
to the Trustee for cancellation or that any Holder has converted pursuant to
Article 11 hereof. No Securities shall be authenticated in lieu of or in
exchange for any Securities canceled as provided in this Section 2.10, except as
expressly permitted by this Indenture. All canceled Securities held by the
Trustee shall be disposed of by the Trustee in accordance with its customary
procedures.
SECTION 2.11. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Fundamental
Change Purchase Price and interest, if any, in respect thereof, for the purpose
of conversion and for all other purposes whatsoever, whether or not such
Security be overdue, and none of the Company, the Trustee or any agent of the
Company or the Trustee shall be affected by notice to the contrary.
SECTION 2.12. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; PROVIDED, that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of redemption
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers. The Company will promptly notify the Trustee of
any change in the "CUSIP" numbers.
15
SECTION 2.13. RESTRICTIONS ON TRANSFER.
(a) Pursuant to the Company's Restated Certificate of Incorporation
(the "CERTIFICATE OF INCORPORATION"), the Company's Capital Stock (as defined in
the Certificate of Incorporation) is subject to certain restriction on ownership
and transfer. These provisions have been implemented in connection with the
License Agreement dated as of August 4, 1997 (the "LICENSE AGREEMENT") by and
between the Company and the Blue Cross Blue Shield Association (the "BCBSA"), as
amended by that certain California Blue Cross License Addendum dated as of June
12, 1998 (the "LICENSE ADDENDUM"). Subject to certain limited exceptions,
Beneficial Ownership (as defined in the Certificate of Incorporation) of 5% or
more (or, in the case of certain institutional investors as specified in the
License Agreement, 10% or more) of the outstanding shares of any class of
Capital Stock will exceed the ownership limit set forth in the Certificate of
Incorporation (the "OWNERSHIP LIMIT"). These provisions have been designed to
insure that the Company will not violate the terms of the License Agreement and
the License Addendum. Pursuant to the terms of the letter of even date herewith,
the Company and the BCBSA have agreed to certain provisions with respect to the
treatment of the Securities for purposes of computing the Beneficial Ownership
of Capital Stock of any Holder. For these purposes, a Holder of any particular
Principal Amount of Securities will be deemed to Beneficially Own shares of
Common Stock on any particular date equal to the greater of (i) the number of
shares of Common Stock issuable in the event of conversion for that particular
Principal Amount of Securities at the Conversion Rate in effect on such date or
(ii) the quotient determined by dividing the Extrapolated Purchase Price (as
defined below) for that particular Principal Amount of Securities at that
particular date by the Market Price (calculated as if that particular date were
a Repurchase Date). For these purposes, the "EXTRAPOLATED PURCHASE PRICE" shall
be the sum of the Issue Price of the particular Principal Amount of Securities
PLUS the amount of the Original Issue Discount accrued to and including such
date. The purchase by any Holder of any Securities shall constitute
acknowledgment and acceptance by such Holder of such restrictions on ownership
and transfer.
(b) Any Securities shall bear a legend in substantially the following
form:
The Securities represented by this certificate are subject to
restrictions on ownership and transfer. No Holder shall Beneficially
Own shares of Capital Stock in excess of the Ownership Limit (as
defined in Article VII, Section 14 of the Restated Certificate of
Incorporation of the Corporation). Subject to certain limited specific
exemptions, Beneficial Ownership of 5% or more (or, in the case of
certain institutional investors as specified in the License Agreement,
10% or more) of the outstanding shares of any class of Capital Stock
will exceed the Ownership Limit. For these purposes of computing the
Beneficial Ownership of Capital Stock, a Holder of any particular
Principal Amount of Securities will be deemed to Beneficially Own
shares of Common Stock on any particular date equal to the greater of
(i) the number of shares of Common Stock issuable in the event of
conversion for that particular Principal Amount of Securities at the
Conversion Rate in effect on such date or (ii) the quotient determined
by dividing the Extrapolated Purchase Price (as defined below) for that
particular Principal Amount of Securities at that particular date by
the Market Price (calculated as if
16
that particular date were a Repurchase Date). For these purposes,
the "Extrapolated Purchase Price" shall be the sum of the Issue
Price of the particular Principal Amount of Securities plus the
amount of the Original Issue Discount accrued to and including such
date. These provisions have been designed to ensure that the
Corporation will not violate the terms of the License Agreement
between the Corporation and the Blue Cross and Blue Shield
Association (the "BCBSA"). The Corporation maintains at its
principal executive office a copy of the applicable requirements of
the BCBSA relating to such restrictions on ownership and transfer,
as such requirements may be amended from time to time, which are
open to inspection by the stockholders, at all reasonable times
during office hours. Any Holder who attempts to Beneficially Own
Securities in violation of this limitation must immediately notify
the Corporation. Except as otherwise noted, all capitalized terms in
this legend have the meaning ascribed to them in the Corporation's
Restated Certificate of Incorporation, as the same may be amended
from time to time, a copy of which, including the restrictions on
ownership and transfer, will be sent without charge to each Holder
who so requests. Upon the occurrence of any event that would cause
any Holder to exceed the Ownership Limit, all Securities and shares
of Capital Stock Beneficially Owned by such Holder in excess of the
Ownership Limit will automatically be deemed Excess Shares and be
transferred immediately to the Share Escrow Agent and be subject to
the provisions of the Corporation's Restated Certificate of
Incorporation and the Share Escrow Agent Agreement, a copy of which
the Corporation maintains at its principal executive offices. The
foregoing summary of the restrictions on ownership and transfer is
qualified in its entirety by reference to the Corporation's Restated
Certificate of Incorporation. The purchase by or transfer to any
Holder of any Securities shall constitute acknowledgment and
acceptance by such Holder of such restrictions on ownership and
transfer.
(c) Any stock certificate representing the Common Stock issued upon
conversion of a Security shall bear any legend then used by the Company
pertaining to the foregoing restriction on ownership and transfer.
ARTICLE 3.
REDEMPTION AND REPURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.
The Company, at its option, may redeem the Securities in accordance
with the provisions of paragraphs 5 and 7 of the Securities. If the Company
elects to redeem Securities pursuant to paragraph 5 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 in the case of any redemption of the Securities, at least 30 days
before the Redemption Date unless a shorter notice shall be satisfactory to the
Trustee.
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SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities held in definitive form are to be
redeemed pursuant to Section 3.01, the Trustee shall select the definitive
Securities to be redeemed PRO RATA or by lot or by a method the Trustee
considers fair and appropriate (as long as such method is not prohibited by
the rules of any securities exchange or quotation system on which the
Securities are then listed or quoted). The Trustee shall make the selection
at least 25 days, but not more than 65 days, before the Redemption Date from
outstanding definitive Securities not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount of
Securities that have denominations larger than $1,000. Securities and
portions of them the Trustee selects shall be in Principal Amounts of $1,000
or an integral multiple of $1,000. Except as expressly stated otherwise,
provisions of this Indenture that apply to definitive Securities called for
redemption also apply to portions of definitive Securities called for
redemption. The Trustee shall notify the Company promptly of the definitive
Securities or portions of definitive Securities to be redeemed.
Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will be
redeemed in accordance with the procedures of the Depositary.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as outstanding for the purpose of such selection.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 20 days but not more than 60 days before a Redemption Date,
the Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall
state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and
Conversion Agent;
(5) that Securities called for redemption may be
converted at any time before the close of business on the last Trading Day prior
to the Redemption Date;
(6) that Holders who want to convert Securities must
satisfy the requirements set forth in paragraph 9 of the Securities;
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(7) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are to be
redeemed, the certificate number and Principal Amounts of the particular
Securities to be redeemed;
(9) that Original Issue Discount and interest, if any, on
Securities called for redemption will cease to accrue on and after the
Redemption Date; and
(10) the CUSIP number or numbers for the Securities.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is given, pursuant to Section 3.03 hereof,
Securities called for redemption become due and payable on the Redemption Date
and at the Redemption Price stated in the notice except for Securities which are
converted in accordance with the terms of this Indenture.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the Redemption
Price stated in the notice.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
Prior to 10 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or an
Affiliate of the Company is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the Redemption Price of all Securities to be
redeemed on that date other than Securities or portions of Securities called
for redemption which prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted into Common Stock, and on or
after the Redemption Date (unless the Company shall default in the payment of
the Securities at the Redemption Price), Original Issue Discount and
interest, if any, on the Securities or portion of Securities called for
redemption shall cease to accrue and such Securities shall cease after the
close of business on the Business Day immediately preceding the Redemption
Date to be convertible into Common Stock and, except as provided in Section
8.02 hereof, to be entitled to any benefit or security under this Indenture,
and the Holders thereof shall have no right in respect of such Securities
except the right to receive the Redemption Price thereof and unpaid interest
to (but excluding) the Redemption Date. The Paying Agent shall as promptly as
practicable return to the Company any money, with interest, if any, thereon,
not required for that purpose because of conversion of
19
Securities. If such money is then held by the Company in trust and is not
required for such purpose, it shall be discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder a new
Security in an authorized denomination equal in Principal Amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Securities, the Company may
arrange for the purchase and conversion into Common Stock of any Securities
called for redemption by an agreement with one or more investment bankers or
other purchasers to purchase such Securities by paying to the Paying Agent in
trust for the Holders, on or before the close of business on the Redemption
Date, an amount that, together with any amounts deposited with the Paying
Agent by the Company for the redemption of the Securities, is not less than
the Redemption Price to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Securities
shall be deemed to be satisfied and discharged to the extent such amount is
so paid by such purchasers. If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may, at
the option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such Holders and (notwithstanding anything
to the contrary contained in Article 11) surrendered by such purchasers for
conversion, all immediately prior to the close of business on the Redemption
Date, subject to payment of the above amount as aforesaid. The Paying Agent
shall hold and pay to the Holders whose Securities are selected for
redemption any such amount paid to it in the same manner as it would money
deposited with it by the Company for the redemption of Securities. Without
the Paying Agent's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Securities shall
increase or otherwise affect any of the powers, duties, responsibilities or
obligations of the Paying Agent as set forth in this Indenture, and the
Company agrees to indemnify the Paying Agent from, and hold it harmless
against, any loss, liability or expense arising out of or in connection with
any such arrangement for the purchase and conversion of any Securities
between the Company and such purchasers, including the costs and expenses
incurred by the Paying Agent in the defense of any claim or liability arising
out of or in connection with the exercise or performance of any of its
powers, duties, responsibilities or obligations under this Indenture.
SECTION 3.08. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER.
(a) GENERAL. Securities shall be repurchased by the Company
pursuant to paragraph 6 of the Securities as of July 2, 2002, July 2, 2009 and
July 2, 2014 (each, a "REPURCHASE DATE"), at the purchase price specified
therein (each, a "PURCHASE PRICE") at the option of the Holder thereof, upon:
(1) delivery to the Paying Agent by the
Holder of a written notice of purchase (a "REPURCHASE NOTICE") at any time
from the opening of business on the date that is 20
20
Business Days prior to a Repurchase Date until the close of business on
such Repurchase Date, stating:
(A) the certificate number of the
Security which the Holder will deliver to be repurchased;
(B) the portion of the Principal Amount
of the Security which the Holder will deliver to be repurchased, which
portion must be $1,000 in Principal Amount or a multiple thereof;
(C) that such Security shall be
repurchased as of the Repurchase Date pursuant to the terms and conditions
specified in paragraph 6 of the Securities and in this Indenture; and
(D) if the Company elects,
pursuant to a Company Notice, to pay the Purchase Price to be paid as of
such Repurchase Date, in whole or in part, in Common Stock but such portion
of the Purchase Price shall ultimately be payable to such Holder in Cash
because any of the conditions to the payment of the Purchase Price in Common
Stock are not satisfied prior to or on the Repurchase Date, as set forth in
Section 3.08(d) hereof, whether such Holder elects (x) to withdraw such
Repurchase Notice as to some or all of the Securities to which such
Repurchase Notice relates (stating the Principal Amount and certificate
numbers of the Securities as to which such withdrawal shall relate), or (y)
to receive Cash in respect of the entire Purchase Price for all Securities
(or portions thereof) to which such Repurchase Notice relates; and
(2) delivery of such Security 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 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 3.08
only if the Security so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Repurchase Notice.
If a Holder, in such Holder's Repurchase Notice (and, in any written
notice of withdrawal of a portion of such Holder's Securities previously
submitted for repurchase pursuant to a Repurchase Notice, the portion that
remains subject to the Repurchase Notice), fails to indicate such Holder's
choice with respect to the election set forth in clause (D) of Section
3.08(a)(1), such Holder shall be deemed to have elected to receive Cash in
respect of the entire Purchase Price for all Securities subject to such
Repurchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the repurchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration to
be received by
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the Holder promptly following the later of the Repurchase Date
and the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder
delivering to the Paying Agent the Repurchase Notice contemplated by this
Section 3.08(a) shall have the right at any time prior to the close of
business on the Repurchase Date to withdraw such Repurchase Notice by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.10 hereof.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Repurchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE
PRICE. The Company may elect with respect to any Repurchase Date to pay the
Purchase Price in respect of the Securities to be purchased pursuant to Section
3.08(a) as of such Repurchase Date, in U.S. legal tender ("CASH") or Common
Stock, or in any combination of Cash and Common Stock, subject to the conditions
set forth in Sections 3.08(c) and (d). The Company shall designate, in the
Company Notice delivered pursuant to Section 3.08(e), whether the Company will
repurchase the Securities for Cash or Common Stock, or, if a combination
thereof, the percentages of the Purchase Price of Securities in respect of which
it will pay in Cash and/or Common Stock; PROVIDED that the Company will pay Cash
for fractional interests in shares of Common Stock. For purposes of determining
the existence of potential fractional interests, all Securities subject to
repurchase by the Company held by a Holder shall be considered together (no
matter how many separate certificates are to be presented). Each Holder whose
Securities are repurchased pursuant to this Section 3.08 shall receive the same
percentage of Cash and/or Common Stock in payment of the Purchase Price for such
Securities, except (i) as provided in Section 3.08(d) with regard to the payment
of Cash in lieu of fractional interests in shares of Common Stock and (ii) in
the event that the Company is unable to repurchase the Securities of a Holder or
Holders for Common Stock because any necessary qualifications or registrations
of the Common Stock under applicable federal or state securities laws cannot be
obtained, the Company may repurchase the Securities of such Holder or Holders
for Cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given its Company Notice to Holders except pursuant to this
Section 3.08(b) or Section 3.08(d).
At least one Business Day before the Company Notice Date (as defined in
Section 3.08(c)), the Company shall deliver an Officers' Certificate to the
Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or
a specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be complied
with, and
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(iv) whether the Company desires the Trustee to give the
Company Notice required by Section 3.08(e).
(c) REPURCHASE WITH CASH. At the option of the Company, the
Purchase Price of Securities in respect of which a Repurchase Notice pursuant to
Section 3.08(a) has been given, or a specified percentage thereof, may be paid
by the Company with Cash equal to the aggregate Purchase Price, or such
specified percentage thereof, as the case may be, of such Securities. If the
Company elects to repurchase Securities with Cash, a Company Notice as provided
in Section 3.08(e) shall be sent to Holders (and to beneficial owners as
required by applicable law) not less than 20 Business Days prior to the
Repurchase Date (the "COMPANY NOTICE DATE").
(d) PAYMENT BY ISSUANCE OF COMMON STOCK. At the option of the
Company, the Purchase Price of Securities in respect of which a Repurchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be paid by the Company by the issuance of a number of shares of
Common Stock equal to the quotient obtained by dividing (i) the amount of Cash
to which the Holders would have been entitled had the Company elected to pay all
or such specified percentage, as the case may be, of the Purchase Price of such
Securities in Cash by (ii) the Market Price of a share of Common Stock, subject
to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay Cash for the current
market value of the fractional share. The current market value of a fraction of
a share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent. It is understood that if a
Holder elects to have more than one Security repurchased, the number of shares
of Common Stock shall be based on the aggregate amount of Securities to be
repurchased.
If the Company elects to repurchase the Securities by the issuance of
shares of Common Stock, a Company Notice as provided in Section 3.08(e) shall be
sent to the Holders (and to beneficial owners as required by applicable law) not
later than the Company Notice Date.
The Company's right to exercise its election to repurchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
(i) the Company having given timely Company Notice of
election to purchase all or a specified percentage of the Securities with
Common Stock as provided herein;
(ii) the registration of the shares of Common Stock to be
issued in respect of the payment of the specified percentage of the Purchase
Price under the Securities Act; unless the shares of Common Stock so issued
can be freely resold by the Holder (unless such Holder is the Company or an
Affiliate of the Company) receiving such shares without registration under
the Securities Act;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption from such
qualification and registration; and
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(iv) the receipt by the Trustee of an Officers' Certificate
and an Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of Common
Stock to be issued by the Company in payment of the specified percentage of the
Purchase Price in respect of Securities have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in payment of the
specified percentage of the Purchase Price in respect of Securities, will be
validly issued, fully paid and nonassessable, and, in the case of such Officers'
Certificate, stating that conditions (i), (ii) and (iii) above have been
satisfied and, in the case of such Opinion of Counsel, stating that conditions
(ii) and (iii) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Common Stock on each Trading Day during the period
during which the Market Price is calculated and ending on the Repurchase Date.
The Company may elect to pay the Purchase Price (or any portion thereof) in
Common Stock only if the information necessary to calculate the Market Price is
reported in a daily newspaper of national circulation. If such conditions are
not satisfied with respect to a Holder or Holders prior to or on the Repurchase
Date and the Company elected to repurchase the Securities to be repurchased as
of such Repurchase Date pursuant to this Section 3.08 through the issuance of
shares of Common Stock, the Company shall pay the entire Purchase Price in
respect of such Securities of such Holder or Holders in Cash.
(e) NOTICE OF ELECTION. The Company's notices of election to
repurchase with Cash or Common Stock, or any combination thereof, shall be sent
to the Holders (and to beneficial owners as required by applicable law) in the
manner provided in Section 13.02 hereof at the time specified in Section 3.08(c)
or (d) hereof, as applicable (each, a COMPANY NOTICE). Such Company Notices
shall state the manner of payment elected and shall contain the following
information:
In the event the Company has elected to pay a Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive
Common Stock with a Market Price determined as of a specified date prior
to the Repurchase Date equal to such specified percentage of the Purchase
Price of the Securities held by such Holder (except any Cash amount to be
paid in lieu of a fractional share); and
(2) set forth the method of calculating the Market
Price and state that because the Market Price of Common Stock will be
determined prior to the Repurchase Date, the Holders will bear the market
risk with respect to the value of the Common Stock to be received from the
date such Market Price is determined to the Repurchase Date.
In any case, each Company Notice shall include a form of Repurchase
Notice to be completed by a Holder and shall state:
(i) the Purchase Price and Conversion Rate;
24
(ii) the name and address of the Paying Agent and the
Conversion Agent;
(iii) that Securities as to which a Repurchase Notice has
been given may be converted only if the applicable Repurchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying
Agent to collect payment;
(v) that the Purchase Price for any Security as to which
a Repurchase Notice has been given and not withdrawn will be paid promptly
following the later of the Repurchase Date and the time of surrender of such
Security as described in clause (iv) above;
(vi) the procedures the Holder must follow under
Section 3.08 hereof;
(vii) briefly, the conversion rights of the Securities; and
(viii) the procedures for withdrawing a Repurchase Notice
(including, without limitation, for a conditional withdrawal pursuant to the
terms of Section 3.08(a)(1)(D) or Section 3.10 hereof).
At the Company's request, the Trustee shall give the Company Notice in
the Company's name and at the Company's expense; PROVIDED, HOWEVER, that, in all
cases, the text of the Company Notice shall be prepared by the Company.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock
delivered upon conversion or repurchase of the Securities shall be newly issued
shares or treasury shares, shall be fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted
all such shares of Common Stock 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) PROCEDURE UPON PURCHASE. On the Business Day following the
Repurchase Date, the Company shall deposit with the Paying Agent Cash (in
respect of a Cash purchase under Section 3.08(c) hereof or for fractional
interests, as applicable), or shares of Common Stock, or a combination thereof,
as applicable, sufficient to pay the aggregate Purchase Price in respect of the
Securities to be repurchased pursuant to this Section 3.08. As soon as
practicable after the Repurchase Date, the Company shall deliver to each Holder
entitled to receive Common Stock, through the Paying Agent, a certificate for
the number of full shares of Common Stock, as applicable, issuable in payment of
such Purchase Price and Cash in lieu of any fractional interests. The Person in
whose name the certificate for Common Stock is registered shall be treated as a
holder of record following the Repurchase Date. Subject to Section 3.08(d)
hereof, no payment or adjustment will be made for dividends on the Common Stock
the record date for which occurred on or prior to the Repurchase Date.
25
(h) TAXES. If a Holder of a Security is paid in Common Stock,
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of shares of Common Stock. However, the Holder shall pay any
such tax which is due because the Holder requests the shares of Common Stock to
be issued in a name other than the Holder's name. The Paying Agent may refuse to
deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Paying Agent receives a sum sufficient to
pay any tax which will be due because the shares of Common Stock are to be
issued in a name other than the Holder's name. Nothing herein shall preclude any
income tax withholding required by law or regulations.
SECTION 3.09. REPURCHASE AT OPTION OF THE HOLDER UPON A
FUNDAMENTAL CHANGE.
(a) If a Fundamental Change shall occur at any time prior to
July 2, 2019, each Holder of Securities shall have the right, at such Holder's
option, to require the Company to repurchase any or all of Holder's Securities
on the date that is 45 days after the date of the Company's notice of such
Fundamental Change (the "FUNDAMENTAL CHANGE REPURCHASE DATE") (or if such date
is not a Business Day, the next succeeding Business Day). The Securities may be
repurchased in integral multiples of $1,000 of Principal Amount. The Company
shall repurchase such Securities at a price (the "FUNDAMENTAL CHANGE PURCHASE
PRICE") equal to the Issue Price plus accrued Original Issue Discount and
interest, if any, to the Fundamental Change Repurchase Date. No Securities may
be repurchased at the option of the Holders as a result of a Fundamental Change
if there has occurred and is continuing an Event of Default (other than a
default in the payment of the Fundamental Change Purchase Price with respect to
such Securities).
(b) The Company, or at its request (which must be received by
the Trustee at least three Business Days prior to the date the Trustee is
requested to give such notice as described below) the Trustee in the name of and
at the expense of the Company, shall mail to all Holders of record of the
Securities a notice (a "FUNDAMENTAL CHANGE REPURCHASE NOTICE") of the occurrence
of a Fundamental Change and of the repurchase right arising as a result thereof
on or before the tenth day after the occurrence of such Fundamental Change. The
Company shall promptly furnish the Trustee a copy of such notice.
(c) For a Security to be so repurchased at the option of the
Holder, the Paying Agent must receive such Security with the form entitled
"Option to Elect Repurchase Upon a Fundamental Change" on the reverse thereof
duly completed, together with such Security duly endorsed for transfer, on or
before the 45th day after the date of such notice (or if such 45th day is not a
Business Day, the immediately preceding Business Day). All questions as to the
validity, eligibility (including time of receipt) and acceptance of any Security
for repurchase shall be determined by the Company, whose determination shall be
final and binding.
SECTION 3.10. EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL
CHANGE REPURCHASE NOTICE.
Upon receipt by the Company of the Repurchase Notice or Fundamental
Change Repurchase Notice specified in Section 3.08(a) hereof or Section 3.09(b)
hereof, as applicable, the Holder of the Security in respect of which such
Repurchase Notice or Fundamental Change Repurchase Notice, as the case may be,
was given shall (unless such Repurchase Notice or
26
Fundamental Change Repurchase Notice is withdrawn as specified in the
following two paragraphs) thereafter be entitled to receive solely the
Purchase Price or Fundamental Change Purchase Price, as the case may be, with
respect to such Security. Such Purchase Price or Fundamental Change Purchase
Price shall be paid to such Holder promptly following the later of (x) the
Repurchase Date or the Fundamental Change Repurchase Date, as the case may
be, with respect to such Security (provided the conditions in Section 3.08(a)
hereof or Section 3.09(c) hereof, as applicable, have been satisfied) and (y)
the time of delivery of such Security to the Paying Agent by the Holder
thereof in the manner required by Section 3.08(a) hereof or Section 3.09(c)
hereof, as applicable. Securities in respect of which a Repurchase Notice or
Fundamental Change 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 Repurchase Notice (or Fundamental
Change Repurchase Notice, as the case may be), unless such Repurchase Notice
(or Fundamental Change Repurchase Notice, as the case may be) has first been
validly withdrawn as specified in the following two paragraphs.
A Repurchase Notice or Fundamental Change Repurchase 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 the close of
business on the Repurchase Date or the Fundamental Change Repurchase Date, as
the case may be, to which it relates specifying:
(1) the certificate number of the Security in
respect of which such notice of withdrawal is being submitted,
(2) the Principal Amount of the Security with respect to
which such notice of withdrawal is being submitted, and
(3) the Principal Amount, if any, of such Security which
remains subject to the original Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be, and which has been or will be delivered
for purchase or redemption by the Company.
A written notice of withdrawal of a Repurchase Notice may be in the
form of (i) a conditional withdrawal contained in a Repurchase Notice pursuant
to the terms of Section 3.08(a)(1)(D) hereof or (ii) a conditional withdrawal
containing the information set forth in Section 3.08(a)(1)(D) hereof and the
preceding paragraph and contained in a written notice of withdrawal delivered to
the Paying Agent as set forth in the preceding paragraph.
There shall be no repurchase of any Securities pursuant to Section 3.08
hereof (other than through the issuance of Common Stock in payment of the
Purchase Price, including Cash in lieu of any fractional shares) or repurchase
pursuant to Section 3.09 hereof if there has occurred (prior to, on or after, as
the case may be, the giving, by the Holders of such Securities, of the required
Repurchase Notice or Fundamental Change Repurchase Notice, as the case may be)
and is continuing an Event of Default (other than a default in the payment of
the Purchase Price or Fundamental Change Purchase Price, as the case may be,
with respect to such Securities).
27
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE
PURCHASE PRICE.
At or before 10 a.m., New York City time, on the Business Day
following a Repurchase Date or a Fundamental Change Repurchase Date, as the
case may be, the Company shall deposit with the Trustee or 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 as provided in Section 2.04
hereof) an amount of money and/or securities, if permitted hereunder,
sufficient to pay the aggregate Purchase Price or Fundamental Change Purchase
Price, as the case may be, of all the Securities or portions thereof which
are to be purchased as of such Repurchase Date or Fundamental Change
Repurchase Date, as the case may be.
SECTION 3.12. SECURITIES REPURCHASED IN PART.
Any Security that is to be repurchased only in part shall be
surrendered at the office of the Paying Agent (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or such Holder's attorney duly authorized in writing) and the
Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, a new Security or
Securities, of any authorized denomination as requested by such Holder in
aggregate Principal Amount equal to, and in exchange for, the portion of the
Principal Amount of the Security so surrendered which is not repurchased.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON
REPURCHASE OF SECURITIES.
In connection with any repurchase of Securities under Sections 3.08
or 3.09 hereof, the Company shall (i) comply with Rule 13e-4 (which term, as
used herein, includes any successor provision thereto) under the Exchange
Act, if applicable, (ii) file the related Schedule 13E-4 (or any successor
schedule, form or report) under the Exchange Act, if applicable, and (iii)
otherwise comply with all Federal and state securities laws so as to permit
the rights and obligations under Sections 3.08 and 3.09 to be exercised in
the time and in the manner specified in Sections 3.08 and 3.09.
SECTION 3.14. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company any
Cash or shares of Common Stock that remain unclaimed as provided in paragraph
14 of the Securities, together with interest or dividends, if any, thereon,
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 or shares of Common Stock deposited by the
Company pursuant to Section 3.11 hereof exceeds the aggregate Purchase Price
or Fundamental Change Purchase Price, as the case may be, of the Securities
or portions thereof which the Company is obligated to repurchase as of the
Repurchase Date or Fundamental Change Repurchase Date, as the case may be,
then promptly after the Business Day following the Repurchase Date or
Fundamental Change Repurchase Date, as the case may be, the Trustee and the
Paying Agent shall return any such excess to the Company together with
interest or dividends, if any, thereon.
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ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall promptly pay or cause to be paid all payments in
respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price and interest, if any, shall be considered
paid on the applicable date due or, in the case of a Purchase Price or
Fundamental Change Purchase Price, on the Business Day following the
applicable Repurchase Date or Fundamental Change Repurchase Date, as the case
may be, if on such date the Trustee or the Paying Agent holds, in accordance
with this Indenture, money or securities, if permitted hereunder, sufficient
to pay all such amount then due.
The Company shall pay interest on overdue amounts at the rate set
forth in paragraph 1 of the Securities and it shall pay interest on overdue
interest at the same rate compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest on
overdue interest shall accrue from the date such amounts became overdue and
shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS.
The Company will deliver to the Trustee (a) as soon as available and
in any event within 90 days after the end of each fiscal year of the Company
(i) a consolidated balance sheet of the Company and its Subsidiaries as of
the end of such fiscal year and the related consolidated statements of
operations, stockholders' equity and cash flows for such fiscal year, all
reported on by an independent public accountant of nationally recognized
standing and (ii) a report containing a management's discussion and analysis
of the financial condition and results of operations and a description of the
business and properties of the Company and (b) as soon as available and in
any event within 45 days after the end of each of the first three quarters of
each fiscal year of the Company (i) an unaudited consolidated financial
report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and results of operations
of the Company; PROVIDED that the foregoing shall -not be required for any
fiscal year or quarter, as the case may be, with respect to which the Company
files or expects to file with the Trustee an annual report or quarterly
report, as the case may be, pursuant to the third paragraph of this Section
4.02.
At any time the Company is not subject to either Section 13 or 15(d)
of the Exchange Act, the Company shall at the request of any Holder (or
holders of Common Stock issued upon conversion of the Securities) provide to
such Holder (or holders of such Common Stock) and any prospective purchaser
designated by such Holders (or holders of such Common Stock), as the case may
be, such information, if any, required by Rule 144A(d)(4) under the
Securities Act.
The Company shall file with the Trustee, within 15 days after it
files such annual and quarterly reports, information, documents and other
reports with the SEC, copies of its annual report and of the information,
documents and other reports (or copies of such portions of any of
29
the foregoing as the SEC may by rules and regulations prescribe) which the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of
the Exchange Act.
Delivery of such reports, information and documents to the Trustee
is for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company, an Officers' Certificate in which one
of the two Officers signing such certificate is either the principal
executive officer, principal financial officer or principal accounting
officer of the Company, stating whether or not to the knowledge of the
signers thereof the Company is in Default in the performance and observance
of any of the terms, provisions and conditions of this Indenture (without
regard to any period of grace or requirement of notice provided hereunder)
and, if the Company shall be in Default, specifying all such Defaults and the
nature and status thereof of which the signers may have knowledge.
The Company will deliver to the Trustee, as soon as possible and in
any event within five days, upon becoming aware of any Default in the
performance or observance of any covenant, agreement or condition contained
in this Indenture, or any Event of Default, an Officers' Certificate
specifying with particularity such Default or Event of Default and further
stating what action the Company has taken, is taking or proposes to take with
respect thereto.
Any notice required to be given under this Section 4.03 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and deliver
such further instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the purposes of this
Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY.
The Company will appoint in the Borough of Manhattan, The City of
New York, an office or agency where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration
of transfer, exchange, purchase, redemption or conversion and where notices
and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office or agency in the Borough of Manhattan,
The City of New York, shall be the Corporate Trust Office of the Trustee, and
shall be the office or agency for all of the aforesaid purposes unless the
Company shall appoint some other office or agency for such purposes and shall
give prompt written notice to the Trustee of the location, and any change in
the location, of such other office or agency. If at any time the Company
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof,
30
such presentations, surrenders, notices and demands may be made or served at
the Corporate Trust Office.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.06. EXISTENCE.
Subject to Article 5 hereof, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate existence under the laws of its jurisdiction of incorporation, and
to maintain all qualifications, permits and licenses (including, without
limitation, all licenses and certifications required pursuant to any health
maintenance organization regulation in connection with the ownership or
operation of health maintenance organizations and the conduct of the health
care, managed care and health insurance businesses and businesses incidental
thereto) necessary in the normal conduct of its business; PROVIDED, HOWEVER,
that the Company shall not be required to maintain any such qualification,
permit or license if the Company shall determine that the maintenance thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the
Holders.
SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of Original Issue
Discount (including daily rates and accrual periods) accrued on the
outstanding Securities as of the end of such year and (ii) such other
specific information relating to such Original Issue Discount as may then be
relevant under the Internal Revenue Code of 1986, as amended from time to
time.
ARTICLE 5.
SUCCESSOR CORPORATION
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any
other Person (other than in a merger or consolidation in which the Company is
the surviving Person) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or lease the properties and assets of the
Company substantially as an entirety shall be a corporation, limited
liability company, partnership or trust organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia, and shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee in form reasonably satisfactory to the
Trustee, the due and punctual payment of the Principal Amount, Issue Price,
31
accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price or interest, if any, on the Securities,
according to their tenor, and the due and punctual performance of all of the
covenants and obligations of the Company under the Securities and this
Indenture, and shall have provided for conversion rights in accordance with
this Indenture;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a supplemental
indenture is required in connection with such transaction, such supplemental
indenture, comply with this Article 5 and that all conditions precedent
herein provided for relating to such transaction have been satisfied.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer
or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same
effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease, the Company shall be discharged
from all obligations and covenants under this Indenture and the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An EVENT OF DEFAULT occurs if:
(1) the Company defaults in the payment of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price or a Fundamental Change Purchase Price on any Security when
the same becomes due and payable at its Stated Maturity, upon redemption,
upon declaration, when due for repurchase by the Company or otherwise,
whether or not such payment shall be prohibited by Article 10 hereof;
(2) after exercise of the option provided for in Section
12.01 hereof following a Tax Event, the Company defaults in the payment of
interest upon any Security when such interest becomes due and payable, and
such default continues for a period of 30 days;
(3) failure of the Company to perform or comply with the
provisions of Section 11.02 hereof, and such failure continues for a period
of 10 days;
(4) the Company fails to comply with any of its agreements
or covenants in the Securities or this Indenture (other than those referred
to in clauses (1) through (3) above) and such failure continues for 60 days
after receipt by the Company of a Notice of Default;
(5) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a
32
petition seeking reorganization of the Company under any Bankruptcy Law, and
such decree or order shall have continued undischarged and unstayed for a
period of 60 consecutive days; or a decree or order of a court having
jurisdiction in the premises of the appointment of a receiver or liquidator
or trustee or assignee in bankruptcy or insolvency of the Company or of its
property, or for the winding-up or liquidation of its affairs, shall have
been entered, and such decree or order shall have remained in force
undischarged and unstayed of a period of 60 consecutive days; or
(6) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under any Bankruptcy Law, or shall consent to
the filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of
it or of its property or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay its debts generally
as they become due.
A Default under clause (4) above is not an Event of Default until
the Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
(and such Default is not waived) within the time specified in clause (2)
above after actual receipt of such notice (a NOTICE OF DEFAULT). Any such
notice must specify the Default, demand that it be remedied and state that
such notice is a Notice of Default.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or (6) hereof) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the Issue Price and accrued Original Issue Discount
(or, if the Securities have been converted to Semiannual Coupon Debentures,
the Restated Principal Amount, plus accrued and unpaid interest) to the date
of declaration on all the Securities to be immediately due and payable. Upon
such a declaration, such Issue Price and accrued Original Issue Discount (or,
if the Securities have been converted to Semiannual Coupon Debentures, the
Restated Principal Amount, plus accrued and unpaid interest) shall become and
be due and payable immediately. If an Event of Default specified in Section
6.01(5) or (6) hereof occurs and is continuing, the Issue Price and accrued
Original Issue Discount (or, if the Securities have been converted to
Semiannual Coupon Debentures, the Restated Principal Amount, plus accrued and
unpaid interest) on all the Securities shall become and be immediately due
and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding, by notice to the Company and the
Trustee (and without notice to any other Holder), may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived
except nonpayment of the Issue Price and accrued Original Issue Discount (or,
if the Securities have been converted to Semiannual Coupon Debentures, the
Restated Principal Amount, plus accrued and unpaid interest) that have become
due solely as a result of acceleration and if all amounts due to the Trustee
under Section 7.07
33
hereof have been paid. No such rescission shall affect any subsequent or
other Default or Event of Default or impair any consequent right.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of the Issue Price and
accrued Original Issue Discount (or, if the Securities have been converted to
Semiannual Coupon Debentures, the Restated Principal Amount, plus accrued and
unpaid interest) on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding, by notice to the Company and the Trustee
(and without notice to any other Holder), may waive an existing Default or
Event of Default and its consequences except (1) an Event of Default
described in Section 6.01(l) or (2) hereof, (2) a Default in respect of a
provision that under Section 9.02 hereof cannot be amended without the
consent of each Holder affected or (3) a Default that constitutes a failure
to convert any Security in accordance with the terms of Article 11 hereof.
When a Default or Event of Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with any law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial
to the rights of other Holders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity reasonably satisfactory to
it.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities unless:
(1) the Holder gives to the Company and the Trustee written
notice stating that an Event of Default is continuing;
34
(2) the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense satisfactory to
the Trustee;
(4) the Trustee does not comply with the request within 60
days after receipt of the notice, the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.
A Holder may not use this Indenture to prejudice the rights of any
other Holder or to obtain a preference or priority over any other Holder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, but subject
to Article 10, the right of any Holder to receive payment of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any date of redemption, or to bring suit
for the enforcement of any such payment on or after such respective dates or
the right to convert the Securities in accordance with Article 11, shall not
be impaired or affected adversely without the consent of each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default described in Section 6.01(1) or (2) hereof
occurs and is continuing, the Trustee may recover judgment in its own name
and as trustee of an express trust against the Company for the whole amount
owing with respect to the Securities and the amounts provided for in Section
7.07 hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor
upon the Securities or the property of the Company or of such other obligor
or their creditors, the Trustee (irrespective of whether the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest, if any, in
respect of the Securities shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Company for the payment of any such amount) shall
be entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental
35
Change Purchase Price or interest, if any, and to file such other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07 hereof.
If the Trustee does not file a claim or proof of debt in the form
required in such proceedings prior to 30 days before the expiration of the
time to file such claims or proofs, then any holder or holders of Senior
Indebtedness or their representative or representatives shall have the right
to demand, xxx for, collect, receive and receipt for the payments and
distributions in respect of the Securities which are required to be paid or
delivered to the holders of Senior Indebtedness as provided in this Article
and to file and prove all claims therefor and to take all such other action
in the name of the holders or otherwise as such holders of Senior
Indebtedness or the Representative thereof may determine to be necessary or
appropriate for the enforcement of the provisions of this Article.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claims of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it
shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10 hereof;
THIRD: to Holders for amounts due and unpaid on the Securities for
the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest, if any, as the case may be, ratably, without preference or priority
of any kind, according to such amounts due and payable on the Securities; and
FOURTH: the balance, if any, to the Company.
36
The Trustee may fix a proposed record date and payment date for any
payment to Holders pursuant to this Section 6.10 and shall notify the Company
in writing with respect to such proposed record date and payment date. At
least 15 days before such record date, the Company (or the Trustee at the
request of the Company) shall mail to each Holder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant (other than the Trustee) in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, any suit by a Holder for the enforcement of
the payment of the Principal Amount, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest, if any, on or after the due date expressed in such Security or to
any suit for the enforcement of the right to convert the Security pursuant to
Article 11, or a suit by Holders of more than 10% in aggregate Principal
Amount of the Securities at the time outstanding.
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law or any usury or other law wherever enacted, now or at any time hereafter
in force, which would prohibit or forgive the Company from paying all or any
portion of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price or Fundamental Change Purchase
Price in respect of Securities, or any interest on any such amounts, as
contemplated herein, or which may affect the covenants or the performance of
this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such laws and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing,
the Trustee shall exercise the rights and powers vested in it by this
Indenture and use the same degree of care and skill in its exercise as a
prudent person would exercise or use under the circumstances in the conduct
of his or her own affairs.
(b) Except during the continuance of an Event of Default:
37
(1) the Trustee need perform only those
duties that are specifically set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Indenture. However, in the case of any such certificates or opinions which by
any provision hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the certificates and opinions to determine
whether or not they conform to the requirements of this Indenture.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted
by the TIA.
(c) The Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the
effect of paragraph (b) of this Section 7.01;
(2) the Trustee shall not be liable for any
error of judgment made in good faith by a Trust Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 6.05 hereof.
Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by
the TIA.
(d) Every provision of this Indenture that in any way
relates to the Trustee is subject to paragraphs (a), (b), (c) and (e) of this
Section 7.01.
(e) The Trustee may refuse to perform any duty or exercise
any right or power or extend or risk its own funds or otherwise incur any
financial liability unless it receives indemnity reasonably satisfactory to
it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not
be segregated from other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on any document
reasonably believed by it to be genuine and to have been signed or presented
by the proper Person. The Trustee need not investigate any fact or matter
stated in the document.
38
(b) Before the Trustee acts or refrains from acting, it may
require a Company Order, an Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on a Company Order, Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) Subject to the provisions of Section 7.01(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith which
it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel selected by it and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture, unless the Holders shall
have offered to the Trustee reasonable security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document, but
the Trustee, in its discretion, may make such further inquiry or investigation
into facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any negligent
act on the part of any agent or attorney appointed with due care by it
hereunder.
(i) The Trustee shall not be deemed to have notice of any
Default or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the Trustee
in accordance with Section 13.02 hereof, and such notice references the
Securities and this Indenture.
(j) The rights, privileges, protections, immunities and
benefits given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
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(k) The Trustee shall be under no obligation to expend or risk
its own funds or to exercise, at the request or direction of any of the Holders,
any of the rights or powers vested in it by this Indenture pursuant to this
Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any Paying
Agent, Registrar, Conversion Agent or co-registrar may do the same with the like
rights. However, the Trustee must comply with Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for Company's use
of the proceeds from the Securities; and it shall not be responsible for any
statement in the prospectus for the Securities or in this Indenture or the
Securities (other than its certificate of authentication), the acts of a prior
Trustee hereunder, or the determination as to which beneficial owners are
entitled to receive any notices hereunder.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is actually known by a
Trust Officer or if written notice of any event which is in fact such a default
is received by the Trustee at the Corporate Trust Office of the Trustee in
accordance with Section 13.02 hereof, and such notice references the Securities
and this Indenture, the Trustee shall give to each Holder notice of the Default
within 90 days after it occurs. Except in the case of a Default described in
Section 6.01(1) or (2) hereof, the Trustee may withhold the notice if and so
long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Holders. The second sentence of
this Section 7.05 shall be in lieu of the proviso to Section 315(b) of the TIA
and such provision is hereby expressly excluded from this Indenture, as
permitted by the TIA. The Trustee shall not give notice of a Default pursuant to
Section 6.01(4) until at least 60 days have passed since its occurrence.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 1, beginning with the May 1 following the
date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 1 that complies with TIA Section 313(a), if required by
such Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange on which the Securities are
listed. The Company agrees to promptly notify the Trustee whenever the
Securities become listed on any securities exchange and of any delisting
thereof.
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SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation
as the Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the Trustee
in accordance with any provision of this Indenture (including the compensation
and the expense, advances and disbursements of its agents and counsel), except
any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless
against, any and all loss, damage, claims, liability or expense (including taxes
other than taxes based upon, measured by, or determined by the income of the
Trustee) incurred without negligence or bad faith on its part, arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim (whether asserted by
the Company, any Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee, except that held in trust to pay the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price, Fundamental Change Purchase Price or interest, if any, as the case may
be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(5) or (6), the expenses
are intended to constitute expenses of administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company; PROVIDED, HOWEVER,
that no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 7.08. The Holders of a
majority in aggregate Principal Amount of the Securities at the time outstanding
may remove the Trustee by so notifying the Trustee and may appoint a successor
Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with, or ceases to be
eligible under, Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
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(3) a receiver or public officer takes charge or
control of the Trustee or its property or affairs; or
(4) the Trustee otherwise in the Company's reasonable
judgment becomes incapable of acting.
In addition, the Company may remove the Trustee if the Company
determines that the services provided by the Trustee hereunder may be obtained
at a substantially lower cost to the Company, determined in the sole discretion
of the Company.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder, subject to the lien provided for in Section
7.07 hereof. Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor Trustee all such rights, powers and trusts. No
successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be eligible under this Article.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Company.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business (including the trust
created by this Indenture) or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee hereunder, PROVIDED such corporation shall be otherwise
eligible under this Article, without the execution or filing of any paper or any
further act on the part of any of the parties hereto. In case any Securities
shall have been authenticated, but not delivered, by the Trustee then in office,
any successor by merger, conversion or consolidation to such
42
authenticating Trustee may adopt such authentication and deliver the Securities
so authenticated with the same effect as if such successor Trustee had itself
authenticated such Securities.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA
Sections 310(a)(1) and 310(b). The Trustee shall have a combined capital and
surplus of at least $50,000,000 (or if the Trustee is a member of a bank
holding company system, its bank holding company shall have a combined
capital and surplus of at least $50,000,000) as set forth in its most recent
published annual report of conditions. Nothing herein contained shall prevent
the Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.10,
it shall correct such ineligibility or resign immediately in the manner and
with the effect specified in this Article 7.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07 hereof) for
cancellation or (ii) all outstanding Securities have become due and payable and
the Company deposits with the Trustee Cash and/or securities, as permitted by
the terms hereof, sufficient to pay at Stated Maturity the Principal Amount of
all outstanding Securities (other than Securities replaced pursuant to Section
2.07 hereof), and if in either case the Company pays all other sums payable
hereunder by the Company, then this Indenture shall, subject to Section 7.07
hereof, cease to be of further effect. The Trustee shall join in the execution
of a document prepared by the Company acknowledging satisfaction and discharge
of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being required
to make any such return, shall, in the event that the Securities are no longer
held in global form, at the expense of the Company cause to be published once in
a newspaper of general circulation in The City of New York or mail to each such
Holder notice that such money or securities remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed money or securities
43
then remaining will be returned to the Company. 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.
ARTICLE 9.
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture and the Securities
without the consent of any Holder:
(1) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions with regard to
matters or questions arising under this Indenture which shall not materially
adversely affect the interests of the Holders;
(2) to provide for the assumption of the Company's
obligations to the Holders of the Debentures in case of a merger or
consolidation or sale of all or substantially all of the Company's assets;
(3) to provide for uncertificated Securities in
addition to certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986, as
amended;
(4) to make any change that does not adversely affect
the right of any Holder; or
(5) to make any change to comply with the TIA, or any
amendment thereto, or to comply with any requirement of the SEC in connection
with the qualification, if any, of the Indenture under the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee, with the written consent of the Holders of
at least a majority in aggregate Principal Amount of the Securities at the time
outstanding, may amend this Indenture or the Securities. However, without the
consent of each Holder affected, an amendment or supplement to this Indenture or
the Securities may not:
(1) make any change to the Principal Amount of
Securities whose Holders must consent to an amendment;
(2) make any change to the manner or rate of accrual
in connection with Original Issue Discount or interest, if any, reduce the
rate of interest referred to in paragraph 1 of the Securities or extend the
time for payment of Original Issue Discount or interest, if any, on any
Security;
44
(3) reduce the Principal Amount or the Issue Price of
or extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or
Fundamental Change Purchase Price of any Security;
(5) make any Security payable in money or
securities other than that stated in the Security;
(6) make any change in Article 10 hereof that
adversely affects the rights of any Holder;
(7) make any change in Sections 6.04 or 6.07 hereof or this
Section 9.02, except to increase the percentage of Holders referenced in
Sections 6.04 or 6.07 hereof, as applicable;
(8) make any change that adversely affects the right of
Holders to convert any Security; or
(9) make any change that adversely affects the right of
Holders to require the Company to repurchase the Securities, or the right to
require the Company to repurchase the Securities upon a Fundamental Change,
in accordance with the terms thereof and this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 or Section 9.01 hereof may not
make any change that adversely affects the rights under Article 10 hereof of
any holder of Senior Indebtedness then outstanding unless the requisite
holders of such Senior Indebtedness consent to such change pursuant to the
terms of such Senior Indebtedness.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article 9
shall comply with the TIA as then in effect, if then required to so comply.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND
ACTIONS.
Until an amendment, waiver or other action becomes effective, a
consent to it or any other action by a Holder of a Security is a continuing
consent by the Holder and every subsequent Holder of that Security or portion
of the Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent, waiver or action as to such Holder's Security or portion of the
Security if the Trustee receives the
45
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall
bind every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Securities.
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.
The Trustee shall sign any supplemental indenture authorized
pursuant to this Article 9 if the amendment does not adversely affect the
rights, duties, liabilities or immunities of the Trustee. If it does, the
Trustee may, but need not, sign such supplemental indenture. In signing such
amendment the Trustee shall be entitled to receive, and (subject to the
provisions of Section 7.01 hereof) shall be fully protected in relying upon,
an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article
9, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT OF SUBORDINATION.
The Company covenants and agrees for itself and its successors, and
each Holder of Securities issued hereunder by such Holder's acceptance
thereof likewise covenants and agrees, that all Securities shall be issued
subject to the provisions of this Article 10, and each Person holding any
such Security whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment of the Principal Amount, Issue Price, accrued Original
Issue Discount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, interest and any other amounts payable, if any, in respect of all
Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full in Cash or other payment satisfactory to the holders of
Senior Indebtedness of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred, or
thereafter created, assumed or guaranteed.
46
No provision of this Article 10 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 10.02. PAYMENTS TO HOLDERS.
No payment shall be made with respect to the payment of Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, interest and any other
amounts payable, if any, on the Securities, except payments and distributions
made by the Trustee as permitted by Section 10.05, if:
(i) a default in any payment obligations in respect of
Designated Senior Indebtedness occurs and is continuing, without regard to
any applicable period of grace (whether at maturity or at a date fixed for
payment or by declaration or otherwise); or
(ii) any other default occurs and is continuing with
respect to Designated Senior Indebtedness that permits the holders of such
Designated Senior Indebtedness as to which such default relates to accelerate
its maturity and the Trustee receives a notice of the default (a PAYMENT
BLOCKAGE NOTICE) from a holder of Designated Senior Indebtedness or a
Representative of Designated Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to
clause (ii) above, no subsequent Payment Blockage Notice shall be effective
for purposes of this Section unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be the
basis for a subsequent Payment Blockage Notice (it being acknowledged that
(x) any action of the Company or any of its Subsidiaries occurring subsequent
to delivery of a Payment Blockage Notice that would give rise to any event of
default pursuant to any provision of Senior Indebtedness under which an event
of default previously existed (or was continuing at the time of delivery of
such Payment Blockage Notice) shall constitute a new event of default for
this purpose and (y) any breach of a financial covenant giving rise to a
nonpayment default for a period ending subsequent to the date of delivery of
the respective Payment Blockage Notice shall constitute a new event of
default for this purpose).
The Company may and shall resume payments on and distributions in
respect of the Securities:
(1) in case of a default referred to in clause (i) above,
the earlier of the date upon which the default is cured or waived in
accordance with the terms of the governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii)
above, the earlier of the date upon which the default is cured, waived in
accordance with the terms of the governing instrument or ceases to exist or
179 days pass after the applicable Payment Blockage Notice is received if the
maturity of such Designated Senior Indebtedness has not been accelerated,
47
unless this Article 10 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company or distribution of assets of the
Company of any kind or character, whether in Cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
or bankruptcy of the Company, whether voluntary or involuntary, or
insolvency, receivership or similar proceedings relating to the Company or
its property, or an assignment for the benefit of creditors or any marshaling
of the Company's assets or liabilities, all amounts due or to become due upon
all Senior Indebtedness of the Company shall first be paid in full in Cash or
other payment satisfactory to the holders of such Senior Indebtedness before
any payment is made on account of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price, interest or any other amounts payable, if any, in respect of
the Securities (except payments made pursuant to Article 8 hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
dissolution or winding-up or liquidation or reorganization or bankruptcy of
the Company, whether voluntary or involuntary or insolvency, receivership or
similar proceedings relating to the Company or its property, or an assignment
of the benefit of creditors or any marshaling of the Company's assets or
liabilities), and upon any such dissolution or winding-up or liquidation or
reorganization or bankruptcy of the Company, whether voluntary or involuntary
or insolvency, receivership or similar proceedings relating to the Company or
its property, or an assignment of the benefit of creditors or any marshaling
of the Company's assets or liabilities, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in
Cash, property or securities, to which the Holders of the Securities or the
Trustee would be entitled, except for the provisions of this Article 10,
shall (except as aforesaid) be paid by the Company or by any receiver,
trustee in bankruptcy, liquidating trustee, agent or other Person making such
payment or distribution, or by the Holders of the Securities or by the
Trustee under this Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company as their interests may appear
or their representative or representatives, or to the trustee or trustees
under any indenture pursuant to which any instruments evidencing any such
Senior Indebtedness may have been issued, as their respective interests may
appear to the extent necessary to pay all such Senior Indebtedness in full in
Cash or other payment satisfactory to the holders of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution
to or for the holders of such Senior Indebtedness, before any payment or
distribution is made to the Holders of the Securities or to the Trustee.
In the event that any Securities are declared due and payable before
their Stated Maturity pursuant to Section 6.02 hereof, then and in such event
the Company shall promptly notify holders of its Designated Senior
Indebtedness of such acceleration. The Company may not pay the Securities
until five days have passed after such acceleration occurs and may thereafter
pay the Securities only to the extent that this Article 10 permits the
payment at that time.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in Cash, property or securities (including, without limitation, by
way of setoff or otherwise), prohibited by the foregoing provisions in this
Section 10.02, shall be received by the Trustee or the Holders of the
Securities before all Senior Indebtedness of the Company is paid in full in
Cash or other payment
48
satisfactory to the holders of such Senior Indebtedness, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness of the Company or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all such
Senior Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness in full in Cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article 10, the words Cash, property or
securities shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 10 with respect to the Securities to the payment of all Senior
Indebtedness of the Company which may at the time be outstanding; PROVIDED
that (i) such Senior Indebtedness is assumed by the new corporation, if any,
resulting from any such reorganization or readjustment, and (ii) the rights
of the holders of such Senior Indebtedness (other than leases that are not
assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety,
or substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article 5 hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of
this Section 10.02 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions
stated in Article 5 hereof.
Nothing in this Section 10.02 shall apply to claims of, or payments
to, the Trustee under or pursuant to Section 7.07 hereof. This Section 10.02
shall be subject to the further provisions of Section 10.05 hereof.
SECTION 10.03. SUBROGATION OF SECURITIES.
Subject to the payment in full in Cash or other payment satisfactory
to the holders of Senior Indebtedness of all Senior Indebtedness of the
Company, the rights of the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments or
distributions of Cash, property or securities of the Company applicable to
such Senior Indebtedness until the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price and interest, if any, in respect of the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any Cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article 10, and no
payment over pursuant to the provisions of this Article 10, to or for the
benefit of the holders of such Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of its Senior Indebtedness, and the Holders of the Securities be
deemed to be a payment by the Company to or
49
on account of the Senior Indebtedness; and no payments or distributions of
Cash, property or securities to or for the benefit of the holders of the
Securities pursuant to the subrogation provisions of this Article 10, which
would otherwise have been paid to the holders of Senior Indebtedness shall be
deemed to be a payment by the Company to or for the account of the
Securities. It is understood that the provisions of this Article 10 are and
are intended solely for the purpose of defining the relative rights of the
Holders of the Securities, on the one hand, and the holders of Senior
Indebtedness, on the other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture
or in the Securities is intended to or shall impair, as between the Company,
its creditors other than the holders of its Senior Indebtedness and the
Holders of the Securities, the obligation of the Company, which is absolute
and unconditional, to pay to the Holders of the Securities the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price and interest, if any, in
respect of the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of its Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 10 of the
holders of Senior Indebtedness in respect of Cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred
to in this Article 10, the Trustee, subject to the provisions of Section 7.01
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee, to the Holders of the Securities for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.04. AUTHORIZATION BY HOLDERS.
Each Holder of a Security by such Holder's acceptance thereof
authorizes and directs the Trustee in his behalf to take such action as may
be necessary or appropriate to effectuate the subordination provided in this
Article 10 and appoints the Trustee such Holder's attorney-in-fact for any
and all such purposes.
SECTION 10.05. NOTICE TO TRUSTEE.
The Company shall give prompt written notice in a form of an
Officers' Certificate to a Trust Officer of any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee
or any Paying Agent in respect of the Securities pursuant to the provisions
of this Article 10, but failure to give such notice shall not affect the
subordination of the Securities to the Senior Indebtedness as provided in
this Article 10.
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Notwithstanding the provisions of this Article 10 or any other provision of
this Indenture, the Trustee shall not be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities pursuant to the
provisions of this Article 10, unless and until a Trust Officer shall have
actually received written notice thereof at the Corporate Trust Office from
the Company (in the form of an Officers' Certificate) or a holder or holders
of Senior Indebtedness or a Representative or from any trustee therefor; and
before the receipt of any such written notice, the Trustee, subject to the
provisions of Section 7.01 hereof, shall be entitled in all respects to
assume that no such facts exist; PROVIDED that if on a date not fewer than
two Business Days prior to the date upon which by the terms hereof any such
monies may become payable for any purpose (including, without limitation, the
payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, interest or any other amounts payable, if any, in respect of any
Security) the Trustee shall not have received, with respect to such monies,
the notice provided for in this Section 10.05, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to receive such monies and to apply the same to the purpose for
which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing
shall prevent any payment of amounts deposited with the Trustee pursuant to
Section 8.01 hereof so long as the Trustee had no notice that such amounts
when so deposited were prohibited pursuant to the provisions of Section 10.02
hereof.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated Senior
Indebtedness or a Representative of Senior Indebtedness of the Company (or a
trustee on behalf of such holder) to establish that such notice has been
given by a holder or a Representative of Designated Senior Indebtedness or a
Representative of such Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as
a holder of Senior Indebtedness of the Company to participate in any payment
or distribution pursuant to this Article 10, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
10, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person
to receive such payment.
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10 in respect of any Senior Indebtedness of
the Company at any time held by it, to the same extent as any other holder of
such Senior Indebtedness, and nothing in this Article 10 or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder. The
provisions of this Article 10 shall not apply to the Trustee's rights under
Section 7.07 hereof.
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With respect to the holders of Senior Indebtedness of the Company,
the Trustee undertakes to perform or to observe only such of its covenants
and obligations as are specifically set forth in this Article 10, and no
implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness of the Company and, subject to the provisions of Section
7.01 hereof, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of Securities, the
Company or any other Person money or assets to which any holder of Senior
Indebtedness of the Company shall be entitled by virtue of this Article 10 or
otherwise.
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION.
No right of any present or future holder of any Senior Indebtedness
of the Company to enforce subordination as herein provided shall at any time
in any way be prejudiced or impaired by (i) any amendment of or addition or
supplement to any such Senior Indebtedness or any instrument or agreement
relating thereto (unless otherwise expressly provided therein), or (ii) any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the
Company with the terms, provisions and covenants of the instrument,
regardless of any knowledge thereof which any such holder may have or
otherwise be charged with or (iii) a failure to act by any Holders of
Securities or the failure of such Holder to comply with this Indenture.
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS.
Each Holder of Securities by such Holder's acceptance thereof,
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created, assumed or acquired before or after the issuance of the Securities,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness, and
no amendment or modification of the provisions contained herein shall
diminish the rights of such holder or holders unless such holder or holders
shall have agreed in writing thereto.
SECTION 10.09. REINSTATEMENT OF SUBORDINATION.
If, at any time, all or part of any payment of any Senior
Indebtedness theretofore made by the Company or any other Person is rescinded
or must otherwise be returned by the holders of such Senior Indebtedness for
any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of the Company or such other Person), these
subordination provisions shall continue to be effective or be reinstated, as
the case may be, all as though such payment had not been made.
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SECTION 10.10. PERMITTED PAYMENTS.
Nothing contained in this Article 10 or elsewhere in this Indenture, or
in the Securities shall prevent (a) the Company at any time, except under the
conditions described in Section 10.02 hereof, from making payments at any time
of Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest or any
other amounts payable, if any, in respect of the Securities, or from depositing
with the Trustee or any Paying Agent money for such payments, or (b) the
application by the Trustee or Paying Agent of any moneys deposited with it under
this Indenture to the payment of or on account of the Principal Amount, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price or interest or any other amounts payable, if
any, in respect of the Securities to the Holders of the Securities entitled
thereto to the beneficiaries thereof, if such payment would not have been
prohibited by the provisions of Section 10.02 hereof.
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this
Article 10 in addition to or in place of the Trustee; PROVIDED, HOWEVER, that
the first paragraph of Section 10.05 hereof shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS.
Notwithstanding anything in this Indenture to the contrary, neither the
issuance and delivery of junior securities upon conversion of the Securities in
accordance with Article 11 nor the payment of Cash in lieu of fractional shares
of Common Stock in accordance with Article 11 shall be deemed to constitute a
payment or distribution on account of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price or Fundamental Change Purchase Price
or interest or any other amounts payable, if any, in respect of the Securities.
For the purposes of this paragraph, the term "junior securities" means (a)
shares of any stock of any class of the Company, (b) securities of the Company
which are subordinated in right of payment to all Senior Indebtedness of the
Company which may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than, the
Securities are so subordinated as provided in this Article 10, and (c) any
securities into which the Securities become convertible pursuant to Section
11.14 hereof which are securities of a Person required to enter into a
supplemental indenture pursuant to such section (or Section 5.01 hereof) and are
either (x) shares of any stock of any class of such Person, or (y) securities of
such Person which are subordinated in right of payment to all Senior
Indebtedness of such Person which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities or, are so subordinated as provided in this Article
10. Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior
53
Indebtedness, and the holders of the Securities, the right, which is absolute
and unconditional, of the holder of any Security to convert such Security in
accordance with Article 11 hereof.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF
LIQUIDATING AGENT.
Upon any payment or distribution of assets of the Company referred to
in this Article 10, the Trustee and the Holders of Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article 10.
ARTICLE 11.
CONVERSION
SECTION 11.01. CONVERSION PRIVILEGE.
A Holder of a Security may convert such Security for Common Stock at
any time during the period stated in paragraph 9 of the Securities. The number
of shares of Common Stock issuable upon conversion of a Security per $1,000 of
Principal Amount thereof (the "CONVERSION RATE") shall be that set forth in
paragraph 9 in the Securities, subject to adjustment as herein set forth.
The Holders' right to convert Securities into shares of Common Stock is
subject to the Company's right to elect to instead pay such Holder the amount of
Cash set forth in the next succeeding sentence, in lieu of delivering such
shares of Common Stock; PROVIDED, HOWEVER, that if such payment of Cash is not
permitted pursuant to the provisions of this Indenture or the provisions of any
other agreement or instrument to which the Company is a party or by which it is
bound or otherwise, the Company shall deliver shares of Common Stock (and Cash
in lieu of fractional shares of Common Stock) in accordance with this Article
11, whether or not the Company has delivered a notice pursuant to Section 11.02
hereof to the effect that the Securities would be paid in Cash. The amount of
Cash to be paid pursuant to Section 11.02 hereof for each $1,000 of Principal
Amount of a Security upon conversion shall be equal to the Sale Price of the
Common Stock on the Trading Day immediately prior to the related Conversion Date
multiplied by the Conversion Rate in effect on such Trading Day. The Company
shall not pay Cash in lieu of delivering shares of Common Stock upon the
conversion of any Security pursuant to the terms of this Article 11 (other than
Cash in lieu of fractional shares pursuant to Section 11.03 hereof) if there has
occurred (prior to, on or after, as the case may be, the Conversion Date or the
date on which the Company delivers its notice of whether such Security shall be
converted into shares of Common Stock or Cash pursuant to Section 11.02 hereof)
and is continuing an Event of Default (other than a default in a Cash payment
upon conversion of such Securities), PROVIDED, HOWEVER, that this sentence shall
not apply in the event that an Event of Default occurs after such Cash is paid.
54
A Holder may convert a portion of the Principal Amount of a Security if
the portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to conversion
of a portion of a Security.
SECTION 11.02. CONVERSION PROCEDURE.
To convert a Security a Holder must satisfy the requirements in
paragraph 9 of the Securities. The date on which the Holder of Securities
satisfies all those requirements is the conversion date (the "CONVERSION DATE").
Within two Business Days following the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, written notice of whether
such Security shall be converted into shares of Common Stock or paid in Cash. If
the Company shall have notified the Holder that such Security shall be converted
into shares of Common Stock, the Company shall deliver to the Holder no later
than the seventh Business Day following the Conversion Date a certificate 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 11.03 hereof.
Except as provided in Section 11.01 hereof, if the Company shall have notified
the Holder that such Security shall be paid in Cash, the Company shall deliver
to the Holder surrendering such Security the amount of Cash payable with respect
to such Security on the fifth Business Day following such Conversion Date.
Except as provided in Section 11.01 hereof, the Company may not change its
election with respect to the consideration to be delivered upon conversion of a
Security once the Company has notified the Holder in accordance with this
paragraph. The Person in whose name the certificate is registered shall be
treated as the stockholder of record on and after the Conversion Date; PROVIDED,
HOWEVER, that no surrender of a Security on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the Person
or Persons entitled to receive the shares of 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 Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such Person shall no longer be a Holder of such
Security.
No payment on the Securities or adjustment of the Conversion Rate will
be made for dividends on or other distributions with respect to any Common Stock
except as provided in this Article 11. On conversion of a Security, that portion
of accrued Original Issue Discount (or interest, if the Company has exercised
the option provided for in Section 12.01 hereof) attributable to the period from
the Issue Date (or, if the Company has exercised the option provided for in
Section 12.01 hereof, the later of (x) the date of such exercise and (y) the
date on which interest was last paid) to the Conversion Date with respect to the
converted Security shall not be canceled, extinguished or forfeited, but rather
shall be deemed to be paid in full to the Holder thereof through delivery of the
Common Stock (together with the Cash payment, if any, in lieu of fractional
shares) in exchange for the Security being converted pursuant to the provisions
hereof.
55
If a Holder converts more than one Security at the same time, the
number of shares of Common Stock issuable or Cash paid upon the conversion shall
be based on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be surrendered
to that Conversion Agent on the next succeeding day that it is not a Legal
Holiday.
SECTION 11.03. FRACTIONAL SHARES.
The Company will not issue a fractional share of Common Stock upon
conversion of a Security. Instead the Company will 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 (determined as set forth in the definition of
Market Price) on the last Trading Day prior to the Conversion Date of a full
share by the fractional amount and rounding the product to the nearest whole
cent.
SECTION 11.04. TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of 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
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulations.
SECTION 11.05. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve out of its authorized but
unissued Common Stock a sufficient number of shares of Common Stock to permit
the conversion of the Securities.
All shares of Common Stock delivered upon conversion of the Securities
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 covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Securities hereunder require registration with
or approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
56
The Company further covenants that if at any time the Common Stock
shall be quoted or listed on the NASDAQ National Market or the NYSE or any other
automated quotation system or national securities exchange or the Company will,
if permitted by the rules of such automated quotation system or exchange, list
and keep listed, so long as the Common Stock shall be so listed on such
automated quotation system or exchange, all shares of Common Stock issuable upon
conversion of the Securities; PROVIDED, HOWEVER, that if the rules of such
automated quotation system or exchange permit the Company to defer the listing
of such Common Stock until the first conversion of the Securities into Common
Stock in accordance with the provisions of this Indenture, the Company covenants
to list such Common Stock issuable upon conversion of the Securities in
accordance with the requirements of such automated quotation system or exchange
at such time.
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
In case the Company shall (i) pay a dividend, or make a distribution,
in shares of its Common Stock, on its Common Stock, (ii) subdivide its
outstanding Common Stock into a greater number of shares, or (iii) combine its
outstanding Common Stock into a smaller number of shares, the Conversion Rate in
effect immediately prior thereto shall be adjusted so that the Holder of any
Security thereafter surrendered for conversion shall be entitled to receive the
number of shares of Common Stock which such Holder would have owned or have been
entitled to receive after the occurrence of any of the events described above
had such Security been converted immediately prior to the occurrence of such
event. If any dividend or distribution of the type described in clause (i) above
is not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate which would then be in effect if such dividend as distribution
had not been declared. An adjustment made pursuant to this Section 11.06 shall
become effective immediately after the record date in the case of a dividend and
shall become effective immediately after the effective date in the case of a
subdivision or combination.
SECTION 11.07. ADJUSTMENT FOR RIGHTS OR WARRANTS.
In case the Company shall issue rights or warrants to all holders of
its Common Stock entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase Common Stock at a
price per share less than the Market Price per share of Common Stock at the
record date for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the same shall equal the Conversion Rate determined by
multiplying the Conversion Rate in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator shall
be the number of shares of Common Stock outstanding on the date of issuance of
such rights or warrants plus the number of additional shares of Common Stock
offered to holders of Common Stock for subscription or purchase, and of which
the denominator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares so
offered would purchase at such Market Price. Such adjustment shall be made
successively whenever any such rights or warrants are issued, and shall become
effective immediately after the opening of business on the day following the
record date for the determination of the stockholders entitled to receive such
rights or warrants. To the
57
extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Rate shall be readjusted to the
Conversion Rate which would then be in effect had the adjustments made upon
the issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If such rights
or warrants are not so issued, the Conversion Rate shall again be adjusted to
be the Conversion Rate which would then be in effect if such record date for
the determination of stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Market Price of such Common Stock, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value
of such consideration, if other than Cash, to be determined by the Board of
Directors.
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
(a) In case the Company shall distribute to all holders of its
Common Stock (excluding any distribution in connection with the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary) any
shares of any class of capital stock of the Company (other than Common Stock),
or evidences of indebtedness of the Company or of assets (other than Cash and
other than dividends, distributions or rights or warrants to subscribe for or
purchase any of its securities referred to in Section 11.07 hereof) (any of the
foregoing hereinafter in this Section 11.08(a) called the "DISTRIBUTED
SECURITIES"), then, the Conversion Rate shall be adjusted so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the date of such distribution by a fraction of which
the numerator shall be the Market Price per share of the Common Stock on the
record date mentioned below, and the denominator shall be the Market Price per
share of the Common Stock on such record date less the fair market value on such
record date (as determined by the Board of Directors of the Company, whose
determination shall be conclusive, and described in a certificate filed with the
Trustee) of the Distributed Securities so distributed applicable to one share of
Common Stock. Such adjustment shall become effective immediately after the
record date for the determination of stockholders entitled to receive such
distribution. Notwithstanding the foregoing, in the event that the then fair
market value (as so determined) of the portion of the Distributed Securities so
distributed applicable to one share of Common Stock is equal to or greater than
the Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Holder shall
have the right to receive upon conversion the amount of Distributed Securities
such Holder would have received had such Holder converted each Security
immediately prior to such record date. In the event that such distribution is
not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate which would then be in effect if such distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 11.08(a) by reference to the actual or
when issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Market Price of
the Common Stock.
Notwithstanding the foregoing provisions of this Section 11.08(a), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper
58
provision so that each Holder of a Security who converts such Security (or
any portion thereof) after the record date for such distribution shall be
entitled to receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the amount and kind of Distributed
Securities that such Holder would have been entitled to receive if such
Holder had, immediately prior to such record date, converted such Security
for Common Stock; PROVIDED that, with respect to any Distributed Securities
that are convertible, exchangeable or exercisable, the foregoing provision
shall only apply to the extent (and so long as) the Distributed Securities
receivable upon conversion of such Security would be convertible,
exchangeable or exercisable, as applicable, without any loss of rights or
privileges for a period of at least 60 days following conversion of such
Security.
(b) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock Cash (excluding (x) any
quarterly Cash dividend on the Common Stock to the extent the aggregate Cash
dividend per share of Common Stock in any fiscal quarter does not exceed the
greater of (A) the amount per share of Common Stock of the next preceding
quarterly Cash dividend on the Common Stock to the extent such preceding
quarterly dividend did not require any adjustment of the Conversion Rate
pursuant to this Section 11.08(b) (as adjusted to reflect subdivisions or
combinations of the Common Stock), and (B) 3.75% of the average of the last
reported sales price of the Common Stock (determined as provided in the
definition of Market Price) during the ten Trading Days immediately prior to
the date of declaration of such dividend and (y) any dividend or distribution
in connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, unless the Company
elects to reserve such Cash for distribution to the Holders of the Securities
upon the conversion of the Securities so that any such Holder converting
Securities will receive upon such conversion in addition to the shares of
Common Stock to which such Holder is entitled, the amount of Cash which such
Holder would have received if such Holder had, immediately prior to the
record date for such distribution of Cash, converted its Securities for
Common Stock, the Conversion Rate shall be increased so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the record date by a fraction of which the
numerator shall be such Market Price of the Common Stock and the denominator
shall be the Market Price of the Common Stock on the record date less the
amount of Cash so distributed (and not excluded as provided above) applicable
to one share of Common Stock, such increase to be effective immediately prior
to the opening of business on the day following the record date; PROVIDED,
HOWEVER, that in the event that the portion of the Cash so distributed
applicable to one share of Common Stock is equal to or greater than the
Market Price of the Common Stock on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have
the right to receive upon conversion the amount of Cash such Holder would
have received had such Holder converted each Security on the record date. If
such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 11.08(b) as a
result of a distribution that is a quarterly dividend, such adjustment shall
be based upon the amount by which such distribution exceeds the amount of the
quarterly Cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 11.08(b) above
as a result of a
59
distribution that is not a quarterly dividend, such adjustment shall be based
upon the full amount of the distribution.
(c) In case a tender or exchange offer made by the Company or
any Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of such Board of Directors at
the last time (the "EXPIRATION TIME") tenders or exchanges may be made pursuant
to such tender or exchange offer (as it shall have been amended)) at the
Expiration Time that exceeds the Market Price of the Common Stock on the Trading
Day next succeeding the Expiration Time, the Conversion Rate shall be increased
so that the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a fraction
of which (i) the numerator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to holders of
Common Stock based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares of Common Stock validly tendered
or exchanged and not withdrawn as of the Expiration Time, other than shares of
Common Stock tendered by the California HealthCare Foundation (the shares deemed
so accepted up to any such maximum, being referred to as the "PURCHASED SHARES")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Market Price of the Common
Stock on the Trading Day next succeeding the Expiration Time, and (ii) the
denominator shall be the number of shares of Common Stock outstanding (including
any tendered or exchanged shares) on the Expiration Time multiplied by the
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such increase to become effective immediately prior to the
opening of business on the day following the Expiration Time. In the event that
the Company is obligated to purchase shares pursuant to any such tender or
exchange offer, but the Company is permanently prevented by applicable law from
effecting any such purchases or all such purchases are rescinded, the Conversion
Rate shall again be adjusted to be the Conversion Rate which would then be
effect if such tender or exchange offer had not been made.
(d) In case of a tender or exchange offer by a Person other
than the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding and
shall involve the payment by such Person of consideration per share of Common
Stock having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of the Board of
Directors at the last time (the "TENDER EXPIRATION TIME") tenders or exchanges
may be made pursuant to such tender or exchange offer (as it shall have been
amended)) at the Tender Expiration Time that exceeds the Market Price of the
Common Stock on the Trading Day next succeeding the Tender Expiration Time, and
in which, as of the Tender Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Rate shall be increased so
that the same shall equal the Conversion Rate determined by multiplying the
Conversion Rate in effect immediately prior to the Tender Expiration Time by a
fraction of which (i) the numerator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
holders of Common Stock based on the acceptance (up to
60
a maximum specified in the terms of the tender or exchange offer) of all
shares of Common Stock validly tendered or exchanged and not withdrawn as of
the Tender Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "TENDER PURCHASED SHARES") and (y) the
product of the number of shares of Common Stock outstanding (less any Tender
Purchased Shares) on the Tender Expiration Time and the Market Price of the
Common Stock on the Trading Day next succeeding the Tender Expiration Time,
and (ii) the denominator shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) on the Tender
Expiration Time multiplied by the Market Price of the Common Stock on the
Trading Day next succeeding the Tender Expiration Time, such increase to
become effective immediately prior to the opening of business on the day
following the Tender Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer,
but such Person is permanently prevented by applicable law from effecting any
such purchases or all such purchases are rescinded, the Conversion Rate shall
again be adjusted to be the Conversion Rate which would then be in effect if
such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 11.08(d) shall not be
made if, as of the Tender Expiration Time, the offering documents with
respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Article 5 hereof.
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate. Any
adjustments that are made shall be carried forward and taken into account any
subsequent adjustment.
All calculations under this Article 11 shall be made to the nearest
cent or to the nearest 1/10,000th of a share, as the case may be.
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for rights to purchase Common Stock pursuant
to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Securities become convertible into Cash, assets,
property or securities (other than capital stock of the Company), no adjustment
need be made thereafter as to the Cash, assets, property or such securities.
Interest will not accrue on the Cash.
SECTION 11.11. 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
61
responsibility with respect to any such certificate except to exhibit the
same to any Holder desiring inspection thereof.
SECTION 11.12. VOLUNTARY INCREASE.
The Company may make such increases in the Conversion Rate, in addition
to those required by Sections 11.06, 11.07 and 11.08 hereof, 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 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. The Company shall mail such notice
at least 15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be in
effect.
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company makes any distribution or dividend
that would require an adjustment in the Conversion Rate pursuant to Section
11.06, 11.07 or 11.08 hereof; or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 11.14 hereof; or
(3) there is a liquidation, dissolution or winding-up
of the Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. The Company shall file and mail the notice at
least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION,
MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification
or change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), (ii) any consolidation, merger or
combination 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 (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as,
62
an entirety 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 Company or the successor or purchasing corporation, as the case may
be, shall execute with the Trustee a supplemental indenture, providing that
each Security shall be convertible into the kind and amount of shares of
stock and other securities or property or assets (including Cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale
or conveyance by a holder of a number of shares of Common Stock issuable upon
conversion of such Securities immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance. Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this
Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at such Holder's address
appearing on the Security register provided for in Section 2.03 hereof.
The above provisions of this Section shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
If this Section applies, none of Sections 11.06, 11.07 nor 11.08 hereof
apply.
SECTION 11.15. COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of Directors must make
pursuant to Sections 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17
hereof is conclusive.
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article 11 should be made, how it should be made or what it should be. The
Trustee has no duty to determine whether a supplemental indenture under Section
11.14 hereof need be entered into or whether any provisions of any supplemental
indenture are correct. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Securities. The Trustee shall not be responsible for the
Company's failure to comply with this Article 11, and shall not be deemed to
have knowledge of any adjustment unless and until it shall have received a
notice of adjustment pursuant to Section 11.11 hereof. Each Conversion Agent
shall have the same protection under this Section 11.16 as the Trustee.
SECTION 11.17. SIMULTANEOUS ADJUSTMENTS.
In the event that this Article 11 requires adjustments to the
Conversion Rate under more than one of Sections 11.06, 11.07, 11.08(a) or
11.08(b) hereof, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 11.08(a) hereof, second, the
provisions of Section 11.08(b) hereof, third, the provisions of Section 11.06
hereof and, fourth, the provisions of Section 11.07 hereof.
63
SECTION 11.18. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article 11, any
subsequent event requiring an adjustment under this Article 11 shall cause an
adjustment to the Conversion Rate as so adjusted.
SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED
UPON CONVERSION.
Notwithstanding any other provision hereof, in the event that the
Company implements a stockholders' rights plan, such rights plan shall provide
that upon conversion of the Securities the Holders will receive, in addition to
the Common Stock issuable upon such conversion, such rights whether or not such
rights have separated from the Common Stock at the time of such conversion.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
(TRIGGER EVENT):
(i) are deemed to be transferred with such shares of
Common Stock,
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of
Common Stock,
shall not be deemed distributed for purposes of Section 11.08(a) hereof until
the occurrence of the earliest Trigger Event. In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with respect thereto,
that shall have resulted in an adjustment to the Conversion Rate under Section
11.08(a) hereof, (1) in the case of any such rights or warrants which shall all
have been redeemed or repurchased without exercise by any holders thereof, the
Conversion Rate shall be readjusted upon such final redemption or repurchase to
give effect to such distribution or Trigger Event, as the case may be, as though
it were a cash distribution, equal to the per share redemption or repurchase
price received by a holder of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made to
all holders of Common Stock as of the date of such redemption or repurchase, and
(2) in the case of any such rights or warrants all of which shall have expired
without exercise by any holder thereof, the Conversion Rate shall be readjusted
as if such issuance had not occurred.
SECTION 11.20. GENERAL CONSIDERATIONS.
Whenever successive adjustments to the Conversion Rate are called for
pursuant to this Article 11, such adjustments shall be made to the Market Price
as may be necessary or appropriate to effectuate the intent of this Article 11
and to avoid unjust or inequitable results as determined in good faith by the
Board of Directors.
64
ARTICLE 12.
SPECIAL TAX EVENT
SECTION 12.01. OPTIONAL CONVERSION TO SEMIANNUAL COUPON
DEBENTURE UPON TAX EVENT.
From and after the date (the "TAX EVENT DATE") of the occurrence of a
Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount shall accrue at 2.0% per annum on a principal amount per Security
(the "RESTATED PRINCIPAL AMOUNT") equal to the Issue Price plus Original Issue
Discount accrued to the date immediately prior to the Tax Event Date or the date
on which the Company exercises the option described herein (to convert the
Security into a Semiannual Coupon Debenture), whichever is later (such date, the
"OPTION EXERCISE DATE"). Such interest shall accrue from the Option Exercise
Date and shall be payable semiannually on January 2 and July 2 of each year
(each an "INTEREST PAYMENT DATE") to Holders of record at the close of business
on December 15 or June 15 (each a "REGULAR RECORD DATE") immediately preceding
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months and 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. Within 15 days of the occurrence of a Tax Event, the
Company shall mail a written notice of such Tax Event by first-class mail to the
Trustee.
SECTION 12.02. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Security 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 Security is registered at the close of
business on the Regular Record Date for such interest at the office or agency
of the Company maintained for such purpose. Each installment of interest on
any Security shall be paid in same-day funds by transfer to an account
maintained by the payee located inside the United States. In the case of a
permanent global Security, interest payable on any Interest Payment Date will
be paid to the Depositary, Euroclear and/or CEDEL, as the case may be, with
respect to that portion of such permanent global Security held for its
account by Cede & Co. or the London office of a depositary, as the case may
be, for the purpose of permitting such party to credit the interest received
by it in respect of such permanent global Security to the accounts of the
beneficial owners thereof.
(b) Except as otherwise specified with respect to the
Securities, any interest on any Security that is payable, but is not punctually
paid or duly provided for, within 30 days following any Interest Payment Date
(herein called "DEFAULTED INTEREST") shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the Company,
as its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the persons in whose names the
Securities are registered at the close of business on a
Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Security
65
and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the
Trustee), and at the same time the Company shall deposit
with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the
Trustee for such deposit on or prior to the date of
proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such
Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than 15
days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of
such Special Record Date and, in the name and at the
expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record
Date therefor to be mailed, first-class postage prepaid, to
each Holder of Securities at his address as it appears on
the list of Holders maintained pursuant to Section 2.05
hereof not less than 10 days prior to such Special Record
Date. The Trustee may, in its discretion, in the name and
at the expense of the Company, cause a similar notice to be
published at least once in an Authorized Newspaper in each
place of payment, but such publications shall not be a
condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names the Securities
are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which such Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to
this clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section
2.06 hereof, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue,which were carried by such
other Security.
ARTICLE 13.
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT.
This Indenture is hereby made subject to, and shall be governed by,
the provisions of the TIA required to be part of and to govern indentures
qualified under the TIA; PROVIDED, HOWEVER that this Section 13.01 shall not
require this Indenture or the Trustee to be qualified under the TIA prior to
the time such qualification is in fact required under the terms of the TIA,
nor shall it
66
constitute any admission or acknowledgment by any party that any
such qualification is required prior to the time such qualification is in
fact required under the terms of the TIA. If any provision hereof limits,
qualifies or conflicts with another provision hereof which is required to be
included in an indenture qualified under the TIA, such required provision
shall control.
SECTION 13.02. NOTICES.
Any request, demand, authorization, notice, waiver, consent
or communication shall be in writing and delivered in Person or mailed by
first class mail, postage prepaid, addressed as follows or transmitted by
facsimile transmission (confirmed by overnight courier) to the following
facsimile numbers:
if to the Company:
WellPoint Health Networks Inc.
0 Xxxxxxxxx Xxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attn: General Counsel
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
if to the Trustee:
The Bank of New York
000 Xxxxxxx Xxxxxx, 00X
Xxx Xxxx, Xxx Xxxx 00000
Attn: Corporate Trust Trustee Administration
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent or
co-registrar.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities. The
Company, the Trustee,
67
the Registrar, the Paying Agent, the Conversion Agent and anyone else shall
have the protection of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of
the signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that each individual making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such individual,
he or she has made such examination or investigation as is necessary to enable
him or her to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement that, in the opinion of such individual, such
covenant or condition has been complied with.
SECTION 13.06. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT
AND REGISTRAR.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
68
SECTION 13.08. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE
SECURITIES, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 13.09. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder shall waive and release all such liability. The waiver and release shall
be part of the consideration for the issue of the Securities.
SECTION 13.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture
shall bind its successor.
SECTION 13.11. MULTIPLE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
(SIGNATURE PAGE FOLLOWS)
69
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first written above.
WELLPOINT HEALTH NETWORKS INC.
By:/s/ Xxxxxx X. Xxxxxx
------------------------------
Xxxxxx X. Xxxxxx
Executive Vice President,
General Counsel and Secretary
THE BANK OF NEW YORK, as Trustee
By:/s/ Xxxxxxx Xxxxx
--------------------------------
Xxxxxxx Xxxxx
Assistant Treasurer
S-1
EXHIBIT A
---------
[FORM OF FACE OF SECURITY]
WELLPOINT HEALTH NETWORKS INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2019
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF ORIGINAL
ISSUE DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE
AVAILABLE TO HOLDERS UPON REQUEST TO R. XXXXX XXXXXXXXXX OF THE COMPANY, AT
(000) 000-0000.
No.
Issue Date: July 2, 1999 Original Issue Discount: $328.35
Issue Price: $671.65 (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)
CUSIP: 949 73H AA6
WellPoint Health Networks Inc., a Delaware corporation, promises to
pay to _________________ or registered assigns, on July 2, 2019 [the Principal
Amount of _____________________________ Dollars ($_______________________)].(1)
This Security shall not bear interest except as specified on the
other side of this Security. Original Issue Discount will accrue as specified
on the other side of this Security. This Security is convertible as specified
on the other side of this Security.
Additional provisions of this Security are set forth on the other
side of this Security.
IN WITNESS WHEREOF, WellPoint Health Networks Inc. has caused this
instrument to be duly executed.
WELLPOINT HEALTH NETWORKS INC.
By -----------------------
Name: -----------------------
Title: -----------------------
Dated:__________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By ____________________________________________
Authorized Signatory
-----------------------
(1) The global Security will read instead: "The Principal Amount then
shown on Schedule A hereto."
A-1
[FORM OF REVERSE SIDE OF SECURITY]
WELLPOINT HEALTH NETWORKS INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2019
[FORM OF LEGEND FOR GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY 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.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
OWNERSHIP AND TRANSFER. NO HOLDER SHALL BENEFICIALLY OWN SHARES OF CAPITAL
STOCK IN EXCESS OF THE OWNERSHIP LIMIT (AS DEFINED IN ARTICLE VII, SECTION 14
OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION). SUBJECT TO
CERTAIN LIMITED SPECIFIC EXEMPTIONS, BENEFICIAL OWNERSHIP OF 5% OR MORE (OR,
IN THE CASE OF CERTAIN INSTITUTIONAL INVESTORS AS SPECIFIED IN THE LICENSE
AGREEMENT, 10% OR MORE) OF THE OUTSTANDING SHARES OF ANY CLASS OF CAPITAL
STOCK WILL EXCEED THE OWNERSHIP LIMIT. FOR THESE PURPOSES OF COMPUTING THE
BENEFICIAL OWNERSHIP OF CAPITAL STOCK, A HOLDER OF ANY PARTICULAR PRINCIPAL
AMOUNT OF SECURITIES WILL BE DEEMED TO BENEFICIALLY OWN SHARES OF COMMON
STOCK ON ANY PARTICULAR DATE EQUAL TO THE GREATER OF (I) THE NUMBER OF SHARES
OF COMMON STOCK ISSUABLE IN THE EVENT OF CONVERSION FOR THAT PARTICULAR
PRINCIPAL AMOUNT OF SECURITIES AT THE CONVERSION RATE IN EFFECT ON SUCH DATE
OR (II) THE QUOTIENT DETERMINED BY DIVIDING THE EXTRAPOLATED PURCHASE PRICE
(AS DEFINED BELOW) FOR THAT PARTICULAR PRINCIPAL AMOUNT OF SECURITIES AT THAT
PARTICULAR DATE BY THE MARKET PRICE (CALCULATED AS IF THAT PARTICULAR DATE
WERE A REPURCHASE DATE). FOR THESE PURPOSES, THE "EXTRAPOLATED PURCHASE
PRICE" SHALL BE THE SUM OF THE ISSUE PRICE OF THE PARTICULAR PRINCIPAL AMOUNT
OF SECURITIES PLUS THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ACCRUED AND
INCLUDING SUCH DATE. THESE PROVISIONS HAVE BEEN DESIGNED TO ENSURE THAT THE
CORPORATION WILL NOT VIOLATE THE TERMS OF THE LICENSE AGREEMENT BETWEEN THE
CORPORATION AND THE BLUE CROSS AND BLUE SHIELD ASSOCIATION (THE "BCBSA"). THE
CORPORATION MAINTAINS AT ITS PRINCIPAL EXECUTIVE OFFICE A COPY OF THE
APPLICABLE REQUIREMENTS OF THE BCBSA RELATING TO SUCH RESTRICTIONS ON
OWNERSHIP AND TRANSFER, AS SUCH REQUIREMENTS MAY BE AMENDED FROM TIME TO
TIME, WHICH ARE OPEN TO INSPECTION BY THE STOCKHOLDERS, AT ALL REASONABLE
TIMES DURING OFFICE HOURS. ANY HOLDER WHO ATTEMPTS TO BENEFICIALLY OWN
SECURITIES IN VIOLATION OF THIS LIMITATION MUST IMMEDIATELY NOTIFY THE
CORPORATION. EXCEPT AS OTHERWISE NOTED, ALL CAPITALIZED TERMS IN THIS LEGEND
HAVE THE MEANING ASCRIBED TO THEM IN THE CORPORATION'S RESTATED CERTIFICATE
OF INCORPORATION, AS THE SAME MAY BE
A-2
AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON
OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH HOLDER WHO SO
REQUESTS. UPON THE OCCURRENCE OF ANY EVENT THAT WOULD CAUSE ANY HOLDER TO
EXCEED THE OWNERSHIP LIMIT, ALL SECURITIES AND SHARES OF CAPITAL STOCK
BENEFICIALLY OWNED BY SUCH HOLDER IN EXCESS OF THE OWNERSHIP LIMIT WILL
AUTOMATICALLY BE DEEMED EXCESS SHARES AND BE TRANSFERRED IMMEDIATELY TO THE
SHARE ESCROW AGENT AND BE SUBJECT TO THE PROVISIONS OF THE CORPORATION'S
RESTATED CERTIFICATE OF INCORPORATION AND THE SHARE ESCROW AGENT AGREEMENT, A
COPY OF WHICH THE CORPORATION MAINTAINS AT ITS PRINCIPAL EXECUTIVE OFFICES.
THE FOREGOING SUMMARY OF THE RESTRICTIONS ON OWNERSHIP AND TRANSFER IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CORPORATION'S RESTATED
CERTIFICATE OF INCORPORATION. THE PURCHASE BY OR TRANSFER TO ANY HOLDER OF
ANY SECURITIES SHALL CONSTITUTE ACKNOWLEDGMENT AND ACCEPTANCE BY SUCH HOLDER
OF SUCH RESTRICTIONS ON OWNERSHIP AND TRANSFER.
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount hereof or any
portion of such Principal Amount is not paid when due (whether upon
acceleration pursuant to Section 6.02 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 a Purchase Price or Fundamental Change Purchase Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security),
then in each such case the overdue amount shall bear interest at the rate of
2.0% per annum, compounded semiannually (to the extent that the payment of
such interest shall be legally enforceable), which interest shall accrue from
the date such overdue amount was 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, the continued accrual of
Original Issue Discount.
The Original Issue Discount (the difference between the Issue Price
and the Principal Amount of the Security) in the period during which a
Security remains outstanding, shall accrue at 2.0% per annum, on a semiannual
bond equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on the Issue Date of this Security. Original Issue Discount shall
cease to accrue on the earlier of (a) the date on which the Principal Amount
hereof or any portion of such Principal Amount becomes due and payable and
(b) any Redemption Date, Conversion Date, Fundamental Change Repurchase Date,
Repurchase Date or other date on which such Original Issue Discount (or, if
such Securities have been converted to Semiannual Coupon Debentures following
the occurrence of a Tax Event, interest on such debentures) shall cease to
accrue in accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the Company
will make payments in respect of the Securities to the Persons who are
registered Holders of Securities at the close of business on the Business Day
preceding the Redemption Date or Stated Maturity, as the case may be, or at
the close of business on a Repurchase Date or Fundamental Change Repurchase
Date, as the case may be. Holders must surrender Securities to the Paying
Agent to collect such payments in respect of the Securities. The Company will
pay cash amounts in money of the United States that at the time of
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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, The Bank of New York., a New York banking corporation
(the "TRUSTEE"), will act as Paying Agent, Conversion Agent and Registrar.
The Company may appoint and change any Paying Agent, Conversion Agent,
Registrar or co-registrar 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, Registrar or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture (the
"INDENTURE"), dated as of July 2, 1999, between the Company and the Trustee.
Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and Holders are referred to the Indenture for a statement of those
terms.
The Securities are general unsecured obligations of the Company
limited to $299,000,000 aggregate Principal Amount (subject to Sections 2.02
and 2.07 of the Indenture). The Indenture does not limit other indebtedness
of the Company, secured or unsecured, including Senior Indebtedness of the
Company.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the
option of the Company at the Redemption Prices set forth below, provided that
the Securities are not redeemable prior to July 2, 2002.
The table below shows Redemption Prices of a Security per $1,000
Principal Amount on the dates shown below and at Stated Maturity, which
prices reflect accrued Original Issue Discount calculated to each such date.
The Redemption Price of a Security redeemed between such dates would include
an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table to the actual Redemption
Date.
Accrued
Original Issue Redemption
Security Discount Price
Redemption Date Issue Price at 2.0 % (1) + (2)
--------------- ----------- -------- ---------
July 2, 2002 $671.65 $41.33 $712.98
July 2, 2003 $671.65 $55.66 $727.31
July 2, 2004 $671.65 $70.27 $741.92
July 2, 2005 $671.65 $85.19 $756.84
July 2, 2006 $671.65 $100.40 $772.05
July 2, 2007 $671.65 $115.92 $787.57
July 2, 2008 $671.65 $131.75 $803.40
July 2, 2009 $671.65 $147.90 $819.55
July 2, 2010 $671.65 $164.37 $836.02
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July 2, 2011 $671.65 $181.17 $852.82
July 2, 2012 $671.65 $198.31 $869.96
July 2, 2013 $671.65 $215.80 $887.45
July 2, 2014 $671.65 $233.64 $905.29
July 2, 2015 $671.65 $251.83 $923.48
July 2, 2016 $671.65 $270.40 $942.05
July 2, 2017 $671.65 $289.33 $960.98
July 2, 2018 $671.65 $308.65 $980.30
At maturity $671.65 $328.35 $1,000.00
If converted to a Semiannual Coupon Debenture following the
occurrence of a Tax Event, this Security will be redeemable at the Restated
Principal Amount plus interest accrued and unpaid from, and including, the
date of such conversion to, but excluding, the Redemption Date.
6. REPURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; REPURCHASE AT
THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
(a) Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder,
the Securities held by such Holder on the following Repurchase Dates and at
the following Purchase Prices per $1,000 Principal Amount, upon delivery of a
Repurchase Notice containing the information set forth in the Indenture, from
the opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on such Repurchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in
the Indenture. Such Purchase Prices may be paid, at the option of the
Company, in Cash or by the issuance and delivery of shares of Common Stock of
the Company, or in any combination thereof.
REPURCHASE DATE PURCHASE PRICE
--------------- --------------
July 2, 2002 $712.98
July 2, 2009 $819.55
July 2, 2014 $905.29
Securities in denominations larger than $1,000 of Principal Amount
may be repurchased in part, but only in integral multiples of $1,000 of
Principal Amount.
(b) If prior to a Repurchase Date this Security has been converted
to a Semiannual Coupon Debenture following the occurrence of a Tax Event, the
Purchase Price will be equal to the Restated Principal Amount plus accrued
and unpaid interest from, and including, the date of conversion to, but
excluding, the Repurchase Date.
(c) At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to repurchase
the Securities held by such Holder and delivered to the Company or its
designated agent on or before 45 days after the date of the Company's notice
of a Fundamental Change occurring on or prior to July 2, 2019 for a
Fundamental Change Purchase Price equal to the Issue Price plus accrued
Original Issue Discount and interest, if any, to the Fundamental Change
Repurchase Date which Fundamental Change Purchase Price shall be paid in
Cash. Securities in denominations larger than $1,000 of Principal Amount may
be repurchased in part in connection with a Fundamental Change, but only in
integral multiples of $1,000 of Principal Amount. If, prior to a Fundamental
Change Repurchase Date, this Security has been converted to a Semiannual
Coupon
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Debenture following the occurrence of a Tax Event, the Purchase Price will be
equal to the Restated Principal Amount plus accrued and unpaid interest from,
and including, the date of conversion to, but excluding, the Fundamental
Change Repurchase Date.
(d) Holders have the right to withdraw any Repurchase Notice or
Fundamental Change Repurchase 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.
(e) If Cash (and/or securities if permitted under the Indenture)
sufficient to pay a Purchase Price or Fundamental Change Purchase Price, as
the case may be, of all Securities or portions thereof to be repurchased as
of the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, is deposited with the Paying Agent on the Business Day following the
Repurchase Date or the Fundamental Change Repurchase Date, as the case may
be, Original Issue Discount (or interest upon conversion to a Semiannual
Coupon Debenture following the occurrence of a Tax Event) ceases to accrue on
such Securities (or portions thereof) on and after such date, 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,
upon surrender of such Security).
7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company will be mailed at
least 20 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, on and after such date Original
Issue Discount (or interest upon conversion to a Semiannual Coupon Debenture
following the occurrence of a Tax Event) ceases to accrue on such Securities
or portions thereof. Securities in denominations larger than $1,000 of
Principal Amount may be redeemed in part but only in multiples of $1,000 of
Principal Amount.
8. SUBORDINATION
The Securities are subordinated to all existing and future Senior
Indebtedness of the Company. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid.
The Indenture does not limit the present or future amount of Senior
Indebtedness that the Company may have. The Company agrees, and each Holder
by accepting a Security agrees, to the subordination and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.
9. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security
may convert this Security for Common Stock of the Company at any time prior
to maturity. If this Security is called for redemption, the Holder may
convert it at any time before the close of the last Trading Day prior to the
Redemption Date. A Security in respect of which a Holder has delivered a
notice of exercise of the option to require the Company to repurchase such
Security or to repurchase such Security in the event of a Fundamental Change
may be converted only if the notice of exercise is withdrawn in accordance
with the terms of the Indenture.
The initial Conversion Rate is 6.797 shares of Common Stock per
$1,000 Principal Amount, subject to adjustment in certain events described in
the Indenture. The Company will deliver Cash or a check in lieu of any
fractional share of Common Stock.
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The Holders' right to convert Securities into shares of Common Stock
is subject to the Company's right to elect to instead pay such Holder the
amount of Cash set forth in the next succeeding sentence in lieu of
delivering such shares of Common Stock; PROVIDED, HOWEVER, that if such
payment of Cash is not permitted pursuant to the provisions of the Indenture
or the provisions of any other agreement or instrument to which the Company
is a party or by which it is bound or otherwise, the Company shall deliver
shares of Common Stock (and Cash in lieu of fractional shares of Common
Stock) in accordance with Article 11 of the Indenture, whether or not the
Company has delivered a notice pursuant to Section 11.02 to the effect that
the Securities will he paid in Cash. The amount of Cash to he paid for each
$1,000 Principal Amount of a Security shall be equal to the Sale Price of a
share of Common Stock on the Trading Day immediately prior to the related
Conversion Date multiplied by the Conversion Rate in effect on such Trading
Day.
The Company shall not pay Cash in lieu of delivering shares of
Common Stock upon the conversion of any Security pursuant to the terms of
Article 11 of the Indenture (other than Cash in lieu of fractional shares) if
there has occurred (prior to, on or after, as the case may be, the Conversion
Date or the date on which the Company delivers its notice of whether each
Security shall he converted into shares of Common Stock or Cash) and is
continuing an Event of Default (other than a default in such payment on such
Securities), provided, however, that this sentence shall not apply in the
event that an Event of Default occurs after such Cash is paid.
In the event the Company exercises its option pursuant to Section
12.01 of the Indenture to have interest in lieu of Original Issue Discount
accrue on the Security 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. If the
Company exercises such option, Securities 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 of such
Interest Payment Date (except Securities to be redeemed on the next Interest
Payment Date) must be accompanied by payment of an amount equal to the
interest thereon that the registered Holder is to receive. Except where
Securities surrendered for conversion must he accompanied by payment as
described above, no interest on converted Securities will he payable by the
Company on any Interest Payment Date subsequent to the date of conversion.
To convert this Security a Holder must (1) complete and manually
sign the conversion notice on the back of this Security (or complete and
manually sign a facsimile of such notice) and deliver such notice to the
Conversion Agent, (2) surrender this Security 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.
A Holder may convert a portion of this Security if the 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 this Security, that portion of
accrued Original Issue Discount attributable to the period from the Issue
Date to the Conversion Date with respect to the converted portion of this
Security shall not be canceled, 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 any cash payment in lieu of fractional
shares) in exchange for the portion of this Security being converted pursuant
to the terms hereof.
10. TAX EVENT
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(a) From and after the date (the "TAX EVENT DATE") of the occurrence
of a Tax Event, at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at 2.0% per annum on a principal amount
per Security (the "RESTATED PRINCIPAL AMOUNT") equal to the Issue Price plus
Original Issue Discount accrued to the date immediately prior to the Tax
Event Date and shall be payable semiannually on January 2 and July 2 of each
year (each an "INTEREST PAYMENT DATE") to Holders of record at the close of
business on December 15 or June 15 (each a "REGULAR RECORD DATE") immediately
preceding such Interest Payment Date. Interest will be computed on the basis
of a 360-day year comprised of twelve 30-day months and will accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from the Tax Event Date.
(b) Interest on any Security 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 Security is registered at the close of business on
the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose. Each installment of interest on any
Security shall be paid in same-day funds by transfer to an account maintained
by the payee located inside the United States. In the case of a permanent
global Security, interest payable on any Interest Payment Date will be paid
to the Depositary, Euroclear and/or Cedel, as the case may be, with respect
to that portion of such permanent global Security held for its account by
Cede & Co. or the London office of a depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
(c) Except as otherwise specified with respect to the Securities,
any interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the registered Holder
thereof on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company as provided
for in Section 12.02(b) of the Indenture.
11. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for
conversion before the close of business on the last Trading Day prior to the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities 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 Securities from the Holders, to convert them for Common Stock
and to make payment for such Securities to the Trustee in trust for such
Holders.
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form, without coupons, in
denominations of $1,000 of Principal Amount and integral multiples of $1,000.
A Holder may transfer or convert Securities in accordance with the Indenture.
The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
transfer or exchange any Securities selected for redemption (except, in the
case of a Security to be redeemed in part, the portion of the Security not to
be redeemed) or any Securities in respect of which a Repurchase Notice or
Fundamental Change Repurchase Notice has been given and not withdrawn
(except, in the case of a Security to be purchased in part, the portion of
the Security not to be purchased) or any Securities for a period of 15 days
before the mailing of notice of Securities to be redeemed.
A-8
13. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner
of this Security for all purposes.
14. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such return, shall at the expense of the Company cause
to be published once in a newspaper of general circulation in The City of New
York or mail to each such Holder notice that such money or securities remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company. 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.
15. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding and (ii) certain Defaults and Events of
Defaults may be waived with the written consent of the Holders of a majority
in aggregate Principal Amount of the Securities at the time outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to provide for
the assumption of the Company's obligations to the Holders of the Securities
in case of a merger or consolidation or sale of all or substantially all of
the Company's assets; to provide for uncertificated Securities in addition to
or in place of certificated Securities or to make any change that does not
adversely affect the rights of any Holder or to comply with any requirement
of the SEC in connection with the qualification of the Indenture under the
TIA.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) the Company
defaults in the payment of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price or a Fundamental
Change Purchase Price on any Security when the same becomes due and payable
at its Stated Maturity, upon redemption, upon declaration, when due for
repurchase by the Company or otherwise, whether or not such payment shall be
prohibited by Article 10 of the Indenture; (ii) after exercise of its option
pursuant to Section 12.01 of the Indenture following a Tax Event, the Company
defaults in the payment of interest upon any security when such interest
becomes due and payable, and such default continues for a period of 30 days;
(iii) failure of the Company to perform or comply with the provisions of
Section 11.02 of the Indenture, and such failure continues for a period of 10
days; (iv) the Company fails to comply with any of its agreements or
covenants in this Security or the Indenture (other than those referred to in
clauses (i) through (iii) above) and such failure continues for 60 days after
receipt by the Company of a Notice of Default; and (v) certain events of
bankruptcy or insolvency as set forth in the Indenture. If an Event of
Default occurs and is continuing, the Trustee, or the Holders of at least 25%
in aggregate Principal Amount of the Securities at the time outstanding, may
declare all the Securities to be due and payable immediately. Certain events
of bankruptcy or insolvency are Events of Default which will result in the
Securities being declared due and payable immediately upon the occurrence of
such Events of Default.
A-9
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing Default (except a Default in payment of amounts specified
in clause (i) and (ii) above) if it determines that withholding notice is in
their interests.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates
and may otherwise deal with the Company or its Affiliates with the same
rights it would have if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the
Company shall not have any liability for any obligations of the Company under
the Securities or the Indenture or for any claim based on, in respect of or
by reason of such obligations or their creation. By accepting a Security,
each Holder waives and releases all such liability. The waiver and release
are part of the consideration for the issue of the Securities.
19. AUTHENTICATION
This Security shall not be valid until an authorized signatory of
the Trustee manually signs the Trustee's Certificate of Authentication on the
other side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TENANT (=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
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND
THIS SECURITY, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
The Company will furnish to any Holder upon written request and
without charge a copy of the Indenture. Requests may be made to:
WellPoint Health Networks Inc.
0 Xxxxxxxxx Xxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
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[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: WellPoint Health Networks Inc.
The undersigned registered holder of this Security hereby
irrevocably exercises the option to convert this Security, or portion hereof
(which is $1,000 principal amount or an integral multiple thereof) below
designated, for shares of Common Stock of WellPoint Health Networks Inc. in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon such conversion,
together with any check in payment for 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
will pay all transfer taxes payable with respect thereto.
Dated: -------------------------------------
-------------------------------------
Signature(s)
Fill in for registration of shares if to be delivered,
and Securities if to be issued other than to and in
the name of the registered holder:
-----------------------------------------
(Name)
-----------------------------------------
(Street Address)
-----------------------------------------
(City, state and zip code)
Please print name and address
Principal amount to be converted
(if less than all):
$_________,000
Social Security or Other Taxpayer
Identification Number
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[FORM OF OPTION TO ELECT REPURCHASE
UPON A FUNDAMENTAL CHANGE]
To: WellPoint Health Networks Inc.
The undersigned registered holder of this Security hereby
acknowledges receipt of a notice from WellPoint Health Networks Inc. (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 an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Security.
Dated:
-----------------------------------------
-----------------------------------------
Signature(s)
Principal amount to be repurchased
(if less than all):
$_______,000
Social Security or Other Taxpayer
Identification Number
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ASSIGNMENT
For value received ________________________ hereby sell(s),
assign(s) and transfer(s) unto _____________________ (Please insert social
security or other Taxpayer Identification Number of assignee) the within
Security, and hereby irrevocably constitutes and appoints _____________
attorney to transfer the said Security on the books of the Company, with full
power of substitution in the premises.
Dated:
----------------------------
----------------------------------
----------------------------------
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (a bank, a
stock broker, a savings and loan association
or a credit union) with membership in an
approved signature guarantee program
pursuant to Securities and Exchange
Commission Rule 17Ad-15) 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
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
Principal Amount of Securities by
which this Global Security is to
be Reduced or Increased, and Reason
for Remaining Principal Amount of Notation
Date Reduction or Increase this Global Security Made by
---- ----------------------------------- ----------------------------- --------
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