EXHIBIT 4.1
CBIZ, INC.
3.125% Convertible Senior Subordinated Notes due 2026
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INDENTURE
Dated as of May 30, 2006
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U.S. BANK NATIONAL ASSOCIATION
TRUSTEE
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CROSS-REFERENCE TABLE*
TRUST INDENTURE ACT SECTION INDENTURE SECTION
310(a)(1)......................................................................... 8.10
(a)(2)......................................................................... 8.10
(a)(3)......................................................................... N.A.
(a)(4)......................................................................... N.A.
(a)(5)......................................................................... N.A.
(b)............................................................................ 8.08, 8.10
(c)............................................................................ N.A.
311(a)............................................................................ 8.11
(b)............................................................................ 8.11
(c)............................................................................ N.A.
312(a)............................................................................ 2.05
(b)............................................................................ 13.03
(c)............................................................................ 13.03
313(a)............................................................................ 8.06
(b)(1)......................................................................... 8.06
(b)(2)......................................................................... 8.06
(c)............................................................................ 13.02
(d)............................................................................ 8.06
314(a)............................................................................ 5.02
(b)............................................................................ N.A.
(c)(1)......................................................................... 13.04
(c)(2)......................................................................... 13.04
(c)(3)......................................................................... N.A.
(d)............................................................................ N.A.
(e)............................................................................ 13.05
(f)............................................................................ 5.04
315(a)............................................................................ 8.01(a)
(b)............................................................................ 8.05
(c)............................................................................ 8.01
(d)............................................................................ 8.01(c)
(e)............................................................................ 7.11
316(a)(1)(A)...................................................................... 7.05
(a)(1)(B)...................................................................... 7.04
(a)(2)......................................................................... N.A.
(b)............................................................................ 7.07
(c)............................................................................ 1.05(e)
317(a)(1)......................................................................... 7.08
(a)(2)......................................................................... 7.09
(b)............................................................................ 2.04
318(a)............................................................................ 13.01
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N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions................................................................. 1
Section 1.02. Other Definitions........................................................... 12
Section 1.03. Incorporation by Reference of Trust Indenture Act........................... 13
Section 1.04. Rules of Construction....................................................... 13
Section 1.05. Acts of Holders............................................................. 14
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating............................................................. 15
Section 2.02. Execution and Authentication................................................ 16
Section 2.03. Registrar, Paying Agent, Bid Solicitation Agent, and Conversion Agent....... 17
Section 2.04. Paying Agent to Hold Money and Securities in Trust.......................... 17
Section 2.05. Securityholder Lists........................................................ 18
Section 2.06. Transfer and Exchange....................................................... 18
Section 2.07. Replacement Securities...................................................... 20
Section 2.08. Outstanding Securities; Determinations of Holders' Action................... 20
Section 2.09. Temporary Securities........................................................ 21
Section 2.10. Cancellation................................................................ 22
Section 2.11. Persons Deemed Owners....................................................... 22
Section 2.12. Global Securities........................................................... 22
Section 2.13. CUSIP Numbers............................................................... 29
Section 2.14. Contingent Debt Tax Treatment............................................... 29
Section 2.15. Calculation of Tax Original Issue Discount.................................. 29
ARTICLE 3
REDEMPTION AND REPURCHASES
Section 3.01. Company's Right to Redeem; Notices to Trustee............................... 30
Section 3.02. Selection of Securities to Be Redeemed...................................... 30
Section 3.03. Notice of Redemption........................................................ 31
Section 3.04. Effect of Notice of Redemption.............................................. 32
Section 3.05. Deposit of Redemption Price................................................. 32
Section 3.06. Securities Redeemed in Part................................................. 32
Section 3.07. Repurchase of Securities by the Company at Option of the Holder............. 32
Section 3.08. Repurchase of Securities at Option of the Holder Upon a Fundamental Change.. 35
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Section 3.09. Effect of Repurchase Notice or Fundamental Change Repurchase Notice......... 38
Section 3.10. Deposit of Repurchase Price or Fundamental Change Repurchase Price.......... 39
Section 3.11. Securities Purchased in Part................................................ 39
Section 3.12. Covenant to Comply with Securities Laws upon Purchase of Securities......... 40
Section 3.13. Repayment to the Company.................................................... 40
ARTICLE 4
SUBORDINATION
Section 4.01. Agreement of Subordination.................................................. 40
Section 4.02. Payments to Holders......................................................... 41
Section 4.03. Subrogation of Securities................................................... 43
Section 4.04. Authorization to Effect Subordination....................................... 44
Section 4.05. Notice to Trustee........................................................... 44
Section 4.06. Trustee's Relation to Senior Indebtedness................................... 45
Section 4.07. No Impairment of Subordination.............................................. 46
Section 4.08. Certain Payments Not Prohibited............................................. 46
Section 4.09. Article Applicable to Paying Agents......................................... 46
Section 4.10. Senior Indebtedness Entitled to Rely........................................ 47
ARTICLE 5
COVENANTS
Section 5.01. Payment of Securities....................................................... 47
Section 5.02. SEC and Other Reports....................................................... 47
Section 5.03. Compliance Certificate...................................................... 47
Section 5.04. Further Instruments and Acts................................................ 48
Section 5.05. Maintenance of Office or Agency............................................. 48
Section 5.06. Delivery of Certain Information............................................. 48
Section 5.07. Additional Amounts Notice................................................... 49
Section 5.08. Anti-Layering............................................................... 49
ARTICLE 6
SUCCESSOR PERSON
Section 6.01. When Company May Merge or Transfer Assets................................... 49
ARTICLE 7
DEFAULTS AND REMEDIES
Section 7.01. Events of Default........................................................... 50
Section 7.02. Acceleration................................................................ 52
Section 7.03. Other Remedies.............................................................. 53
Section 7.04. Waiver of Past Defaults..................................................... 53
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Section 7.05. Control by Majority......................................................... 53
Section 7.06. Limitation on Suits......................................................... 53
Section 7.07. Rights of Holders to Receive Payment........................................ 54
Section 7.08. Collection Suit by Trustee.................................................. 54
Section 7.09. Trustee May File Proofs of Claim............................................ 54
Section 7.10. Priorities.................................................................. 55
Section 7.11. Undertaking for Costs....................................................... 56
Section 7.12. Waiver of Stay, Extension or Usury Laws..................................... 56
ARTICLE 8
TRUSTEE
Section 8.01. Duties of Trustee........................................................... 56
Section 8.02. Rights of Trustee........................................................... 58
Section 8.03. Individual Rights of Trustee................................................ 59
Section 8.04. Trustee's Disclaimer........................................................ 60
Section 8.05. Notice of Defaults.......................................................... 60
Section 8.06. Reports by Trustee to Holders............................................... 60
Section 8.07. Compensation and Indemnity.................................................. 60
Section 8.08. Replacement of Trustee...................................................... 61
Section 8.09. Successor Trustee by Merger................................................. 63
Section 8.10. Eligibility; Disqualification............................................... 63
Section 8.11. Preferential Collection of Claims Against Company........................... 63
ARTICLE 9
DISCHARGE OF INDENTURE
Section 9.01. Discharge of Liability on Securities........................................ 63
Section 9.02. Repayment to the Company.................................................... 63
Section 9.03. Application of Trust Money.................................................. 64
ARTICLE 10
AMENDMENTS
Section 10.01. Without Consent of Holders................................................. 64
Section 10.02. With Consent of Holders.................................................... 65
Section 10.03. Compliance With Trust Indenture Act........................................ 67
Section 10.04. Revocation and Effect of Consents, Waivers and Actions..................... 67
Section 10.05. Notice of Amendments, Notation on or Exchange of Securities................ 67
Section 10.06. Trustee to Sign Supplemental Indentures.................................... 67
Section 10.07. Effect of Supplemental Indentures.......................................... 68
ARTICLE 11
CONVERSIONS
Section 11.01. Conversion Privilege....................................................... 68
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Section 11.02. Conversion Procedure; Conversion Rate; Fractional Shares........................................ 74
Section 11.03. Payment Upon Conversion......................................................................... 76
Section 11.04. Adjustment of Conversion Rate................................................................... 78
Section 11.05. Effect of Reclassification, Consolidation, Merger or Sale....................................... 87
Section 11.06. Taxes on Shares Issued.......................................................................... 89
Section 11.07. Reservation of Shares, Shares to Be Fully Paid; Compliance with Governmental Requirements....... 89
Section 11.08. Responsibility of Trustee....................................................................... 89
Section 11.09. Notice to Holders Prior to Certain Actions...................................................... 90
Section 11.10. Shareholder Rights Plan......................................................................... 91
Section 11.11. Unconditional Right of Holders to Convert....................................................... 91
ARTICLE 12
CONTINGENT INTEREST
Section 12.01. Contingent Interest............................................................................. 91
Section 12.02. Payment of Contingent Interest.................................................................. 92
Section 12.03. Contingent Interest Notification................................................................ 92
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls.................................................................... 92
Section 13.02. Notices......................................................................................... 92
Section 13.03. Communication by Holders with Other Holders..................................................... 93
Section 13.04. Certificate and Opinion as to Conditions Precedent.............................................. 93
Section 13.05. Statements Required in Certificate or Opinion................................................... 94
Section 13.06. Separability Clause............................................................................. 95
Section 13.07. Rules by Trustee, Paying Agent, Conversion Agent and Registrar.................................. 95
Section 13.08. Legal Holidays.................................................................................. 95
Section 13.09. Governing Law................................................................................... 95
Section 13.10. No Recourse Against Others...................................................................... 95
Section 13.11. Successors...................................................................................... 95
Section 13.12. Multiple Originals.............................................................................. 95
Section 13.13. Execution in Counterparts....................................................................... 95
Section 13.14. Benefits of Indenture........................................................................... 96
Section 13.15. No Adverse Interpretation of Other Agreements................................................... 96
Section 13.16. Calculations in Respect of Securities........................................................... 96
Section 13.17. Table of Contents, Cross Reference Sheet and Headings........................................... 96
EXHIBIT A Form of Global Security
EXHIBIT B Form of Certificated Security
EXHIBIT C Transfer Certificate
EXHIBIT D Form of Notice of Redemption
EXHIBIT E Form of Notice of Repurchase
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EXHIBIT F Notice of Occurrence of Change of Control
SCHEDULE I Number of Additional Shares
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INDENTURE dated as of May 30, 2006 between CBIZ, INC., a Delaware
corporation ("COMPANY"), and U.S. BANK NATIONAL ASSOCIATION, a national banking
association ("TRUSTEE").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's 3.125% Convertible
Senior Subordinated Notes due 2026:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
"144A GLOBAL SECURITY" means a permanent Global Security in the form of
the Security attached hereto as Exhibit A, and that is deposited with and
registered in the name of the Depositary, representing Securities sold in
reliance on Rule 144A under the Securities Act.
"ADDITIONAL AMOUNTS" means the interest that is payable by the Company
pursuant to the Registration Rights Agreement upon a Registration Default (as
defined in such agreement).
"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.
"APPLICABLE PROCEDURES" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"BANK INDEBTEDNESS" means any and all amounts payable under or in respect
of (i) the Credit Agreement, and (ii) any lines of credit and letters of credit
of the Company, in each case, including principal, premium (if any), interest
(including interest accruing on or after the filing of any petition in
bankruptcy or for reorganization relating to the Company whether or not a claim
for post-filing interest is allowed in such proceedings), fees, charges,
expenses, reimbursement obligations, guarantees and all other amounts payable
thereunder or in respect thereof.
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"BID SOLICITATION AGENT" means the agent of the Company appointed to
obtain quotations for the Securities as set forth under the definition of
Trading Price, which agent shall be appointed no later than the first Contingent
Interest Period and shall at no time be an Affiliate of the Company. The Company
may, from time to time, change the Bid Solicitation Agent.
"BOARD OF DIRECTORS" means either the board of directors of the Company or
any duly authorized committee of such board.
"BOARD RESOLUTION" means a resolution of the Board of Directors.
"BUSINESS DAY" means, with respect to any Security, any day, other than a
Saturday or Sunday, that is neither a legal holiday nor a day on which
commercial banks are authorized or required by law, regulation or executive
order to close in The City of New York.
"CAPITALIZED LEASE OBLIGATION" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP; and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease before the first
date on which such lease may be terminated by the lessee without payment of a
penalty.
"CAPITAL STOCK" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) stock issued by that corporation.
"CERTIFICATED SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit B.
"CHANGE OF CONTROL" means the occurrence at such time after the original
issuance of the Securities when any of the following has occurred:
(1) a "person" or "group" within the meaning of Section 13(d)(3)
of the Exchange Act, files a Schedule TO or any schedule, form or report under
the Exchange Act disclosing that such person or group has become the direct or
indirect "beneficial owner," as defined in Rule 13d-3 under the Exchange Act, of
shares of Common Stock representing more than 50% of the Voting Stock; or
(2) the first day on which a majority of the members of the Board
of Directors does not consist of Continuing Directors; or
(3) a consolidation, merger or binding share exchange, or any
conveyance, transfer, sale, lease or other disposition of all or substantially
all of the Company's properties and assets to another Person, other than:
2
(a) any transaction (i) that does not result in any
reclassification, conversion, exchange or cancellation of Capital
Stock and (ii) under which holders of the Company's Capital Stock
immediately prior to such transaction have the entitlement to
exercise, directly or indirectly, 50% or more of the total Voting
Stock of the continuing or surviving or successor Person immediately
after giving effect to such issuance; or
(b) any merger, share exchange, transfer of assets or similar
transaction solely for the purpose of changing the Company's
jurisdiction of incorporation and resulting in a reclassification,
conversion or exchange of outstanding shares of Common Stock, if at
all, solely into shares of common stock, ordinary shares or American
Depositary Shares of the surviving entity or a direct or indirect
parent of the surviving corporation; or
(c) any consolidation, merger, conveyance, transfer, lease or other
disposition with or into a Subsidiary, so long as such merger,
consolidation, conveyance, transfer, lease or other disposition is
not part of a plan or a series of transactions designed to or having
the effect of merging, consolidating with, or conveying,
transferring, selling, leasing or otherwise disposing of all or
substantially all the Company's properties and assets to, any other
Person.
The term "PERSON" includes any syndicate or group that would be deemed to
be a "person" under Section 13(d)(3) of the Exchange Act.
"CLOSE OF BUSINESS" means 5:00 p.m. (New York City time).
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMON STOCK" means the common stock, $0.01 par value, of the Company
existing on the date of this Indenture or any other shares of Capital Stock of
the Company into which such Common Stock shall be reclassified or changed,
including, subject to Section 11.05 below, in the event of a merger,
consolidation or other similar transaction involving the Company that is
otherwise permitted hereunder in which the Company is not the surviving Person,
the common stock of such surviving corporation.
"COMPANY" means the party named as the "Company" in the preamble 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.
3
"COMPANY NOTICE" means a notice to Holders delivered pursuant to Section
3.07 or Section 3.08.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by any Officer.
"CONTINGENT INTEREST" means such interest payable as described in Article
12.
"CONTINGENT INTEREST PERIOD" means (i) the period commencing on, and
including, June 6, 2011 and ending on, but excluding, December 1, 2011, and (ii)
each six-month period from June 1 to November 30 or from December 1 to May 31
thereafter.
"CONTINUING DIRECTOR" means a director who either was a member of the
Board of Directors on May 30, 2006 or who becomes a member of the Board of
Directors after that date and whose appointment, election or nomination for
election by the Company's shareholders is duly approved by a majority of the
Continuing Directors on the Board of Directors at the time of such approval,
either by specific vote or by approval of the proxy statement issued by the
Company on behalf of the Board of Directors in which such individual is named as
nominee for director.
"CONVERSION SETTLEMENT DATE" means (A) with respect to the Conversion
Settlement Distribution (other than any Additional Shares which may be issuable
pursuant to Section 11.01(c), the third Business Day immediately following the
Cash Settlement Period, and (B) with respect to any Additional Shares which may
be issuable, the later of (i) the fifth Business Day following the effective
date of any Change of Control transaction and (2) the third Business Day
immediately following the Cash Settlement Period.
"CONVERSION PRICE" as of any date means $1,000 divided by the Conversion
Rate as of such date.
"CORPORATE TRUST OFFICE" means the designated office of the Trustee at
which at any time its corporate trust business shall be principally
administered, which office at the date hereof is located at ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other address as the Trustee may designate
from time to time by notice to the Holders and the Company, or the principal
corporate trust office of any successor Trustee (or such other address as a
successor Trustee may designate from time to time by notice to the Holders and
the Company).
"CREDIT AGREEMENT" means the Credit Agreement dated as of February 13,
2006, among CBIZ, as ▇▇▇▇▇▇▇▇, and the Lenders party thereto, as supplemented,
amended, modified, refinanced or replaced at any time or from time to time.
"CURRENT MARKET PRICE" of the Common Stock on any day means the average of
the Last Reported Sale Price per share of the Common Stock for each of
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the ten consecutive Trading Days ending on the earlier of the day in question
and the day before the "Ex-Dividend Date" with respect to the issuance or
distribution requiring such computation, subject to adjustment by the Board of
Directors if another transaction requiring an adjustment to the Conversion Rate
pursuant to Section 11.04 occurs during such ten day period.
"DEFAULT" means any event that is, or after notice or passage of time,
would be, an Event of Default.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) the Bank Indebtedness and (ii)
any other Senior Indebtedness the principal amount of which (or, in the case of
a revolving credit, the commitments thereunder) is $15.0 million or more and
that at the time of determination has been designated by the Company as
"Designated Senior Indebtedness".
"EX-DIVIDEND DATE" means the first date upon which a sale of the Common
Stock, regular way on the relevant exchange or in the relevant market for the
Common Stock, does not automatically transfer the right to receive the relevant
dividend or distribution from the seller of the Common Stock to its buyer.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
"FAIR MARKET VALUE", or "FAIR MARKET VALUE" means the amount which a
willing buyer would pay a willing seller in an arm's-length transaction.
"FUNDAMENTAL CHANGE" means either a Change of Control or a Termination of
Trading.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are applied on a consistent basis.
"GLOBAL SECURITIES" means Securities that are in the form of the
Securities attached hereto as Exhibit A, and that are registered in the register
of Securities in the name of a Depositary or a nominee thereof, and to the
extent that such Securities are required to bear the Legend required by Section
2.06(g), such Securities shall be in the form of a 144A Global Security.
"HOLDER" or "SECURITYHOLDER" means a person in whose name a Security is
registered on the Registrar's books.
"INDEBTEDNESS" means, with respect to any Person on any date of
determination (without duplication),
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(1) the indebtedness of such Person for borrowed money;
(2) the obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments;
(3) all Capitalized Lease Obligations of such Person;
(4) all obligations of such Person to pay the deferred and unpaid
purchase price of property or services (except trade payables);
(5) all obligations of such Person in respect of letters of
credit, banker's acceptances or other similar instruments or credit transactions
(including reimbursement obligations with respect thereto), other than
obligations with respect to letters of credit securing obligations (other than
obligations described in the first four clauses above) entered into in the
ordinary course of business of such Person to the extent such letters of credit
are not drawn on or, if and to the extent drawn on, such drawing is reimbursed
no later than the third Business Day following receipt by such Person of a
demand for reimbursement following payment on the letter of credit;
(6) all Indebtedness of other Persons secured by a lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person; provided, however, that the amount of such Indebtedness shall be the
lesser of (A) the fair market value of such asset at such date of determination
or (B) the amount of such Indebtedness of such other Person; and
(7) all indebtedness of other Persons to the extent guaranteed by
such Person.
The amount of Indebtedness of any Person at any date shall be the
outstanding balance at such date of all unconditional obligations as described
above and the maximum liability, on the occurrence of the contingency giving
rise to the obligation, of any contingent obligations at such date.
"INDENTURE" means this Indenture, as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"INTEREST" means interest payable on each Security pursuant to Section 1
of the Securities.
"INTEREST PAYMENT DATE" means June 1 and December 1 of each year,
commencing December 1, 2006.
"INTEREST RECORD DATE" means May 15 and November 15 of each year.
6
"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.
"LAST REPORTED SALE PRICE" means, with respect to the Common Stock on any
date, the closing sale price (or if no closing sale price is reported, the
average of the bid and asked prices or, if more than one in either case, the
average of the average bid and the average asked prices) on that date as
reported by The Nasdaq National Market or, if the Common Stock is not reported
by The Nasdaq National Market, in composite transactions for the principal U.S.
national or regional securities exchange on which the Common Stock is traded. If
the Common Stock is not listed for trading on a U.S. national or regional
securities exchange and not reported by The Nasdaq National Market on the
relevant date, the "Last Reported Sale Price" shall be the last quoted bid price
for the Common Stock in the over-the-counter market on the relevant date as
reported by the National Quotation Bureau Incorporated or similar organization.
If the Common Stock is not so quoted, the "Last Reported Sale Price" shall be
the average of the mid-point of the last bid and ask prices for the Common Stock
on the relevant date from each of at least three independent nationally
recognized investment banking firms selected by the Company for this purpose.
"OFFICER" means the Chairman of the Board, the Chief Executive Officer,
the Chief Financial Officer, the President, any Vice President, the Treasurer,
the Controller, the Chief Accounting Officer, the Secretary or any Assistant
Secretary of the Company.
"OFFICER'S CERTIFICATE" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by any Officer, and delivered to the Trustee. An Officer's Certificate
given pursuant to Section 5.03 shall be signed by the principal executive
officer, principal financial officer or principal accounting officer of the
Company but need not contain the information specified in Sections 13.04 and
13.05.
"OFFERING MEMORANDUM" means the offering memorandum of the Company dated
May 23, 2006 relating to the offering of the Securities.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 13.04 and 13.05, from legal counsel. The counsel may be an
employee of, or counsel to, the Company who is reasonably acceptable to the
Trustee.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof, or other entity.
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"PURCHASE AGREEMENT" means the Purchase Agreement dated March 23, 2006
between the Company, on the one hand, and Banc of America Securities LLC, on the
other.
"RECORD DATE" shall mean, with respect to any dividend, distribution or
other transaction or event in which the holders of Common Stock have the right
to receive any cash, securities or other property or in which the Common Stock
(or other applicable security) is exchanged for or converted into any
combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
"REDEMPTION DATE" means the date specified in a notice of redemption on
which the Securities may be redeemed in accordance with the terms of the
Securities and this Indenture.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement,
dated the date hereof, between the Company, on the one hand, and Banc of America
Securities LLC, on the other.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee, any
officer of the Trustee within the Institutional Trust Services department (or
any successor department) of the Trustee located at the Corporate Trust Office
of the Trustee who has direct responsibility for the administration of this
Indenture and, for the purposes of Section 8.01(c)(2) and 8.05 shall also mean
any other officer of the Trustee to whom any corporate trust matter is referred
because of such person's knowledge of and familiarity with the particular
subject matter.
"RESTRICTED SECURITY" means a Security required to bear the Legend.
"RULE 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SECURITY" means any of the Company's 3.125% Convertible Senior
Subordinated Notes due 2026 issued under this Indenture.
"SECURITYHOLDER" or "HOLDER" means a Person in whose name a Security is
registered on the Registrar's books.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest,
including any interest accruing after the commencement of any bankruptcy or
similar proceeding, whether or not a claim for post-petition interest is allowed
as a
8
claim in the proceeding, and rent payable on or in connection with, and all
fees, costs, expenses and other amounts accrued or due on or in connection with,
the Company's Indebtedness (including the Credit Agreement), whether secured or
unsecured, absolute or contingent, due or to become due, outstanding on the date
of the 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.
Senior Indebtedness does not include:
(1) Indebtedness that expressly provides that such Indebtedness
will not be senior in right of payment to the Securities or expressly provides
that such Indebtedness is on parity with or junior in right of payment to the
Securities;
(2) any Indebtedness to any of the Company's Subsidiaries;
(3) any liability for federal, state, local or other taxes owed or
owing by the Company; and
(4) Indebtedness for trade payables or the deferred purchase price
of assets or services incurred in the ordinary course of business.
"SENIOR SUBORDINATED DEBT", with respect to the Company, means the
Securities and any other Indebtedness of the Company that specifically provides
that such Indebtedness is to have the same rank as the Securities in right of
payment and is not subordinated by its terms in right of payment to any
Indebtedness of the Company or other obligations of the Company that is not
Senior Indebtedness.
"STATED MATURITY", when used with respect to any Security, means June 1,
2026.
"STOCK PRICE" means the price per share of Common Stock paid in connection
with a Change of Control transaction pursuant to which Additional Shares are
issuable as set forth in Section 11.01(c) hereof, which shall be equal to (i) if
Holders of Common Stock receive only cash in such Change of Control transaction,
the cash amount paid per share of Common Stock and (ii) in all other cases, the
average of the Last Reported Sale Prices of the Common Stock on the five Trading
Days prior to, but not including, the effective date of such Change of Control
transaction.
"SUBORDINATED DEBT" means, with respect to the Company, means any current
or future Indebtedness of the Company that by its terms is subordinated in right
of payment to the Securities.
"SUBSIDIARY" means any person of which at least a majority of the
outstanding Voting Stock shall at the time directly or indirectly be owned or
9
controlled by the Company or by one or more Subsidiaries or by the Company and
one or more Subsidiaries.
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest income
on a Security that must be accrued as original issue discount for U.S. federal
income tax purposes pursuant to Treasury regulations section 1.1275-4.
"TERMINATION OF TRADING" means the occurrence, at any time, of the Common
Stock of the Company (or other common stock into which the Securities are then
convertible) being neither listed for trading on a U.S. national securities
exchange nor quoted on the Nasdaq National Market.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
this Indenture, provided, however, that in the event the TIA is amended after
such date, TIA means, to the extent required by any such amendment, the TIA as
so amended.
"TRADING DAY" means a day during which trading in securities generally
occurs on The Nasdaq National Market or, if the Common Stock is not quoted on
The Nasdaq National Market, then a day during which trading in securities
generally occurs on the principal U.S. securities exchange on which the Common
Stock is then listed or, if the Common Stock is not listed on a U.S. national or
regional securities exchange, then on the principal other market on which the
Common Stock is then traded or quoted.
"TRADING PRICE" of the Securities on any date of determination means the
average of the secondary market bid quotations per $1,000 principal amount of
the Securities obtained by the Bid Solicitation Agent for $5,000,000 principal
amount of the Securities at approximately 3:30 p.m., New York City time, on such
determination date from three independent nationally recognized securities
dealers which the Company selects, provided that if three such bids cannot
reasonably be obtained by the Bid Solicitation Agent, but two such bids are
obtained, then the average of the two bids shall be used, and if only one such
bid can reasonably be obtained by the Bid Solicitation Agent, that one bid shall
be used; provided further that if no bids are received or in the Company's
reasonable judgment, the bid quotations are not indicative of the secondary
market value of the Securities, then
(i) for purposes of any determination of whether Contingent Interest is
payable or the amount thereof, the Trading Price of the Securities on any date
of determination shall equal the product of (a) the applicable Conversion Rate
for the Securities as of the date of determination and (b) the average Last
Reported Sale Price of the Common Stock on the five Trading Days ending on such
determination date; and
(ii) for purposes of determining whether the condition to conversion of
the Securities set forth in Section 11.01(a)(1) has been satisfied, the Trading
Price of the Securities will be deemed to be less than 98% of the product of the
Closing Price of the Common Stock and the Conversion Rate on such date.
10
"TREASURY REGULATIONS" means the U.S. federal income tax regulations,
including temporary regulations, promulgated under the Code, as those
regulations may be amended from time to time. Any reference herein to a specific
section of the Treasury regulations shall include any corresponding provisions
of succeeding, similar, substitute, proposed or final Treasury regulations.
"TRUSTEE" means the party named as the "Trustee" in the preamble of this
Indenture unless and until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" of a Person means Capital Stock of such Person of the class
or classes pursuant to which the holders thereof have the general voting power
under ordinary circumstances to elect at least a majority of the board of
directors, managers or trustees of such Person (irrespective of whether or not
at the time Capital Stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).
11
Section 1.02. Other Definitions.
DEFINED IN
TERMS: SECTION:
"Act"............................................................................... 1.05
"Accepted Purchased Shares"......................................................... 11.04(g)
"Acquisition Value"................................................................. 11.01(d)
"Additional Amounts Notice" ........................................................ 5.07
"Additional Shares.................................................................. 11.01(c)
"Adjustment Event".................................................................. 11.04(k)
"Agent Members"..................................................................... 2.12(e)
"Bankruptcy Law".................................................................... 7.01(i)
"cash".............................................................................. 3.01
"Cash Amount"....................................................................... 11.03
"Cash Settlement Period"............................................................ 11.03
"contingent debt regulations"....................................................... 2.14
"Conversion Agent".................................................................. 2.03
"Conversion Date"................................................................... 11.02(c)
"Conversion Notice"................................................................. 11.02(b)
"Conversion Obligation"............................................................. 11.01(a)
"Conversion Rate"................................................................... 11.02(a)
"Conversion Settlement Distribution"................................................ 11.03
"Conversion Value".................................................................. 11.03
"Depositary"........................................................................ 2.01(b)
"Determination Date"................................................................ 11.04(k)
"Distributed Assets"................................................................ 11.04(d)
"DTC"............................................................................... 2.01(b)
"effective date".................................................................... 11.01(c)
"Event of Default".................................................................. 7.01
"Exchange Property"................................................................. 11.01(b)
"Expiration Time"................................................................... 11.04(f)
"Fiscal Quarter".................................................................... 11.01(a)
"Fundamental Change Repurchase Date"................................................ 3.08(a)
"Fundamental Change Repurchase Notice".............................................. 3.08(c)
"Fundamental Change Repurchase Price"............................................... 3.08(a)
"legal holiday"..................................................................... 13.08
"junior securities" ................................................................ 4.08
"Legend"............................................................................ 2.06(g)
"Measurement Period"................................................................ 11.01(a)(2)
"net share amount".................................................................. 11.03
"Non-Electing Share"................................................................ 11.05(b)
"Notice of Default"................................................................. 7.01
"Offer Expiration Time"............................................................. 11.04(g)
"Paying Agent"...................................................................... 2.03
12
DEFINED IN
TERMS: SECTION:
"Payment Blockage Period" .......................................................... 4.02
"Public Acquirer Change of Control.................................................. 11.01(d)
"Public Acquirer Common Stock"...................................................... 11.01(d)
"Purchased Shares".................................................................. 11.04(f)
"QIB"............................................................................... 2.01(b)
"Redemption Price".................................................................. 3.01
"Registrar"......................................................................... 2.03
"Repurchase Date"................................................................... 3.07(a)
"Repurchase Notice"................................................................. 3.07(b)
"Repurchase Price".................................................................. 3.07(a)
"Rule 144A Information"............................................................. 5.06
"specified cash amount"............................................................. 11.03
"successor Person".................................................................. 6.01(a)
"Trigger Event"..................................................................... 11.04(d)
"Valuation Period".................................................................. 11.01(d)
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 Securityholder.
"INDENTURE TO BE QUALIFIED" means this Indenture.
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee.
"OBLIGOR" on the indenture securities means the Company.
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 GAAP as in effect from time
to time;
13
(3) "or" is not exclusive;
(4) "including" means including, without limitation;
(5) words in the singular include the plural, and words in the
plural include the singular; and
(6) references to Sections and Articles are to references to
Sections and Articles of this Indenture.
Section 1.05. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee and, where it is hereby expressly required, to the
Company, as described in Section 13.02. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "ACT" of Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and conclusive in favor of the
Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to such officer the execution thereof.
Where such execution is by a signer acting in a capacity other than such
signer's individual capacity, such certificate or affidavit shall also
constitute sufficient proof of such signer's authority. The fact and date of the
execution of any such instrument or writing, or the authority of the person
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The principal amount and serial number of any Security and the
ownership of Securities shall be proved by the register for the Securities.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such
Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at
14
its option, by or pursuant to a Board Resolution, fix in advance a record date
for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If such a record date is fixed, such request,
demand, authorization, direction, notice, consent, waiver or other Act may be
given before or after such record date, but only the Holders of record at the
close of business on such record date shall be deemed to be Holders for the
purposes of determining whether Holders of the requisite proportion of
outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the outstanding Securities shall be computed as of such record
date; provided that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
ARTICLE 2
THE SECURITIES
Section 2.01. Form and Dating. (a) The Securities and the Trustee's
certificate of authentication shall be substantially in the form of Exhibits A
and B, which are 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. The Securities may, but need not, have the
corporate seal of the Company or a facsimile thereof affixed thereto or
imprinted thereon.
(b) 144A Global Securities. Securities offered and sold within the United
States to qualified institutional buyers as defined in Rule 144A ("QIBS") in
reliance on Rule 144A shall be issued, initially in the form of a 144A Global
Security, which shall be deposited with the Trustee at its Corporate Trust
Office, as custodian for the Depositary (as defined below) and registered in the
name of The Depository Trust Company ("DTC") or the nominee thereof (DTC, or any
successor thereto, and any such nominee being hereinafter referred to as the
"DEPOSITARY"), duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depositary as hereinafter provided.
(c) Global Securities in General. Each Global Security shall represent
such amount of the outstanding Securities as shall be specified therein and each
shall provide that it shall represent the aggregate amount of outstanding
Securities from time to time endorsed in the Schedule of Increases and Decreases
of Global Security attached thereto and that the aggregate amount of outstanding
Securities
15
represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, redemptions, repurchases and conversions.
Any adjustment of the aggregate principal amount of a Global Security to
reflect the amount of any increase or decrease in the amount of outstanding
Securities represented thereby shall be made by the Trustee in accordance with
instructions given by the Holder thereof as required by Section 2.12 hereof, and
shall be made on the records of the Trustee and the Depositary.
(d) Book-Entry Provisions. This Section 2.01(d) shall apply only to Global
Securities deposited with or on behalf of the Depositary.
The Company shall execute and the Trustee shall, in accordance with this
Section 2.01(d), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depositary or a
nominee thereof, (b) shall be delivered by the Trustee to the Depositary or held
by the Trustee pursuant to the Depositary's instructions and (c) shall be
substantially in the form of Exhibit A attached hereto.
(e) Certificated Securities. Securities not issued as interests in the
Global Securities shall be issued in certificated form substantially in the form
of Exhibit B attached hereto.
Section 2.02. Execution and Authentication. The Securities shall be
executed on behalf of the Company by one Officer. The signature of such Officer
on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signature of an individual who
was, at the time of the execution of the Securities, an Officer shall bind the
Company, notwithstanding that such individual has ceased to hold such office
prior to the authentication and delivery of such Securities or did not hold such
office 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 the Securities for original
issue in an aggregate principal amount of up to $85,000,000 (or, to the extent
the Initial Purchaser exercises its over-allotment option, up to $100,000,000)
upon one or more Company Orders without any further action by the Company (other
than as contemplated in Section 13.04 and Section 13.05 hereof). Subject to the
provisions of Section 2.08, the aggregate principal amount of the Securities due
at the Stated
16
Maturity thereof outstanding at any time may not exceed the amount set forth in
the foregoing sentence.
The Securities shall be issued only in registered form without coupons and
only in denominations of $1,000 of principal amount and any integral multiple of
$1,000.
Section 2.03. Registrar, Paying Agent, Bid Solicitation Agent, and
Conversion Agent. The Company shall maintain an office or agency where
Securities may be presented for registration of transfer or for exchange
("REGISTRAR"), an office or agency where Securities may be presented for
purchase or payment ("PAYING AGENT") and an office or agency where Securities
may be presented for conversion ("CONVERSION AGENT"). The Registrar shall keep a
register of the Securities and of their transfer and exchange. The Company may
have one or more co-registrars, one or more additional paying agents, one or
more additional bid solicitation agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, including
any named pursuant to Section 5.05. The term "Conversion Agent" includes any
additional conversion agent, including any named pursuant to Section 5.05.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent, Bid Solicitation Agent or
co-registrar (in each case, if such Registrar, agent or co-registrar is a Person
other than the Trustee). The agreement shall implement the provisions of this
Indenture that relate to such agent. The Company shall promptly notify the
Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar, Paying Agent, Bid Solicitation Agent or Conversion Agent,
the Trustee shall act as such and shall be entitled to appropriate compensation
therefore pursuant to Section 8.07. The Company or any Subsidiary or an
Affiliate of either of them may act as Paying Agent, Registrar, Conversion
Agent, Bid Solicitation Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent,
Bid Solicitation 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, on or prior to each due date of payments in
respect of any Security, the Company shall deposit with the Paying Agent a sum
of money (in immediately available funds if deposited on the due date) or shares
of Common Stock sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money and shares of Common Stock held by the
Paying Agent for the making of payments in respect of the Securities and shall
promptly 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 shares of Common Stock
17
so held in trust. If the Company, a Subsidiary or an Affiliate of either of them
acts as Paying Agent, it shall segregate the money and shares of Common Stock
held by it as Paying Agent and hold it as a separate trust fund. The Company at
any time may require a Paying Agent to pay all money and shares of Common Stock
held by it to the Trustee and to account for any funds and Common Stock
disbursed by it. Upon doing so, the Paying Agent shall have no further liability
for the money or shares of Common Stock.
Section 2.05. Securityholder Lists. The Trustee shall preserve the most
recent list available to it of the names and addresses of Securityholders. If
the Trustee is not the Registrar, the Company shall cause to be furnished to the
Trustee at least semiannually on May 15 and November 15 a listing of
Securityholders dated within 15 days of the date on which the list is furnished
and at such other times as the Trustee may request in writing a list in such
form and as of such date as the Trustee may reasonably require of the names and
addresses of Securityholders.
Section 2.06. Transfer and Exchange. (a) Subject to Section 2.12 hereof,
upon surrender for registration of transfer of any Security, together with a
written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at the office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.03, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denomination or
denominations, of a like aggregate principal amount. The Company shall not
charge a service charge for any registration of transfer or exchange, but the
Company may require payment of a sum sufficient to pay all taxes, assessments or
other governmental charges that may be imposed in connection with the transfer
or exchange of the Securities from the Securityholder requesting such transfer
or exchange.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount upon surrender of the Securities to be exchanged, together with
a written instrument of transfer satisfactory to the Registrar duly executed by
the Securityholder or such Securityholder's attorney duly authorized in writing,
at such office or agency. Whenever any Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the Holder making the exchange is entitled to
receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of Securities selected for redemption (except,
in the case of Securities to be redeemed in part, the portion thereof not to be
redeemed) or any Securities in respect of which a Repurchase Notice or
Fundamental Change Repurchase Notice has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the
case of Securities to be
18
purchased in part, the portion thereof not to be purchased) or any Securities
for a period of 15 days before the mailing of a notice of redemption of
Securities to be redeemed.
(b) Notwithstanding any provision to the contrary herein, so long as a
Global Security remains outstanding and is held by or on behalf of the
Depositary, transfers of a Global Security, in whole or in part, shall be made
only in accordance with Section 2.12 and this Section 2.06(b). Transfers of a
Global Security shall, except as set forth in Section 2.12, be limited to
transfers of such Global Security in whole or in part, to the Depositary, to
nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
(c) Successive registrations and registrations of transfers and exchanges
as aforesaid may be made from time to time as desired, and each such
registration shall be noted on the register for the Securities.
(d) Except as otherwise set forth in this Indenture, any such action taken
by a Holder shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor, irrespective of whether any notation in regard thereto is
made upon such Security or any Security issued in exchange or substitution
therefore.
(e) Any Registrar appointed pursuant to Section 2.03 hereof shall provide
to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(f) No Registrar shall be required to make registrations of transfer or
exchange of Securities during any periods designated in the text of the
Securities or in this Indenture as periods during which such registration of
transfers and exchanges need not be made.
(g) If Securities are issued upon the transfer, exchange or replacement of
Securities subject to restrictions on transfer and bearing the legends relating
to such restrictions imposed by the securities laws set forth on the forms of
Security attached hereto as Exhibits A and B setting forth such restrictions
(collectively, the "LEGEND"), or if a request is made to remove the Legend on a
Security, the Securities so issued shall bear the Legend, or the Legend shall
not be removed, as the case may be, unless there is delivered to the Company and
the Registrar such satisfactory evidence, which shall include an opinion of
counsel, as may be reasonably required by the Company and the Registrar and the
Trustee (if not the same Person as the Registrar), that neither the Legend nor
the restrictions on transfer set forth therein are required to ensure that
transfers thereof comply with the provisions of Rule 144 under the Securities
Act or that such Securities are not "restricted" within the meaning of Rule 144
under the Securities Act. Upon (i) provision of such satisfactory evidence, or
(ii) notification by the Company to the Trustee and Registrar of the sale of
such Security pursuant to a registration
19
statement that is effective at the time of such sale, the Trustee, at the
written direction of the Company, shall authenticate and deliver a Security that
does not bear the Legend. If the Legend is removed from the face of a Security
and the Security is subsequently held by the Company or an Affiliate of the
Company, the Legend shall be reinstated.
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 certificate 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 redeemed or purchased
by the Company pursuant to Article 3 hereof, the Company in its discretion may,
instead of issuing a new Security, pay or purchase such Security, as the case
may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section 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.
Section 2.08. Outstanding Securities; Determinations of Holders' Action.
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those redeemed or purchased pursuant
to Section 2.07, those delivered to it for cancellation and those described in
this Section 2.08 as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
principal amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent, waiver, or other Act hereunder,
Securities owned by the Company or any
20
other obligor upon the Securities or any Affiliate of the Company or such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other act,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to Article
7 and Article 10).
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 immediately 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 from and after such Redemption Date, Repurchase Date, Fundamental
Change Repurchase Date or Stated Maturity, as the case may be, such Securities
shall cease to be outstanding and Interest, Contingent Interest and Additional
Amounts, 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, then from and
after the time of conversion on the date of conversion, such Security shall
cease to be outstanding and Interest, Contingent Interest, Additional Amounts,
if any, shall cease to accrue, and the rights of the Holders therein shall
terminate (other than the right to receive the Conversion Settlement
Distribution).
Section 2.09. Temporary Securities. Pending the preparation of
Certificated 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 Certificated 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 Certificated
Securities to be prepared without unreasonable delay. After the preparation of
Certificated Securities, the temporary Securities shall be exchangeable for
Certificated Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03,
without charge to the Holder. Upon surrender for cancellation of any one or more
21
temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefore a like principal amount of
Certificated Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Certificated Securities.
Section 2.10. Cancellation. All Securities surrendered for payment,
purchase by the Company pursuant to Article 3, conversion, redemption or
registration of transfer or exchange shall, if surrendered to any Person other
than the Trustee, be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly cancelled by the Trustee. The Company may not issue new
Securities to replace Securities it has paid or delivered to the Trustee for
cancellation other than in connection with registrations of transfer or exchange
or that any Holder has converted pursuant to Article 11. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with the Trustee's customary procedure.
Section 2.11. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee may treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
the principal amount of the Security or any portion thereof, or the payment of
any Redemption Price, Repurchase Price or Fundamental Change Repurchase Price in
respect thereof, and Interest, Contingent Interest or Additional Amounts
thereon, for the purpose of conversion and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the Company, the Trustee
nor any agent of the Company or the Trustee shall be affected by notice to the
contrary.
Section 2.12. Global Securities. (a) Notwithstanding any other provisions
of this Indenture or the Securities, (A) transfers of a Global Security, in
whole or in part, shall be made only in accordance with Section 2.06 and Section
2.12(a)(i) below, (B) transfers of a beneficial interest in a Global Security
for a Certificated Security shall comply with Section 2.06 and Section
2.12(a)(ii) below and Section 2.12(e) below, and (C) transfers of a Certificated
Security shall comply with Section 2.06, Section 2.12(a)(iii) and Section
2.12(a)(iv) below.
(i) Transfer of Global Security. A Global Security may not be
transferred, in whole or in part, to any Person other than the Depositary
or a nominee or any successor thereof, and no such transfer to any such
other Person may be registered; provided that this Section 2.12(a)(i)
shall not prohibit any transfer of a Security that is issued in exchange
for a Global
22
Security but is not itself a Global Security. No transfer of a Security to
any Person shall be effective under this Indenture or the Securities
unless and until such Security has been registered in the name of such
Person. Nothing in this Section 2.12(a)(i) shall prohibit or render
ineffective any transfer of a beneficial interest in a Global Security
effected in accordance with the other provisions of this Section 2.12.
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
Security for a Certificated Security. A beneficial interest in a Global
Security may not be exchanged for a Certificated Security except upon
satisfaction of the requirements set forth in this clause (ii) below and
in Section 2.12(e) below. Upon receipt by the Trustee of a request to
transfer a beneficial interest in a Global Security in accordance with
Applicable Procedures for a Certificated Security in the form satisfactory
to the Trustee, together with:
(A) so long as the Securities are Restricted Securities,
certification in the form set forth in Exhibit C;
(B) written instructions to the Trustee to make, or direct the
Registrar to make, an adjustment on its books and records with
respect to such Global Security to reflect a decrease in the
aggregate principal amount of the Securities represented by the
Global Security, such instructions to contain information regarding
the Depositary account to be decreased; and
(C) if the Company or the Trustee so requests, an opinion of
counsel or other evidence reasonably satisfactory to it as to the
compliance with the restrictions set forth in the Legend,
then the Trustee shall cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate principal amount of the
Securities represented by the Global Security to be decreased by the
aggregate principal amount of the Certificated Security to be issued,
shall issue such Certificated Security and shall debit or cause to be
debited to the account of the Person specified in such instructions a
beneficial interest in the Global Security equal to the principal amount
of the Certificated Security so issued.
(iii) Transfer and Exchange of Certificated Securities. When
Certificated Securities are presented to the Registrar with a request:
(y) to register the transfer of such Certificated
Securities; or
23
(z) to exchange such Certificated Securities for an equal
principal amount of Certificated Securities of other authorized
denominations,
the Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Certificated Securities surrendered for
transfer or exchange:
(1) shall be duly endorsed or accompanied by a written
instrument of transfer in form reasonably satisfactory to the
Company and the Registrar, duly executed by the Holder thereof or
his attorney duly authorized in writing; and
(2) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an
effective registration statement under the Securities Act or
pursuant to clause (A), (B) or (C) below, and are accompanied by the
following additional information and documents, as applicable:
(A) if such Certificated Securities are being delivered
to the Registrar by a Holder for registration in the name of
such Holder, without transfer, a certification from such
Holder to that effect; or
(B) if such Certificated Securities are being
transferred to the Company, a certification to that effect; or
(C) if such Certificated Securities are being
transferred pursuant to an exemption from registration, (i) a
certification to that effect (in the form set forth in Exhibit
C, if applicable) and (ii) if the Company or the Trustee so
requests, an opinion of counsel or other evidence reasonably
satisfactory to it as to the compliance with the restrictions
set forth in the Legend.
(iv) Restrictions on Transfer or Exchange of a Certificated Security
for a Beneficial Interest in a Global Security. A Certificated Security
may not be transferred or exchanged for a beneficial interest in a Global
Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Trustee of a Certificated Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Trustee, together with:
(I) so long as the Securities are Restricted Securities, certification, in
the form set forth in Exhibit C, that such Certificated Security (A) is
being transferred to a QIB in accordance with Rule 144A under the
Securities Act
24
or (B) is being transferred pursuant to and in compliance with Rule 144
under the Securities Act or another exemption from the securities laws
(which is documented to the Company's satisfaction); and
(II) written instructions directing the Trustee to make, or to direct the
Registrar to make, an adjustment on its books and records with respect to
such Global Security to reflect an increase in the aggregate principal
amount of the Securities represented by the Global Security, such
instructions to contain information regarding the Depositary account to be
credited with such increase, then the Trustee shall cancel such
Certificated Security and cause, or direct the Registrar to cause, in
accordance with the standing instructions and procedures existing between
the Depositary and the Registrar, the aggregate principal amount of
Securities represented by the Global Security to be increased by the
aggregate principal amount of the Certificated Security to be exchanged,
and shall credit or cause to be credited to the account of the person
specified in such instructions a beneficial interest in the Global
Security equal to the principal amount of the Certificated Security so
cancelled. If no Global Securities are then outstanding, the Company shall
issue and the Trustee shall authenticate, upon written order of the
Company in the form of an Officer's Certificate, a new Global Security in
the appropriate principal amount.
(b) Subject to the succeeding Section 2.12(c), every Security shall be
subject to the restrictions on transfer provided in the Legend including the
delivery of an opinion of counsel, if so provided. Whenever any Restricted
Security is presented or surrendered for registration of transfer or for
exchange for a Security registered in a name other than that of the Holder, such
Security must be accompanied by a certificate in substantially the form set
forth in Exhibit C, dated the date of such surrender and signed by the Holder of
such Security, as to compliance with such restrictions on transfer. The
Registrar shall not be required to accept for such registration of transfer or
exchange any Security not so accompanied by a properly completed certificate.
(c) The restrictions imposed by the Legend upon the transferability of any
Security shall cease and terminate when such Security has been sold pursuant to
an effective registration statement under the Securities Act or transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 under the Securities Act or any successor provision, by an opinion
of counsel having substantial experience in practice under the Securities Act
and otherwise reasonably acceptable
25
to the Company and the Trustee, addressed to the Company and the Trustee and in
form acceptable to the Company and the Trustee, to the effect that the transfer
of such Security has been made in compliance with Rule 144 under the Securities
Act or such successor provision), be exchanged for a new Security, of like tenor
and aggregate principal amount, which shall not bear the restrictive Legend. The
Company shall inform the Trustee of the effective date of any registration
statement registering the Securities under the Securities Act. The Trustee shall
not be liable for any action taken or omitted to be taken by it in good faith in
accordance with the aforementioned opinion of counsel or registration statement.
(d) As used in the preceding two paragraphs of this Section 2.12, the term
"transfer" encompasses any sale, pledge, transfer, loan, hypothecation, or other
disposition of any Security.
(e) The provisions of clauses (i), (ii), (iii), (iv) and (v) below shall
apply only to Global Securities:
(i) Notwithstanding any other provisions of this Indenture or the
Securities, a Global Security shall not be exchanged in whole or in part
for a Security registered in the name of any Person other than the
Depositary or one or more nominees thereof, provided that a Global
Security may be exchanged for Securities registered in the names of any
Person designated by the Depositary in the event that (i) the Depositary
has notified the Company that it is unwilling or unable to continue as
Depositary for such Global Security or such Depositary has ceased to be a
"clearing agency" registered under Exchange Act, and a successor
Depositary is not appointed by the Company within 90 days (ii) the Company
determines at any time that the Securities shall no longer be represented
by Global Securities and shall inform such Depositary of such
determination in writing or (iii) a Default has occurred and is
continuing. Any Global Security exchanged pursuant to clause (i) above
shall be so exchanged in whole and not in part, and any Global Security
exchanged pursuant to clauses (ii) or (iii) above may be exchanged in
whole or from time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any portion thereof
shall be a Global Security; provided that any such Security so issued that
is registered in the name of a person other than the Depositary or a
nominee thereof or any successor of either of the foregoing pursuant to
this paragraph shall not be a Global Security.
(ii) Securities issued in exchange for a Global Security or any
portion thereof shall be issued in definitive, fully registered form,
shall have an aggregate principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be registered in
such names and be in such authorized denominations as the Depositary shall
designate and shall bear the applicable legends provided for herein. Any
Global Security to be exchanged in whole shall be surrendered by the
Depositary to the
26
Registrar. With regard to any Global Security to be exchanged in part,
either such Global Security shall be so surrendered for exchange or, if
the Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the principal amount thereof shall be
reduced by an amount equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records of the Trustee.
Upon any such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(iii) Subject to the provisions of clause (v) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members (as defined below) and persons that may hold interests
through Agent Members, to take any action which a Holder is entitled to
take under this Indenture or the Securities.
(iv) In the event of the occurrence of any of the events specified
in clause (i) above, the Company shall promptly make available to the
Trustee a reasonable supply of Certificated Securities in definitive,
fully registered form.
(v) Neither any members of, or participants in, the Depositary
(collectively, the "AGENT MEMBERS") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Security registered in the name of the Depositary or
any nominee thereof, or under any such Global Security, and the Depositary
or such nominee, as the case may be, may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner
and Holder of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company,
the Trustee or any agent of the Company or the Trustee from giving effect
to any written certification, proxy or other authorization furnished by
the Depositary or such nominee, as the case may be, or impair, as between
the Depositary, its Agent Members and any other Person on whose behalf an
Agent Member may act, the operation of customary practices of such Persons
governing the exercise of the rights of a Holder of any Security.
(vi) Except as expressly set forth in this Indenture, including
Sections 2.12(a)(ii) and 2.12(e), none of the Trustee, any Paying Agent,
Conversion Agent, the Company or the Registrar shall have any
responsibility or obligation to any beneficial owner in the Global
Securities, a member of, or a participant in the Depositary or other
Person with respect to the accuracy of the records of the Depositary or
its nominee or of any participant or member thereof, with respect to any
ownership interest in the Global Securities or with respect to the
delivery to any participant, member,
27
beneficial owner or other Person (other than the Depositary) of any notice
(including any notice of redemption) or the payment of any amount, under
or with respect to such Global Securities. All notices and communications
to be given to the Holders and all payments to be made to Holders under
the Securities shall be given or made only to or upon the order of the
registered Holders (which shall be, in the case of a Global Security, the
Depositary or its nominee). The rights of beneficial owners in the Global
Securities shall be exercised only through the Depositary subject to the
applicable rules and procedures of the Depositary. Other than as set forth
in this Indenture, the Trustee, any Paying Agent, the Conversion Agent,
the Company and the Registrar may rely and shall be fully protected in
relying upon information furnished by the Depositary with respect to its
members, participants and any beneficial owners. Except as expressly set
forth in this Indenture, including Sections 2.12(a)(ii) and 2.12(e), the
Trustee, each Paying Agent, the Conversion Agent, the Company and the
Registrar shall be entitled to deal with any depositary (including the
Depositary), and any nominee thereof, that is the Holder of any Global
Securities as a Holder for all purposes of this Indenture relating to such
Global Securities (including the payment of principal, Interest,
Contingent Interest, if any, and Additional Amounts, if any, and the
giving of instructions or directions by or to the owner or Holder of a
beneficial ownership interest in such Global Securities) as the sole
Holder of such Global Securities and shall have no obligations to the
beneficial owners thereof. None of the Trustee, any Paying Agent, the
Conversion Agent, the Company or the Registrar shall have any
responsibility or liability for any acts or omissions of any such
depositary with respect to such Global Securities, for the records of any
such depositary, including records in respect of beneficial ownership
interests in respect of any such Global Securities, for any transactions
between such depositary and any participant in such depositary or between
or among any such depositary, any such participant and/or any holder or
owner of a beneficial interest in such Global Securities or for any
transfers of beneficial interests in any such Global Securities.
(f) The Trustee and the Registrar shall have no obligation or duty to
monitor, determine or inquire as to compliance with any restrictions on transfer
imposed under this Indenture or under applicable law with respect to any
transfer of any interest in any Security (including any transfers between or
among Agent Members or beneficial owners of interests in any Global Security)
other than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by the terms of, this Indenture, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
The Trustee shall have no responsibility for the actions or omissions of
the Depositary, or the accuracy of the books and records of the Depositary.
28
Section 2.13. CUSIP Numbers. The Company may issue the Securities with one
or more "CUSIP", "ISIN" or other similar numbers (if then generally in use),
and, if so, the Trustee shall use "CUSIP" , "ISIN" or other similar numbers in
notices of redemption as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption or purchase 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 shall
promptly notify the Trustee of any change in the CUSIP, ISIN or other similar
numbers.
Section 2.14. Contingent Debt Tax Treatment. (a) The Company and each
Holder, by acquiring a beneficial interest in a Security, agree (i) to treat the
Security as indebtedness for U.S. federal income tax purposes that is subject to
the Treasury regulations governing contingent payment debt instruments (the
"contingent debt regulations"), (ii) that each Holder shall be bound by the
Company's application of the contingent debt regulations to the Security,
including the Company's determination of the "comparable yield" and "projected
payment schedule" within the meaning of the contingent debt regulations, (iii)
to treat the cash and the fair market value of any Common Stock received upon
the conversion of the Security as a contingent payment for purposes of the
contingent debt regulations, (iv) to accrue interest with respect to the
outstanding Security as Tax Original Issue Discount according to the
"noncontingent bond method" set forth in the contingent debt regulations, using
the comparable yield of 9.0% compounded semi-annually and (v) that the Company
and each Holder will not take any position on any U.S. federal income tax return
that is inconsistent with (i), (ii), (iii) or (iv) unless required by applicable
law. A Holder may obtain the issue price, the amount of Tax Original Issue
Discount, issue date, yield to maturity, comparable yield and projected payment
schedule for the Security, as determined by the Company pursuant to the
contingent debt regulations, by submitting a written request to the Company at
the following address: CBIZ, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel.
(b) Each Security shall bear a legend relating to U.S. federal income tax
matters in the form set forth in Exhibits A and B.
Section 2.15. Calculation of Tax 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 Tax Original Issue Discount (including
daily rates and accrual periods) accrued on outstanding Securities as of the end
of such year and (ii) such other specific information relating to such Tax
Original Issue Discount as may then be required under the Code or the Treasury
regulations promulgated thereunder.
29
Article 3
REDEMPTION AND REPURCHASES
Section 3.01. Company's Right to Redeem; Notices to Trustee. Prior to June
6, 2011, the Securities shall not be redeemable at the Company's option. On or
after June 6, 2011, the Company, at its option, may redeem the Securities for
U.S. legal tender ("CASH") at any time, in whole or in part, at a redemption
price (the "REDEMPTION PRICE") equal to 100% of the principal amount of the
Securities to be redeemed, plus any accrued and unpaid Interest, accrued and
unpaid Contingent Interest, if any, and accrued and unpaid Additional Amounts,
if any, on the Securities redeemed up to, but not including, the Redemption
Date; provided that if the Redemption Date is on a date that is after an
Interest Record Date and on or prior to the corresponding Interest Payment Date,
the Redemption Price shall be 100% of the principal amount of the Securities
redeemed but shall not include accrued and unpaid Interest, accrued and unpaid
Contingent Interest, if any, and Additional Amounts, if any. Instead, the
Company shall pay such Interest, Contingent Interest, if any, and Additional
Amounts, if any, on the Interest Payment Date to the Holder of record on the
corresponding Interest Record Date. If the Company elects to redeem Securities
pursuant to this Section 3.01, it shall notify the Trustee in writing of such
election together with the Redemption Date, the Conversion Rate, the principal
amount of Securities to be redeemed and the Redemption Price. Notwithstanding
the foregoing, the Company may not redeem the Securities if it has failed to pay
any Interest, including Contingent Interest, if any, and Additional Amounts, if
any, on the Securities when due and such failure to pay is continuing.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 by a Company Order, at least 45 days but not more than 60 days
before the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee).
Section 3.02. Selection of Securities to Be Redeemed. If less than all of
the Securities are to be redeemed, unless the procedures of the Depositary
provide otherwise, the Trustee shall select the Securities to be redeemed by
lot, on a pro rata basis or by another method the Trustee considers fair and
appropriate (so long as such method is not prohibited by the rules of any stock
exchange or quotation association on which the Securities are then traded or
quoted). The Trustee may select for redemption portions of the principal amount
of Securities that have denominations larger than $1,000.
Securities and portions of Securities that the Trustee selects shall be in
principal amounts of $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to Securities called for redemption also apply to
portions of Securities called for redemption. The Trustee shall notify the
Company promptly (but in any case within 7 days of the Company Order referred to
in Section 3.01 unless a shorter notice is acceptable to the Company) of the
Securities or portions
30
of the Securities selected to be redeemed and, in the case of any Securities
selected for partial redemption, the method it has chosen for the selection of
the Security.
Following a notice of redemption, Securities and portions of Securities
are convertible, pursuant to Section 11.01(a)(1), by the Holder until the close
of business on the Business Day prior to the Redemption Date. 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 that have been converted during a
selection of Securities to be redeemed may be treated by the Trustee as
outstanding for the purpose of such selection.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
days before a Redemption Date, the Company shall mail a notice of redemption
(substantially in the form of Exhibit D) 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
(along with any other information the Company wishes to include):
(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 may be converted at any time before the close of
business on the Business Day prior to the Redemption Date;
(6) that Securities called for redemption and not converted shall be
redeemed on the Redemption Date;
(7) that Holders who want to convert their Securities must satisfy the
requirements set forth in the Securities;
(8) that Securities called for redemption must be surrendered to the
Paying Agent (by effecting book entry transfer of the Securities or
delivering Certificated Securities, together with necessary
endorsements, as the case may be) to collect the Redemption Price;
(9) if fewer than all of the outstanding Securities are to be redeemed,
the certificate numbers, if any, and principal amounts of the
particular Securities to be redeemed;
31
(10) that, unless the Company defaults in making payment of such
Redemption Price, Interest, Contingent Interest, if any, and
Additional Amounts, if any, the Securities called for redemption
shall cease to accrue from and after the Redemption Date; and
(11) the CUSIP, "ISIN" or other similar number(s), as the case may be, of
the Securities being redeemed.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at the Company's expense, provided that the Company
makes such request at least seven Business Days (or such shorter period as may
be satisfactory to the Trustee) prior to the date by which such notice of
redemption must be given to Holders in accordance with this Section 3.03.
Section 3.04. Effect of Notice of Redemption. Once notice of redemption is
given, Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities that
are converted in accordance with the terms of this Indenture. Upon surrender to
the Paying Agent, such Securities shall be paid at the Redemption Price stated
in the notice and from and after the Redemption Date (unless the Company shall
default in the payment of the Redemption Price) such Securities shall cease to
bear Interest, Contingent Interest, if any, and Additional Amounts, if any, and
the rights of the Holders therein shall terminate (other than the right to
receive the Redemption Price).
Section 3.05. Deposit of Redemption Price. Prior to 11:00 a.m. (New York
City time), on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) 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 on or prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted. The Paying Agent shall as promptly as practicable return to
the Company any money not required for that purpose because of conversion of
Securities pursuant to Article 11. If such money is then held by the Company or
a Subsidiary or an Affiliate of either 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,
without charge, 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. Repurchase of Securities by the Company at Option of the
Holder. (a) On each of June 1, 2011, June 1, 2016 and June 1, 2021 (each, a
"REPURCHASE DATE"), each Holder shall have the option to require the Company to
32
repurchase Securities for which that Holder has properly delivered and not
withdrawn a written Repurchase Notice (as described below) at a repurchase price
in cash equal to 100% of the principal amount of those Securities, plus accrued
and unpaid Interest, accrued and unpaid Contingent Interest, if any, and accrued
and unpaid Additional Amounts, if any, on those Securities, to, but not
including, such Repurchase Date (the "REPURCHASE PRICE"); provided that if the
Repurchase Date is on a date that is after an Interest Record Date and on or
prior to the corresponding Interest Payment Date, the Repurchase Price shall be
100% of the principal amount of the Securities repurchased but shall not include
accrued and unpaid Interest, accrued and unpaid Contingent Interest, if any, and
Additional Amounts, if any. Instead, the Company shall pay such accrued and
unpaid Interest, Contingent Interest, if any, and Additional Amounts, if any, on
the Interest Payment Date, to the Holder of Record on the corresponding Interest
Record Date. Not later than 20 Business Days prior to any Repurchase Date, the
Company shall mail a Company Notice (substantially in the form of Exhibit E) by
first class mail to the Trustee and to each Holder (and to beneficial owners if
required by applicable law). The Company Notice shall include a form of
repurchase Notice to be completed by a Holder and shall state:
(i) the Repurchase Price and the Conversion Rate;
(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 if they are otherwise convertible only in accordance with
Article 11 hereof and the terms of the Securities 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 (by
effecting book entry transfer of the Securities or delivering Certificated
Securities, together with necessary endorsements, as the case may be) to
collect payment;
(v) that the Repurchase Price for any security as to which a
Repurchase Notice has been given and not withdrawn shall be paid promptly
following the later of the Business Day immediately following the
Repurchase Date and the time of surrender of such Security as described in
clause (iv) above;
(vi) the procedures the Holder must follow to exercise its right to
require the Company to repurchase such ▇▇▇▇▇▇'s Securities under this
Section 3.07 and a brief description of that right;
33
(vii) briefly, the conversion rights, if any, that exist at the date
of the Company Notice or as a result of the Company Notice with respect to
the Securities;
(viii) the procedures for withdrawing a Repurchase Notice;
(ix) that, unless the Company defaults in making payment on
Securities for which a Repurchase Notice has been submitted, Interest,
Contingent Interest, if any, or Additional Amounts, if any, on such
Securities shall cease to accrue from and after the Repurchase Date; and
(x) the CUSIP, "ISIN" or other similar number(s), as the case may
be, of the Securities.
At the Company's request, the Trustee shall give such Company Notice to
each Holder in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Company Notice shall be prepared
by the Company.
(b) A Holder may exercise its rights specified in Section 3.07(a) upon
delivery to the Paying Agent of a written notice of repurchase (a "REPURCHASE
NOTICE") during the period beginning at any time from the opening of business on
the date that is 20 Business Days prior to the relevant Repurchase Date until
the close of business on such Repurchase Date, stating:
(i) if Certificated Securities have been issued, the certificate
number(s) of the Securities which the Holder shall deliver to be
repurchased or, if Certificated Securities have not been issued for such
Security, the Repurchase Notice shall comply with the appropriate
Depositary procedures for book-entry transfer,
(ii) the portion of the principal amount of the Security which the
Holder shall deliver to be repurchased, which portion must be in principal
amounts of $1,000 or an integral multiple of $1,000, and
(iii) that such Security shall be repurchased by the Company as of
the Repurchase Date pursuant to the terms and conditions specified in
Section 6 of the Securities and in this Indenture.
The delivery of such Security (together with all necessary endorsements)
to the Paying Agent at any time after delivery of the Repurchase Notice at the
offices of the Paying Agent shall be a condition to receipt by the Holder of the
Repurchase Price therefor; provided, however, that such Repurchase Price shall
be so paid pursuant to this Section 3.07 only if the Security (together with all
necessary endorsements) so delivered to the Paying Agent shall conform in all
respects to the description thereof in the related Repurchase Notice.
34
The Company shall repurchase from the Holder thereof, pursuant to this
Section 3.07, 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 repurchase of all of a Security also apply to the repurchase of
such portion of such Security.
Any repurchase by the Company contemplated pursuant to the provisions of
this Section 3.07 shall be consummated by the delivery of the consideration to
be received by the Holder promptly following the later of the Business Day
immediately following the Repurchase Date and the time of delivery of the
Security (together with all necessary endorsements or notifications of
book-entry transfer).
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Repurchase Notice contemplated by this Section 3.07 shall
have the right to withdraw such Repurchase Notice by delivery of a written
notice of withdrawal to the Paying Agent in accordance with Section 3.09 at any
time prior to the close of business on the Repurchase Date.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Repurchase Notice or written notice of withdrawal thereof.
Section 3.08. Repurchase of Securities at Option of the Holder Upon a
Fundamental Change. (a) If a Fundamental Change occurs, each Holder shall have
the right, at such Holder's option, to require the Company to repurchase for
cash all of such Holder's Securities not previously called for redemption by the
Company, or any portion thereof that is equal to or an integral multiple of
$1,000 principal amount, at a repurchase price equal to 100% of the principal
amount of those Securities, plus accrued and unpaid Interest, accrued and unpaid
Contingent Interest, if any, and accrued and unpaid Additional Amounts, if any,
on those Securities (the "FUNDAMENTAL CHANGE REPURCHASE PRICE") to, but not
including, the date that is 30 days following the date of the notice of a
Fundamental Change mailed by the Company pursuant to Section 3.08(b) (the
"FUNDAMENTAL CHANGE REPURCHASE DATE"), subject to satisfaction by or on behalf
of the Holder of the requirements set forth in Section 3.08(c); provided that if
the Fundamental Change Repurchase Date is on a date that is after an Interest
Record Date and on or prior to the corresponding Interest Payment Date, the
Fundamental Change Repurchase Price shall be 100% of the principal amount of the
Securities repurchased but shall not include accrued and unpaid Interest,
accrued and unpaid Contingent Interest, if any, and Additional Amounts, if any.
Instead, the Company shall pay such Interest, Contingent Interest, if any, and
Additional Amounts, if any, on the Interest Payment Date to the Holder of Record
on the corresponding Interest Record Date.
(b) No later than 15 days after the occurrence of a Fundamental Change,
the Company shall mail a Company Notice of the Fundamental Change (substantially
in the form of Exhibit F) by first class mail to the Trustee and to each
35
Holder (and to beneficial owners if required by applicable law). The Company
Notice shall include a form of Fundamental Change Repurchase Notice to be
completed by the Holder and shall state:
(i) briefly, the events causing a Fundamental Change and the date of
such Fundamental Change;
(ii) the date by which the Fundamental Change Repurchase Notice
pursuant to this Section 3.08 must be delivered to the Paying Agent in
order for a Holder to exercise the repurchase rights;
(iii) the Fundamental Change Repurchase Date;
(iv) the Fundamental Change Repurchase Price;
(v) the name and address of the Paying Agent and the Conversion
Agent;
(vi) the Conversion Rate;
(vii) that the Securities as to which a Fundamental Change
Repurchase Notice has been given may be converted if they are otherwise
convertible pursuant to Article 11 hereof only if the Fundamental Change
Repurchase Notice has been withdrawn in accordance with the terms of this
Indenture;
(viii) that the Securities must be surrendered to the Paying Agent
(by effecting book entry transfer of the Securities or delivering
Certificated Securities, together with necessary endorsements, as the case
may be) to collect payment;
(ix) that the Fundamental Change Repurchase Price for any Security
as to which a Fundamental Change Repurchase Notice has been duly given and
not withdrawn shall be paid promptly following the later of the Business
Day immediately following the Fundamental Change Repurchase Date and the
time of surrender of such Security as described in clause (viii);
(x) briefly, the procedures the Holder must follow to exercise
rights under this Section 3.08;
(xi) briefly, the conversion rights, if any, that exist on the
Securities at the date of the Company Notice and as a result of such
Fundamental Change;
(xii) the procedures for withdrawing a Fundamental Change Repurchase
Notice;
36
(xiii) that, unless the Company defaults in making payment of such
Fundamental Change Repurchase Price on Securities for which a Fundamental
Change Repurchase Notice is submitted, Interest, Contingent Interest and
Additional Amounts, if any, on Securities surrendered for purchase by the
Company shall cease to accrue from and after the Fundamental Change
Repurchase Date; and
(xiv) the CUSIP, "ISIN" or other similar number(s), as the case may
be, of the Securities.
At the Company's request, the Trustee shall give such Company Notice to
each Holder in the Company's name and at the Company's expense; provided,
however, that, in all cases, the text of such Company Notice shall be prepared
by the Company.
(c) A Holder may exercise its rights specified in this Section 3.08 upon
delivery of a written notice of repurchase (a "FUNDAMENTAL CHANGE REPURCHASE
NOTICE") to the Paying Agent at any time on or prior to the close of business on
the Fundamental Change Repurchase Date, stating:
(i) If Certificated Securities have been issued, the certificate
number(s) of the Securities which the Holder shall deliver to be
repurchased or, if Certificated Securities have not been issued, the
Fundamental Change Repurchase Notice shall comply with the appropriate
Depositary procedures for book-entry transfer;
(ii) the portion of the principal amount of the Security which the
Holder shall deliver to be repurchased, which portion must be $1,000 or an
integral multiple of $1,000; and
(iii) that such Security shall be repurchased pursuant to the terms
and conditions specified in Section 6 of the Securities and in this
Indenture.
The delivery of such Security (together with all necessary endorsements)
to the Paying Agent with the Fundamental Change Repurchase Notice at the offices
of the Paying Agent shall be a condition to the receipt by the Holder of the
Fundamental Change Repurchase Price therefor; provided, however, that such
Fundamental Change Repurchase Price shall be so paid pursuant to this Section
3.08 only if the Security (together with all necessary endorsements) so
delivered to the Paying Agent shall conform in all respects to the description
thereof set forth in the related Fundamental Change Repurchase Notice.
The Company shall repurchase 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 repurchase of all of a Security also apply to the repurchase of
such portion of such Security.
37
Any repurchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the Fundamental Change
Repurchase Price promptly following the later of the Business Day following the
Fundamental Change Repurchase Date or the time of delivery of such Security
(together with all necessary endorsements or notifications of book-entry
transfer).
Notwithstanding the foregoing, Holders shall not have the right to require
the Company to repurchase the Securities upon a Change of Control described in
clause (3) of the definition thereof if more than 90% of the consideration in
the transaction or transactions constituting such Change of Control consists of
shares of common stock traded or to be traded immediately following such Change
of Control on a U.S. national securities exchange or The Nasdaq National Market,
and, as a result of such transaction or transactions, the Securities become
convertible into such common stock (and any rights attached thereto).
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Fundamental Change Repurchase Notice contemplated by this
Section 3.08(c) shall have the right to withdraw such Fundamental Change
Repurchase Notice by delivery of a written notice of withdrawal to the Paying
Agent in accordance with Section 3.09 at any time prior to the close of business
on the Fundamental Change Repurchase Date.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Fundamental Change Repurchase Notice or written withdrawal thereof.
Section 3.09. Effect of Repurchase Notice or Fundamental Change Repurchase
Notice. (a) Upon receipt by the Paying Agent of the Repurchase Notice or
Fundamental Change Repurchase Notice specified in Section 3.07 or Section 3.08,
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 Fundamental Change Repurchase Notice, as
the case may be, is withdrawn as specified in Section 3.09(b)) thereafter be
entitled solely to receive the Repurchase Price or Fundamental Change Repurchase
Price, as the case may be, with respect to such Security whether or not the
Security is, in fact, properly delivered. Such Repurchase Price or Fundamental
Change Repurchase Price shall be paid to such Holder, subject to receipt of
funds and/or securities by the Paying Agent, promptly following the later of (x)
the Business Day following the Repurchase Date or the Fundamental Change
Repurchase Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.07 or Section 3.08, 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 3.07 or Section 3.08, as applicable.
Securities in respect of which a Repurchase Notice or Fundamental Change
Repurchase Notice has been given by the Holder thereof may not be converted
pursuant to and to the extent permitted by Article 11 hereof on or after the
date of the delivery of such Repurchase Notice or Fundamental Change
38
Repurchase Notice unless such Repurchase Notice or Fundamental Change Repurchase
Notice has first been validly withdrawn as specified in Section 3.09(b).
(b) A Repurchase Notice or Fundamental Change Repurchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent in accordance with the Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be, at any time (i) in the case of the
Repurchase Notice, if received by the Paying Agent prior to the close of
business on the Repurchase Date or (ii) in the case of the Fundamental Change
Repurchase Notice, if received by the Paying Agent prior to the close of
business on the Fundamental Change Repurchase Date, as the case may be,
specifying:
(1) 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 shall be delivered
for purchase by the Company,
(2) if Certificated Securities have been issued, the certificate number,
if any, of the Security in respect of which such notice of
withdrawal is being submitted (or, if Certificated Securities have
not been issued, that such withdrawal notice shall comply with the
appropriate Depositary procedures), and
(3) the principal amount of the Security with respect to which such
notice of withdrawal is being submitted.
Section 3.10. Deposit of Repurchase Price or Fundamental Change Repurchase
Price. Prior to 11:00 a.m. (local time in The City of New York) on the Business
Day following the Repurchase Date or the Fundamental Change Repurchase Date, as
the case may be, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust as provided in Section 2.04) an
amount of cash in immediately available funds sufficient to pay the aggregate
Repurchase Price or Fundamental Change Repurchase Price, as the case may be, of
all the Securities or portions thereof which are to be purchased as of the
Repurchase Date or Fundamental Change Repurchase Date, as the case may be.
Section 3.11. Securities Purchased in Part. Any Certificated Security
which is to be purchased only in part shall be surrendered at the office of the
Paying Agent (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or such ▇▇▇▇▇▇'s attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered which is not
purchased.
39
Section 3.12. Covenant to Comply with Securities Laws upon Purchase of
Securities. When complying with the provisions of Section 3.07 or Section 3.08
hereof (provided that such offer or purchase constitutes an "issuer tender
offer" for purposes of Rule 13e-4 (which term, as used herein, includes any
successor provision thereto) under the Exchange Act at the time of such offer or
purchase), and subject to any exemptions available under applicable law, the
Company shall (i) comply with Rule 13e-4 and Rule 14e-1 (or any successor
provision) and any other applicable tender offer rules under the Exchange Act,
(ii) file the related Schedule TO (or any successor schedule, form or report)
under the Exchange Act, and (iii) otherwise comply with all Federal and state
securities laws so as to permit the rights and obligations under Section 3.07
and Section 3.08 to be exercised in the time and in the manner specified in
Section 3.07 and Section 3.08.
Section 3.13. Repayment to the Company. The Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed as provided in
Section 12 of the Securities, together with interest, if any, thereon (subject
to the provisions of Section 8.01(f)), held by them for the payment of the
Repurchase Price or Fundamental Change Repurchase Price, as the case may be.
ARTICLE 4
SUBORDINATION
Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each Holder of Securities issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article 4; and each Person holding any Security, whether
upon original issue or upon transfer, assignment or exchange thereof, accepts
and agrees to be bound by such provisions.
The payment of the principal, Interest, Contingent Interest and Additional
Amounts, if any, on all Securities (including, but not limited to, the
Redemption Price, the Repurchase Price and the Fundamental Change Repurchase
Price with respect to the Securities subject to redemption or repurchase in
accordance with Article 3 and the payment of any cash upon conversion in
accordance with Article 11) issued hereunder shall, to the extent and in the
manner hereinafter set forth, be (i) 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, whether
outstanding at the date of this Indenture or thereafter incurred; (ii) pari
passu in right of payment to all Senior Subordinated Debt and (iii) senior in
right of payment to all Subordinated Debt.
No provision of this Article 4 shall prevent the occurrence of any default
or Event of Default hereunder.
40
Section 4.02. Payments to Holders. No payment shall be made with respect
to the principal of, or Interest, Contingent Interest or Additional Amounts, if
any, on the Securities (including, but not limited to, the Redemption Price, the
Repurchase Price and the Fundamental Change Repurchase Price with respect to the
Securities subject to redemption or repurchase in accordance with Article 3 and
any payment of cash upon conversion in accordance with Article 11), except
payments and distributions made by the Trustee as permitted by the first or
second paragraph of Section 4.08, if:
(a) any principal, premium, if any, or interest with respect to
Designated Senior Indebtedness is not paid within any applicable grace
period (including at maturity), or
(b) any other default on Designated Senior Indebtedness occurs and
the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms,
unless, in either case,
(i) the default has been cured or waived and such acceleration has
been rescinded,
(ii) such Senior Indebtedness has been paid in full in cash, or
(iii) the Company and the Trustee receive written notice approving
such payment from the representatives of each issue of
Designated Senior Indebtedness.
During any default (other than a default described in clause (a) or (b)
above of this Section 4.02) on any Designated Senior Indebtedness under which
the maturity of the Designated Senior Indebtedness may be accelerated without
further notice (except any notice required to effect the acceleration) or the
expiration of any applicable grace periods, the Company may not make payments on
the Securities for a period (the "PAYMENT BLOCKAGE PERIOD") starting on the date
of receipt by the Company and the Trustee of written notice of the election to
effect a Payment Blockage Period and ending 179 days thereafter. The Payment
Blockage Period may be terminated before its expiration by written notice by a
representative of the holders of such Designated Senior Indebtedness to the
Trustee and to the Company from the Person who gave the blockage notice, by
repayment in full in cash of the Designated Senior Indebtedness with respect to
which the blockage notice was given, or because the default giving rise to the
Payment Blockage Period is no longer continuing or has been waived. Unless the
holders of the Designated Senior Indebtedness have accelerated the maturity of
the Designated Senior Indebtedness, the Company may and shall resume payments on
the Securities after the expiration of the Payment Blockage Period. Not more
than one blockage notice may be given in any period of 360 consecutive days
unless the first blockage notice within such 360-day period is given by or on
behalf of holders of Designated Senior Indebtedness other than the Bank
Indebtedness, in which case
41
the representative of the Bank Indebtedness may give another blockage notice
within such period. In no event, however, may the total number of days during
which any Payment Blockage Period or Payment Blockage Periods is in effect
exceed 179 days in the aggregate during any period of 360 consecutive days. No
default that existed or was continuing on the date of delivery of any payment
blockage notice to the Trustee will be, or can be made, the basis for the
commencement of a subsequent Payment Blockage Period whether or not within a
period of 360 consecutive days.
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 of the
Company (whether voluntary or involuntary) or in bankruptcy, insolvency,
receivership or similar proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash, or other payments
satisfactory to the holders of Senior Indebtedness, before any payment of cash,
property or securities is made on account of the principal of, Interest,
Contingent Interest or Additional Amounts, if any, on, or with respect to the
conversion of, the Securities (except as permitted by Section 4.08); and upon
any such dissolution or winding-up or liquidation or reorganization of the
Company or bankruptcy, insolvency, receivership or other proceeding, 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 4, 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 (pro rata to such holders on the basis of the
respective amounts of Senior Indebtedness held by such holders, or as otherwise
required by law or a court order) or their representative or representatives, or
to the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all Senior Indebtedness in
full in cash, or other payment satisfactory to the holders of Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness, before any payment or distribution is
made to the Holders of the Securities or to the Trustee.
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, transfer or lease of all or substantially all its property to
another corporation upon the terms and conditions provided for in Article 6
shall not be deemed a dissolution, winding-up, liquidation or reorganization for
the purposes of this Section 4.02 if such other corporation shall, as a part of
such consolidation, merger, conveyance, transfer or lease, comply with the
conditions stated in Article 6.
42
If payment of the Securities is accelerated because of an Event of
Default, the Company shall promptly notify holders of Senior Indebtedness or
their Representatives of such acceleration.
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, shall be received by the Trustee or the
Holders of the Securities before all Senior Indebtedness is paid in full, in
cash or other payment satisfactory to the holders of Senior Indebtedness, or
provision is made for such payment thereof in accordance with its terms in cash
or other payment satisfactory to the holders of 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 or their
Representative or Representatives, as their respective interests may appear, as
calculated by the Company, for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
Senior Indebtedness or their Representative, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.02 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 7.10 and Section 8.07. This Section 4.02
shall be subject to the further provisions of Section 4.08.
Section 4.03. 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, the rights of the Holders of the Securities shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article 4 (equally
and ratably with the holders of all Senior Subordinated Indebtedness) to the
rights of the holders of Senior Indebtedness to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal, interest or Additional Amounts, if any,
on the Securities shall be paid in full in cash or other payment satisfactory to
the holders of Securities; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article 4, and no payment
over pursuant to the provisions of this Article 4, to or for the benefit of the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as between the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment by
the Company to or 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
4, 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
43
understood that the provisions of this Article 4 are and are intended solely for
the purposes of defining the relative rights of the Holders of the Securities,
on the one hand, and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article 4 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 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 of, Interest, Contingent
Interest or Additional Amounts, if any, on 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 the 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
4 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 4, the Trustee, subject to the provisions of Section 8.01, 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 bankruptcy,
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 or 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 and all other facts pertinent thereto or to this Article 4.
Section 4.04. Authorization to Effect Subordination. Each Holder of a
Security by the Holder's acceptance thereof authorizes and directs the Trustee
on the Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the Holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in Section 4.03 hereof at least 30
days before the expiration of the time to file such claim, the holders of any
Senior Indebtedness or their representatives are hereby authorized to file an
appropriate claim for and on behalf of the Holders of the Securities.
Section 4.05. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officer's Certificate to a Responsible Officer of the
Trustee and to any Paying Agent 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
44
respect of the Securities pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 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
4, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officer's Certificate) or a Representative or a Holder or Holders of
Senior Indebtedness or from any trustee thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.01,
shall be entitled in all respects to assume that no such facts exist; provided
that, if on a date not less 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 of, Interest,
Contingent Interest or Additional Amount, if any, on any Security) the Trustee
shall not have received, with respect to such monies, the notice provided for in
this Section 4.05, 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.
The Trustee, subject to the provisions of Section 8.01, shall be entitled
to rely on the delivery to it of a written notice by a Representative or a
Person representing himself to be a holder of Senior Indebtedness (or a trustee
on behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article 4, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4, 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 4.06. Trustee's Relation to Senior Indebtedness. The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.11 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture
45
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of Senior Indebtedness and, subject to the provisions of Section
8.01, the Trustee shall not be liable to any holder of 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 shall be
entitled by virtue of this Article 4 or otherwise.
Section 4.07. No Impairment of Subordination. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.08. Certain Payments Not Prohibited. (a) For the purposes of
this Article 4 only, the issuance and delivery of junior securities upon
dissolution, winding-up, liquidation, insolvency or reorganization and the
issuance of Common Stock, other securities into which the Notes are then
convertible or junior securities upon conversion of Securities in accordance
with Article 11 shall not be deemed to constitute a payment or distribution on
account of the principal of such Security or interest subject to blockage
pursuant to Section 4.02. For the purposes of this Section 4.08, the term
"JUNIOR SECURITIES" means (x) shares of any Capital Stock of any class of the
Company, or (y) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness that 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. Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Indebtedness and the Holders, the right,
which is absolute and unconditional, of the Holder of any Security to convert
such Security in accordance with Article 11.
(b) Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Holders of monies deposited with
it pursuant to Article 9 prior to commencement of a Payment Blockage Period or
commencement of proceedings for dissolution, winding-up, liquidation or
reorganization, and any such payment shall not be subject to the provisions of
this Article 4.
Section 4.09. 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 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 in addition to or in
place of the Trustee;
46
provided, however, that the first paragraph of Section 4.05 shall not apply to
the Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
Section 4.10. Senior Indebtedness Entitled to Rely. The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article 4, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
ARTICLE 5
COVENANTS
Section 5.01. Payment of Securities. The Company shall make all payments
in respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. Any amounts of cash in immediately
available funds or shares of Common Stock to be given to the Trustee or Paying
Agent shall be deposited with the Trustee or Paying Agent by 11:00 a.m., New
York City time, by the Company. The principal amount of, and Interest,
Contingent Interest, if any, and Additional Amounts, if any, on the Securities,
and the Redemption Price, Repurchase Price and the Fundamental Change Repurchase
Price shall be considered paid on the applicable date due if on such date
(which, in the case of a Repurchase Price or a Fundamental Change Repurchase
Price, shall be on the Business Day immediately following the applicable
Repurchase Date or Fundamental Change Repurchase Date, as the case may be) the
Trustee or the Paying Agent holds, in accordance with this Indenture, cash or
securities, if permitted hereunder, sufficient to pay all such amounts then due.
Section 5.02. SEC and Other Reports. The Company shall deliver to the
Trustee, within 15 days after it files such annual and quarterly reports,
information, documents and other reports with the SEC, copies of its annual
report and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act. The Company shall also comply with the
other provisions of TIA Section 314(a). 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 information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely conclusively on Officer's
Certificates).
Section 5.03. Compliance Certificate. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company
(beginning with the fiscal year ending December 31, 2006) an Officer's
Certificate,
47
stating whether or not to the knowledge of the signer 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
such Officer may have knowledge and otherwise comply with Section 314(a)(4) of
the TIA.
The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, within 30 days of any executive officer of the Company
becoming aware of any Default or Event of Default in respect of the performance
or observance of any covenant or agreement contained in this Indenture or the
Securities, an Officers' Certificate specifying such Default or Event of Default
and what action the Company is taking or proposes to take with respect thereto.
Section 5.04. Further Instruments and Acts. The Company shall 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 5.05. Maintenance of Office or Agency. The Company shall maintain
in the United States of America, an office or agency of the Trustee, Registrar,
Paying Agent and Conversion Agent where Securities may be presented or
surrendered for payment, where Securities may be surrendered for registration of
transfer, exchange, purchase, redemption or conversion and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Corporate Trust Office of the Trustee, as listed in Section
13.02, shall initially be such office or agency for all of the aforesaid
purposes. The Company shall give prompt written notice to the Trustee of the
location, and of any change in the location, of any such office or agency (other
than a change in the location of the office of the Trustee). If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee set
forth in Section 13.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the United States
of America, for such purposes.
Section 5.06. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act, upon the
request of a Holder or any beneficial owner of Securities or Holder or
beneficial owner of shares of Common Stock issued upon conversion thereof, the
Company shall promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder or any beneficial owner of Securities or
Holder or beneficial
48
owner of shares of Common Stock issued upon conversion thereof, the Company
shall promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder or any beneficial owner of Securities or Holder or
beneficial owner of shares of Common Stock, or to a prospective purchaser of any
such security designated by any such Holder, as the case may be, to the extent
required to permit compliance by such Holder or beneficial owner with Rule 144A
under the Securities Act in connection with the resale of any such security.
"RULE 144A INFORMATION" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act. Whether a person is a beneficial owner
shall be determined by the Company to the Company's reasonable satisfaction.
Section 5.07. Additional Amounts Notice. In the event that the Company is
required to pay Additional Amounts to Holders of Securities pursuant to the
Registration Rights Agreement, the Company shall provide written notice
("ADDITIONAL AMOUNTS NOTICE") to the Trustee of its obligation to pay Additional
Amounts prior to the required payment date for the Additional Amounts, and the
Additional Amounts Notice shall set forth the amount of Additional Amounts to be
paid by the Company on such payment date. The Trustee shall not at any time be
under any duty to any Holder of Securities to determine the Additional Amounts,
or with respect to the nature, extent or calculation of the amount of Additional
Amounts when made, or with respect to the method employed in such calculation of
the Additional Amounts.
Section 5.08. Anti-Layering. The Company may not incur any Indebtedness
that is subordinate in right of payment to Senior Indebtedness of the Company
unless such Indebtedness is pari passu with, or subordinated in right of payment
to, the Notes. This does not apply to distinctions between categories of
Indebtedness that exist by reason of any liens or guarantees securing or in
favor of some but not all of such Indebtedness.
ARTICLE 6
SUCCESSOR PERSON
Section 6.01. When Company May Merge or Transfer Assets. The Company
shall not consolidate with or merge with or into any other Person or convey,
transfer, sell or lease all or substantially all of its properties and assets to
any Person, unless:
(a) the resulting, surviving or transferee person (the "SUCCESSOR
PERSON") will be a corporation organized and existing under the laws of
the United States of America, any State thereof or the District of
Columbia and the successor Person (if not the Company) will expressly
assume, by indenture supplemental hereto, executed and delivered to the
Trustee, in form reasonably satisfactory to the Trustee, all of the
obligations of the Company or such successor Person under the Securities
and this Indenture;
(b) immediately after giving effect to such transaction (and
treating any indebtedness which becomes an obligation of the successor
49
Person as a result of such transaction as having been incurred by such
successor Person as the time of such transaction), no Default shall have
occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer, sale or lease and, if a
supplemental indenture is required in connection with such transaction,
such supplemental indenture comply with this Article 6 and that all
conditions precedent herein provided 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,
sale, lease or other disposition is made shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this Indenture
with the same effect as if such successor had been named as the Company herein;
and thereafter, except in the case of a lease and obligations the Company may
have under a supplemental indenture, the Company shall be discharged from all
obligations and covenants under this Indenture and the Securities. Subject to
Section 10.06, the Company, the Trustee and the successor Person shall enter
into a supplemental indenture to evidence the succession and substitution of
such successor Person and such discharge and release of the Company.
ARTICLE 7
DEFAULTS AND REMEDIES
Section 7.01. Events of Default. So long as any Securities are
outstanding, each of the following shall be an "EVENT OF DEFAULT":
(a) the Company defaults in the payment of the principal amount of any
Security when due at maturity, redemption, upon repurchase or otherwise, whether
or not such payment is prohibited by reason of the subordination provisions in
Article 4;
(b) the Company defaults in the payment of any Interest, Contingent
Interest or Additional Amounts, if any, when due and payable, whether or not
such payment is prohibited by reason of the subordination provisions in Article
4, and continuance of such default for a period of 30 days;
(c) the Company defaults in its obligation to provide timely notice of a
Fundamental Change to the Trustee and each Holder as required under Section
3.08(b);
(d) following the exercise by the Holder of the right to convert a
Security in accordance with Article 11 hereof, the Company fails to comply with
its
50
obligations to deliver the cash or shares of Common Stock, if any, required to
be delivered as part of the applicable Conversion Settlement Distribution on the
applicable Conversion Settlement Date and such failure continues for a period of
5 days or more;
(e) the Company fails to comply with the obligation to repurchase Notes
pursuant to Section 3.07 or Section 3.08, whether or not such payment is
prohibited by reason of the subordination provisions in Article 13;
(f) the Company defaults in its obligation to redeem any Security, or any
portion thereof, called for redemption by the Company pursuant to and in
accordance with Section 3.01 hereof;
(g) the Company fails to perform or observe any covenant or warranty in
the Securities or this Indenture (other than those referred to in clause (a)
through clause (f) above) and such failure continues for 60 days after receipt
by the Company of a Notice of Default;
(h) the failure by the Company or any Subsidiary to pay Indebtedness
within any applicable grace period after final maturity or the Indebtedness is
accelerated by the holders of the Indebtedness because of a default, the total
amount of such Indebtedness unpaid or accelerated exceeds $25.0 million, and
such default remains uncured or such acceleration is not rescinded for 10 days
after the date on which Notice of Default has been provided;
(i) the entry by a court having jurisdiction in the premise of (i) a
decree or order for relief in respect of the Company or any of Subsidiary, in an
involuntary case or proceeding under any applicable bankruptcy, insolvency,
reorganization or other similar law (any "BANKRUPTCY LAW")or (ii) a decree or
order adjudging the Company or any Subsidiary, a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or any Subsidiary,
under any applicable Bankruptcy Law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company or of any substantial part of its property, or ordering the winding up
or liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order described in clause (i) or (ii)
above is unstayed and in effect for a period of 60 consecutive days; and
(j) (i) the commencement by the Company or any Subsidiary, of a voluntary
case or proceeding under any applicable Bankruptcy Law or of any other case or
proceeding to be adjudicated a bankrupt or insolvent, or (ii) the consent by the
Company, to the entry of a decree or order for relief in respect of the Company
or any Subsidiary, in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company, or (iii) the filing by the Company, of a
petition or answer or consent seeking reorganization or relief under any
applicable Bankruptcy Law, or (iv) the consent by the Company to the filing of
such petition or to the
51
appointment of or the taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or of
any substantial part of its property, or (v) the making by the Company or any
Subsidiary, of a general assignment for the benefit of creditors.
The foregoing shall constitute Events of Default whatever the reason for
any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.
For the avoidance of doubt, clauses (g) and (h) above shall not constitute
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 such default and the Company
does not cure such default (and such default is not waived) within the time
specified in clauses (g) and (h) above after actual receipt of such notice. Any
such notice must specify the default, demand that it be remedied and state that
such notice is a "NOTICE OF DEFAULT."
Section 7.02. Acceleration. If an Event of Default (other than an Event
of Default specified in Section 7.01(i) or Section 7.01(j) with respect to the
Company) occurs and is continuing (the Event of Default not having been cured or
waived), the Trustee by notice to the Company, or the Holders of at least 25% in
aggregate principal amount of the Securities at the time outstanding by notice
to the Company and the Trustee, may declare the principal amount of the
Securities and any accrued and unpaid Interest, any accrued and unpaid
Contingent Interest, if any, and accrued and unpaid Additional Amounts, if any,
on all the Securities to be immediately due and payable. Upon such a
declaration, such accelerated amount shall be due and payable immediately. If an
Event of Default specified in Section 7.01(i) or Section 7.01(j) with respect to
the Company occurs and is continuing, the principal amount of the Securities and
any accrued and unpaid Interest, any accrued and unpaid Contingent Interest, if
any, and accrued and unpaid Additional Amounts, if any, 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 Securityholders. The Holders of a majority
in aggregate principal amount of the Securities at the time outstanding, by
notice to the Trustee (and without notice to any other Securityholder) may
rescind an acceleration and its consequences, and thereby waive the Events of
Default giving rise to such acceleration, if the rescission would not conflict
with any judgment or decree and if all existing Events of Default have been
cured or waived except (1) an Event of Default described in clauses (a), (b),
(c), and (d) of Section 7.01 or (2) an Event of Default in respect of a
provision that under Section 10.02 cannot be amended without the consent of each
Securityholder affected. No such rescission shall affect any subsequent Event of
Default or impair any right consequent thereto.
52
Section 7.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of the principal amount of the Securities and any accrued and unpaid Interest,
any accrued and unpaid Contingent Interest, if any, and accrued and unpaid
Additional Amounts, if any, 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 Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 7.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive any
existing or past Default and its consequences except (1) an Event of Default
described in clauses (a), (b), (c), and (d) of Section 7.01 or (2) an Event of
Default in respect of a provision that under Section 10.02 cannot be amended
without the consent of each Securityholder affected. When a Default is waived,
it is deemed cured, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right. This Section 7.04 shall be in lieu of
Section 316(a)1(B) of the TIA and such Section 316(a)1(B) is hereby expressly
excluded from this Indenture, as permitted by the TIA.
Section 7.05. Control by Majority. The Holders of a majority in aggregate
principal amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines is unduly prejudicial to the rights of
other Securityholders or would involve the Trustee in personal liability;
provided that the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction or this Agreement. Prior to taking
any action under this Indenture, the Trustee may require indemnity satisfactory
to it in its sole discretion against all losses and expenses caused by taking or
not taking such action. This Section 7.05 shall be in lieu of Section 316(a)1(A)
of the TIA and such Section 316(a)1(A) is hereby expressly excluded from this
Indenture, as permitted by the TIA.
Section 7.06. Limitation on Suits. A Securityholder may not pursue any
remedy with respect to this Indenture or the Securities, except in case of a
Default due to the non-payment of the principal amount of the Securities, any
accrued and unpaid Interest, any accrued and unpaid Contingent Interest, if any,
or any accrued and unpaid Additional Amounts, if any, unless:
53
(1) the Holder gives to the Trustee written notice stating that a
Default is continuing;
(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 reasonable security or indemnity to the
Trustee against any costs, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of such notice and 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 Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 7.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, the right of any Holder to receive payment of
the principal amount of the Securities and any accrued and unpaid Interest, any
accrued and unpaid Contingent Interest, if any, and accrued and unpaid
Additional Amounts, if any, in respect of the Securities held by such Holder, on
or after the respective due dates expressed in the Securities or any Redemption
Date, Repurchase Date or Fundamental Change Repurchase Date, and to convert the
Securities in accordance with Article 11, or to bring suit for the enforcement
of any such payment or the right to convert on or after such respective dates,
shall not be impaired or affected adversely without the consent of such Holder.
Section 7.08. Collection Suit by Trustee. If an Event of Default
described in Section 7.01 clauses (a) through (f) (other than (b)) 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 8.07.
Section 7.09. 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 of the Securities and any accrued and unpaid
Interest, accrued and unpaid Contingent Interest, if any, and accrued and unpaid
Additional Amounts, 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
54
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 principal amount of the
Securities and any accrued and unpaid Interest, any accrued and unpaid
Contingent Interest, if any, and accrued and unpaid Additional Amounts, 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 or any other amounts due the Trustee
under Section 8.07) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that
the Trustee shall consent to the making of such payments directly to the
Holders, to pay the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and any other amounts due the Trustee under Section
8.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
The Company agrees not to object to the Trustee participating as a member
of any official committee of creditors of the Company as it deems necessary or
advisable.
Section 7.10. Priorities. Any money collected by the Trustee pursuant to
this Article 7, and, after an Event of Default, any money or other property
distributable in respect of the Company's obligations under this Indenture,
shall be paid out in the following order:
FIRST: to the Trustee (including any predecessor Trustee) for
amounts due under Section 8.07;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the principal amount of the Securities and any accrued and
unpaid Interest, any accrued and unpaid Contingent Interest, if any, and
accrued and unpaid Additional Amounts, 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
55
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 7.10. At least 15 days before such
record date, the Trustee shall mail to each Securityholder and the Company a
notice that states the record date, the payment date and the amount to be paid.
Section 7.11. 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 7.11
does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
7.07 or a suit by Holders of more than 10% in aggregate principal amount of the
Securities at the time outstanding. This Section 7.11 shall be in lieu of
Section 315(e) of the TIA and such Section 315(e) is hereby expressly excluded
from this Indenture, as permitted by the TIA.
Section 7.12. Waiver of Stay, Extension or Usury Laws. The Company
covenants (to the extent that it may lawfully do so) that it shall 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 of
the Securities and any accrued and unpaid Interest, any accrued and unpaid
Contingent Interest, if any, and accrued and unpaid Additional Amounts, if any,
on Securities, as contemplated herein, or which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it shall not hinder, delay or impede the execution of
any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
ARTICLE 8
TRUSTEE
Section 8.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in their exercise as a prudent Person
would exercise or use under the circumstances in the conduct of such Person's
own affairs.
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(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others, and no
implied duties shall be read into this Indenture against the
Trustee; 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, but 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 be under a duty to examine such
certificates and opinions to determine whether or not they
conform to the requirements of this Indenture, but need not
confirm or investigate the accuracy of mathematical
calculations or other facts stated therein. This Section
8.01(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 Section 8.01(c) does not limit the effect of Section
8.01(b) and 8.01(g);
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer unless it is proved
that the Trustee was negligent in ascertaining the pertinent
facts; and
(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 7.05.
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 this Section 8.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
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(f) Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee (acting in
any capacity hereunder) shall be under no liability for interest on any money
received by it hereunder unless otherwise agreed in writing with the Company
(provided that any interest earned on money held by the Trustee in trust
hereunder shall be the property of the Company).
(g) No provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 8.02. Rights of Trustee. Subject to the provisions of Section
8.01:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document (whether in original or facsimile form) believed
by it to be genuine and to have been signed or presented by the proper
party or parties;
(b) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, conclusively rely upon an Officer's Certificate;
(c) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(d) the Trustee shall not be liable for any action taken, suffered,
or omitted to be taken by it in good faith which it believes to be
authorized or within its rights or powers conferred under this Indenture;
(e) the Trustee may consult with counsel selected by it and any
advice or Opinion of 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 at the request, order or
direction of any of the Holders, pursuant to the provisions of this
Indenture,
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unless such Holders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby;
(g) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(h) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to, during regular business hours,
examine the books, records and premises of the Company, personally or by
agent or attorney at the sole cost of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation;
(i) the Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a Default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture;
(j) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, 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;
(k) the Trustee may request that the Company deliver an Officer's
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to
this Indenture, which Officer's Certificate may be signed by any person
authorized to sign an Officer's Certificate, including any person
specified as so authorized in any such certificate previously delivered
and not superseded; and
(l) the permissive rights of the Trustee to take certain actions
under this Indenture shall not be construed as a duty unless so specified
herein.
Section 8.03. Individual Rights of Trustee. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
59
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 like rights. However, the Trustee must comply
with Section 8.10 and Section 8.11.
Section 8.04. Trustee's Disclaimer. The Trustee makes no representation
as to, and shall have no responsibility for, the validity or adequacy of this
Indenture or the Securities, it shall not be accountable for the Company's use
or application by the Company of the Securities or of the proceeds from the
Securities, it shall not be responsible for the correctness of any statement in
the registration statement for the Securities under the Securities Act or in any
offering document for the Securities, the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
Section 8.05. Notice of Defaults. If a Default or Event of Default occurs
and if it is known to the Trustee, the Trustee shall give to each Securityholder
notice of the Default or Event of Default within 90 days after it occurs or, if
later, within 15 days after it is known to the Trustee, unless such Default or
Event of Default shall have been cured or waived before the giving of such
notice. Notwithstanding the preceding sentence, except in the case of a Default
or Event of Default described in clauses (a) and (b) of Section 7.01, the
Trustee may withhold the notice if and so long as a committee of its Responsible
Officers in good faith determines that withholding the notice is in the interest
of the Securityholders. The preceding sentence shall be in lieu of the proviso
to Section 315(b) of the TIA and such proviso is hereby expressly excluded from
this Indenture, as permitted by the TIA. The Trustee shall not be deemed to have
knowledge of a Default or Event of Default unless a Responsible Officer of the
Trustee has received written notice of such Default or Event of Default, which
notice specifically references this Indenture and the Securities.
Section 8.06. Reports by Trustee to Holders. Within 75 days after each
December 31 beginning with December 31, 2006, the Trustee shall mail to each
Securityholder a brief report dated as of such December 31 that complies with
TIA Section 313(a), if required by such Section 313(a). The Trustee also shall
comply with TIA Section 313(b). Any reports required by this Section 8.06 shall
be transmitted by mail to Securityholders pursuant to TIA Section 313(c).
A copy of each report at the time of its mailing to Securityholders shall
be filed with the SEC and each securities exchange, if any, on which the
Securities are listed. The Company agrees to notify the Trustee promptly
whenever the Securities become listed on any securities exchange and of any
delisting thereof.
Section 8.07. 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
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services rendered by it hereunder (which compensation shall not be limited
(to the extent permitted by law) by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its own negligence, willful misconduct or bad faith; and
(c) to indemnify the Trustee or any predecessor Trustee and their
agents for, and to hold them harmless against, any loss, damage, claim,
liability, cost or expense (including reasonable attorney's fees and
expenses, and taxes (other than taxes based upon, measured by or
determined by the income of the Trustee)) incurred without negligence,
willful misconduct or bad faith on its part, arising out of or in
connection with the acceptance or administration of this trust, including
the costs and expenses of defending itself against any claim (whether
asserted by the Company or any Holder or any other Person) or liability in
connection with the exercise or performance of any of its powers or duties
hereunder.
To secure the Company's payment obligations in this Section 8.07, 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 of, or the Redemption Price, Repurchase Price, Fundamental Change
Repurchase Price, Interest, Contingent Interest or Additional Amounts, if any,
as the case may be, on particular Securities.
The Company's payment, reimbursement and indemnity obligations pursuant to
this Section 8.07 shall survive the satisfaction and discharge of this
Indenture, the resignation or removal of the Trustee and the termination of this
Indenture for any reason. In addition to and without prejudice to its rights
hereunder, when the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 7.01(i) or Section 7.01(j), the
expenses, including the reasonable charges and expenses of its counsel and the
compensation for services payable pursuant to Section 8.07(a), are intended to
constitute expenses of administration under any applicable federal or state
bankruptcy, insolvency or similar laws.
For the purposes of this Section 8.07, the "Trustee" shall include any
predecessor Trustee; provided, however, that except as may be otherwise agreed
among the parties, the negligence, willful misconduct or bad faith of any
Trustee hereunder shall not affect the rights of any other Trustee hereunder.
Section 8.08. Replacement of Trustee. The Trustee may resign at any time
by so notifying the Company; provided, however, no such resignation shall be
61
effective until a successor Trustee has accepted its appointment pursuant to
this Section 8.08. The Holders of a majority in aggregate principal amount of
the Securities at the time outstanding may remove the Trustee by so notifying
the Trustee and the Company in writing. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with Section 8.10;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee otherwise becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company satisfactory in form and substance to
the retiring Trustee and the Company. Thereupon the resignation or removal of
the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 8.07.
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 at the expense
of the Company for the appointment of a successor Trustee.
If the Trustee fails to comply with Section 8.10, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
So long as no Default or Event of Default shall have occurred and be
continuing, if the Company shall have delivered to the Trustee (i) a Board
Resolution appointing a successor Trustee, effective as of a date at least 30
days after delivery of such Resolution to the Trustee, and (ii) an instrument of
acceptance of such appointment, effective as of such date, by such successor
Trustee in accordance with this Indenture, the Trustee shall be deemed to have
resigned as contemplated in this Section 8.08, the successor Trustee shall be
deemed to have been accepted as contemplated in this Indenture, all as of such
date, and all other provisions of this Indenture shall be applicable to such
resignation, appointment and acceptance.
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Section 8.09. Successor Trustee by ▇▇▇▇▇▇. If the Trustee consolidates
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another Person, the resulting, surviving
or transferee Person without any further act shall be the successor Trustee,
subject to Section 8.10 and 8.11.
Section 8.10. Eligibility; Disqualification. The Trustee shall at all
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
(or any parent holding company) shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition. Nothing herein contained shall prevent the Trustee from filing with
the Commission the application referred to in the penultimate paragraph of TIA
Section 310(b).
Section 8.11. 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 9
DISCHARGE OF INDENTURE
Section 9.01. Discharge of Liability on Securities. When (i) the Company
causes to be delivered to the Trustee all outstanding Securities (other than
Securities replaced or repaid pursuant to Section 2.07) for cancellation or (ii)
all outstanding Securities have become due and payable and the Company deposits
with the Trustee cash sufficient to pay all amounts due and owing on all
outstanding Securities (other than Securities replaced pursuant to Section
2.07), and if in either case the Company pays all other sums payable hereunder
by the Company, then this Indenture shall, subject to Section 8.07, cease to be
of further effect. The Trustee shall join in the execution of a document
prepared by the Company acknowledging satisfaction and discharge of this
Indenture on demand of the Company accompanied by an Officer's Certificate and
Opinion of Counsel and at the cost and expense of the Company.
Section 9.02. 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, subject to applicable abandoned property law. After
return to the Company, Holders entitled to the money or securities must look to
the Company for payment as general creditors unless an applicable abandoned
property law designates another person and the Trustee and the Paying Agent
shall have no further liability to the Securityholders with respect to such
money or securities for that period commencing after the return thereof.
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Section 9.03. Application of Trust Money. The Trustee shall hold in trust
all money and other consideration deposited with it pursuant to Section 9.01 and
shall apply such deposited money and other consideration through the Paying
Agent and in accordance with this Indenture to the payment of amounts due on the
Securities. Money and other consideration so held in trust is subject to the
Trustee's rights under Section 8.07.
ARTICLE 10
AMENDMENTS
Section 10.01. Without Consent of Holders. The Company and the Trustee
may modify or amend this Indenture or the Securities without the consent of any
Securityholder to:
(a) provide for the assumption by a successor Person of the
Company's obligations to the Holders of Securities in the case of a
merger, consolidation, conveyance, sale, transfer or lease pursuant to
Article 6 or Section 11.05 hereof, and otherwise to comply with the
provisions of this Indenture relating to consolidations, mergers, and
sales of assets;
(b) to surrender any right or power conferred on the Company by the
indenture, to add further covenants, restrictions, conditions, or
provisions for the protection of the Holders of all or any Securities, and
to make the occurrence, or the occurrence and continuance of, a default in
any of such additional covenants, restrictions, conditions, or provisions,
a Default or an Event of Default;
(c) cure any ambiguity or to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which
is otherwise defective or inconsistent with any provision contained in
this Indenture or the Securities; to convey, transfer, assign, mortgage,
or pledge any property to or with the Trustee, or to make such other
provisions in regard to matters or questions arising under this Indenture
as shall not adversely affect the interests of any Holders of the
Securities;
(d) comply with the requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA;
(e) to add or change any of the provisions of this Indenture to
change or eliminate any restriction on the payment of principal with
respect to the Securities so long as any such action does not adversely
affect the interests of the Holders of the Securities in any material
respect;
(f) provide for uncertificated Securities in addition to or in place
of Certificated Securities; provided, however, that uncertificated
Securities
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are issued in registered form for purposes of Section 163(f) of the Code
or in a manner such that uncertificated Securities are described in
Section 163(f)(2)(B) of the Code;
(g) to make any change in the provisions of Article 13 that would
limit or terminate the benefits available to any Holder of Senior
Indebtedness under such provisions (but only if such Holder of Senior
Indebtedness consents to such change);
(h) add guarantees with respect to the Securities or to secure the
Securities;
(i) evidence and provide for the acceptance of the appointment under
this Indenture of a successor Trustee in accordance with the terms of this
Indenture and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
this Indenture by more than one Trustee;
(j) establish the form of Securities if issued in definitive form
(substantially in the form of Exhibit B);
(k) provide for conversion rights of Holders of Securities if any
reclassification or change of the Common Stock or any consolidation,
merger or sale of all or substantially all of the Company's assets occurs;
(l) change the Conversion Rate in accordance with this Indenture;
provided, however, that any increase in the Conversion Rate other than
pursuant to Article 11 shall not adversely affect the interests of the
Holders of Securities (after taking into account U.S. federal income tax
and other consequences of such increase);
(m) to confirm, as necessary, the Indenture and the form or terms of
the Notes, to the "Description of the Notes" as set forth in the Offering
Memorandum; and
(n) make any changes or modifications in the Indenture or the
Securities; provided, however, that any such change or modification does
not, adversely affect the interests of the Holders of Securities in any
material respect;
Section 10.02. With Consent of Holders. Except as provided below in this
Section 10.02 and in Section 10.01, this Indenture or the Securities may be
amended, modified or supplemented, and noncompliance in any particular instance
with any provision of this Indenture or the Securities may be waived, in each
case with the written consent of the Holders of at least a majority of the
principal amount of the Securities at the time outstanding.
65
Without the written consent or the affirmative vote of each Holder of
Securities affected thereby, an amendment, supplement or waiver under this
Section 10.02 may not:
(a) reduce the percentage of the aggregate principal amount of the
outstanding Securities the consent of whose Holders is required for any
such supplemental indenture entered into in accordance with this Section
10.02 or the consent of whose Holders is required for any waiver provided
for in this Indenture.
(b) alter the manner of calculation or rate of accrual of Interest,
Contingent Interest or Additional Amounts, or extend the time for payment
of any such amount or the Redemption Price, Fundamental Change Repurchase
Price or Repurchase Price of any Security;
(c) reduce the principal amount of or change the maturity of any
Security, or the payment date of any installment of Interest, Contingent
Interest or Additional Amounts payable on any Security;
(d) reduce the Redemption Price, Repurchase Price or Fundamental
Change Repurchase Price of, any Security or change the time at which or
circumstances under which the Securities may be redeemed or repurchased;
(e) change the currency of payment of such Securities or Interest,
Contingent Interest, Additional Amounts, Redemption Price, Fundamental
Change Repurchase Price or Repurchase Price thereon;
(f) make any change to Article 4 or Section 5.08 that adversely
affects the rights of the Holders thereunder;
(g) modify any of the provisions of this Section, or reduce the
percentage of the aggregate principal amount of outstanding Securities
required to amend, modify or supplement this Indenture or the Securities
or waive an Event of Default, except to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each outstanding Security affected thereby;
(h) adversely impair the right of the Holders of the Securities to
convert any Security or reduce the shares of Common Stock or other
property receivable upon conversion as provided in Article 11, except as
otherwise permitted pursuant to Article 6 or Section 11.05 hereof; or
(i) impair the right of any Holder to institute suit for the
enforcement of any payment of past due amounts with respect to, or
conversion of, any Security.
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It shall not be necessary for the consent of the Holders under this
Section 10.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof. A consent to
any amendment or waiver under this Indenture by any Holder of the Securities
given in connection with a tender of such Holder's Securities will not be
rendered invalid by such tender.
After an amendment under this Section 10.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment. The failure
to give such notice to all Securityholders, or any defect therein, shall not
impair or affect the validity of an amendment under this Section 10.02.
Section 10.03. Compliance With Trust Indenture Act. Every supplemental
indenture executed pursuant to this Article shall comply with the TIA as then in
effect.
Section 10.04. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a Holder of a Security hereunder is a continuing consent by
the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's Security,
even if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver or
action as to such Holder's Security or portion of the Security if the Trustee
receives the notice of revocation before the date the amendment, waiver or
action becomes effective. After an amendment, waiver or action becomes
effective, it shall bind every Securityholder.
For the purposes of this Indenture, the written consent of the Holder of a
Global Security shall be deemed to include any consent delivered by an Agent by
electronic means in accordance with the Automated Tender Offer Procedures system
or other customary procedures of, and pursuant to authorization by, DTC.
Section 10.05. Notice of Amendments, Notation on or Exchange of
Securities. Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 10 may, and shall if required by
the Company, bear a notation in form approved by the Company 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. Failure to make the appropriate notation or
to issue a new Security shall not affect the validity of such amendment.
Section 10.06. Trustee to Sign Supplemental Indentures. The Trustee shall
sign any supplemental indenture authorized pursuant to this Article 10 if the
amendment contained therein does not affect the rights, duties, liabilities or
67
immunities of the Trustee. If it does, the Trustee may, but need not, sign such
supplemental indenture. In signing such supplemental indenture the Trustee shall
receive, and (subject to the provisions of Section 8.01) shall be fully
protected in relying upon, an Officer's Certificate and an Opinion of Counsel
stating that such amendment is authorized or permitted by this Indenture.
Section 10.07. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, 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 11
CONVERSIONS
Section 11.01. Conversion Privilege. (a) Subject to and upon compliance
with the provisions of this Article 11, a Holder of a Security shall have the
right, at such Holder's option, to convert all or any portion (if the portion to
be converted is $1,000 principal amount or an integral multiple thereof) of such
Security prior to the close of business on the Business Day immediately
preceding Stated Maturity into cash and shares of Common Stock, if any, at the
Conversion Rate (the "CONVERSION OBLIGATION") in effect on the date of
conversion only as follows:
(1) during any fiscal quarter of the Company (a "FISCAL
QUARTER") commencing after June 30, 2006 (and only during such
Fiscal Quarter), if the Last Reported Sale Price of the Common Stock
for at least 20 Trading Days during the period of 30 consecutive
Trading Days ending on the last Trading Day of the immediately
preceding Fiscal Quarter exceeds 130% of the Conversion Price in
effect on such last Trading Day;
(2) during the five Business Days immediately following any
five consecutive Trading Day period (the "MEASUREMENT PERIOD") in
which the Trading Price per $1,000 principal amount of the
Securities for each day of such Measurement Period was less than 98%
of the product of the Closing Price of the Common Stock and the
Conversion Rate on each such date; provided, however that a Holder
cannot convert any Security in reliance on this provision after June
1, 2021 if on any Trading Day during the Measurement Period the
closing price of the Common Stock was between 100% and 130% of the
Conversion Price of the Securities. The Conversion Agent will, on
the Company's behalf, determine if the Securities are convertible as
a result of the Trading Price of the Securities and notify the
Company and the Trustee; provided, that the Conversion Agent shall
have no obligation to determine the Trading Price of the Securities
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unless the Company has requested such determination and the Company
shall have no obligation to make such request unless requested to do
so by a Holder of the Securities in writing. Upon making any such
written request, any such requesting Holder shall provide reasonable
evidence that (A) such requesting Holder is a Holder of the
Securities as of the date of such notice, and (B) the Trading Price
per $1,000 principal amount of Securities would be less than 98% of
the product of the Closing Price of the Common Stock and the
Conversion Rate. At such time, the Company shall instruct the
Conversion Agent to determine the Trading Price of the Securities
beginning on the next Trading Day and on each successive Trading Day
until the Trading Price per $1,000 principal amount of the
Securities is greater than or equal to 98% of the product of the
Closing Price of the Common Stock and the Conversion Rate;
(3) at any time prior to the close of business on the Business
Day immediately preceding the Redemption Date, if the Company has
called the Securities for redemption pursuant to Article 3 hereof,
even if the Securities are not otherwise convertible at that time;
(4) as provided in clause (b) of this Section 11.01.
The Company or, at its option, the Conversion Agent on behalf of the
Company, shall determine on a daily basis during the time periods specified in
Section 11.01(a)(1) or, following a request by a Holder of Securities in
accordance with the procedures specified in Section 11.01(a)(2), whether the
Securities shall be convertible as a result of the occurrence of an event
specified in such Sections and, if the Securities shall be so convertible, the
Company or the Conversion Agent, as applicable, shall promptly deliver to the
Trustee and Conversion Agent or the Company, as applicable written notice
thereof. Whenever the Securities shall become convertible pursuant to this
Section 11.01 (as determined in accordance with this Section 11.01), the Company
or, at the Company's written request, the Trustee in the name and at the expense
of the Company, shall promptly notify the Holders of the event triggering such
convertibility in the manner provided in Section 13.02, and the Company shall
also promptly disseminate a press release through Dow ▇▇▇▇▇ & Company, Inc. or
Bloomberg Business News and publish such information on the Company's Website or
through another public medium the Company may use at that time. Any notice so
given shall be conclusively presumed to have been duly given, whether or not the
Holder receives such notice.
(b) In the event that:
(1) (A) the Company distributes to all or substantially all
holders of Common Stock rights or warrants entitling them to
purchase, for a period expiring within 60 days after the date of
such distribution, Common Stock at less than the Last Reported Sale
Price
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of the Common Stock on the Trading Day immediately preceding the
announcement date for such distribution; or (B) the Company
distributes to all or substantially all holders of Common Stock
assets (including cash), debt securities or rights or warrants to
purchase the Company's securities, which distribution has a per
share value as determined by the Board of Directors exceeding 10% of
the Last Reported Sale Price of the Common Stock on the Trading Day
immediately preceding the announcement date of such distribution,
then, in either case, the Securities may be surrendered for
conversion at any time on and after the date that the Company gives
notice to the Holders of such distribution, which shall be not less
than 20 Business Days prior to the Ex-Dividend Date for such
distribution, until the earlier of the close of business on the
Business Day immediately preceding the Ex-Dividend Date or the date
on which the Company announces that such distribution shall not take
place, even if the Securities are not otherwise convertible at such
time; provided that no Holder of a Security shall have the right to
convert if the Holder may otherwise participate in such distribution
without conversion; or
(2) a Change of Control occurs pursuant to clause (1) of the
definition thereof set forth above or pursuant to clause (3) of the
definition thereof set forth above under which the Common Stock is
to be converted into cash, securities or other property, in either
case regardless of whether a Holder has the right to require the
Company to repurchase such Holder's Securities pursuant to Section
3.08, then the Securities may be surrendered for conversion at any
time from and after the date which is 15 days prior to the
anticipated effective date of such transaction until 15 days after
the actual effective date of such transaction (or, if such
transaction also constitutes a Change of Control pursuant to which
Holders have a right to require the Company to repurchase the
Securities pursuant to Section 3.08, to, but not including, the
applicable Fundamental Change Repurchase Date). The Company shall
notify Holders and the Trustee at the time the Company publicly
announces the Change of Control transaction giving rise to the above
conversion right (but in no event less than 15 days prior to the
anticipated effective date of such transaction). If the Company
engages in any reclassification of the Common Stock (other than a
subdivision or combination of its outstanding Common Stock, or a
change in par value, or from par value to no par value, or from no
par value to par value) or is party to a consolidation, merger,
binding share exchange or transfer of all or substantially all of
its assets pursuant to which Holders of Common Stock would be
entitled to receive cash, securities or other property, then at the
effective time of such transaction, to the extent that it
constitutes a Change of Control as described in this paragraph above
as giving rise to a conversion right, the Conversion Obligation and
the Conversion Settlement
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Distribution shall be based on the applicable Conversion Rate and
the kind and amount of cash, securities or other property that a
holder of one share of the Common Stock would have received in such
transaction (such property, collectively, the "EXCHANGE PROPERTY").
In addition, if a Holder converts Securities following the effective
time of any such transaction, any amounts of the Conversion
Settlement Distribution to be settled in shares of Common Stock
shall be paid in such Exchange Property rather than shares of Common
Stock. If the transaction also constitutes a Change of Control, (A)
a Holder can require the Company to repurchase all or a portion of
its Securities pursuant to Section 3.08 or, (B) if such Holder
elects, instead, to convert all or a portion of its Securities, such
Holder shall receive Additional Shares upon conversion pursuant to
Section 11.01(c), in each case, subject to the terms and conditions
set forth in each such Section.
(c) If and only to the extent a Holder timely elects to convert Securities
during the period specified in Section 11.01(b)(2) above on or prior to June 6,
2011, and 10% or more of the consideration for the Common Stock in such Change
of Control transaction consists of consideration other than common stock traded
or scheduled to be traded immediately following such transaction on a U.S.
national securities exchange or the Nasdaq National Market, the Conversion Rate
shall be increased by an additional number of shares of Common Stock (the
"ADDITIONAL SHARES") as described below; provided that if the Stock Price paid
in connection with such transaction is greater than $80.00 or less than $7.96
(subject in each case to adjustment as described below), no Additional Shares
shall be added to the Conversion Rate. Notwithstanding this Section 11.01(c), if
the Company elects to adjust the Conversion Rate pursuant to Section 11.01(d),
the provisions of Section 11.01(d) shall apply in lieu of the provisions of this
Section 11.01(c). The Company shall notify Holders, at least 15 days prior to
the anticipated effective date of such transaction causing any increase of the
Conversion Rate pursuant to this Section 11.01(c), whether the Company elects to
increase the Conversion Rate as described above or to adjust the Conversion Rate
pursuant to Section 11.01(d).
The number of Additional Shares to be added to the Conversion Rate as
described in the immediately preceding paragraph shall be determined by
reference to the table attached as Schedule I hereto, based on the effective
date of such Change of Control transaction and the Stock Price paid in
connection with such transaction; provided that if the Stock Price is between
two Stock Price amounts in the table or such effective date is between two
effective dates in the table, the number of Additional Shares shall be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Stock Price amounts and the two dates,
as applicable, based on a 365-day year. The "EFFECTIVE DATE" with respect to a
Change of Control transaction means the date that a Change of Control becomes
effective.
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With respect to any Securities tendered for conversion to which Additional
Shares apply, any shares of Common Stock to be delivered upon conversion of such
Securities pursuant to Section 11.02 shall be delivered to Holders who elect to
convert their Securities on the later of (i) the fifth Business Day following
the effective date and (2) the third Business Day following the final day of the
Cash Settlement Period.
The Stock Prices set forth in the first row of the table in Schedule I
hereto shall be adjusted as of any date on which the Conversion Rate of the
Securities is adjusted pursuant to Section 11.04. The adjusted Stock Prices
shall equal the Stock Prices applicable immediately prior to such adjustment,
multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to the adjustment giving rise to the Stock Price adjustment
and the denominator of which is the Conversion Rate as so adjusted. The number
of Additional Shares shall be adjusted in the same manner as the Conversion Rate
as set forth in Section 11.04.
Notwithstanding the foregoing, in no event shall the total additional
number of shares of Common Stock issuable upon conversion of the Securities
pursuant to this clause (c) exceed 31.5246 per $1,000 principal amount of
Securities, subject to adjustments in the same manner as the Conversion Rate as
set forth in Section 11.04.
(d) Notwithstanding the provisions of Section 11.01(c), in the case of a
Change of Control that would lead to the issuance of Additional Shares as set
forth in clause (c) above that is also a Public Acquirer Change of Control, the
Company may, in lieu of increasing the Conversion Rate by Additional Shares as
described in Section 11.01(c), elect to adjust the Conversion Rate and the
related Conversion Obligation such that from and after the effective date of
such Public Acquirer Change of Control, Holders of Securities shall be entitled
to convert their Securities (subject to the satisfaction of the conditions to
conversion set forth in Section 11.01(a)) into Public Acquirer Common Stock. The
Conversion Rate following the effective date of such transaction will be a
number of shares of Public Acquirer Common Stock equal to the product of the
Conversion Rate in effect immediately before the Public Acquirer Change of
Control times the average of the quotients obtained, for each Trading Day in the
10 consecutive Trading Day period ending on the Trading Day immediately
preceding the effective date of such Public Acquirer Change of Control (the
"VALUATION PERIOD"), of:
(i) the Acquisition Value of our Common Stock on each such Trading
Day in the Valuation Period, divided by
(ii) the Last Reported Sale Price of the Public Acquirer Common
Stock on each such Trading Day in the Valuation Period.
The "ACQUISITION VALUE" of the Common Stock means, for each Trading Day in
the Valuation Period, the value of the consideration paid per share of
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Common Stock in connection with such Public Acquirer Change of Control, as
follows:
(i) for any cash, 100% of the face amount of such cash;
(ii) for any Public Acquirer Common Stock, 100% of the Last Reported
Sale Price of such Public Acquirer Common Stock on such trading day; and
(iii) for any other securities, assets or property, 100% of the fair
market value of such security, asset or property on such Trading Day, as
determined by three independent nationally recognized investment banks
selected by the Company for this purpose.
"PUBLIC ACQUIRER CHANGE OF CONTROL" means an event constituting a
corporate transaction that would otherwise obligate the Company to increase the
Conversion Rate as described in Section 11.01(c) and the acquirer, the Person
formed by or surviving the merger or consolidation or any entity that is direct
or indirect "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act)
of more than 50% of such Person's or acquirer's Voting Stock has a class of
common stock traded on a national securities exchange or quoted on a The Nasdaq
National Market or which shall be so traded or quoted when issued or exchanged
in connection with such Change of Control (the "PUBLIC ACQUIRER COMMON STOCK");
provided, that if there is more than one of such entity, the relevant entity
shall be such entity with the most direct beneficial ownership to such
acquirer's or Person's Capital Stock.
Upon a Public Acquirer Change of Control, if the Company so elects,
Holders may convert their Securities (subject to the satisfaction of the
conditions to conversion set forth in Section 11.01(a)) at the adjusted
Conversion Rate described above but shall not be entitled to the increased
Conversion Rate described in Section 11.01(c). The Company shall notify Holders
of its election in its notice to Holders pursuant to Section 11.01(b)(2) above.
Holders may convert their Securities upon a Public Acquirer Change of Control
during the period specified in Section 11.01(b)(2). In addition, Holders can
also, subject to certain conditions, require the Company to repurchase all or a
portion of their Securities as described in Section 3.08.
After any adjustment of the Conversion Rate in connection with a Public
Acquirer Change of Control, the Conversion Rate shall be subject to further
similar adjustments in the event that any of the events described in Section
11.04 occur thereafter.
The Company may only make such election if such public acquirer is a
corporation organized under the laws of the United States, any State thereof or
the District of Columbia and if the Company and such public acquirer executes a
supplemental indenture whereby the public acquirer agrees to comply with the
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obligations of the Company under the Securities and the Indenture applicable to
such public acquirer or any securities thereof that may be issuable upon
conversion of the Securities.
Section 11.02. Conversion Procedure; Conversion Rate; Fractional Shares.
(a) Subject to Section 11.01 and the Company's rights under Section 11.03, each
Security shall be convertible at the office of the Conversion Agent into a
combination of cash and fully paid and nonassessable shares (calculated to the
nearest 1/10,000th of a share) of Common Stock, if any at a rate (the
"CONVERSION RATE") equal to, initially, 94.1035 shares of Common Stock for each
$1,000 principal amount of Securities. The Conversion Rate shall be adjusted in
certain instances as provided in Section 11.04 hereof, but shall not be adjusted
for any accrued and unpaid Interest, Contingent Interest, or Additional Amounts,
if any. Upon conversion, no payment shall be made by the Company with respect to
any accrued and unpaid Interest, including Contingent Interest, if any. Instead,
such amount shall be deemed paid by the applicable Conversion Settlement
Distribution delivered upon conversion of any Security. In addition, no payment
or adjustment shall be made in respect of dividends on the Common Stock with a
record date prior to the Conversion Date. Notwithstanding the foregoing, upon
conversion, a Holder shall receive any accrued and unpaid Additional Amounts to
the Conversion Date. The Company shall not issue any fraction of a share of
Common Stock in connection with any conversion of Securities, but instead shall,
subject to Section 11.03 hereof, make a cash payment (calculated to the nearest
cent) equal to such fraction multiplied by the Last Reported Sale Price of the
Common Stock on the Trading Day prior to the Conversion Date.
(b) Before any Holder of a Security shall be entitled to convert the same
into a combination of cash and Common Stock, if any, such Holder shall (1) in
the case of Global Securities, comply with the procedures of the Depositary in
effect at that time for converting a beneficial interest in a Global Security,
and in the case of Certificated Securities, surrender such Securities, duly
endorsed to the Company or in blank, at the office of the Conversion Agent, and
(2) give written notice to the Company in the form on the reverse of such
Certificated Security (the "CONVERSION NOTICE") at said office or place that
such Holder elects to convert the same and shall state in writing therein the
principal amount of Securities to be converted and the name or names (with
addresses) in which such Holder wishes the certificate or certificates for
Common Stock included in the Conversion Settlement Distribution, if any, to be
registered.
Before any such conversion, a Holder also shall pay all taxes or duties,
if any, as provided in Section 11.06 and any amount payable pursuant to Section
11.02(g).
If more than one Security shall be surrendered for conversion at one time
by the same Holder, the number of full shares of Common Stock, if any, that
shall be deliverable upon conversion as part of the Conversion Settlement
Distribution shall
74
be computed on the basis of the aggregate principal amount of the Securities (or
specified portions thereof to the extent permitted thereby) so surrendered.
(c) A Security shall be deemed to have been converted as of the close of
business on the date (the "CONVERSION DATE") that the Holder has complied with
Section 11.02(b).
(d) The Company shall, on the Conversion Settlement Date, (i) pay the cash
component (including cash in lieu of any fraction of a share to which such
Holder would otherwise be entitled) of the Conversion Obligation determined
pursuant to Section 11.03 to the Holder of a Security surrendered for
conversion, or such Holder's nominee or nominees, and (ii) issue, or cause to be
issued, and deliver to the Conversion Agent or to such Holder, or such Holder's
nominee or nominees, certificates for the number of full shares of Common Stock,
if any, to which such Holder shall be entitled as part of such Conversion
Obligation. The Company shall not be required to deliver certificates for shares
of Common Stock while the stock transfer books for such stock or the security
register are duly closed for any purpose, but certificates for shares of Common
Stock shall be issued and delivered as soon as practicable after the opening of
such books or security register, and the Person or Persons entitled to receive
the Common Stock as part of the applicable Conversion Settlement Distribution
upon such conversion shall be treated for all purposes as the record holder or
holders of such Common Stock, as of the close of business on the applicable
Conversion Settlement Date.
(e) In case any Security shall be surrendered for partial conversion, the
Company shall execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Security so surrendered, without charge
to such Holder (subject to the provisions of Section 11.06 hereof), a new
Security or Securities in authorized denominations in an aggregate principal
amount equal to the unconverted portion of the surrendered Securities.
(f) By delivering the combination of cash and shares of Common Stock, if
any, together with a cash payment in lieu of any fractional shares to the
Conversion Agent or to the Holder or such Holder's nominee or nominees, the
Company shall have satisfied in full its Conversion Obligation with respect to
such Security, and upon such delivery, accrued and unpaid Interest, if any, and
Contingent Interest, if any, with respect to such Security shall be deemed to be
paid in full rather than canceled, extinguished or forfeited, and such amounts
shall no longer accrue.
(g) If a Securityholder delivers a Conversion Notice after the Interest
Record Date for a payment of Interest (including Contingent Interest, if any)
but prior to the corresponding Interest Payment Date, such Securityholder must
pay to the Company, at the time such Securityholder surrenders Securities for
conversion, an amount equal to the Interest (including Contingent Interest, if
any, and excluding, for the avoidance of doubt, Additional Amounts, if any),
that has
75
accrued and shall be paid on the related Interest Payment Date. The preceding
sentence shall not apply if (1) the Company has specified a Redemption Date that
is after an Interest Record Date but on or prior to the corresponding Interest
Payment Date, (2) the Company has specified a Fundamental Change Repurchase Date
during such period referred to in clause (1) of this paragraph or (3) to the
extent of Overdue Interest, if any overdue Interest exists at the time of
conversion with respect to the Securities converted.
Section 11.03. Payment Upon Conversion. (a) Upon conversion of Securities,
the Company shall deliver to Holders surrendering Securities for conversion, for
each $1,000 principal amount of Securities, a settlement amount (the "CONVERSION
SETTLEMENT DISTRIBUTION") on the Conversion Settlement Date consisting of:
(i) cash amount (the "CASH AMOUNT") equal to the lesser of $1,000
and the Conversion Value; and
(ii) to the extent the Conversion Value exceeds $1,000, (x) a number
of shares of Common Stock equal to the sum of, for each day of the Cash
Settlement Period described below, the greater of:
(A) zero and
(B) the quotient of
(1) 5% of the difference between (x) the product
of the Conversion Rate (plus any Additional Shares as
described under Section 11.01(c))and the Last Reported
Sale Price of the Common Stock on such date, and (y)
$1,000, divided by
(2) the Last Reported Sale Price of the Common
Stock for such day, or
(y) if the Company so elects, cash equal to the difference (such
difference, the "NET SHARE AMOUNT") between the Conversion Value and
$1,000 or
(z) if the Company so elects, a combination of cash and shares of
Common Stock with a value equal to the difference between the Conversion
Value and $1,000, such amount to be determined as set out below.
The Company may elect to pay cash to Holders of Securities surrendered for
conversion in lieu of all or a portion of the net shares of Common Stock
issuable upon conversion of such Securities only if payment of such cash would
not be prohibited by the terms of the Company's other Indebtedness. If the
Company does so elect to pay cash, the Company will notify Holders though the
Trustee of
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the dollar amount to be satisfied in cash (either 100% or a fixed dollar amount
will be paid (the "SPECIFIED CASH AMOUNT")) at any time on or before the date
that is two Business Days following the Conversion Date.
If the Company elects to satisfy some but not all of the net share amount
for any conversion in cash as set out in clause (ii)(z) above, (a) the Company
will pay to converting Holders cash in an amount equal to the lesser of (x) the
net share amount for such conversion and (y) the specified cash amount, and (b)
the Company will deliver to converting holders a number of shares of Common
Stock equal to the greater of (i) zero and (ii) the number of shares to which
such Holder would be entitled under clause (ii)(x), but replacing "$1,000" in
clause (ii)(x)(B)(l)(y) with "$1,000 plus the specified cash amount".
The "CONVERSION VALUE" means the product of (1) the Conversion Rate in
effect (plus any Additional Shares as described under Section 11.01(c)) and (2)
the average of the Last Reported Sale Prices of the Common Stock for the Trading
Days during the Cash Settlement Period.
The "CASH SETTLEMENT PERIOD" with respect to any Securities converted
means the 20 consecutive Trading Days beginning on the second Trading Day after
the Conversion Date for those Securities except in circumstances where
conversion occurs within 20 days leading up to the Stated Maturity or a
specified Redemption Date, in which case the Cash Settlement Period will be the
20 consecutive Trading Days beginning on the second Trading Day following the
Stated Maturity or the Redemption Date, as the case may be. In addition, if the
Company chooses to settle all or any portion of the net shares in cash in
conjunction with conversion within 20 days leading up to the Stated Maturity or
a specified Redemption Date, the Company will send, on or prior to the Stated
Maturity or the specified Redemption Date, as the case may be, a single notice
to the Trustee of the net shares to be satisfied in cash.
(b) If a Holder tenders Securities for conversion and the Conversion Value
is being determined at a time when the Securities are convertible into Exchange
Property, the Conversion Value of each Security shall be determined based on the
kind and amount of such Exchange Property and the value thereof during the Cash
Settlement Period. Settlement of Securities tendered for conversion after the
effective date of any transaction giving rise to Exchange Property shall be as
set forth above.
For the purposes of this Section, the Last Reported Sale Price of the
Common Stock shall be deemed to equal the sum of (A) 100% of the value of any
Exchange Property consisting of cash received per share of Common Stock, (B) the
Last Reported Sale Price of any Exchange Property received per share of Common
Stock consisting of securities that are traded on a U.S. national securities
exchange or approved for quotation on The Nasdaq National Market and (3) the
Fair Market Value of any other Exchange Property received per share, as
determined by three
77
independent nationally recognized investment banks selected by the Company for
this purpose. Settlement (in cash and/or shares) will occur on the third
Business Day following the final day of such Cash Settlement Period.
Section 11.04. Adjustment of Conversion Rate. The Conversion Rate shall
be adjusted from time to time, without duplication, by the Company in accordance
with this Section 11.04:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all or substantially all holders of the outstanding Common Stock
in shares of Common Stock, the Conversion Rate shall be increased so that the
same shall equal the rate determined by multiplying the Conversion Rate in
effect at the opening of business on the date following the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the number of
shares of Common Stock outstanding at the close of business on the date
fixed for such determination plus (B) the total number of shares of Common
Stock constituting the dividend or distribution; and
(ii) the denominator of which shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for
such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 11.04 is declared but not so
paid or made, the Conversion Rate shall again be adjusted to the Conversion Rate
that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights, warrants or options (other
than pursuant to any dividend reinvestment or share repurchase plans) to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 60 days after the date of such distribution) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Rate shall be adjusted so that
the same shall equal the rate determined by multiplying the Conversion Rate in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the sum of (A) the number of
shares of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus (B) the
total number of additional shares of Common Stock offered for subscription
or purchase, and
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(ii) the denominator of which is the sum of (A) the number of shares
of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights or warrants plus (B) the
total number of additional shares of Common Stock that the aggregate
offering price of the total number of shares of Common Stock offered for
subscription or purchase would purchase at the Current Market Price of the
Common Stock on such date.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the 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 that 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. In the event that such rights or warrants are not so issued,
the Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights, options or warrants entitle the holders to subscribe for or
purchase shares of Common Stock at less than such Current Market Price, 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 and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Rate in effect at the opening of business
on the day following the day upon which such combination becomes effective shall
be proportionately reduced, such increase or reduction, as the case may be, to
become effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(d) In case the Company shall, by dividend or otherwise, distribute to all
or substantially all holders of its Common Stock shares of any class of Capital
Stock of the Company or evidences of its indebtedness or assets (including
securities, but excluding any rights, options or warrants referred to in Section
11.04(b) and excluding any dividend or distribution (x) paid exclusively in cash
or (y) referred to in Section 11.04(a)) (any of the foregoing hereinafter in
this Section 11.04(d) called the "DISTRIBUTED ASSETS"), then, in each such case,
the Conversion Rate shall be increased so that the same shall be equal to the
rate determined by
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multiplying the Conversion Rate in effect on the Record Date with respect to
such distribution by a fraction,
(i) the numerator of which shall be the Current Market Price per
share of the Common Stock on such Record Date; and
(ii) the denominator of which shall be the Current Market Price per
share of the Common Stock less the Fair Market Value (as determined by the
Board of Directors and described in a resolution of the Board of
Directors) on the Record Date of the portion of the Distributed Assets so
distributed applicable to one share of Common Stock,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided, however, that in the event (1)
the then Fair Market Value (as so determined) of the portion of the Distributed
Assets so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on such Record Date or
(2) the Current Market Price of Common Stock on the Record Date exceeds the then
Fair Market Value (as so determined) of the portion of the Distributed Assets so
distributed applicable to one share of Common Stock by less than $1.00, 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
Assets such Holder would have received had such Holder converted each Security
on the Record Date for such distribution. In the event that such dividend or
distribution is not so paid or made, the Conversion Rate shall be adjusted to be
the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared. If the Board of Directors determines the
Fair Market Value of any distribution for purposes of this Section 11.04(d) 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 Current Market Price of the Common Stock.
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 (a
"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 be deemed not to have been distributed for
purposes of this Section 11.04 (and no adjustment to the Conversion Rate under
this Section 11.04 shall be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 11.04. If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to
80
purchase different securities, evidences of indebtedness or other assets, then
the date of the occurrence of any and each such event shall be deemed to be the
date of distribution and record date with respect to new rights or warrants with
such rights (and a termination or expiration of the existing rights or warrants
without exercise by any of the holders thereof). In addition, in the event of
any distribution (or deemed distribution) of rights or warrants, or any Trigger
Event or other event (of the type described in the preceding sentence) with
respect thereto that was counted for purposes of calculating a distribution
amount for which an adjustment to the Conversion Rate under this Section 11.04
was made, (1) in the case of any such rights or warrants that 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 or holders 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 such rights or warrants that shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Rate shall be readjusted as if such rights and warrants had not been
issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 11.04(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to Holders of
Securities upon conversion by such Holders of Securities to Common Stock.
For purposes of this Section 11.04(d) and Section 11.04(a) and (b), any
dividend or distribution to which this Section 11.04(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Rate adjustment required by this Section 11.04(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Rate adjustment required by Section
11.04(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution", "the date fixed for the
determination of stockholders entitled to receive such rights or warrants" and
"the date fixed for such determination" within the meaning of Section 11.04(a)
and (b), and (B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 11.04(a).
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If any Distributed Assets requiring any adjustment pursuant to this
Section 11.04(d) consists of the Capital Stock, or similar equity interests in,
a Subsidiary or other business unit of the Company which are or in connection
with such distribution will be listed or quoted for trading on a U.S. national
securities exchange or The Nasdaq National Market, the Conversion Rate in effect
immediately before the close of business on the Record Date fixed for
determination of stockholders entitled to receive the distribution shall instead
be increased by multiplying the Conversion Rate then in effect by a fraction,
(A) the numerator of which is the sum of (1) the average of the Last Reported
Sale Prices of such distributed security for the 10 Trading Days commencing on
and including the fifth Trading Day after the Ex-Dividend Date on The Nasdaq
National Market or such other national or regional exchange or market on which
such securities are then listed or quoted plus (2) the average of the Closing
Prices of the Common Stock over the same Trading Day period and (B) the
denominator of which is such average of the Last Reported Sale Prices of the
Common Stock for the 10 Trading Days commencing on and including the fifth
Trading Day after the Ex-Dividend Date on The Nasdaq National Market or such
other national or regional exchange or market on which the securities are then
listed or quoted.
(e) In case the Company shall, by dividend or otherwise, distribute to all
or substantially all holders of its Common Stock cash (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on the Record Date for such cash dividend by a fraction,
(i) the numerator of which shall be the Current Market Price of the
Common Stock on such Record Date, and
(ii) the denominator of which shall be such Current Market Price of
the Common Stock minus the amount per share of such dividend or the amount
of cash so distributed applicable to one share of Common Stock,
such adjustment to be effective immediately prior to the opening of business on
the day following such Record Date; provided, however, that in the event the
portion of the cash so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock on such
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 such Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared.
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(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders 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)
that as of the last time (the "EXPIRATION TIME") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Last Reported Sale 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 rate determined by multiplying the Conversion Rate in
effect immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the Fair Market
Value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed
so accepted up to any such maximum, being referred to as the "PURCHASED
SHARES") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the
Last Reported Sale Price of the Common Stock on the first Trading Day
after the Expiration Time, and
(ii) the denominator of which shall be the product of the number of
shares of Common Stock outstanding (including any Purchased Shares) at the
Expiration Time multiplied by the Last Reported Sale Price of the Common
Stock on the first Trading Day after the Expiration Time,
such adjustment 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 that would then be in effect if such
tender or exchange offer had not been made.
(g) In case of a tender or exchange offer made by a Person other than the
Company or any Subsidiary for an amount that increases the offeror's ownership
of Common Stock to more than twenty-five percent (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) that as of the last time (the "OFFER
EXPIRATION TIME") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) exceeds the Last Reported Sale
Price of the Common
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Stock on the first Trading Day after the Offer Expiration Time, and in which, as
of the Offer 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 rate determined by multiplying the Conversion Rate in effect
immediately prior to the Offer Expiration Time by a fraction
(i) the numerator of which shall be the sum of (x) the Fair Market
Value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the
terms of the tender or exchange offer) of all shares of Common Stock
validly tendered or exchanged and not withdrawn as of the Offer Expiration
Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "ACCEPTED PURCHASED SHARES") and (y) the product of the
number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) at the Offer Expiration Time and the Last Reported Sale Price of
the Common Stock on the first Trading Day after the Offer Expiration Time,
and
(ii) the denominator of which shall be the product of the number of
shares of Common Stock outstanding (including any Accepted Purchase
Shares) at the Offer Expiration Time multiplied by the Last Reported Sale
Price of the Common Stock on the first Trading Day after the Offer
Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Offer 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 that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 11.04(g) shall not be made if, as of the
Offer 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 Section 11.05.
(h) The Company may make such increases in the Conversion Rate, in
addition to those required by this Section 11.04, as the Board of Directors
considers to be advisable to avoid or diminish any U.S. federal income tax to
holders of Common Stock resulting from any stock distribution; provided,
however, that such increase in the Conversion Rate shall not adversely affect
the interests of the Holders of Securities (after taking into account U.S.
federal income tax and other consequences of such increase).
To the extent permitted by applicable law and the listing requirements of
the Nasdaq National Market or any national securities exchange on which the
Common Stock is then listed, the Company from time to time may increase the
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Conversion Rate by any amount for any period of time if the period is at least
twenty (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 increased pursuant to the preceding sentence, the Company
shall mail to Holders of record of the Securities a notice of the increase at
least fifteen (15) days prior to the date the increased Conversion Rate takes
effect, and such notice shall state the increased Conversion Rate and the period
during which it shall be in effect.
(i) All calculations under this Article 11 shall be made by the Company
and shall be made to the nearest cent or to the nearest one-ten thousandth of a
share, as the case may be, with one half-cent and 0.005 of a share,
respectively, being rounded upward. Notwithstanding the foregoing, no adjustment
need be made for:
(i) the issuance of any shares of Common Stock pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on the Company's securities and the investment of
additional optional amounts in shares of Common Stock under any plan,
(ii) the issuance of any shares of Common Stock or options or rights
to purchase those shares pursuant to any present or future employee,
director or consultant benefit plan or program of or assumed by the
Company or any of its Subsidiaries,
(iii) the issuance of any shares of Common Stock pursuant to any
option, warrant, right or exercisable, exchangeable or convertible
security outstanding as of the date the Securities were first issued,
(iv) a change in the par value of the Common Stock, or
(v) accrued and unpaid Interest, including Contingent Interest or
Additional Amounts, if any.
(j) Whenever the Conversion Rate is adjusted as herein provided, the
Company shall promptly file with the Trustee and any Conversion Agent (if other
than the Trustee) an Officer's Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officer's Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall mail such notice
of such adjustment of the Conversion Rate to the Holder of each Security at his
last address appearing on
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the Security register provided for in Section 2.03 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of any such adjustment.
(k) In any case in which this Section 11.04 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 11.04(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 11.04(b), (4) the effective date of any subdivision
or combination of Common Stock, (5) the Expiration Time for any tender or
exchange offer pursuant to Section 11.04(f), or (6) the Offer Expiration Time
for a tender offer or exchange offer pursuant to Section 11.04(g) (each a
"DETERMINATION DATE"), the Company may elect to defer until the occurrence of
the relevant Adjustment Event (as hereinafter defined) (x) issuing to the Holder
of any Security converted after such Determination Date and before the
occurrence of such Adjustment Event, the additional shares of Common Stock or
other securities issuable upon such conversion by reason of the adjustment
required by such Adjustment Event over and above the Common Stock issuable upon
such conversion before giving effect to such adjustment and (y) paying to such
Holder any amount in cash in lieu of any fraction pursuant to Section 11.04(a).
For purposes of this Section 11.04(k), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence of
such event,
(ii) in any case referred to in clause (2) hereof, the date any such
dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants,
(iv) in any case referred to in clause (4) hereof, the date of such
subdivision or combination, and
(v) in any case referred to in clause (5) or clause (6) hereof, the
date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(l) For purposes of this Section 11.04, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company shall not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
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Section 11.05. Effect of Reclassification, Consolidation, Merger or Sale.
(a) If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 11.04(c) applies or a change in par value) as a
result of which holders of Common Stock shall be entitled to receive Exchange
Property with respect to or in exchange for Common Stock, (ii) any
consolidation, merger, binding share exchange or combination of the Company with
another Person as a result of which holders of Common Stock shall be entitled to
receive Exchange Property with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of all or substantially all the properties and
assets of the Company to any other Person as a result of which holders of Common
Stock shall be entitled to receive Exchange Property with respect to or in
exchange for such Common Stock, then the Company or the successor or purchasing
Person, as the case may be, shall execute with the Trustee a supplemental
indenture (which shall comply with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) providing for the conversion
and settlement of the Securities as set forth in this Indenture. 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
11. If, in the case of any such reclassification, change, merger, consolidation,
binding share exchange, combination, sale or conveyance, the Exchange Property
receivable thereupon by a holder of Common Stock includes shares of stock or
other securities and assets of a corporation other than the successor or
purchasing corporation, as the case may be, in such reclassification, change,
merger, consolidation, statutory share exchange, combination, sale or
conveyance, then such supplemental indenture shall also be executed by such
other corporation and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors shall
reasonably consider necessary by reason of the foregoing.
(b) The Conversion Obligation with respect to each $1,000 principal amount
of Securities converted following the effective date of any such transaction,
shall be calculated (as provided in clause (c) below) based on the Exchange
Property. In the event holders of the Common Stock have the opportunity to elect
the form of consideration to be received in such transaction, the Company shall
make adequate provision whereby the Holders of the Securities shall have a
reasonable opportunity to determine the form of consideration, consistent with
election rights and restrictions applicable to holders of Common Stock, into
which all of the Securities, treated as a single class, shall be convertible
from and after the effective date of such transaction (subject to the Company's
ability to settle the conversion obligation, entirely in cash as set forth in
Section 11.03). Such determination shall be subject to any limitations to which
all of the holders of the Common Stock are subject, such as pro-rata reductions
applicable to any portion of the considerable payable in such event and shall be
conducted in such a manner as to be completed by the date which is the latest of
(a) the deadline for elections to be made by holders of the Common Stock in
connection with such transaction, and (b) two Trading Days prior to the
anticipated effective date of such event. The
87
Company shall provide notice of the opportunity to determine the form of such
consideration, as well as notice of the determination made by Holders of the
Securities by issuing a press release and providing a copy of such notice to the
Trustee. The Company shall not become a party to any such transaction unless its
terms are consistent with the proceeding. However, if the transaction described
above also constitutes a Public Acquirer Change of Control, then the Company may
in certain circumstances elect to change the conversion right in the manner
described in Section 11.01(c) in lieu of changing the conversion right in the
manner described in this Section 11.05(b).
(c) The Conversion Obligation in respect of any Securities converted
following the effective date of any such transaction shall be computed in the
same manner as set forth in Section 11.03(a) except that if the Securities
become convertible into Exchange Property, the Last Reported Sale Price of the
Common Stock shall be deemed to equal the sum of (A) 100% of the value of any
Exchange Property consisting of cash received per share of Common Stock, (B) the
Last Reported Sale Price of any Exchange Property received per share of Common
Stock consisting of securities that are traded on a U.S. national securities
exchange or approved for quotation on the Nasdaq National Market and (C) the
Fair Market Value of any other Exchange Property received per share, as
determined by three independent nationally recognized investment banks selected
by the Company for this purpose. Settlement (in cash and/or shares) shall occur
on the third Business Day following the final day of such Cash Settlement
Period, provided that any amount of the Conversion Settlement Distribution to be
delivered in shares of Common Stock shall be paid in Exchange Property rather
than shares of Common Stock. If the Exchange Property includes more than one
kind of property, the amount of Exchange Property of each kind to be delivered
shall be in the proportion that the value of the Exchange Property (as
calculated pursuant to Section 11.03) of such kind bears to the value of all
such Exchange Property. If the foregoing calculations would require the Company
to deliver a fractional share or unit of Exchange Property to a Holder of
Securities being converted, the Company shall deliver cash in lieu of such
fractional share or unit based on the value of the Exchange Property.
(d) The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at its address appearing on
the Security register provided for in Section 2.03 of this Indenture, within
twenty (20) days after execution thereof. Failure to deliver such notice shall
not affect the legality or validity of such supplemental indenture.
(e) The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, statutory share
exchanges, combinations, sales and conveyances.
If this Section 11.05 applies to any event or occurrence, Section 11.04
shall not apply.
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Section 11.06. Taxes on Shares Issued. The issue of stock certificates on
conversions of Securities shall be made without charge to the converting Holder
for any documentary, stamp or similar issue or transfer tax in respect of the
issue thereof, except for applicable withholding, if any. The Company shall not,
however, be required to pay any tax or duty which may be payable in respect of
any transfer involved in the issue and delivery of stock in any name other than
that of the Holder of any Securities converted, and the Company shall not be
required to issue or deliver any such stock certificate unless and until the
Person or Persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
Section 11.07. Reservation of Shares, Shares to Be Fully Paid; Compliance
with Governmental Requirements. (a) The Company shall provide, free from
preemptive rights, out of its authorized but unissued shares or shares held in
treasury, sufficient shares of Common Stock for the conversion of the Securities
from time to time as such Securities are presented for conversion.
(b) Before taking any action which would cause an adjustment increasing
the Conversion Rate to an amount that would cause the Conversion Price to be
reduced below the then par value, if any, of the shares of Common Stock issuable
upon conversion of the Securities, the Company shall take all corporate action
which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue shares of such Common Stock at such adjusted
Conversion Rate.
(c) (i) The Company covenants that all shares of Common Stock which may be
issued upon conversion of Securities shall upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and charges with
respect to the issue thereof.
(ii) 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 shall in good faith and as expeditiously as
possible, to the extent then permitted by the rules and interpretations of
the Securities and Exchange Commission (or any successor thereto),
endeavor to secure such registration or approval, as the case may be.
Section 11.08. Responsibility of Trustee. The Trustee and any other
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be
89
employed, in making the same. The Trustee and any other Conversion Agent shall
not be accountable with respect to the validity or value (or the kind or amount)
of any shares of Common Stock, or of any securities or property, which may at
any time be issued or delivered upon the conversion of any Security; and the
Trustee and any other Conversion Agent make no representations with respect
thereto. Neither the Trustee nor any Conversion Agent shall be responsible for
any failure of the Company to issue, transfer or deliver any shares of Common
Stock or stock certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion or to comply with any of
the duties, responsibilities or covenants of the Company contained in this
Article 11. Without limiting the generality of the foregoing, neither the
Trustee nor any Conversion Agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
entered into pursuant to Section 11.05 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by Holders
upon the conversion of their Securities after any event referred to in such
Section 11.05 or to any adjustment to be made with respect thereto, but, subject
to the provisions of Section 8.01, may accept as conclusive evidence of the
correctness of any such provisions, and shall be protected in relying upon the
Officer's Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 11.09. Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Rate
pursuant to Section 11.04; or
(b) the Company shall authorize the granting to the holders of all of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants that would require an adjustment in the
Conversion Rate pursuant to Section 11.04(b); or
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation, merger or statutory share
exchange to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale or transfer of all or
substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
Holder of Securities at his address appearing on the register provided for in
Section 2.03 of this Indenture, as promptly as possible but in any event at
least ten (10)
90
days prior to the applicable date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution of rights or warrants, or, if a record is not to be taken, the date
as of which the Holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on which
such reclassification, consolidation, merger, or statutory share exchange, sale,
transfer, dissolution, liquidation or winding up is expected to become effective
or occur, and the date as of which it is expected that holders of Common Stock
of record shall be entitled to exchange their Common Stock for securities or
other property deliverable upon such reclassification, consolidation, merger, or
statutory share exchange, sale, transfer, dissolution, liquidation or winding
up. Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, or statutory share exchange, sale, transfer, dissolution,
liquidation or winding up.
Section 11.10. Shareholder Rights Plan. To the extent that the Company has
a rights plan in effect upon conversion of the Securities into Common Stock, a
Holder who converts Securities shall receive, in addition to the Common Stock,
the rights under the rights plan, unless prior to any conversion, the rights
have separated from the Common Stock, in which case the Conversion Rate shall be
adjusted at the time of separation as if the Company distributed to all Holders
of Common Stock, shares of the Company's Capital Stock, evidences of
indebtedness or assets as described in Section 11.04(d) above, subject to
readjustment in the event of the expiration, termination or redemption of such
rights. In lieu of any such adjustment, the Company may amend such applicable
shareholder rights plan to provide that upon conversion of the Securities the
Holders shall receive, in addition to the Common Stock issuable upon such
conversion, the rights which would have attached to such Common Stock if the
rights had not become separated from the Common Stock under such applicable
shareholder rights agreement.
Section 11.11. Unconditional Right of Holders to Convert. Notwithstanding
any other provision in this Indenture, the Holder of any Security shall have the
right, which is absolute and unconditional, to convert its Security in
accordance with this Article 11 and to bring an action for the enforcement of
any such right to convert, and such rights shall not be impaired or affected
without the consent of such Holder.
ARTICLE 12
CONTINGENT INTEREST
Section 12.01. Contingent Interest. (a) The Company shall pay Contingent
Interest with respect to the Securities for any Contingent Interest Period if
the average Trading Price of Securities for the five consecutive Trading Days
ending on the third Trading Day immediately preceding the first day of the
relevant
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Contingent Interest Period equals or exceeds 120% of the principal amount of
such Securities.
(b) The amount of Contingent Interest payable per $1,000 principal amount
of Securities in respect of any Contingent Interest Period shall equal 0.25% per
annum calculated on the average Trading Price of $1,000 principal amount of
Securities during the relevant five Trading Day period used to determine whether
Contingent Interest must be paid.
(c) The Company shall be responsible for calculating the amounts of
Contingent Interest, if any, accrued on the Securities. The Company shall make
any such calculations using the Trading Price provided by the Bid Solicitation
Agent. The Bid Solicitation Agent or the Trustee shall be entitled in their sole
discretion to consult with the Company and to request the assistance of the
Company in connection with the Bid Solicitation Agent's or Trustee's duties
pursuant to this Article 12, and the Company agrees, if requested by the Bid
Solicitation Agent or by the Trustee, to cooperate with, and provide assistance
to, the Trustee in carrying out its duties under this Article 12.
Section 12.02. Payment of Contingent Interest. Payments of Contingent
Interest shall be made in the same manner, at the same time, and subject to the
same restrictions, including those restrictions in respect of accrued and unpaid
interest on any Securities that are submitted for conversion, as payments of
Interest.
Section 12.03. Contingent Interest Notification. By the first Business Day
of a Contingent Interest Period for which Contingent Interest shall be payable,
the Company shall disseminate a press release containing this information or
publish the information on its Website or through such other public medium as it
may use at that time.
ARTICLE 13
MISCELLANEOUS
Section 13.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 13.02. Notices. Any request, demand, authorization, notice,
waiver, consent or communication by the Company or the Trustee to the other is
duly given if in writing and delivered in person or mailed by first-class mail,
postage prepaid, addressed as follows or transmitted by facsimile transmission
to the following facsimile numbers:
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if to the Company:
CBIZ, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
if to the Trustee:
U.S. Bank National Association
Corporate Trust Services, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇-▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice given to the other in the manner
provided above may designate additional or different addresses for subsequent
notices or communications.
Any notice or communication given to a Securityholder shall be delivered
to the Securityholder, in accordance with the procedures of the Registrar or by
first-class mail, postage prepaid, at the Securityholder's address as it appears
on the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee; provided,
however, that no notice to the Trustee shall be deemed to be duly given unless
and until the Trustee actually receives same at the address given above.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 13.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
Section 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:
93
(1) an Officer's Certificate stating that, in the opinion of the
signer, 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.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate of opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, and may
state that it is so based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an Officer or Officers of the
Company stating that the information with respect to such factual matters is in
possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate of opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.05. Statements Required in Certificate or Opinion. Each
Officer's 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 person making such Officer's 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
Officer's Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
94
(4) a statement that, in the opinion of such person, 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
Securityholders. The Registrar, the Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 13.08. Legal Holidays. A "LEGAL HOLIDAY" is any day other than a
Business Day. If any specified date (including a date for giving notice) is a
legal holiday, the action shall be taken on the next succeeding day that is not
a legal holiday, and, if the action to be taken on such date is a payment in
respect of the Securities, no interest shall accrue with respect to such payment
for the intervening period.
Section 13.09. Governing Law. THIS INDENTURE SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.
Section 13.10. No Recourse Against Others. A director, officer,
incorporator, 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 Securityholder
shall waive and release all such liability. The waiver and release shall be part
of the consideration for the issue of the Securities.
Section 13.11. Successors. All agreements of the Company in this Indenture
and the Securities shall bind its successor. All agreements of the Trustee in
this Indenture shall bind its successor.
Section 13.12. 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.
Section 13.13. Execution in Counterparts. This Indenture may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery
95
of an executed counterpart of a signature page to this Indenture by telecopier
shall be as effective as delivery of a manually executed counterpart of this
Indenture.
Section 13.14. Benefits of Indenture. Nothing in this Indenture or in the
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder (and, pursuant to Article 4, the holders
of Senior Indebtedness and Designated Senior Indebtedness) and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 13.15. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret any other indenture, loan or debt
agreement of the Company or of any other Person. Any such indenture, loan or
debt agreement may not be used to interpret this Indenture.
Section 13.16. Calculations in Respect of Securities. The Company or its
agents shall be responsible for making all calculations called for under the
Securities including, but not limited to, determination of the market prices for
the Securities and of the Common Stock and the amounts of Interest, Contingent
Interest and Additional Amounts, if any, accrued on the Securities. The Company
shall make all calculations in good faith. Any calculations made in good faith
and without manifest error shall be final and binding on Holders of the
Securities. The Company or its agents shall be required to deliver to the
Trustee and the Conversion Agent a schedule of its calculations and each of the
Trustee and the Conversion Agent shall be entitled to conclusively rely upon the
accuracy of such calculations without independent verification. The Trustee will
forward such calculations to any Holder upon the request of such Holder.
Section 13.17. Table of Contents, Cross-Reference Sheet and Headings. The
table of contents, cross-reference sheet and headings of the Articles and
Sections of this Indenture have been inserted for convenience of reference only,
are not intended to be considered a part hereof and shall not modify or restrict
any of the terms or provisions hereof.
96
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
CBIZ, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: President and Chief
Operating Officer
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
1
EXHIBIT A
[FORM OF FACE OF GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO
NOMINEES OF THE DEPOSITORY TRUST COMPANY, OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE TWO OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
NEITHER THIS SECURITY NOR THE SHARES OF COMMON STOCK ISSUABLE ON
CONVERSION OF THIS SECURITY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR
OTHER JURISDICTION. NEITHER THIS SECURITY NOR THE SHARES OF COMMON STOCK
ISSUABLE ON CONVERSION OF THIS SECURITY, NOR ANY INTEREST OR PARTICIPATION
HEREIN OR THEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS
A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT ("RULE 144A")); (2) AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR
ACCOUNT FOR WHICH IT HAS PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE
TRANSFER THIS SECURITY OR ANY COMMON STOCK ISSUABLE ON CONVERSION OF THIS
SECURITY, PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF
THIS SECURITY UNDER RULE 144(k) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), ONLY (A) TO CBIZ, INC. (THE
A-1
"ISSUER"), (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE UNDER
RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) UNDER ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
UNDER CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED ON THE
EARLIER OF THE TRANSFER OF THIS SECURITY UNDER CLAUSE 2(B) ABOVE OR ON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION);
The foregoing legend may be removed from this Security upon the earlier of
the Resale Restriction Termination Date or the transfer of the Securities
pursuant to clause 2(C) or 2(D) above.
THIS SECURITY IS BEING ISSUED WITH TAX ORIGINAL ISSUE DISCOUNT. THE
COMPANY AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN
REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE,
YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: CBIZ,
INC., ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
ATTENTION: GENERAL COUNSEL.
Pursuant to Section 2.15 of the Indenture, the foregoing Legend is
required for U.S. Federal income tax purposes.
A-2
CBIZ, INC.
3.125% Convertible Senior Subordinated Notes due 2026
CUSIP: [ ]
ISSUE DATE: May 30, 2006 Principal Amount: $_____________
No. R-1
CBIZ, INC., a Delaware corporation, promises to pay to Cede & Co. or
registered assigns, the principal amount of ________________, on June 1, 2026.
Interest Rate: 3.125% per year.
Interest Payment Dates: June 1 and December 1 of each year, commencing
December 1, 2006.
Interest Record Date: May 15 and November 15 of each year.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: [ ], 2006 CBIZ, INC.
By: ____________________________________
Name:
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
U.S. BANK NATIONAL ASSOCIATION,
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By__________________________________
Authorized Officer
Dated: [ ], 2006
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[FORM OF REVERSE OF GLOBAL SECURITY]
3.125% Convertible Senior Subordinated Notes due 2026
This Security is one of a duly authorized issue of 3.125% Convertible
Senior Subordinated Notes due 2026 (the "SECURITIES") of CBIZ, Inc., a Delaware
corporation (including any successor corporation under the Indenture hereinafter
referred to, the "COMPANY"), issued under an Indenture, dated as of May 30, 2006
(the "INDENTURE"), between the Company and U.S. Bank National Association, as
trustee (the "TRUSTEE"). The terms of the Security include those stated in the
Indenture, those made part of the Indenture by reference to the Trust Indenture
Act of 1939, as amended ("TIA"), and those set forth in this Security. This
Security is subject to all such terms, and Holders are referred to the Indenture
and the TIA for a statement of all such terms. To the extent permitted by
applicable law, in the event of any inconsistency between the terms of this
Security and the terms of the Indenture, the terms of the Indenture shall
control. Capitalized terms used but not defined herein have the meanings
assigned to them in the Indenture unless otherwise indicated.
1. INTEREST.
The Securities shall bear Interest on the principal amount thereof at a
rate of 3.125% per year. The Company shall pay Contingent Interest, if any, as
set forth in the Indenture and in Section 3 hereof. The Company shall also pay
Additional Amounts, if any, as set forth in Section 5.07 of the Indenture and
the Registration Rights Agreement.
Interest shall be payable semi-annually in arrears on each Interest
Payment Date to Holders at the close of business on the preceding Interest
Record Date. Interest shall be computed on the basis of a 360-day year comprised
of twelve 30 day months.
The Company shall pay Interest to the Securityholder of record on the
Interest Record Date even if the Company elects to redeem or Securityholders
elect to require the Company to repurchase, the Securities on a date that is
after an Interest Record Date but on or prior to the corresponding Interest
Payment Date. In that instance, the Company shall pay accrued and unpaid
Interest on the Securities being redeemed to, but not including, the Redemption
Date, the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, to the Securityholder of record on the Interest Record Date.
If the principal amount of any Security, or any accrued and unpaid
Interest, Contingent Interest, if any, or Additional Amounts, if any, are not
paid when due (whether upon acceleration pursuant to Section 7.02 of the
Indenture, upon the date set for payment of the Redemption Price pursuant to
Section 5 hereof, upon the date set for payment of the Repurchase Price or
Fundamental
A-5
Change Repurchase Price pursuant to Section 6 hereof, upon the Stated Maturity
of the Securities, upon the Interest Payment Dates or upon the Additional
Amounts Payment Dates as defined in the Registration Rights Agreement), then in
each such case the overdue amount shall, to the extent permitted by law, bear
cash interest at the rate of 3.125% per annum, compounded semiannually, which
interest shall accrue from the date such overdue amount was originally due to
the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable in cash on demand but if
not so demanded shall be paid quarterly to the Holders on the last day of each
quarter.
2. METHOD OF PAYMENT.
Except as provided below, the Company shall pay Interest, Contingent
Interest, if any, and Additional Amounts, if any, on (i) Global Securities, to
DTC in immediately available funds, (ii) any Certificated Security having an
aggregate principal amount of $2,000,000 or less, by check mailed to the Holder
of such Security and (iii) any Certificated Security having an aggregate
principal amount of more than $2,000,000, by wire transfer in immediately
available funds if requested in writing by the Holder of any such Security as
least five business days prior to the relevant Interest Payment Date.
At Stated Maturity, the Company shall pay Interest on Certificated
Securities at the Company's office or agency maintained for that purpose, which
initially shall be the office or agency of the Trustee located at ▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇. ▇▇▇▇ ▇▇ ▇▇▇▇▇.
Subject to the terms and conditions of the Indenture, the Company shall
make payments in cash in respect of Redemption Prices, Repurchase Prices,
Fundamental Change Repurchase Prices and at Stated Maturity to Holders who
surrender Securities to a Paying Agent to collect such payments in respect of
the Securities. The Company shall pay cash amounts in money of the United States
that at the time of payment is legal tender for payment of public and private
debts. However, the Company may make such cash payments by check payable in such
money.
3. CONTINGENT INTEREST
The Company shall pay Contingent Interest under the circumstances and in
the amounts described in Article 12 of the Indenture. Such Contingent Interest,
if any, shall be payable in the same manner, at the same time, and subject to
the same restrictions, including those restrictions in respect of accrued and
unpaid interest on any Securities that are submitted for conversion, as payments
of Interest.
4. INDENTURE.
A-6
The Securities are general unsecured obligations of the Company limited to
$85,000,000 aggregate principal amount (or, to the extent the Initial Purchaser
exercise its over-allotment option, $100,000,000). The Indenture does not limit
other indebtedness of the Company, secured or unsecured.
5. REDEMPTION AT THE OPTION OF THE COMPANY.
No sinking fund is provided for the Securities. The Securities are
redeemable for cash at the option of the Company, in whole or in part, at any
time or from time to time on or after June 6, 2011 upon not less than 30 nor
more than 60 days' notice by mail for a redemption price (the "REDEMPTION
PRICE") equal to the principal amount of those Securities plus accrued and
unpaid Interest, accrued and unpaid Contingent Interest, if any, and Additional
Amounts, if any, on those Securities up to, but not including, the Redemption
Date.
In no event shall any Security be redeemable before June 6, 2011.
6. PURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to repurchase for cash, at the option of any Holder, all or any
portion of the Securities held by such Holder on June 1, 2011, June 1, 2016 and
June 1, 2021 in integral multiples of $1,000 at a Repurchase Price equal to 100%
of the principal amount of those Securities plus accrued and unpaid Interest,
accrued and unpaid Contingent Interest, if any, and Additional Amounts, if any,
on those Securities up to, but not including, the Repurchase Date. To exercise
such right, a Holder shall deliver to the Paying Agent a Repurchase Notice
containing the information set forth in the Indenture, at any time from the
opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on the Repurchase Date, and shall
deliver the Securities to the Paying Agent as set forth in the Indenture.
At the option of any Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to repurchase for cash the
Securities held by such Holder after the occurrence of a Fundamental Change for
a Fundamental Change Repurchase Price equal to 100% of the principal amount of
those Securities plus accrued and unpaid Interest, accrued and unpaid Contingent
Interest, if any, and Additional Amounts, if any, on those Securities up to, but
not including, the Fundamental Change Repurchase Date. To exercise such right, a
Holder shall deliver to the Paying Agent a Fundamental Change Repurchase Notice
containing the information set forth in the Indenture at any time on or prior to
the close of business on the Fundamental Change Repurchase Date and shall
deliver the Securities to the Paying Agent as set forth in the Indenture.
Holders have the right to withdraw any Repurchase Notice or Fundamental
Change Repurchase Notice, as the case may be, by delivering to the
A-7
Paying Agent a written notice of withdrawal in accordance with the provisions of
the Indenture.
If cash sufficient to pay the Repurchase Price or Fundamental Change
Repurchase Price, as the case may be, of all Securities or portions thereof to
be purchased as of the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, is deposited with the Paying Agent, prior to or on the
Business Day following the Repurchase Date or the Fundamental Change Repurchase
Date, as the case may be, Interest, Contingent Interest, if any, and Additional
Amounts, if any, shall cease to accrue on such Securities (or portions thereof)
on and following such Repurchase Date or Fundamental Change Repurchase Date, and
the Holder thereof shall have no other rights as such other than the right to
receive the Repurchase Price or Fundamental Change Repurchase Price upon
surrender of such Security.
7. NOTICE OF REDEMPTION.
Notice of redemption pursuant to Section 6.01 of this Security shall be
mailed at least 30 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, Interest, Contingent Interest, if any,
and Additional Amounts, if any, shall cease to accrue on such Securities or
portions thereof on and following such Redemption Date, and the Holder thereof
shall have no other rights as such other than the right to receive the
Redemption Price under surrender of such Security. Securities in denominations
larger than $1,000 principal amount may be redeemed in part but only in integral
multiples of $1,000 of principal amount.
8. CONVERSION.
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture (including, without limitation, the conditions to
conversion of this Security set forth in Section 11.01 thereof), a Holder is
entitled, at such Holder's option, to convert the Holder's Security (or any
portion of the principal amount thereof that is $1,000 or an integral multiple
of $1,000), into cash or a combination of cash and fully paid and nonassessable
shares of Common Stock at the Conversion Rate in effect at the time of
conversion.
The Company shall notify Holders of any event triggering the right to
convert the Securities as specified in the Indenture.
A Security in respect of which a Holder has delivered a Repurchase Notice
or Fundamental Change Repurchase Notice, as the case may be, exercising the
option of such Holder to require the Company to purchase such Security, may be
converted only if such Repurchase Notice or Fundamental Change Repurchase
A-8
Notice, as the case may be, is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Rate is 94.1035 shares of Common Stock per $1,000
principal amount, subject to adjustment in certain events described in the
Indenture. The Conversion Rate shall not be adjusted for any accrued and unpaid
Interest, accrued and unpaid Contingent Interest, if any or accrued and unpaid
Additional Amounts, if any. Upon conversion, no payment shall be made by the
Company with respect to accrued and unpaid Interest and accrued and unpaid
Contingent Interest, if any. Instead, such amount shall be deemed paid by the
cash and shares of Common Stock, if any, delivered upon conversion of any
Security. A Holder shall receive, however, accrued and unpaid Additional
Amounts, if any. In addition, no payment or adjustment shall be made in respect
of dividends on the Common Stock, except as set forth in the Indenture.
In addition, following certain corporate transactions as set forth in
Section 11.01(b) of the Indenture that occur prior to June 6, 2011 and that also
constitute a Change of Control, a Holder who elects to convert its Securities in
connection with such corporate transaction shall be entitled to receive
Additional Shares of Common Stock upon conversion (subject to the Company's
ability to settle the conversion entirely in cash as set forth in the
Indenture). Notwithstanding the previous sentence, in the case of a Public
Acquirer Change of Control, the Company may, in lieu of increasing the
Conversion Rate by Additional Shares, elect to adjust the Conversion Rate and
Conversion Obligation such that from and after the effective date of such Public
Acquirer Change of Control, Holders of the Securities shall be entitled to
convert their Securities into a number of shares of Public Acquirer Common
Stock, as determined pursuant to Section 11.01(d) of the Indenture.
To surrender a Security for conversion, a Holder must (1) complete and
manually sign the Conversion Notice attached hereto (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender the Security to the Conversion Agent, (3) if required,
furnish appropriate endorsements and transfer documents, (4) if required by
Section 11.02(g) of the Indenture, pay Interest and Contingent Interest and (5)
pay any transfer or similar tax, if required.
No fractional shares of Common Stock shall be issued upon conversion of
any Security. Instead of any fractional share of Common Stock that would
otherwise be issued upon conversion of such Security, the Company shall pay a
cash adjustment as provided in the Indenture.
If the Company engages in any reclassification of the Common Stock, (other
than a subdivision or combination of its outstanding Common Stock, or a change
in par value, or from par value to no par value, or from no par value to par
value) or is party to a consolidation, merger, binding share exchange or
transfer of
A-9
all or substantially all of its assets, and as a result of any such event the
Holders of Common Stock would be entitled to receive Exchange Property for their
Common Stock, upon conversion of the Securities after the effective date of such
event, the Conversion Obligation and the Conversion Settlement Distribution
shall be based on the applicable Conversion Rate and the Exchange Property, in
each case in accordance with the Indenture.
9. PAYING AGENT, CONVERSION AGENT AND REGISTRAR.
Initially, the Trustee shall act as Paying Agent, Conversion Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion Agent
or Registrar without notice, other than notice to the Trustee. The Company or
any of its Subsidiaries or any of their Affiliates may act as Paying Agent,
Conversion Agent or Registrar.
10. DENOMINATIONS; TRANSFER; EXCHANGE.
The Securities are in fully registered form, without coupons, in
denominations of $1,000 of principal amount and integral multiples of $1,000. A
Holder may transfer or exchange Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) for a period
of 15 days before the mailing of a notice of redemption of Securities 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).
11. PERSONS DEEMED OWNERS.
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
12. UNCLAIMED MONEY OR SECURITIES.
The Trustee and the Paying Agent shall return to the Company upon written
request any money or securities held by them for the payment of any amount with
respect to the Securities that remains unclaimed for two years, subject to
applicable abandoned property law. After return to the Company, Holders entitled
to the money or securities must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
13. AMENDMENT; WAIVER.
A-10
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 outstanding
Securities and (ii) certain Events of Defaults may be waived with the written
consent of the Holders of a majority in aggregate principal amount of the
outstanding Securities. Without the consent of any Securityholder, the Company
and the Trustee may amend the Indenture or the Securities in certain respects.
14. DEFAULTS AND REMEDIES.
If any Event of Default with respect to Securities shall occur and be
continuing, the principal amount of the Securities and any accrued and unpaid
Interest, accrued and unpaid Contingent Interest, if any, and accrued and unpaid
Additional Amounts, if any, on all the Securities may be declared due and
payable in the manner and with the effect provided in the Indenture.
15. SUBORDINATION.
This Note is subordinated as set forth in the Indenture to all Obligations
in respect of Senior Indebtedness (including all interest accrued or accruing on
Senior Indebtedness after the commencement of any bankruptcy, insolvency or
reorganization or similar case or proceeding at the contract rate (including,
without limitation, any contract rate applicable upon default) specified in the
relevant documentation, whether or not the claim for the interest is allowed as
a claim in the case or proceeding with respect to the Senior Indebtedness).
16. TRUSTEE DEALINGS WITH THE COMPANY.
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. CALCULATIONS IN RESPECT OF SECURITIES.
The Company or its agents shall be responsible for making all calculations
called for under the Securities including, but not limited to, determination of
the market prices for the Securities and of the Common Stock and the amounts of
Contingent Interest and Additional Amounts, if any, accrued on the Securities.
Any calculations made in good faith and without manifest error shall be final
and binding on Holders of the Securities. The Company or its agents shall be
required to deliver to the Trustee a schedule of its calculations and the
Trustee shall be entitled to conclusively rely upon the accuracy of such
calculations without independent verification.
A-11
18. U.S. FEDERAL INCOME TAX TREATMENT.
For purposes of Sections 1272, 1273 and 1275 of the Code, this Security is
being issued with Tax Original Issue Discount and the issue date of this
Security is May 30, 2006. In addition, this Security is subject to the Treasury
regulations governing contingent payment debt instruments. For purposes of
Sections 1272, 1273 and 1275 of the Code, the comparable yield of this Security
is 9.0%, compounded semi-annually (which shall be treated as the yield to
maturity for U.S. federal income tax purposes).
The Company and each Holder, by acquiring a beneficial interest in a
Security, agree (i) to treat the Security as indebtedness for U.S. federal
income tax purposes that is subject to the Treasury regulations governing
contingent payment debt instruments (the "contingent debt regulations"), (ii)
that each Holder shall be bound by the Company's application of the contingent
debt regulations to the Security, including the Company's determination of the
"comparable yield" and "projected payment schedule" within the meaning of the
contingent debt regulations, (iii) to treat the cash and the fair market value
of any Common Stock received upon the conversion of the Security as a contingent
payment for purposes of the contingent debt regulations, (iv) to accrue interest
with respect to the outstanding Security as Tax Original Discount according to
the "noncontingent bond method" set forth in the contingent debt regulations, u
the comparable yield of 9.0% compounded semi-annually and (v) that the Company
and each Holder will not take any position on any U.S. federal income tax return
that is inconsistent with (i), (ii), (iii) or (iv) unless required by applicable
law. The Company agrees to provide promptly to the Holder of this Security, upon
written request, the issue price, amount of Tax Original Issue Discount, issue
date, yield to maturity, comparable yield and projected payment schedule. Any
such written request should be sent to the Company at the following address:
CBIZ, Inc., ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
Attention: General Counsel.
19. NO RECOURSE AGAINST OTHERS.
A director, officer, incorporator, employee or shareholder, as such, of
the Company shall not have any liability for any obligations of the Company
under the Securities or the Indenture or for any claim based on, in respect of
or by reason of such obligations or their creation. By accepting a Security,
each Securityholder waives and releases all such liability. The waiver and
release are part of the consideration for the issue of the Securities.
20. AUTHENTICATION.
This Security shall not be valid until an authorize signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the other
side of this Security.
A-12
21. ABBREVIATIONS.
Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as TEN COM (=tenants in common), TEN ENT
(=tenants by the entireties), JT TEN (=joint tenants with right of survivorship
and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).
22. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.
23. COPY OF INDENTURE.
The Company shall furnish to any Securityholder upon written request and
without charge a copy of the Indenture which has in it the text of this Security
in larger type. Requests may be made to:
CBIZ, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
24. REGISTRATION RIGHTS.
The Holders of the Securities are entitled to the benefits of a
Registration Rights Agreement, dated May 30, 2006, between the Company and Banc
of America Securities LLC, as representative of the initial purchasers,
including the right to receive Additional Amounts upon a Registration Default
(as defined in such agreement). The Company shall make payments of Additional
Amounts on the Additional Amounts Payment Dates (as defined in the Registration
Rights Agreement), but otherwise in accordance with the provisions set forth
herein for the payment of Interest.
A-13
ASSIGNMENT FORM CONVERSION NOTICE
-------------------------------------- -------------------------------------
To assign this Security, fill in the To convert this Security, check the
form below: box [ ]
I or we assign and transfer this To convert only part of this
Security to Security, state the principal amount
____________________________________ to be converted (which must be
_________________________________ $1,000 or an integral multiple of
(Insert assignee's soc. sec. or tax ID $1,000):
no.)
_________________________________ If you want the stock certificate
_________________________________ made out in another person's name
_________________________________ fill in the form below:
(Print or type assignee's name, ___________________________________
address and zip code) ___________________________________
(Insert the other person's soc. sec.
and irrevocably appoint tax ID no.)
___________________________________
____________________ agent to ___________________________________
transfer this Security on the books of ___________________________________
the Company. The agent may ___________________________________
substitute another to act for him. ___________________________________
(Print or type other person's name,
address and zip code)
Date: __________ Your Signature: _____________________________________________
________________________________________________________________________________
(Sign exactly as your name appears on the other side of this Security)
Signature Guaranteed
______________________________________
Participant in a Recognized Signature
Guarantee Medallion Program
By:___________________________________
Authorized Signatory
A-14
SCHEDULE OF INCREASES AND DECREASES
OF GLOBAL SECURITY
Initial Principal Amount of Global Security: __________ ($__________).
Amount of Amount of Principal
Increase in Decrease in Amount of
Principal Principal Global Notation by
Amount of Amount of Security After Registrar or
Global Global Increase or Security
Date Security Security Decrease Custodian
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
---- ----------- ----------- -------------- ------------
EXHIBIT B
[FORM OF FACE OF CERTIFICATED SECURITY]
NEITHER THIS SECURITY NOR THE SHARES OF COMMON STOCK ISSUABLE ON CONVERSION OF
THIS SECURITY HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION. NEITHER THIS SECURITY NOR THE SHARES OF COMMON STOCK ISSUABLE ON
CONVERSION OF THIS SECURITY, NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN
MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY,
BY ITS ACCEPTANCE HEREOF, (1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")); (2)
AGREES ON ITS OWN BEHALF AND ON BEHALF OF ANY INVESTOR ACCOUNT FOR WHICH IT HAS
PURCHASED SECURITIES, TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY OR ANY
COMMON STOCK ISSUABLE ON CONVERSION OF THIS SECURITY, PRIOR TO THE EXPIRATION OF
THE HOLDING PERIOD APPLICABLE TO SALES OF THIS SECURITY UNDER RULE 144(k) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), ONLY (A) TO CBIZ, INC. (THE
"ISSUER"), (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF
SUCH TRANSFER), (C) FOR SO LONG AS THE SECURITIES ARE ELIGIBLE FOR RESALE UNDER
RULE 144A, IN COMPLIANCE WITH RULE 144A TO A PERSON IT REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A OR (D) UNDER ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO
THE ISSUER'S AND THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
UNDER CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION
AND/ OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM; AND (3) AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED ON THE
EARLIER OF THE TRANSFER OF THIS SECURITY UNDER CLAUSE 2(B) ABOVE OR ON ANY
TRANSFER OF THIS SECURITY UNDER RULE 144 UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION);
B-1
The foregoing legend may be removed from this Security upon the earlier of
the Resale Restriction Termination Date or the transfer of the Securities
pursuant to clause 2(C) or 2(D) above.
THIS SECURITY IS BEING ISSUED WITH TAX ORIGINAL ISSUE DISCOUNT. THE
COMPANY AGREES TO PROVIDE PROMPTLY TO THE HOLDER OF THIS SECURITY, UPON WRITTEN
REQUEST, THE ISSUE PRICE, AMOUNT OF TAX ORIGINAL ISSUE DISCOUNT, ISSUE DATE,
YIELD TO MATURITY, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE. ANY SUCH
WRITTEN REQUEST SHOULD BE SENT TO THE COMPANY AT THE FOLLOWING ADDRESS: CBIZ,
INC., ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
ATTENTION: GENERAL COUNSEL.
Pursuant to Section 2.14 of the Indenture, the foregoing legend is
required for U.S. federal income tax purposes.
B-2
CBIZ, INC.
3.125% Convertible Senior Subordinated Notes due 2026
CUSIP: ___________
ISSUE DATE: May 30, 2006 Principal Amount: $ [ ]
No. R-1
CBIZ, INC., a Delaware corporation, promises to pay to __________ or
registered assigns, the principal amount of _____________________, on June 1,
2026.
Interest Rate: 3.125% per year.
Interest Payment Dates: December 1 and June 1 of each year, commencing
December 1, 2006.
Interest Record Date: November 15 and May 15 of each year.
Reference is hereby made to the further provisions of this Security set
forth on the reverse side of this Security, which further provisions shall for
all purposes have the same effect as if set forth at this place.
B-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated: [____] CBIZ, INC.
By:
-------------------------------
Title:
-----------------------------
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
____________________________________
U.S. Bank National Association
as Trustee, certifies that this is one
of the Securities referred to in the
within-mentioned Indenture.
By
-----------------------------------
Authorized Signatory
Dated: [__]
B-4
[FORM OF REVERSE OF CERTIFICATED SECURITY IS IDENTICAL TO EXHIBIT A]
B-5
EXHIBIT C
CBIZ, INC.
3.125% Convertible Senior Subordinated Notes due 2026
Transfer Certificate
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "SECURITIES
ACT") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $____________ principal amount of the
above-captioned Securities presented or surrendered on the date hereof (the
"SURRENDERED SECURITIES") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "TRANSFER"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[_] A transfer of the Surrendered Securities is made to the Company or
any subsidiaries; or
[_] The transfer of the Surrendered Securities is pursuant to an
effective registration statement under the Securities Act; or
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to Rule 144
under the Securities Act and each of the conditions set forth in
such rule have been met;
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"AFFILIATE").
C-1
[_] The transferee is an Affiliate of the Company.
DATE:
-----------------------------------
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary, the
title of the person signing on behalf of such registered owner must be stated.)
Signature Guaranteed
----------------------------------------
Participant in a Recognized Signature
Name:
Address:
Tax I.D.:
C-2
EXHIBIT D
CBIZ, INC.
NOTICE OF REDEMPTION
[DATE]
To the Holders of the 3.125% Convertible Senior Subordinated Notes due 2026
issued by CBIZ, Inc.:
CBIZ, Inc. (the "Issuer") by this written notice hereby exercises,
pursuant to Section 3.01 of that certain Indenture (the "Indenture"), dated as
of May 30, 2006, between the Issuer and U.S. Bank National Association, its
right to redeem $[_________] of its 3.125% Convertible Senior Subordinated Notes
due 2026 (the "Securities"). All capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Indenture.
1. Redemption Date: [_______ _, ____]
2. Redemption Price: $[______]
3. Conversion Rate: Each $1,000 principal amount of the Securities is
convertible at your option into cash and Common Stock, if any, at a rate of
[insert number of shares] shares of the Issuer's common stock, par value $0.01
per share (the "Common Stock"), subject to adjustment, during the period
described below.
4. Paying Agent and Conversion Agent: [NAME] [ADDRESS]
5. The Securities called for redemption may be converted at your option at any
time from the date of this Notice of Redemption until 5:00 p.m. (New York City
time) on the Business Day immediately prior to the Redemption Date set forth
above.
6. The Securities called for redemption and not converted at your election prior
to 5:00 p.m. (New York City time) on the Business Day immediately prior to
Redemption Date set forth above shall be redeemed on the Redemption Date.
7. If you elect to convert your Securities, you must satisfy the requirements
for conversion set forth in your Securities.
8. Your Securities called for redemption must be surrendered by you (by
effecting book entry transfer of the Securities or delivering Certificated
Securities, together with necessary endorsements, as the case may be) to [Name
of Paying Agent] at [insert address] in order for you to collect the Redemption
Price.
D-1
9. [The Securities bearing the following Certificate Number(s) in the principal
amount set forth below opposite such Certificate Number(s) are being redeemed:
Certificate Number(s) Principal Amount]
10. Unless the Issuer defaults in making the payment of the Redemption Price
owed to you, Interest, Contingent Interest, if any, and Additional Amounts, if
any, on your Securities called for redemption shall cease to accrue on and after
the Redemption Date.
11. CUSIP Number: [ ]
CBIZ, INC.
D-2
EXHIBIT E
CBIZ, INC.
NOTICE OF REPURCHASE
[DATE]
To the Beneficial Owners of the 3.125% Convertible Senior Subordinated Notes due
2026 (the "Securities") issued by CBIZ, Inc.:
CBIZ, Inc. (the "Issuer") by this written notice hereby notifies you,
pursuant to Section 3.07 of that certain Indenture (the "Indenture"), dated as
of May 30, 2006, between the Issuer and U.S. Bank National Association, that you
may request the Issuer to repurchase your Securities by delivery of a Repurchase
Notice. Included herewith is the form of Repurchase Notice to be completed by
you if you wish to have your Securities repurchased by the Issuer. All
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Indenture.
1. Repurchase Date: [ ]
2. Repurchase Price: [ ]
3. Conversion Rate: To the extent described in Item 5 below, each $1,000
principal amount of the Securities is convertible into [insert number of shares]
shares of the Issuer's common stock, par value $0.01 per share (the "Common
Stock"), subject to adjustment.
4. Paying Agent and Conversion Agent: [NAME] [ADDRESS]
5. The Securities as to which you have delivered a Repurchase Notice to the
Paying Agent may be converted if they are otherwise convertible pursuant to
Article 11 of the Indenture and the terms of the Securities only if you withdraw
such Repurchase Notice pursuant to the terms of the Indenture. You may be
entitled to have your Securities converted into cash or a combination of cash
and shares of the Issuer's common stock:
(i) during any fiscal quarter commencing after June 30, 2006 (and only
during such quarter, if the last reported sale price (as defined in the
Indenture) of the Issuer's common stock for at least 20 trading days (as
defined in the Indenture) during the period of 30 consecutive trading days
ending on the last trading day of the preceding fiscal quarter more than
130% of the conversion price (as defined in the Indenture) on such last
trading day;
E-1
(ii) during the five business days immediately following any five
consecutive trading-day period in which the trading price (as defined in
the Indenture) per $1,000 principal amount of the Securities for each day
of that period was less than 98% of the product of the closing price of
the Common Stock and the conversion rate (as defined in the Indenture) of
the Securities on each such day; provided, however, that you may not
convert the Securities in reliance on this provision after June 1, 2021 if
on any trading day during such five consecutive trading-day period the
closing price of the Common Stock was between 100% and 130% of the
conversion price of the Securities;
(iii) if the Issuer has called the Securities for redemption; or
(iv) upon the occurrence of certain specified corporate transactions
described in the Indenture.
6. The Securities as to which you have delivered a Repurchase Notice must be
surrendered by you (by effecting book entry transfer of the Securities or
delivering Certificated Securities, together with necessary endorsements, as the
case may be) to [Name of Paying Agent] at [insert address] in order for you to
collect the Repurchase Price.
7. The Repurchase Price for the Securities as to which you have delivered a
Repurchase Notice and not withdrawn such Repurchase Notice shall be paid
promptly following the later of the business day immediately following such
Repurchase Date and the date you deliver such Securities to [Name of Paying
Agent].
8. In order to exercise your option to have the Issuer repurchase your
Securities, you must deliver the Repurchase Notice, duly completed by you with
the information required by such Repurchase Notice (as specified in Section 3.07
of the Indenture) and deliver such Repurchase Notice to the Paying Agent at any
time from 9:00 a.m. (New York City time) on [insert day that is 20 Business Days
prior to Repurchase Date] until 5:00 p.m. (New York City time) on the [insert
day that is the Repurchase Date].
9. In order to withdraw any Repurchase Notice previously delivered by you to the
Paying Agent, you must deliver to the Paying Agent, by 5:00 p.m. (New York time)
on [insert day that is the Repurchase Date], a written notice of withdrawal
specifying (i) the certificate number, if any, of the Securities in respect of
which such notice of withdrawal is being submitted, (ii) the principal amount of
the Securities in respect of which such notice of withdrawal is being submitted,
and (iii) if you are not withdrawing your Repurchase Notice for all of
E-2
your Securities, the principal amount of the Securities which still remain
subject to the original Repurchase Notice.
10. Unless the Issuer defaults in making the payment of the Repurchase Price
owed to you, Interest, Contingent Interest, if any, and Additional Amounts, if
any, on your Securities as to which you have delivered a Repurchase Notice shall
cease to accrue on and after the Repurchase Date.
11. CUSIP Number: [ ]
CBIZ, INC.
E-3
EXHIBIT F
CBIZ, INC.
NOTICE OF OCCURRENCE
OF FUNDAMENTAL CHANGE
[DATE]
To the Holders of the 3.125% Convertible Senior Subordinated Notes due 2026 (the
"Securities") issued by CBIZ, Inc.:
CBIZ, Inc. (the "Issuer") by this written notice hereby notifies you,
pursuant to Section 3.08 of that certain Indenture (the "Indenture"), dated as
of May 30, 2006, between the Issuer and U.S. Bank National Association, that a
Fundamental Change (as such term and other capitalized terms used herein and not
otherwise defined herein are defined in the Indenture) as described below has
occurred. Included herewith is the form of Fundamental Change Repurchase Notice
to be completed by you if you wish to have your Securities repurchased by the
Issuer.
1. Fundamental Change: [Insert brief description of the Fundamental Change and
the date of the occurrence thereof].
2. Date by which Fundamental Change Repurchase Notice must be delivered by you
to Paying Agent in order to have your Securities repurchased:
3. Fundamental Change Repurchase Date:
4. Fundamental Change Repurchase Price:
5. Paying Agent and Conversion Agent: [NAME] [ADDRESS]
6. Conversion Rate: To the extent described in Item 7 below, each $1,000
principal amount of the Securities is convertible into [insert number of shares]
shares of the Issuer's common stock, par value $0.01 per share (the "Common
Stock"), subject to adjustment.
7. The Securities as to which you have delivered a Fundamental Change Repurchase
Notice to the Paying Agent may be converted if they are otherwise convertible
pursuant to Article 11 of the Indenture and the terms of the Securities only if
you withdraw such Fundamental Change Repurchase Notice pursuant to the terms of
the Indenture. You may be entitled to have your Securities converted into cash
or a combination of cash and shares of the Issuer's common stock:
(i) during any fiscal quarter commencing after June 30, 2006 (and
only during such fiscal quarter), if the last reported sale price (as
defined in the Indenture) of the Issuer's common stock for at least 20
days during the period of 30 consecutive trading days ending on the last
trading day
(as defined in the Indenture) of the preceding fiscal quarter was more
than 130% of the conversion price (as defined in the Indenture) on such
last trading day;
(ii) during the five business days immediately following any five
consecutive trading-day period in which the trading price (as defined in
the Indenture) per $1,000 principal amount of the Securities for each day
of that period was less than 98% of the product of the closing price of
the Common Stock and the conversion rate (as defined in the Indenture) of
the Securities on each such day; provided, however, that you may not
convert the Securities in reliance on this provision after June 1, 2021 if
on any trading day during such five consecutive trading-day period the
closing price of the Common Stock was between 100% and 130% of the
conversion price of the Securities;
(iii) if the Issuer has called the Securities for redemption; or
(iv) upon the occurrence of certain specified corporate transactions
described in the Indenture.
8. The Securities as to which you have delivered a Fundamental Change Repurchase
Notice must be surrendered by you (by effecting book entry transfer of the
Securities or delivering Certificated Securities, together with necessary
endorsements, as the case may be) to [Name of Paying Agent] at [insert address]
in order for you to collect the Fundamental Change Repurchase Price.
9. The Fundamental Change Repurchase Price for the Securities as to which you
have delivered a Fundamental Change Repurchase Notice and not withdrawn such
Notice shall be paid promptly following the later of the Business Day
immediately following such Fundamental Change Repurchase Date and the date you
deliver such Securities to [Name of Paying Agent].
10. In order to have the Issuer repurchase your Securities, you must deliver the
Fundamental Change Repurchase Notice, duly completed by you with the information
required by such Fundamental Change Repurchase Notice (as specified in Section
3.08 of the Indenture) and deliver such Fundamental Change Repurchase Notice to
the Paying Agent at any time from 9:00 a.m. (New York City time) on the date of
the occurrence of the Change of Control until 5:00 p.m. (New York City time) on
the Fundamental Change Repurchase Date.
11. In order to withdraw any Fundamental Change Repurchase Notice previously
delivered by you to the Paying Agent, you must deliver to the Paying Agent, by
5:00 p.m. (New York City time) on the Fundamental Change Repurchase Date, a
written notice of withdrawal specifying (i) the certificate number, if any, of
the Securities in respect of which such notice of withdrawal is
F-2
being submitted, (ii) the principal amount of the Securities in respect of which
such notice of withdrawal is being submitted, and (iii) if you are not
withdrawing your Fundamental Change Repurchase Notice for all of your
Securities, the principal amount of the Securities which still remain subject to
the original Fundamental Change Repurchase Notice.
12. Unless the Issuer defaults in making the payment of the Fundamental Change
Repurchase Price owed to you, Interest, Contingent Interest, if any, and
Additional Amounts, if any, on your Securities as to which you have delivered a
Fundamental Change Repurchase Notice shall cease to accrue on and after the
Fundamental Change Repurchase Date.
13. CUSIP Number: ____________
CBIZ, INC.
F-3
SCHEDULE I
The following table sets forth the Stock Prices and the number of Additional
Shares per $1,000 principal amount of Securities.
STOCK PRICE
EFFECTIVE DATE $ 7.96 $ 9.00 $ 10.63 $ 12.50 $ 15.00 $ 20.00 $ 25.00 $ 30.00 $ 40.00 $ 50.00 $ 60.00 $ 70.00 $80.00
------ ------- ------- ------- ------- ------- -------- ------- ------- ------- -------- ------- ------
23-May-06 31.52 24.44 17.38 12.46 8.64 4.98 3.28 2.37 1.34 0.78 0.45 0.24 0.10
1-Jun-07 31.52 23.15 15.83 10.96 7.36 4.06 2.64 1.91 1.09 0.64 0.37 0.19 0.08
1-Jun-08 31.52 22.57 14.11 9.20 5.88 3.07 2.01 1.45 0.85 0.50 0.29 0.15 0.06
1-Jun-09 31.52 21.22 12.72 7.44 3.92 1.86 1.24 0.91 0.54 0.33 0.19 0.10 0.04
1-Jun-10 31.52 18.84 9.52 4.39 1.54 0.56 0.37 0.27 0.15 0.07 0.02 0.00 0.00
6-Jun-11 31.52 15.52 5.97 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00