EXHIBIT 4.5
THIS NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS
OF ANY STATE, AND MAY NOT BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED OR
HYPOTHECATED, OR OTHERWISE TRANSFERRED OR DISPOSED OF IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THIS NOTE OR SUCH SECURITIES
UNDER SUCH ACT AND ANY APPLICABLE STATE SECURITIES LAWS, EXCEPT IN A TRANSACTION
THAT IS EXEMPT FROM OR NOT SUBJECT TO THE REGISTRATION REQUIREMENTS OF SUCH ACT
OR SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN OPINION OF
COUNSEL REASONABLY SATISFACTORY TO THE COMPANY TO THE EFFECT THAT SUCH
TRANSACTION IS NOT REQUIRED TO BE REGISTERED UNDER SUCH ACT.
ECHOSTAR COMMUNICATIONS CORPORATION
$500,000,000
CONVERTIBLE SUBORDINATED NOTE DUE JULY 21, 2010
ECHOSTAR COMMUNICATIONS CORPORATION, a Nevada corporation (the
"Company"), for value received, hereby promises to pay to SBC COMMUNICATIONS
INC., a Delaware corporation, or its successors and permitted assigns (the
"Holder"), the principal amount of FIVE HUNDRED MILLION DOLLARS ($500,000,000),
on July 21, 2010 (the "Maturity Date") and to pay interest thereon, from July
21, 2003 or the most recent interest payment date on which interest has been
paid to the Maturity Date, semiannually on June 30 and December 31 in each year
and on the Maturity Date, commencing December 31, 2003, at the rate of 3% per
annum. The Company will pay interest on any overdue principal and on any overdue
installments of interest (without regard to any applicable grace period) at a
rate of 10%, compounded semiannually.
Payment of the principal amount of this Note, and interest thereon,
shall be made in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, by transfer to an account maintained by the Holder with a bank in the
United States of America. Terms not defined elsewhere herein are defined in
Section 9.
This Note has been executed, issued and delivered pursuant to the
Investment Agreement, dated as of July 20, 2003 (the "Investment Agreement"),
between the Company and the Holder.
1. Conversion. (a) The Holder shall be entitled at any time prior to
the Maturity Date (or, in the event this Note has been called for redemption or
the Holder has
exercised any of its rights pursuant to Section 3 below, then (only in respect
of the principal amount to be redeemed or repurchased) until and including, but
(unless the Company defaults in making the payment due upon redemption or
repurchase, as the case may be) not after, the close of business on the second
Business Day next preceding the Redemption Date or the date of the Repurchase
Notice, as the case may be) to convert this Note as a whole, or from time to
time in part (in any principal amount that is an integral multiple of
$50,000,000 or, if less, the aggregate principal amount outstanding), into newly
issued, fully paid and nonassessable shares of Class A Common Stock, par value
$0.01 per share (the "Class A Common Stock"), of the Company at the conversion
price per share of Class A Common Stock issuable upon such conversion (each such
share, a "Conversion Share" and such price per share, the "Conversion Price") in
effect on the applicable Satisfaction Date (as herein defined), by delivering to
the Company a written notice of its election to convert this Note (a "Conversion
Notice"), specifying the principal amount to be converted. The Conversion Price
on the date of the Investment Agreement was $72.82 (the "Initial Conversion
Price"), and the Conversion Price in effect on the applicable Satisfaction Date
shall be the Initial Conversion Price as it shall have been adjusted from time
to time pursuant to Section 1(g).
(b) In connection with any conversion:
(i) The Company shall (A) if requested by the Holder, file or cause
to be filed, on or prior to the twentieth day following the date of the
Conversion Notice, or as soon thereafter as may be reasonably
practicable, with the United States Federal Trade Commission and the
Antitrust Division of the United States Department of Justice, all
reports and other documents required to be filed by it under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended, and
the rules and regulations thereunder (the "HSR Act") concerning the
acquisition of securities pursuant to such conversion, (B) promptly
comply with or cause to be complied with any requests by the United
States Federal Trade Commission or the Antitrust Division of the United
States Department of Justice for additional information, so that the
waiting period applicable to the acquisition of securities pursuant to
such conversion under the HSR Act shall expire as soon as reasonably
practicable, and (C) if requested by the Holder, request early
termination of such waiting period. Nothing in this Section 1(b)(i)
shall be deemed to require the Company to (A) waive any rights or agree
to any limitation on its operations or to dispose of any securities or
assets or collection of securities or assets, or (B) incur any material
out-of-pocket costs other than attorneys' fees and disbursements, it
being understood that all HSR Act filing fees shall be paid by the
Holder.
(ii) Promptly following its receipt of the Conversion Notice and
from time to time thereafter, the Company shall take or cause to be
taken all reasonable actions, and shall do or cause to be done, and
shall assist and cooperate with the Holder in doing, all things
reasonably necessary to effect the conversion in the most expeditious
manner practicable, including attempting to obtain all necessary
2
actions or non-actions, waivers, consents and approvals from
Governmental Authorities and the making of any necessary registrations
and filings (including filings with Governmental Authorities, if any)
and the taking of all reasonable steps as may be necessary to obtain an
approval or waiver from, or to avoid any action or proceeding by, any
Governmental Authority. Nothing in this Section 1(b)(ii) shall be
deemed to require the Company to (A) waive any rights or agree to any
limitation on its operations or to dispose of any securities or assets
or collection of securities or assets, or (B) incur any material
out-of-pocket costs other than attorneys' fees and disbursements and
any filing fees required to be paid by the Company by applicable law.
(iii) Prior to the issuance and delivery of the Conversion Shares,
the Company shall (A) effect and/or maintain such registrations with
Governmental Authorities, and obtain such approvals by Governmental
Authorities, as may be necessary under any United States federal or
state law (including the Securities Act of 1933, as amended (the
"Securities Act"), the Securities Exchange Act of 1934, as amended (the
"Exchange Act") and state securities and "blue sky" laws), in each case
to the extent necessary, and only to the extent necessary, for the
Conversion Shares to be lawfully issued and delivered as provided
herein and listed or qualified for quotation as contemplated by clause
(B) of this subsection 1(b)(iii), and (B) cause the Conversion Shares
to be qualified for quotation, subject to notice of issuance, on the
Nasdaq Stock Market or such other inter-dealer quotation system, if
any, on which the Class A Common Stock is then quoted or cause the
Conversion Shares to be listed, subject to notice of issuance, on each
national securities exchange on which the Class A Common Stock is
listed or traded at the time of such delivery, in each case to the
extent permitted by the rules of the Nasdaq Stock Market or such
securities exchange, as the case may be.
(iv) It shall be a condition precedent to the effectiveness of such
conversion that (A) any waiting period applicable thereto under the HSR
Act shall have elapsed or been terminated, and (B) any authorization,
consent, order and approval of, or declaration or filing with, and any
other waiting period imposed by, any Governmental Authority in
connection therewith shall have been received or filed or shall have
elapsed or been terminated, as the case may be. Not later than the
second Business Day following the satisfaction of the foregoing
conditions precedent (or, if no waiting period is applicable to the
conversion under the HSR Act and no authorization, consent, order,
approval, declaration, filing or other waiting period is required or
imposed, then the third Business Day following the date of the
Conversion Notice) (such second or third Business Day, as the case may
be, the "Satisfaction Date"), the Company shall deliver to the Holder,
upon the surrender of this Note, a certificate or certificates
representing the Conversion Shares, registered in the name of the
Holder or its designee and containing such legends as the Company and
the Holder shall agree, and a replacement note identical to this Note
but having a principal amount equal to the
3
principal amount not theretofore converted, redeemed or repurchased (if
any). Any conversion shall be deemed to have been made as of the
applicable Satisfaction Date, and the Holder shall be treated for all
purposes as the record holder of the Conversion Shares as of such
Satisfaction Date.
(c) The Company will not issue fractional Conversion Shares upon
conversion of this Note. In lieu thereof, the Company will pay an amount in cash
based upon the Daily Market Price per share of the Class A Common Stock on the
trading day prior to the Satisfaction Date or, at its option, shall round up to
the next higher whole share.
(d) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued Class A Common Stock,
for the purpose of effecting the conversion of this Note, the maximum number of
shares of Class A Common Stock then issuable upon the conversion of this Note.
(e) Except as provided in the next sentence, the Company shall pay any
and all transfer taxes, stamp taxes and similar taxes and duties that may be
payable in respect of the issue or delivery of Conversion Shares on conversion
of this Note. 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 Conversion Shares in a name other than that of the Holder, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax or duty, or has
established to the satisfaction of the Company that such tax or duty has been
paid.
(f) The Company agrees that all shares of Class A Common Stock which
may be delivered upon conversion of this Note, upon such delivery, shall have
been duly authorized and validly issued and shall be fully paid and
nonassessable (and shall be issued out of the Company's authorized but unissued
Class A Common Stock) .
(g) The Conversion Price in effect on the date of any Conversion Notice
shall reflect any and all adjustments to the Initial Conversion Price effected
on or following the date of the Investment Agreement and on or prior to the
applicable Satisfaction Date, in accordance with the following provisions:
(i) In case the Company shall (1) pay a dividend in shares of Class
A Common Stock to all holders of Class A Common Stock, (2) make a
distribution in shares of Class A Common Stock to all holders of Class
A Common Stock, (3) subdivide its outstanding shares of Class A Common
Stock into a greater number of shares of Class A Common Stock or (4)
combine its outstanding shares of Class A Common Stock into a smaller
number of shares of Class A Common Stock, the Conversion Price in
effect immediately prior to such action shall be adjusted so that the
Holder shall upon the conversion of this Note be entitled to receive
the number of shares of Class A Common Stock which the Holder would
have owned immediately following such action had the Note been
converted immediately prior thereto. Any adjustment made pursuant to
this
4
subsection 1(g)(i) shall become effective immediately after the record
date in the case of a dividend or distribution and shall become
effective immediately after the effective date in the case of a
subdivision or combination.
(ii) In case the Company shall issue rights or warrants to all or
substantially all holders of Class A Common Stock entitling them (for a
period commencing no earlier than the record date for the determination
of holders of Class A Common Stock entitled to receive such rights or
warrants and expiring not more than 45 days after such record date) to
subscribe for or purchase shares of Class A Common Stock (or securities
convertible into Class A Common Stock) at a price per share less than
the current market price (as determined pursuant to subsection
1(g)(vi)) of the Class A Common Stock on such record date, the
Conversion Price shall be adjusted so that the same shall equal the
price determined by multiplying the Conversion Price in effect
immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Class A Common Stock
outstanding on such record date, plus the number of shares of Class A
Common Stock which the aggregate offering price of the offered shares
of Class A Common Stock (or the aggregate conversion price of the
convertible securities so offered) would purchase at such current
market price, and of which the denominator shall be the number of
shares of Class A Common Stock outstanding on such record date plus the
number of additional shares of Class A Common Stock offered (or into
which the convertible securities so offered are convertible). Such
adjustment shall become effective immediately after such record date.
(iii) In case the Company shall distribute to all or substantially
all holders of Class A Common Stock shares of Capital Stock of the
Company other than Class A Common Stock, evidences of Indebtedness or
other assets (other than cash dividends out of current or retained
earnings), or shall distribute to all or substantially all holders of
Class A Common Stock, rights or warrants to subscribe for securities
(other than those referred to in subsection 1(g)(ii)), then in each
such case the Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction
of which the numerator shall be the current market price (determined as
provided in subsection 1(g)(vi)) of the Class A Common Stock on the
record date mentioned below less the then fair market value (as
determined by the Board of Directors or a duly authorized committee
thereof, whose determination shall be conclusive evidence of such fair
market value and described in a Board Resolution) of the portion of
shares of Capital Stock, evidences of Indebtedness or other assets so
distributed in respect of, or of such rights or warrants applicable to,
one share of Class A Common Stock, and of which the denominator shall
be such current market price of the Class A Common Stock. Such
adjustment shall become effective immediately after the record date for
the determination of the holders of Class A Common Stock entitled to
receive such distribution. Notwithstanding the foregoing, in the
5
event that the Company shall distribute rights or warrants (other than
those referred to in subsection 1(g)(ii)) ("Rights") pro rata to
holders of Class A Common Stock, the Company may, in lieu of making any
adjustment pursuant to this subsection 1(g)(iii), make proper provision
so that if the applicable Satisfaction Date occurs after the record
date for such distribution and prior to the expiration or redemption of
the Rights the Holder shall be entitled to receive upon such
conversion, in addition to the Conversion Shares, a number of Rights to
be determined as follows: (i) if the Satisfaction Date occurs on or
prior to the date for the distribution to the holders of Rights of
separate certificates evidencing such Rights (the "Distribution Date"),
the same number of Rights to which a holder of a number of shares of
Class A Common Stock equal to the number of Conversion Shares is
entitled at the Satisfaction Date in accordance with the terms and
provisions of and applicable to the Rights; and (ii) if the
Satisfaction Date occurs after the Distribution Date, the same number
of Rights to which a holder of the number of shares of Class A Common
Stock into which the principal amount of the Note so converted was
convertible immediately prior to the Distribution Date would have been
entitled on the Distribution Date in accordance with the terms and
provisions of and applicable to the Rights.
(iv) In case the Company shall, by dividend or otherwise, at any
time distribute to all or substantially all holders of its Class A
Common Stock cash (including any distributions of cash out of current
or retained earnings of the Company but excluding any cash that is
distributed as part of a distribution requiring a Conversion Price
adjustment pursuant to subsection 1(g)(iii)) in an aggregate amount
that, together with the sum of (x) the aggregate amount of any other
distributions to all or substantially all holders of its Class A Common
Stock made in cash plus (y) all Excess Payments, in each case made
within the 12 months preceding the date fixed for determining the
stockholders entitled to such distribution (the "Distribution Record
Date") and in respect of which no Conversion Price adjustment pursuant
to subsection 1(g)(iii) or 1(g)(v) or this subsection 1(g)(iv) has been
made, exceeds 10% of the product of the current market price per share
(determined as provided in subsection 1(g)(vi)) of the Class A Common
Stock on the Distribution Record Date times the number of shares of
Class A Common Stock outstanding on the Distribution Record Date
(excluding shares held in the treasury of the Company), the Conversion
Price shall be reduced so that the same shall equal the price
determined by multiplying such Conversion Price in effect immediately
prior to the effectiveness of the Conversion Price reduction
contemplated by this subsection 1(g)(iv) by a fraction of which the
numerator shall be the current market price per share (determined as
provided in subsection 1(g)(vi)) of the Class A Common Stock on the
Distribution Record Date less the amount of such cash distributions and
Excess Payments applicable to one share (based on the pro rata portion
of the aggregate amount of such cash distributions and Excess Payments,
divided by the number of shares of Class A Common Stock outstanding on
the Distribution Record Date) of Class A Common Stock and the
denominator shall be such current market price per share
6
(determined as provided in subsection 1(g)(vi)) of the Class A Common
Stock on the Distribution Record Date, such reduction to become
effective immediately prior to the opening of business on the day
following the Distribution Record Date.
(v) In case a tender offer or other negotiated transaction made by
the Company or any Subsidiary for all or any portion of the Class A
Common Stock shall be consummated, if an Excess Payment is made in
respect of such tender offer or negotiated transaction and the amount
of such Excess Payment, together with the sum of (x) the aggregate
amount of all Excess Payments plus (y) the aggregate amount of all
distributions to all or substantially all holders of the Class A Common
Stock made in cash (specifically including distributions of cash out of
current or retained earnings), in each case made within the 12 months
preceding the date of payment of such current negotiated transaction
consideration or expiration of such current tender offer, as the case
may be (any such date, the "Tender Payment Date"), and as to which no
adjustment pursuant to subsection 1(g)(iii) or 1(g)(iv) or this
subsection 1(g)(v) has been made, exceeds 10% of the product of the
current market price per share (determined as provided in subsection
1(g)(vi)) of the Class A Common Stock on the Tender Payment Date times
the number of shares of Class A Common Stock outstanding (including any
acquired shares but excluding any shares held in the treasury of the
Company) on the Tender Payment Date, the Conversion Price shall be
reduced so that the same shall equal the price determined by
multiplying such Conversion Price in effect immediately prior to the
effectiveness of the Conversion Price reduction contemplated by this
subsection 1(g)(v) by a fraction of which the numerator shall be the
current market price per share (determined as provided in subsection
1(g)(vi)) of the Class A Common Stock on the Tender Payment Date less
the amount of such Excess Payments and such cash distributions, if any,
applicable to one share (based on the pro rata portion of the aggregate
amount of such Excess Payments and such cash distributions, divided by
the number of shares of Class A Common Stock outstanding on the Tender
Payment Date) of Class A Common Stock and the denominator shall be such
current market price per share (determined as provided in subsection
1(g)(vi)) of the Class A Common Stock on the Tender Payment Date, such
reduction to become effective immediately prior to the opening of
business on the day following the Tender Payment Date.
(vi) The current market price per share of the Class A Common Stock
on any date shall be deemed to be the average of the Daily Market
Prices for the shorter of (i) ten consecutive business days ending on
the last full trading day on the exchange or market referred to in
determining such Daily Market Prices prior to the time of
determination, or (ii) the period commencing on the date next
succeeding the first public announcement of the issuance of such rights
or such warrants or such other distribution or such negotiated
transaction through such
7
last full trading day on the exchange or market referred to in
determining such Daily Market Prices prior to the time of
determination.
(vii) In any case in which this Section 1(g) shall require that an
adjustment be made immediately following a record date and the
applicable Satisfaction Date occurs after such record date, the Company
may elect to defer issuing to the Holder after such record date the
shares of Class A Common Stock and other Capital Stock of the Company
issuable upon such conversion over and above the shares of Class A
Common Stock and other Capital Stock of the Company issuable upon such
conversion only on the basis of the Conversion Price prior to
adjustment; and, in lieu of the shares the issuance of which is so
deferred, the Company shall issue or cause its transfer agents to issue
due bills or other appropriate evidence of the right to receive such
shares.
(viii) No adjustment in the Conversion Price shall be required
until cumulative adjustments amount to 1% or more of the Conversion
Price as last adjusted; provided, however, that any adjustments which
by reason of this subsection 1(g)(viii) are not required to be made
shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 1(g) shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the
case may be. No adjustment need be made for rights to purchase Class A
Common Stock pursuant to a Company plan for reinvestment of dividends
or interest. No adjustment need be made for a change in the par value
or no par value of the Class A Common Stock.
(ix) In the event that, as a result of an adjustment made pursuant
to this Section 1(g), the Holder shall become entitled to receive any
shares of Capital Stock of the Company other than shares of Class A
Common Stock, thereafter the Conversion Price of such other shares so
receivable upon conversion of the Note shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to Class A Common Stock
contained in this Section 1(g). In the event that shares of Class A
Common Stock are not delivered after the expiration of any of the
rights or warrants referred to in subsection 1(g)(ii) and subsection
1(g)(iii), the Conversion Price shall be readjusted to the Conversion
Price which would otherwise be in effect had the adjustment made upon
the issuance of such rights or warrants been made on the basis of
delivery of only the number of shares of Class A Common Stock actually
delivered.
(x) The Company may make such reductions in the Conversion Price,
in addition to those required by this Section 1(g), as it determines to
be advisable in order that any stock dividend, subdivision of shares,
distribution or rights to purchase stock or securities or distribution
of securities convertible into or exchangeable for stock made by the
Company to its stockholders will not be taxable to the recipients
thereof.
8
(xi) Whenever the Conversion Price is adjusted, the Company shall
promptly mail to the Holder at the address set forth herein a notice of
the adjustment briefly stating the facts requiring the adjustment and
the manner of computing it.
(h) In the event that:
(i) the Company takes any action which would require an adjustment
to the Conversion Price;
(ii) the Company takes any action that would require a supplemental
agreement pursuant to Section 1(i); or
(iii) there is a dissolution or liquidation of the Company;
the Holder may wish to convert this Note into shares of Class A Common Stock
prior to the record date for or the effective date of the transaction so that
the Holder may receive the rights, warrants, securities or assets which a holder
of shares of Class A Common Stock on that date may receive. Therefore, the
Company shall mail to the Holder a notice stating the proposed record or
effective date, as the case may be. The Company shall mail the notice at least
15 days before such date; however, failure to mail such notice or any defect
therein shall not affect the validity of any transaction referred to in clauses
(i), (ii) or (iii) of this Section 1(h).
(i) If any of the following shall occur, namely: (A) any
reclassification or change in the Class A Common Stock issuable upon conversion
of this Note (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), (B) any consolidation or merger to which the Company is a party,
other than a merger in which the Company is the continuing corporation and which
does not result in any reclassification of, or change (other than a change in
name, or par value, or from par value to no par value, or from no par value to
par value or as a result of a subdivision or combination) in, the Class A Common
Stock or (C) any sale, assignment, transfer, lease, conveyance or other
disposition of all or substantially all of the properties or assets of the
Company and its Subsidiaries (taken as a whole), then the Company, or such
successor or transferee, as the case may be, shall, as a condition precedent to
such reclassification, change, consolidation, merger, sale, assignment,
transfer, lease, conveyance or other disposition, execute and deliver an
agreement to the Holder in form reasonably satisfactory to the Holder providing
that the Holder shall have the right to convert this Note into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, consolidation, merger, sale,
assignment, transfer, lease, conveyance or other disposition by a holder of the
number of shares of Class A Common Stock deliverable upon conversion of this
Note immediately prior to such reclassification, change, consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition. Such
agreement shall provide for adjustments of the Conversion Price which
9
shall be as nearly equivalent as may be practicable to the adjustments of the
Conversion Price provided for in Section 1(g).
The foregoing, however, shall not in any way affect the right the
Holder may otherwise have, pursuant to Section 1(g)(iii), to receive Rights upon
conversion of this Note. If, in the case of any such consolidation, merger,
sale, assignment, transfer, lease, conveyance or other disposition, the stock or
other securities and property (including cash) receivable thereupon by a holder
of Class A Common Stock includes shares of stock or other securities and
property of a business entity other than the successor or transferee, as the
case may be, in such consolidation, merger, sale, assignment, transfer, lease,
conveyance or other disposition, then such supplemental agreement shall also be
executed by such other business entity and shall contain such additional
provisions to protect the interests of the Holder as the Board of Directors
shall reasonably consider necessary by reason of the foregoing. The provision of
this Section 1(i) shall similarly apply to successive consolidations, mergers,
sales, assignments, transfers, leases, conveyances or other dispositions. In the
event the Company shall execute a supplemental agreement pursuant to this
Section 1(i), the Company shall promptly deliver to the Holder of the Note an
Officers' Certificate briefly stating the reasons therefor, the kind or amount
of shares of stock or securities or property (including cash) receivable by the
Holder upon the conversion of this Note after any such reclassification, change,
consolidation, merger, sale, assignment, transfer, lease, conveyance or other
disposition and any adjustment to be made with respect thereto.
2. Redemption. Prior to July 21, 2008, this Note shall not be
redeemable at the Company's option. Beginning on July 21, 2008, the Company, at
its option, shall be entitled to redeem this Note for cash at any time, as a
whole, or from time to time in part (in any principal amount that is an integral
multiple of not less than $50,000,000 or, if less, the aggregate principal
amount outstanding), on the Redemption Date (as herein defined), at a price
equal to 100% of the principal amount to be redeemed, together with accrued but
unpaid interest thereon through the Redemption Date (if any) (the "Redemption
Price"); provided that the Company shall not be entitled to redeem this Note to
the extent that the Holder shall have duly delivered to the Company, on or prior
to the close of business on the second Business Day next preceding the
Redemption Date, a Conversion Notice relating to all or a portion of the
principal amount hereof. Not fewer than 30 nor more than 60 days prior to the
date on which redemption is to be effected (such date, the "Redemption Date"),
the Company shall provide the Holder with written notice (a "Redemption Notice")
of the Redemption Date and the principal amount to be redeemed, and this Note
shall thereupon be due and payable at the Redemption Price at 3:00 p.m., Central
time, on the Redemption Date, to the extent of the principal amount to be
redeemed, except to the extent that the Holder shall have so delivered such a
Conversion Notice. On the Redemption Date, the Company shall pay to the Holder,
by transfer to an account maintained by the Holder with a bank in the United
States of America specified to the Company in writing not fewer than five
Business Days prior to the Redemption Date, the Redemption Price in respect of
the principal amount to be redeemed and, in the case of a redemption in part,
shall execute, issue and deliver to the
10
Holder a replacement note identical to this Note but having a principal amount
equal to the principal amount hereof not theretofore converted, redeemed or
repurchased. Upon the Holder's receipt of the Redemption Price (and, in the case
of a redemption in part, such replacement note), this Note shall be deemed to be
cancelled, and the Holder shall thereafter send this Note to the Company.
3. Repurchase Rights. (a) At any time following any Repurchase Trigger
Date, the Holder, at its option, shall be entitled to require the Company to
repurchase this Note, as a whole, or from time to time in part (in any principal
amount that is an integral multiple of $50,000,000 or, if less, the aggregate
principal amount outstanding), at a price equal to 100% of the principal amount
to be repurchased, together with accrued but unpaid interest thereon through the
Repurchase Date (if any) (the "Repurchase Price"), by delivering to the Company
a written notice (a "Repurchase Notice") of the exercise of its rights pursuant
to this Section 3 specifying the principal amount to be repurchased. Prior to
July 21, 2008, the Repurchase Notice shall be delivered not more than 60 days
following the Holder's receipt of the Company Change in Control Notice (as
herein defined). Upon delivery of the Repurchase Notice, this Note shall be due
and payable at 3:00 p.m., Central time, on the 40th day following the date of
the Repurchase Notice (the "Repurchase Date"), to the extent of the principal
amount to be repurchased. On the Repurchase Date, the Company shall pay to the
Holder, by transfer to an account maintained by the Holder with a bank in the
United State of America specified to the Company in writing not fewer than five
Business Days prior to the Repurchase Date, the Repurchase Price in respect of
the principal amount to be repurchased and, in the case of a repurchase in part,
shall execute, issue and deliver to the Holder a replacement note identical to
this Note but having a principal amount equal to the principal amount hereof not
theretofore converted, redeemed or repurchased. Upon the Holder's receipt of the
Repurchase Price (and, in the case of a repurchase in part, such replacement
note), this Note shall be deemed to be cancelled, and the Holder shall send this
Note to the Company.
(b) Not later than 40 days following the occurrence of a Company Change
in Control, the Company shall deliver to the Holder a written notice (a "Company
Change in Control Notice") stating that a Company Change in Control has
occurred.
4. Covenants. The Company covenants and agrees with the Holder that:
(a) The Company shall duly and punctually pay the principal of and
interest on this Note in accordance herewith, and perform and discharge its
other obligations pursuant hereto.
(b) Subject to Section 5, to the extent permitted by law, the Company
shall do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence and the corporate, partnership or other
existence of each Subsidiary of the Company in accordance with the respective
organizational documents of each Subsidiary and the rights (charter and
statutory), licenses and franchises of the Company;
11
provided, however, that the Company shall not be required to preserve any such
right, license or franchise, or the corporate, partnership or other existence of
any Subsidiary, if the Company shall determine that the preservation thereof is
no longer desirable in the conduct of the business of the Company and its
Subsidiaries taken as a whole.
5. Consolidation, Merger, Etc. The Company shall not sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of the
properties or assets of the Company and its Subsidiaries (taken as a whole) in
one or more related transactions to another corporation, Person or entity
unless:
(a) the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia;
(b) the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition will have been made assumes all the
obligations of the Company under this Note, including the conversion and
repurchase rights provided herein, pursuant to an agreement in form and
substance reasonably satisfactory to the Holder; and
(c) immediately after such transaction no Default or Event of Default
shall exist.
Upon any consolidation or merger, or any sale, assignment, transfer, lease,
conveyance or other disposition of all or substantially all of the properties or
assets of the Company and its Subsidiaries (taken as a whole) in accordance with
Section 5, the successor corporation formed by such consolidation or into which
the Company is merged or to which such sale, assignment, transfer, lease,
conveyance or other disposition is made shall succeed to, and be substituted for
and may exercise every right and power of, the Company under this Note with the
same effect as if such successor has been named as the Company herein; provided
that the Company, as predecessor in the case of any sale, assignment, transfer,
lease, conveyance or other disposition shall not be released from the obligation
to pay the principal of and interest on this Note.
6. Events of Default. (a) An "Event of Default" shall occur if:
(i) the Company defaults in the payment of any amount due and
payable on this Note when the same becomes due and payable at the
Maturity Date, any interest payment date, any Redemption Date or
Repurchase Date or otherwise; provided that no Event of Default shall
occur with respect to a default in the payment of interest on this Note
unless such default shall continue for a period of 30 days after the
date such interest payment is due and payable;
(ii) the Company fails to observe or perform for a period of 30
days after written notice from the Holder to the Company stating that
such notice is a
12
"Notice of Default" any covenant or agreement contained in Section 3(b)
or Section 5;
(iii) the Company fails to observe or perform any other covenant or
agreement contained in this Note, required by it to be performed (other
than the covenant to duly and punctually pay the principal of and
interest on this Note) and such Default continues for a period of 60
days after written notice from the Holder to the Company stating that
such notice is a "Notice of Default";
(iv) the Company or any of its Significant Subsidiaries defaults
under any mortgage, indenture, agreement or instrument under which
there may be issued or by which there may be secured or evidenced any
Indebtedness for money borrowed by the Company or any of its
Significant Subsidiaries, which Indebtedness has been either (A)
offered or sold through a public offering or resold to qualified
institutional buyers pursuant to Rule 144A under the Securities Act, or
(B) incurred in connection with the Company's main unsecured revolving
credit facility (if any), whether, in any such case described by clause
(A) or (B), such Indebtedness now exists or is created after the
issuance of this Note, and which default:
(A) is caused by a failure to pay when due principal of or
interest on such Indebtedness within the grace period
provided for in such Indebtedness (which failure continues
beyond any applicable grace period) (a "Payment Default");
or
(B) results in the acceleration of such Indebtedness prior to
its express maturity and, in each case, the principal
amount of any such Indebtedness, together with the
principal amount of any other such Indebtedness described
in this subsection 6(iv) under which there is a Payment
Default or the maturity of which has been so accelerated,
aggregates $100 million or more;
(v) the Company or any of its Subsidiaries that is a Significant
Subsidiary or any group of two or more Subsidiaries that, taken as a
whole, would constitute a Significant Subsidiary pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in
an involuntary case in which it is the debtor;
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property;
13
(D) makes a general assignment for the benefit of its
creditors; or
(E) generally is unable to pay its debts as the same become
due; or
(vi) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group
of two or more Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary in an involuntary
case;
(B) appoints a Custodian of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group
of two or more Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary or for all or
substantially all of its property; or
(C) orders the liquidation of the Company or any of its
Subsidiaries that is a Significant Subsidiary or any group
of two or more Subsidiaries that, taken as a whole, would
constitute a Significant Subsidiary, and the order or
decree remains unstayed and in effect for 60 days.
(b) If an Event of Default (other than an Event of Default specified in
clauses (v) or (vi) of Section 6(a)) occurs and is continuing, the Holder may
declare the principal amount of this Note together with accrued but unpaid
interest thereon (if any) to be due and payable immediately. If an Event of
Default specified in clauses (v) or (vi) of Section 6(a) occurs, such an amount
shall ipso facto become and be immediately due and payable without any other act
on the part of the Holder. If this Note shall have been declared due and payable
as a result of the acceleration of Indebtedness prior to its Maturity Date
pursuant to subsection 6(a)(iv)(B), such declaration shall be automatically
rescinded if the acceleration of such Indebtedness has been rescinded or
annulled within 30 days after such acceleration in accordance with the mortgage,
indenture or instrument under which it was issued and (A) such rescission would
not conflict with any judgment or decree of a court of competent jurisdiction
and (B) if all existing Events of Default have been cured or waived except
nonpayment of the principal amount of or interest on this Note that has become
due solely because of the acceleration of this Note.
(c) If an Event of Default occurs and is continuing, the Holder may
pursue any available remedy to collect the payment of the principal amount on
this Note or to enforce the performance of any provision of this Note. A delay
or omission by the Holder in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. All remedies are cumulative to the
extent permitted by law.
14
(d) The Holder may waive an existing Default or Event of Default and
its consequences. When a Default or Event of Default is waived, it is cured and
ceases, except as set forth in such waiver; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
7. Subordination.
(a) Agreement To Subordinate and Ranking. The Company, for itself and
its successors, and the Holder, by its acceptance of this Note, agree that the
payment of the principal of or interest on or any other amounts due on this Note
is subordinated in right and priority of payment, to the extent and in the
manner stated in this Section 7, to the prior payment in full of all existing
and future Senior Debt. This Note shall rank pari passu with, and shall not be
senior in right of payment to such other Indebtedness of the Company whether
outstanding on the date of issuance of this Note or hereafter created, incurred,
issued or guaranteed by the Company, whenever the instrument creating or
evidencing such Indebtedness expressly provides that such Indebtedness ranks
pari passu with this Note. The Notes shall rank pari passu with the 1999
Convertible Notes and the 2001 Convertible Notes.
(b) No Payment On Note If Senior Debt In Default. Anything in this Note
to the contrary notwithstanding, no payment on account of principal of or
redemption of, interest on or other amounts due on this Note, and no redemption,
repurchase, or other acquisition of this Note, shall be made by or on behalf of
the Company (i) unless full payment of amounts then due for principal and
interest and of all other amounts then due on all Senior Debt has been made or
duly provided for pursuant to the terms of the instrument governing such Senior
Debt, (ii) if, at the time of such payment, redemption, repurchase or other
acquisition, or immediately after giving effect thereto, there shall exist under
any Senior Debt, or any agreement pursuant to which any Senior Debt is issued,
any default, which default shall not have been cured or waived and which default
shall have resulted in the full amount of such Senior Debt being declared due
and payable or (iii) if, at the time of such payment, redemption, repurchase or
other acquisition, the Holder shall have received written notice from any of the
holders of Senior Debt or such holder's representative (a "Payment Blockage
Notice") that there exists under such Senior Debt, or any agreement pursuant to
which such Senior Debt is issued, any default, which default shall not have been
cured or waived, permitting the holders thereof to declare any amounts of such
Senior Debt due and payable, but only for the period (the "Payment Blockage
Period") commencing on the date of receipt of the Payment Blockage Notice and
ending (unless earlier terminated by notice given to the Holder by the holders
of such Senior Debt) on the earlier of (a) the date on which such event of
default shall have been cured or waived or (b) 180 days from the receipt of the
Payment Blockage Notice. Upon termination of the Payment Blockage Period,
payments on account of principal of or interest on this Note (other than,
subject to subsection 7(c) hereof, amounts due and payable by reason of the
acceleration of the maturity of this Note) and redemptions, repurchases or other
acquisitions may be made by or on behalf of the Company. Notwithstanding
anything herein to the contrary, (x) only one Payment
15
Blockage Notice may be given during any period of 360 consecutive days with
respect to the same event of default or any other events of default on the same
issue of Senior Debt existing and known to the Person giving such notice at the
time of such notice unless such event of default or such other events of default
have been cured or waived for a period of not less than 90 consecutive days and
(y) no new Payment Blockage Period may be commenced by the holder or holders of
the same issue of Senior Debt or their representative or representatives during
any period of 360 consecutive days unless all events of default which were the
object of the immediately preceding Payment Blockage Notice, and any other event
of default on the same issue of Senior Debt existing and known to the Person
giving such notice at the time of such notice, have been cured or waived.
In the event that, notwithstanding the provisions of this subsection
7(b), payments are made by or on behalf of the Company in contravention of the
provisions of this subsection 7(b), such payments shall be held by the Holder in
trust for the benefit of, and shall be paid over to and delivered to, the
holders of Senior Debt or their representative or the trustee under the
indenture or other agreement (if any), pursuant to which any instruments
evidencing any Senior Debt may have been issued for application to the payment
of all Senior Debt ratably according to the aggregate amounts remaining unpaid
to the extent necessary to pay all Senior Debt in full in accordance with the
terms of such Senior Debt, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
The Company shall give prompt written notice to the Holder of any
default or event of default under any Senior Debt or under any agreement
pursuant to which any Senior Debt may have been issued.
(c) Distribution On Acceleration Of Note; Dissolution and
Reorganization; Subrogation Of Note.
(i) If this Note is declared due and payable because of the
occurrence of an Event of Default, the Company shall give prompt
written notice to the holders of all Senior Debt or to the trustee(s)
for such Senior Debt of such acceleration. The Company may not pay the
principal of or interest on or any other amounts due on this Note until
five days after such holders or trustee(s) of Senior Debt receive such
notice and, thereafter, the Company may pay the principal of or
interest on or any other amounts due on this Note only if the
provisions of this Section 7 permit such payment.
(ii) Upon (A) any acceleration of the principal amount due on this
Note because of an Event of Default or (B) any distribution of assets
of the Company upon any dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of
creditors or any other dissolution, winding up, liquidation or
reorganization of the Company):
16
(A) the holders of all Senior Debt shall first be entitled to
receive payment in full of the principal thereof, the
interest thereon and any other amounts due thereon before
the Holder is entitled to receive payment on account of
the principal of or interest on or any other amounts due
on this Note;
(B) any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or
securities (other than securities of the Company as
reorganized or readjusted or securities of the Company or
any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in this
Section 7 with respect to the Note, to the payment in full
without diminution or modification by such plan of all
Senior Debt), to which the Holder would be entitled except
for the provisions of this Section 7, shall be paid by the
liquidating trustee or agent or other Person making such a
payment or distribution, directly to the holders of Senior
Debt (or their representatives(s) or trustee(s) acting on
their behalf), ratably according to the aggregate amounts
remaining unpaid on account of the principal of or
interest on and other amounts due on the Senior Debt held
or represented by each, to the extent necessary to make
payment in full of all Senior Debt remaining unpaid, after
giving effect to any concurrent payment or distribution to
the holders of such Senior Debt; and
(C) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities
(other than securities of the Company as reorganized or
readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least
to the extent provided in this Section 7 with respect to
the Note, to the payment in full without diminution or
modification by such plan of Senior Debt), shall be
received by the Holder before all Senior Debt is paid in
full, such payment or distribution shall be held in trust
for the benefit of, and be paid over to upon request by a
holder of the Senior Debt, the holders of the Senior Debt
remaining unpaid (or their representatives) or trustee(s)
acting on their behalf, ratably as aforesaid, for
application to the payment of such Senior Debt until all
such Senior Debt shall have been paid in full, after
giving effect to any
17
concurrent payment or distribution to the holders of such
Senior Debt.
Subject to the payment in full of all Senior Debt, the Holder shall
be subrogated to the rights of the holders of Senior Debt to receive
payments or distributions of cash, property or securities of the
Company applicable to the Senior Debt until the principal of and
interest on this Note shall be paid in full and, for purposes of such
subrogation, no such payments or distributions to the holders of Senior
Debt of cash, property or securities which otherwise would have been
payable or distributable to the Holder shall, as between the Company,
its creditors other than the holders of Senior Debt, and the Holder, be
deemed to be a payment by the Company to or on account of the Senior
Debt, it being understood that the provisions of this Section 7 are and
are intended solely for the purpose of defining the relative rights of
the Holder, on the one hand, and the holders of Senior Debt, on the
other hand.
Nothing contained in this Section 7 or elsewhere in this Note is
intended to or shall (i) impair, as between the Company and its
creditors other than the holders of Senior Debt, the obligation of the
Company, which is absolute and unconditional, to pay to the Holder the
principal of and interest on this Note as and when the same shall
become due and payable in accordance with the terms of this Note, (ii)
affect the relative rights of the Holder and creditors of the Company
other than holders of Senior Debt or, as between the Company and the
Holder, the obligations of the Company to the Holder, or (iii) prevent
the Holder from exercising all remedies otherwise permitted by
applicable law upon default under this Note, subject to the rights, if
any, under this Section 7 of the holders of Senior Debt in respect of
cash, property and securities of the Company received upon the exercise
of any such remedy.
Upon distribution of assets of the Company referred to in this
Section 7, the Holder shall be entitled to rely upon a certificate of
the liquidating trustee or agent or other Person making any
distribution to the Holder for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Debt and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and
all other facts pertinent thereto or to this Section 7. The Holder,
however, shall not be deemed to owe any fiduciary duty to the holders
of Senior Debt.
(iii) The provisions of this Section 7 shall not be applicable to
any cash, properties or securities received by the Holder when received
as a holder of Senior Debt and nothing in this Section 7 or elsewhere
in this Note shall deprive the Holder of any of its rights as such a
holder.
(iv) The Company shall give prompt written notice to the Holder of
any fact known to the Company which would prohibit the making by the
18
Company of any payment of money to the Holder in respect of the Note
pursuant to the provisions of this Section 7.
The Holder shall be entitled to rely on the delivery to it of a
written notice by a Person representing himself or itself to be a
holder of Senior Debt (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of Senior Debt
(or a trustee on behalf of any such holder or holders). In the event
that the Holder determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior
Debt to participate in any payment or distribution pursuant to this
Section 7, the Holder may request such Person to furnish evidence to
the reasonable satisfaction of the Holder as to the amount of Senior
Debt 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 Section 7, and, if
such evidence is not furnished, the Holder may defer any payment to
such Person pending judicial determination as to the right of such
Person to receive such payment.
(d) Reliance By Senior Debt On Subordination Provisions. The Holder, by
his acceptance of this Note, acknowledges and agrees that the foregoing
subordination provisions are, and are intended to be, an inducement and a
consideration for each holder of any Senior Debt, whether such Senior Debt was
created or acquired before or after the issuance of this Note, to acquire and
continue to hold, or to continue to hold, such Senior Debt, and such holder of
Senior Debt shall be deemed conclusively to have relied on such subordination
provisions in acquiring and continuing to hold, or in continuing to hold, such
Senior Debt. Notice of any default in the payment of any Senior Debt, except as
expressly stated in this Section 7, and notice of acceptance of the provisions
hereof are hereby expressly waived. Except as otherwise expressly provided
herein, no waiver, forbearance or release by any holder of Senior Debt under
such Senior Debt or under this Section 7 shall constitute a release of any of
the obligations or liabilities of the Holder provided in this Section 7.
(e) No Waiver Of Subordination Provisions. Except as otherwise
expressly provided herein, no right of any present or future holder of any
Senior Debt 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 Note, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of, or notice to, the Holder, without incurring responsibility to the
Holder and without impairing or releasing the subordination provided in this
Section 7 or the obligations hereunder of the Holder to the holders of Senior
Debt, do any one or more of the following: (i) change the manner, place or terms
of payment of, or renew or alter, Senior Debt, or otherwise amend
19
or supplement in any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (ii) sell, exchange,
release or otherwise dispose of any property pledged, mortgaged or otherwise
securing Senior Debt; (iii) release any Person liable in any manner for the
collection of Senior Debt; and (iv) exercise or refrain from exercising any
rights against the Company or any other Person.
(f) Other Provisions Subject Hereto. Expect as expressly stated in this
Section 7, notwithstanding anything contained in this Note to the contrary, all
the provisions of this Note are subject to the provisions of this Section 7.
Notwithstanding the foregoing, the failure to make a payment on account of
principal of or interest on the Notes by reason of any provision of this Section
7 shall not be construed as preventing the occurrence of an Event of Default
under Section 6 hereof.
8. Miscellaneous.
(a) Absolute Obligation to Pay. No provision of this Note shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of, and interest on, this Note at the times, places and rate,
and in the coin or currency, herein prescribed or to convert this Note as herein
provided. The Company shall not have any right to set off any payment of any
amounts payable pursuant to this Note against any payment of amounts payable to
the Holder or its Affiliates under any other agreement or instrument
(collectively, "Other Amounts"), or set off any payment of any Other Amount
against any payment of any amounts payable pursuant to this Note.
(b) Assignment. Neither the Company nor the Holder may assign this Note
without the prior written consent of the other and any attempted assignment by
either the Company or the Holder without such written consent shall be null and
void; provided that the Holder may, at any time and without the prior consent of
the Company, assign this Note to any of the Holder's wholly-owned Subsidiaries;
and, provided, further, that upon the termination of the Commercial Agreement in
accordance with its terms, the Holder may, at any time thereafter and without
the prior written consent of the Company, assign this Note to any Person in
whole but not in part; and provided, further, that any subsequent assignee of
this Note may only transfer this Note in whole but not in part. Upon notice to
the Company of an assignment of this Note in accordance with the provisions
hereof, the Company shall recognize such assignee as the Holder of this Note for
all purposes hereof and such assignee shall be entitled to all rights,
privileges and benefits received by the Holder under the terms of this Note.
(c) Notices. In any case where any notice, approval, agreement or other
communication is required or permitted to be given hereunder, such notice,
approval, agreement or communication shall be in writing and deemed to have been
duly given and delivered: (i) if delivered in person, on the date of such
delivery; (ii) if sent by overnight express or registered or certified mail
(with return receipt requested), on the date of receipt of such mail; or (iii)
if sent by confirmed facsimile transmission (with answer
20
back received), on the date of such facsimile transmission; provided that notice
is also sent on the same day by one of the methods set forth in (i) or (ii)
above. Such notice or other communication shall be sent to the following
address(es) (or such other address(es) as designated from time to time in
writing):
If to the Holder, to:
SBC Communications Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Senior Executive Vice President -
Corporate Development
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Senior Vice President and Assistant General Counsel - Corporate
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
and a copy (which shall not constitute notice) to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
if to the Company, to:
Echostar Communications Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Senior Vice President and
General ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇-▇▇▇-▇▇▇▇
(d) Governing Law; WAIVER OF JURY TRIAL.
(i) THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA APPLICABLE
TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN THE STATE OF NEW
21
YORK. Any suit, action or proceeding shall be brought against any of
the Company or the Holder only in a federal court sitting in the
Southern District of New York or New York state court situated in The
Borough of Manhattan, The City of New York. Each of the Company and the
Holder (by the Holder's acceptance hereof) irrevocably and
unconditionally agrees: (A) to be subject to the jurisdiction of the
courts of the State of New York situated in The Borough of Manhattan,
The City of New York and of the federal courts sitting in the Southern
District of New York and (B) (I) to the extent the Company or the
Holder, as the case may be, is not otherwise subject to service of
process in the State of New York, to appoint and maintain an agent in
the State of New York as its agent for service of legal process, and
(II) that service of process may also be made on the Company or Holder
by prepaid certified mail with a proof of mailing receipt validated by
the United States Postal Service constituting evidence of valid
service, and that service made pursuant to clause (A) (I) or (II) above
shall have the same legal force and effect as if served upon the Holder
or the Company, as the case may be, personally within the State of New
York. Without limiting the generality of the foregoing, each of the
Company and the Holder (by the Holder's acceptance hereof) agrees that
service of process at the address referred to in subsection 8(c),
together with written notice of such service to the Company or Holder,
as the case may be, shall be deemed effective service of process.
(ii) EACH OF THE COMPANY AND THE HOLDER (BY ITS ACCEPTANCE HEREOF)
ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS
NOTE IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH OF THE COMPANY AND THE HOLDER (BY SUCH ACCEPTANCE)
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF OR RELATING TO THIS NOTE. THE COMPANY CERTIFIES AND ACKNOWLEDGES
THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE HOLDER HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE HOLDER WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) THE
COMPANY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER,
AND (C) THE COMPANY MAKES THIS WAIVER VOLUNTARILY. THE HOLDER (BY SUCH
ACCEPTANCE) CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE,
AGENT OR ATTORNEY OF THE COMPANY HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT THE COMPANY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (B) THE HOLDER UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, AND (C) THE HOLDER MAKES
THIS WAIVER VOLUNTARILY.
22
(e) Amendments and Waivers. Any provision of this Note may be amended
or waived if, but only if, such amendment or waiver is in writing and is signed,
in the case of an amendment, by the Company and the Holder, or, in the case of a
waiver, by each party against whom the waiver is to be effective. No failure or
delay by the Company or the Holder in exercising any right, power or privilege
hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
(f) Remedies Cumulative. Unless expressly provided otherwise herein,
all rights and remedies granted to each of the Company and the Holder under this
Note are cumulative and in addition to, and not in lieu of, any other rights or
remedies otherwise available to the Company and the Holder at law.
(g) Severability. The provisions of this Note shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of any other provision hereof. To the fullest extent
permitted by law, if any provision of this Note, or the application thereof to
any Person or circumstance, is invalid or unenforceable: (i) a suitable and
equitable provision shall be substituted therefor in order to carry out, so far
as may be valid and enforceable, the intent and purpose of such invalid or
unenforceable provision and (ii) the remainder of this Note and the application
of such provision to other persons, entities or circumstances shall not be
affected by such invalidity or unenforceability.
(h) Specific Performance. The parties agree that irreparable damage may
occur if any provision of this Note were not performed in accordance with the
terms hereof and that the Holder shall be entitled to seek an injunction or
injunctions to prevent breaches of this Note or to enforce specifically the
performance of the terms and provisions in addition to any other remedy to which
the Holder is entitled at law in accordance with the terms set forth in this
Note. The Holder shall be required to post any bond, guaranty or other surety in
order to obtain any such injunction or specific performance.
(i) Expenses; Waivers. If any action is instituted to collect or
otherwise enforce this Note, the Company promises to pay all costs and expenses,
including, without limitation, reasonable attorneys' fees and costs, incurred in
connection with such action. The Company hereby waives notice of default,
presentment or demand for payment, protest or notice of nonpayment or dishonor
and all other notices or demands relative to this instrument.
(j) Successors and Assigns. Subject to the restrictions on assignment
described in subsection 8(b), the rights and obligations of the Company and the
Holder shall be binding upon and benefit the successors, assigns, heirs,
administrators and transferees of the parties.
23
(k) Principles of Construction. In this Note, unless otherwise
expressly indicated or required by the context:
(i) The captions herein are included for convenience of reference
only and shall be ignored in the construction or interpretation hereof.
This Note has been drafted jointly by the Company and the Holder and
shall not be construed against either the Company or the Holder as a
result of any role the Company or the Holder, respectively, may have
had in the drafting process.
(ii) Any reference to and the definition of any document shall be
deemed a reference to such document as it may be amended, supplemented,
revised, or modified, in writing, from time to time but disregarding
any amendment, supplement, replacement or novation made in breach of
this Note.
(iii) Any reference in this Note to any statute, decree or
regulation shall be construed as a reference to such statute, law,
decree or regulation as re-enacted, redesignated, amended or extended
from time to time and references herein or in this Note to any document
or agreement shall be deemed to include references to such document or
agreement as amended, varied, supplemented or replaced from time to
time in accordance with such document's or agreement's terms.
(iv) Defined terms in the singular shall include the plural and
vice versa, and the masculine, feminine or neuter gender shall include
all genders.
(v) The words "including" or "includes" shall be deemed to mean
"including without limitation" and "including but not limited to" (or
"includes without limitation" and "includes but is not limited to")
regardless of whether the words "without limitation" or "but not
limited to" actually follow the term.
(vi) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Note shall refer to this Note as a
whole and not to any particular provision hereof or thereof, as the
case may be.
9. Definitions. For purposes hereof:
"1999 Convertible Notes" means the Company's 4 7/8% Convertible
Subordinated Notes due 2007.
"2001 Convertible Notes" means the Company's 5 3/4% Convertible
Subordinated Notes due 2008.
"Affiliate" of any Person means any other Person that directly or
indirectly controls, is controlled by or is under common control with such
specified Person.
"Bankruptcy Law" means Title 11, U.S. Code or any similar federal,
state or foreign law for the relief of debtors or the protection of creditors.
24
"Board of Directors" means the Board of Directors of the Company.
"Board Resolution" means a duly authorized resolution of the Board of
Directors or any duly authorized committee thereof.
"Business Day" means any day that is not a Legal Holiday.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents, however designated, of corporate stock, including,
without limitation, partnership interests.
"Commercial Agreement" means that certain agreement, dated as of July
20, 2003, entered into by SBC Communications Inc., EchoStar Satellite
Corporation and the Company, relating to the provision, marketing, sale and
distribution of a co-branded digital broadcast satellite service.
"Company Change in Control" means: (a) any transaction or series of
transactions (including, without limitation, a tender offer, merger or
consolidation) the result of which is that the Principal and his Related Parties
or an entity controlled by the Principal and his Related Parties (and not
controlled by any Person other than the Principal or his Related Parties) sell,
transfer or otherwise dispose of more than 50% of the total Equity Interests in
the Company beneficially owned (as defined in Rule 13(d) (3) under the Exchange
Act but without including any Equity Interests which may be deemed to be owned
solely by reason of the existence of any voting arrangements), by such persons
on the date of issuance of this Note (as adjusted for stock splits and dividends
and other distributions payable in Equity Interests); or (b) the first day on
which a majority of the members of the Board of Directors of the Company are not
Continuing Directors.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors who: (a) was a member of such Board of
Directors on the date of issuance of this Note; or (b) was nominated for
election or elected to the Board of Directors with the affirmative vote of a
majority of the Continuing Directors who were members of the Board of Directors
at the time of such nomination or election or was nominated for election or
elected by the Principal and his Related Parties.
"Custodian" means any receiver, trustee, assignee, liquidator or
similar official under any Bankruptcy Law.
"Daily Market Price" means the price of a share of Class A Common Stock
on the relevant date, determined: (a) on the basis of the last reported sale
price regular way of the Class A Common Stock as reported on the Nasdaq Stock
Market, or if the Class A Common Stock is not then listed on the Nasdaq Stock
Market, as reported on such national securities exchange upon which the Class A
Common Stock is listed, or (b) if there is no such reported sale on the day in
question, on the basis of the average of the closing bid and asked quotations
regular way as so reported, or (c) if the Class A Common Stock is not listed on
the Nasdaq Stock Market or on any national securities
25
exchange, on the basis of the average of the high bid and low asked quotations
regular way on the day in question in the over-the-counter market as reported by
the National Association of Security Dealers Automated Quotation System, or if
not so quoted, as reported by National Quotation Bureau, Incorporated, or a
similar organization.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock, but excluding any Indebtedness that is
convertible into or exchangeable for Capital Stock.
"Excess Payment" means the excess of (A) the aggregate of the cash and
value of other consideration paid by the Company or any of its Subsidiaries with
respect to shares of Class A Common Stock acquired in a tender offer or other
negotiated transaction, over (B) the aggregate market value of such acquired
shares after giving effect to the completion of such tender offer or other
negotiated transaction.
"Exchange Rate Contract" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, the principal purpose
of which is to provide protection against fluctuations in currency exchange
rates. An Exchange Rate Contract may also include an Interest Rate Agreement.
"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 in effect on the date hereof and are applied on a consistent basis.
"Governmental Authority" means any foreign, federal, state or local
court or governmental or regulatory agency or authority or applicable stock
exchange or trading market.
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit, or reimbursement agreements in respect thereof, or representing the
balance deferred and unpaid of the purchase price of any property (which
purchase price is due more than six months after the placing into
26
service or delivery of such property) including pursuant to capital leases and
sale-and-leaseback transactions, or representing any hedging obligations under
an Exchange Rate Contract or an Interest Rate Agreement, except any such balance
that constitutes an accrued expense or trade payable, if and to the extent any
of the foregoing indebtedness, other than obligations under an Exchange Rate
Contract or an Interest Rate Agreement, would appear as a liability upon a
balance sheet of such Person prepared in accordance with GAAP, and also
includes, to the extent not otherwise included, the Guarantee of items which
would be included within this definition. The amount of any Indebtedness
outstanding as of any date shall be the accreted value thereof, in the case of
any Indebtedness issued with original issue discount. Indebtedness shall not
include liabilities for taxes of any kind.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement the principal purpose of which is to
protect the party indicated therein against fluctuations in interest rates.
"Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in the State of New York are not required to be open.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"Officer's Certificate" means a certificate of the Company signed by
any two of the Chairman of the Board, the chief executive officer, president,
chief financial officer, treasurer or general counsel of the Company.
"Person" means a natural person, corporation, a limited liability
company, a general or limited partnership, a trust, an estate, a joint venture,
any governmental entity, or any other entity or organization.
"Principal" means ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
"Related Party" means, with respect to the Principal, (a) the spouse
and each immediate family member of the Principal and (b) each trust,
corporation, partnership or other entity of which the Principal beneficially
holds an 80% or more controlling interest.
"Repurchase Trigger Date" means the earliest of (x) July 21, 2008; and
(y) the date on which a Company Change in Control shall first occur.
"Senior Debt" means the principal of, interest on and other amounts due
on (i) Indebtedness of the Company, whether outstanding on the date of issuance
of this Note or hereafter created, incurred, assumed or guaranteed by the
Company, for money borrowed from banks or other financial institutions; (ii)
Indebtedness of the Company, whether outstanding on the date of issuance of this
Note or hereafter created, incurred,
27
assumed or guaranteed by the Company; and (iii) Indebtedness of the Company
under interest rate swaps, caps or similar hedging agreements and foreign
exchange contracts, currency swaps or similar agreements: unless, in the
instrument creating or evidencing or pursuant to which Indebtedness under clause
(i) or (ii) is outstanding, it is expressly provided that such Indebtedness is
not senior in right of payment to this Note. Senior Debt includes, with respect
to the obligations described in clauses (i) and (ii) above, interest accruing,
pursuant to the terms of such Senior Debt, on or after the filing of any
petition in bankruptcy or for reorganization relating to the Company, whether or
not post-filing interest is allowed in such proceeding, at the rate specified in
the instrument governing the relevant obligation. Notwithstanding anything to
the contrary in the foregoing, Senior Debt shall not include: (a) Indebtedness
of or amounts owed by the Company for compensation to employees, or for goods or
materials purchased in the ordinary course of business, or for services; and (b)
Indebtedness of the Company to a Subsidiary of the Company.
"Significant Subsidiary" means any Subsidiary of the Company which is a
"significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X under the
Securities Act and the Exchange Act, as such Regulation is in effect on the date
hereof.
"Subsidiary" means any corporation, association or other business
entity of which more than 50% of the total voting power of shares of Capital
Stock entitled, without regard to the occurrence of any contingency, to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by any Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
28
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed, issued and delivered.
Dated: July 21, 2003
ECHOSTAR COMMUNICATIONS CORPORATION
By:
-----------------------------------
Name:
Title:
Attest:
-----------------------------
Name:
Title:
29
