Exhibit 4.20
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AMERICA ONLINE, INC.
Convertible Subordinated Notes Due 2019
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SUPPLEMENTAL INDENTURE NO. 1
Dated as of December 6, 1999
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STATE STREET BANK AND TRUST COMPANY
TRUSTEE
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TABLE OF CONTENTS
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ARTICLE 1
RELATION TO BASE INDENTURE; DEFINITIONS
Section 1.1. Relation to Base Indenture .......................................... 1
Section 1.2. Certain Definitions ................................................. 1
Section 1.3. Other Definitions ................................................... 4
ARTICLE 2
THE NOTES
Section 2.1. Title of the Securities ............................................. 6
Section 2.2. Limitation on Aggregate Principal Amount at Maturity of the
Notes ............................................................... 6
Section 2.3. Form, Dating and Denomination of the Notes .......................... 6
Section 2.4. Registrar, Paying Agent and Conversion Agent ........................ 6
Section 2.5. Paying Agent to Hold Money and Notes in Trust........................ 7
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.1. Right to Redeem; Notices to Trustee ................................. 7
Section 3.2. Selection of Notes to Be Redeemed ................................... 7
Section 3.3. Notice of Redemption ................................................ 8
Section 3.4. Effect of Notice of Redemption ...................................... 8
Section 3.5. Deposit of Redemption Price ......................................... 9
Section 3.6. Notes Redeemed in Part .............................................. 9
Section 3.7. Purchase of Notes at Option of the Holder ........................... 9
Section 3.8. Purchase of Notes at Option of the Holder upon Fundamental
Change ..............................................................15
Section 3.9. Effect of Purchase Notice or Fundamental Change Purchase Notice......17
Section 3.10. Deposit of Purchase Price or Fundamental Change Purchase Price.......18
Section 3.11. Covenant to Comply With Securities Laws Upon Purchase of
Notes ...............................................................19
Section 3.12. Repayment to the Company ............................................19
Section 3.13. No Defeasance .......................................................19
Section 3.14. Payment Terms; Place of Payment .....................................19
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Section 3.15. Conversion Arrangement on Call for Redemption .......................19
ARTICLE 4
DEFAULTS
Section 4.1. Events of Default ...................................................20
ARTICLE 5
MODIFICATION
Section 5.1. Without Consent of Holders ..........................................21
Section 5.2. With Consent of Holders .............................................22
Section 5.3. Revocation and Effect of Consents, Waivers and Actions ..............22
Section 5.4. General Requirements ................................................23
ARTICLE 6
SPECIAL TAX EVENT CONVERSION
Section 6.1. Optional Conversion to Semiannual Coupon Note Upon Tax Event.........23
Section 6.2. Payment of Interest; Interest Rights Preserved ......................24
ARTICLE 7
CONVERSION
Section 7.1. Conversion Privilege ................................................25
Section 7.2. Conversion Procedure ................................................25
Section 7.3. Fractional Shares ...................................................26
Section 7.4. Taxes on Conversion .................................................26
Section 7.5. Company to Provide Stock ............................................27
Section 7.6. Adjustment for Change in Capital Stock ..............................27
Section 7.7. Adjustment for Rights Issue .........................................28
Section 7.8. Adjustment for Other Distributions ..................................30
Section 7.9. When Adjustment May Be Deferred .....................................31
Section 7.10. When No Adjustment Required .........................................31
Section 7.11. Notice of Adjustment ................................................32
Section 7.12. Voluntary Increase ..................................................32
Section 7.13. Notice of Certain Transactions ......................................32
Section 7.14. Reorganization of Company; Special Distributions ....................33
Section 7.15. Company Determination Final .........................................33
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Section 7.16. Trustee's Adjustment Disclaimer .............................................33
Section 7.17. Simultaneous Adjustments ....................................................34
Section 7.18. Successive Adjustments ......................................................34
Section 7.19. Rights Issued in Respect of Common Stock Issued Upon
Conversion ..................................................................34
ARTICLE 8
SUBORDINATION
Section 8.1. Notes Subordinate to Senior Debt ............................................34
Section 8.2. Payment Over of Proceeds Upon Dissolution, Etc. .............................34
Section 8.3. No Payment When Senior Debt in Default ......................................36
Section 8.4. Payment Permitted If No Default .............................................36
Section 8.5. Subrogation to Rights of Holders of Senior Debt .............................37
Section 8.6. Provisions Solely To Define Relative Rights .................................37
Section 8.7. Trustee To Effectuate Subordination .........................................37
Section 8.8. No Waiver of Subordination Provisions .......................................37
Section 8.9. Notice to Trustee ...........................................................38
Section 8.10. Reliance on Judicial Order or Certificate of Liquidating Agent ..............38
Section 8.11. Trustee Not Fiduciary for Holders of Senior Debt ............................39
Section 8.12. Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights ............................................................39
Section 8.13. Article Applicable to Paying Agents .........................................39
Section 8.14. Subsidiaries ................................................................39
Section 8.15. Rescission ..................................................................39
Section 8.16. Payment .....................................................................39
ARTICLE 9
MISCELLANEOUS
Section 9.1. Notices .....................................................................40
Section 9.2. Communication by Holders with Other Holders .................................41
Section 9.3. Certificate and Opinion as to Conditions Precedent ..........................41
Section 9.4. Statements Required in Certificate or Opinion ...............................41
Section 9.5. Separability Clause .........................................................41
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Section 9.6. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar ...........................................................41
Section 9.7. Legal Holidays ......................................................42
Section 9.8. GOVERNING LAW .......................................................42
Section 9.9. No Recourse Against Others ..........................................42
Section 9.10. Successors ..........................................................42
Section 9.11. Multiple Originals ..................................................42
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America Online, Inc.
Convertible Subordinated Notes Due 2019
SUPPLEMENTAL INDENTURE NO. 1
SUPPLEMENTAL INDENTURE No. 1, dated as of December 6, 1999, between
America Online, Inc., a corporation duly organized and existing under the laws
of the State of Delaware (the "Company"), and State Street Bank and Trust
Company, a trust company duly organized and existing under the laws of the
Commonwealth of Massachusetts, as Trustee (the "Trustee").
RECITALS
The Company and the Trustee have heretofore executed an Indenture (the
"Base Indenture" and, together with this Supplemental Indenture, the
"Indenture"), dated as of December 6, 1999, providing for the issuance from time
to time of series of the Company's Securities to be issued in one or more series
as therein provided.
Sections 2.1 and 3.1 of the Base Indenture provide for various matters
with respect to any series of Securities issued under the Base Indenture to be
established in an indenture supplemental to the Base Indenture.
Section 8.1 of the Base Indenture provides for the Company and the
Trustee to enter into an indenture supplemental to the Base Indenture to
establish the form or terms of Securities of any series as provided by Sections
2.1 and 3.1 of the Base Indenture.
For and in consideration of the premises and the issuance of the Notes
provided for herein, it is mutually covenanted and agreed, for the equal and
proportionate benefit of the Holders of the Notes, as follows:
ARTICLE 1
RELATION TO BASE INDENTURE; DEFINITIONS
Section 1.1. Relation to Base Indenture. This Supplemental Indenture
constitutes an integral part of the Indenture. In the event of inconsistencies
between the Base Indenture and this Supplemental Indenture, the terms hereof
shall govern.
Section 1.2. Certain Definitions. For all purposes of this Supplemental
Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(1) capitalized terms used herein without definition have
the meanings specified in the Base Indenture;
(2) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(3) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to
them therein;
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles, and, except as otherwise herein expressly
provided, the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder means such
accounting principles as are generally accepted in the United States
of America;
(5) unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Supplemental Indenture; and
(6) the words "herein", "hereof", "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
"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.
"Common Stock" means the shares of Common Stock, par value $.01 per
share, of the Company as it exists on the date of this Supplemental Indenture or
any other shares of Capital Stock of the Company into which the Common Stock
shall be reclassified or changed.
"Conversion Price" means the Redemption Price at the relevant date of
determination divided by the Conversion Rate at such date.
"DTC" means The Depository Trust Company as depository for the Global
Notes, or any successor thereto.
"DTC Letter of Representations" means the letter of representations
from the Company and the Trustee to DTC dated December 3, 1999 with respect to
the Global Notes.
"Global Notes" means Notes that are in the form of the Notes attached
hereto as Exhibit A.
"Issue Date" of the Note means the date on which the Note was
originally issued or deemed issued as set forth on the face of the Note.
"Issue Price" of the Note means, in connection with the original
issuance of the Note, the initial issue price at which the Note is sold as set
forth on the face of the Note.
"Original Issue Discount" of the Note means the difference between the
Issue Price and the Principal Amount at Maturity of the Note.
"Principal Amount at Maturity" means the Principal Amount at Maturity
as set forth on the face of the Note.
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"Redemption Date" or "redemption date" means the date specified for
redemption of the Notes in accordance with the terms of the Notes and this
Indenture.
"Redemption Price" or "redemption price" has the meaning set forth in
paragraph 5 of the Notes.
"Senior Debt" means the principal of (and premium, if any) and interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts (including collection expenses, attorneys' fees and late charges)
owing with respect to, the following, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, outstanding at the date
of execution of this Supplemental Indenture or thereafter incurred, created or
assumed:
(a) indebtedness of the Company for money borrowed or evidenced by
bonds, debentures, notes or similar instruments;
(b) reimbursement obligations of the Company with respect to letters of
credit, bankers' acceptances and similar facilities issued for the account of
the Company;
(c) every obligation of the Company issued or assumed as the deferred
purchase price of property or services purchased by the Company, excluding any
trade payables and other accrued current liabilities incurred in the ordinary
course of business;
(d) (i) obligations of the Company as lessee under leases required to
be capitalized on the balance sheet of the lessee under United States generally
accepted accounting principles and (ii) if the Company's 4% Convertible
Subordinated Notes due November 15, 2002 are no longer outstanding, obligations
of the Company under leases required to be accounted for as operating leases,
provided either (A) such operating lease requires, at the end of the term
thereof, that the Company make a payment other than accrued periodic rent if it
does not acquire the leased property subject to such lease or (B) the Company
has an option to acquire the leased property exercisable at any time under
specified circumstances;
(e) obligations of the Company under interest rate and currency swaps,
caps, floors, collars or similar arrangements intended to protect the Company
against fluctuations in interest or currency exchange rates;
(f) indebtedness of others of the kinds described in the preceding
clauses (a) through (e) that the Company has assumed or guaranteed or of which
the Company has otherwise assured the payment, directly or indirectly; and/or
(g) deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness or obligation described in the
preceding clauses (a) through (f), whether or not there is any notice to or
consent of the Holders of Notes;
provided, however, that the following shall not constitute Senior Debt:
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(i) any particular indebtedness or obligation that is owed by the
Company to any of its direct and indirect Subsidiaries, and
(ii) any particular indebtedness or obligation, or any deferral,
renewal, extension or refunding of such indebtedness or obligation, if it is
expressly stated in the governing terms or in the assumption thereof that the
indebtedness or obligation involved is not senior in right of payment to the
Securities or that such indebtedness or obligation is pari passu with or junior
to the Securities.
"Supplemental Indenture" means this Supplemental Indenture No. 1 dated
as of December 6, 1999.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after December 6, 1999, as a result of (a) any amendment to, or change,
including any announced prospective change, in, the laws, or any regulations
thereunder, of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken, on or after
December 6, 1999, there is more than an insubstantial risk that interest,
including original issue discount, payable on the Notes either: (a) would not be
deductible on a current accrual basis, or (b) would not be deductible under any
other method, in either case in whole or in part, by the Company, by reason of
deferral, disallowance, or otherwise, for United States federal income tax
purposes.
"trading day" means a day during which trading in securities generally
occurs on the New York Stock Exchange or, if the Common Stock is not listed on
the New York Stock Exchange, on the principal other national or regional
securities exchange on which the Common Stock is then listed or, if the Common
Stock is not listed on a national or regional securities exchange, on the
National Association of Securities Dealers Automated Quotation System or, if the
Common Stock is not quoted on the National Association of Securities Dealers
Automated Quotation System, on the principal other market on which the Common
Stock is then traded.
"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.
Section 1.3. Other Definitions.
Defined in
Term Section
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"Average Market Price"...............................................3.7(d)
"Average Sale Price"....................................................7.7
"Bankruptcy Law"........................................................4.1
"Base Indenture"...................................................Preamble
"beneficial owner"...................................................3.8(a)
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Defined in
Term Section
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"cash"...............................................................3.7(b)
"Company"..........................................................Preamble
"Company Notice".....................................................3.7(e)
"Company Notice Date"................................................3.7(c)
"Conversion Agent"......................................................2.4
"Conversion Date".......................................................7.2
"Conversion Rate".......................................................7.1
"Custodian".............................................................4.1
"Defaulted Interest".................................................6.2(b)
"Event of Default".....................................................4.1
"Exchange Act".......................................................3.7(d)
"Ex-Dividend Time"......................................................7.7
"Extraordinary Cash Dividend"...........................................7.8
"Fundamental Change".................................................3.8(a)
"Fundamental Change Purchase Date"...................................3.8(a)
"Fundamental Change Purchase Notice".............................. .3.8(c)
"Fundamental Change Purchase Price"..................................3.8(a)
"Indenture"........................................................Preamble
"Interest Payment Date".................................................6.1
"issuer tender offer"..................................................3.11
"Legal Holiday".........................................................9.7
"Notice of Default".....................................................4.1
"Notes".................................................................2.1
"Notes Payment".........................................................8.2
"Option Exercise Date"..................................................6.1
"Paying Agent"..........................................................2.4
"payment in full"......................................................8.16
"Proceeding"............................................................8.2
"Purchase Date"......................................................3.7(a)
"Purchase Notice"....................................................3.7(a)
"Purchase Price".....................................................3.7(a)
"Registrar".............................................................2.4
"Regular Record Date"...................................................6.1
"Restated Principal Amount".............................................6.1
"Rights"...............................................................7.19
"Rights Agreement".....................................................7.19
"Sale Price".........................................................3.7(d)
"Securities Act".....................................................3.7(d)
"Tax Event Date"........................................................6.1
"Time of Determination".................................................7.7
"Trustee"..........................................................Preamble
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ARTICLE 2
THE NOTES
Section 2.1. Title of the Securities. There shall be a series of
Securities designated the "Convertible Subordinated Notes due 2019" (the
"Notes").
Section 2.2. Limitation on Aggregate Principal Amount at Maturity of
the Notes. The aggregate Principal Amount at Maturity of the Notes shall be
limited to $2,607,663,000.
Section 2.3. Form, Dating and Denomination of the Notes. The Notes and
the Trustee's certificate of authentication shall be substantially in the form
of Exhibit A, which is a part of this Indenture. The Notes 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. The Notes shall be dated the
date of their authentication. The Notes shall be issued in fully registered
form, without coupons, in denominations of $1,000 of Principal Amount at
Maturity and integral multiples of $1,000. The form of legend on the Notes shall
be as set forth in Exhibit A.
Section 2.4. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Notes may be presented for registration
of transfer or for exchange ("Registrar"), an office or agency where Notes may
be presented for purchase or payment ("Paying Agent") and an office or agency
where Notes may be presented for conversion ("Conversion Agent"). The Registrar
shall keep a register of the Notes and of their transfer and exchange. The
Company may have one or more co-registrars, one or more additional paying agents
and one or more additional conversion agents. The term Paying Agent includes any
additional paying agent. The term Conversion Agent includes any additional
conversion agent. Initially, the Trustee will act as Paying Agent, Conversion
Agent and Registrar and State Street Bank and Trust Company, N.A., New York, New
York will act as an additional paying agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (provided, however,
that a separate agreement shall not be necessary in the case of the Trustee
serving in any such capacity). The agreement shall implement the provisions of
this Indenture that relate to such agent. The Company shall notify the Trustee
in writing of the name and address of any such agent. If the Company fails to
maintain a Registrar, Paying Agent or Conversion Agent, the Trustee shall act as
such and shall be entitled to appropriate compensation therefor. The Company or
any Subsidiary or an Affiliate of either of them may act as Paying Agent,
Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Notes, and the Trustee accepts
such appointment. In acquiring such appointments, the Trustee shall, to the
extent serving in any such capacity, be entitled to each of the immunities,
benefits, indemnifications and rights of reimbursement provided to it under the
Indenture as Trustee.
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Section 2.5. Paying Agent to Hold Money and Notes in Trust. Except as
otherwise provided herein, on or prior to each due date of payments in respect
of any Note, the Company shall deposit with the Paying Agent a sum of money (in
immediately available funds if deposited on the due date) or 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 Holders of the Notes or the Trustee
all money and Common Stock held by the Paying Agent for the making of payments
in respect of the Notes and shall notify the Trustee of any default by the
Company in making any such payment. At any time during the continuance of any
such default, the Paying Agent shall, upon the written request of the Trustee,
forthwith pay to the Trustee all money and Common Stock 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 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 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 Common Stock.
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.1. Right to Redeem; Notices to Trustee. The Company, at its
option, may redeem the Notes in accordance with the provisions of paragraphs 5
and 7 of the Notes. If the Company elects to redeem Notes pursuant to paragraph
5 of the Notes, it shall notify the Trustee in writing of the Redemption Date,
the Principal Amount at Maturity of Notes to be redeemed and the Redemption
Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.1 by a Company Order, in the case of any redemption of less than all
of the Notes, at least 20 Business Days before the Redemption Date and, in the
case of any redemption of all of the Notes, on or prior to the date of notice to
the Holders of the Notes of redemption pursuant to Section 3.3 (in each case,
unless a shorter notice shall be satisfactory to the Trustee).
Section 3.2. Selection of Notes to Be Redeemed. If less than all the
Notes are to be redeemed, the Trustee shall select the Notes to be redeemed pro
rata or by lot or by any other method the Trustee considers fair and appropriate
(so long as such method is not prohibited by the rules of any stock exchange on
which the Notes are then listed, as notified in writing to the Trustee by the
Company). The Trustee shall make the selection at least 15 days but not more
than 60 days before the Redemption Date from outstanding Notes not previously
called for redemption. Notes and portions of them the Trustee selects shall be
in Principal Amounts at Maturity of $1,000 or an integral multiple of $1,000.
Provisions of this Indenture that apply to Notes called for redemption also
apply to portions of Notes called for redemption. The Trustee shall notify the
Company promptly of the Notes or portions of Notes to be redeemed.
If any Note selected for partial redemption is converted in part before
termination of the conversion right with respect to the portion of the Note so
selected, the converted portion of such Note shall be deemed (so far as may be)
to be the portion selected for redemption. Notes
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which have been converted during a selection of Notes to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection.
Section 3.3. Notice of Redemption. At least 20 Business Days but not
more than 60 days before a Redemption Date, the Company shall provide a notice
of redemption by first class mail to the Holders of the Note and by publication
in The Wall Street Journal and notice on the Company's Web site.
The notice shall identify the Notes to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion Agent;
(5) that Notes called for redemption may be converted at any time
before the close of business on the Redemption Date;
(6) that Holders who want to convert Notes must satisfy the
requirements set forth in paragraph 8 of the Notes;
(7) that Notes called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Notes are to be redeemed, the
certificate number and Principal Amounts at Maturity of the particular Notes to
be redeemed;
(9) that, unless the Company defaults in making payment of such
Redemption Price, Original Issue Discount on Notes called for redemption, and
interest, if any, will cease to accrue on and after the Redemption Date; and
(10) the CUSIP number of the Notes.
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 ten (10) Business Days prior to such notice
of redemption (unless a shorter advance notice is acceptable to the Trustee) and
provided that the Company shall prepare and provide to the Trustee such notice
(or, if acceptable to the Trustee, provides sufficient information to allow for
the preparation of such notice by the Trustee).
Section 3.4. Effect of Notice of Redemption. Once notice of redemption
is given, Notes called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Notes which are
converted in accordance with the terms of this Indenture. Upon surrender to the
Paying Agent, such Notes shall be paid at the Redemption Price stated in the
notice.
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Section 3.5. Deposit of Redemption Price. Prior to or 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
Notes to be redeemed on that date other than Notes or portions of Notes 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 Notes pursuant to Article 7. If such money is
then held by the Company in trust and is not required for such purpose, it shall
be discharged from such trust.
Section 3.6. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder a new Note in an authorized denomination equal in
Principal Amount at Maturity to the unredeemed portion of the Note surrendered.
Section 3.7. Purchase of Notes at Option of the Holder.
(a) General. Notes shall be purchased by the Company pursuant to
paragraph 6 of the Notes as of December 6, 2004 (the "Purchase Date"), at the
purchase price specified therein (the "Purchase Price"), at the option of the
Holder thereof, upon:
(1) delivery to the Paying Agent (and the Trustee, if different than
the Paying Agent) by the Holder of a written notice of purchase (a
"Purchase Notice") at any time from the opening of business on the date
that is 20 Business Days prior to the Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Note which the Holder will deliver to be
purchased,
(B) the portion of the Principal Amount at Maturity of the Note which the
Holder will deliver to be purchased, which portion must be $1,000 or
an integral multiple thereof,
(C) that such Note shall be purchased as of the Purchase Date pursuant to
the terms and conditions specified in paragraph 6 of the Notes and in
this Indenture, and
(D) in the event the Company elects, pursuant to Section 3.7(b), to pay
the Purchase Price to be paid as of such Purchase Date, in whole or in
part, in shares of Common Stock but such portion of the Purchase Price
shall ultimately be payable to such Holder entirely in cash because
any of the conditions to payment of the Purchase Price in Common Stock
is not satisfied prior to the close of business on such Purchase Date,
as set forth in Section 3.7(d), whether such Holder elects (i) to
withdraw such Purchase Notice as to some or all of the Notes to which
such Purchase Notice relates (stating the Principal Amount at Maturity
and certificate numbers of the Notes as to which such withdrawal shall
relate), or (ii) to
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receive cash in respect of the entire Purchase Price for all Notes (or
portions thereof) to which such Purchase Notice relates; and
(2) delivery of such Note (or surrender of the beneficial interest
therein pursuant to Paragraph 7 of the DTC Letter of Representations) to
the Paying Agent prior to, on or after the Purchase Date (together with all
necessary endorsements) at the offices of the Paying Agent, such delivery
being a condition to receipt by the Holder of the Purchase Price therefor;
provided, however, that such Purchase Price shall be so paid pursuant to
this Section 3.7 only if the Note so delivered to the Paying Agent shall
conform in all respects to the description thereof in the related Purchase
Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice
of withdrawal delivered by such Holder pursuant to the terms of Section 3.9,
fails to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.7(a)(1), such Holder shall be deemed to have elected to
receive cash in respect of the Purchase Price for all Notes subject to such
Purchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.7, a portion of a Note if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Note also apply to the purchase
of such portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.7 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Purchase Date and the
time of delivery of the Note (or surrender of the beneficial interest therein
pursuant to Paragraph 7 of the DTC Letter of Representations).
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Purchase Notice contemplated by this Section 3.7(a)
shall have the right to withdraw such Purchase Notice at any time prior to the
close of business on the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.9.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
Notes to be purchased pursuant to Section 3.7(a) may be paid for, at the
election of the Company, in U.S. legal tender ("cash") or Common Stock, or in
any combination of cash and Common Stock, subject to the conditions set forth in
Sections 3.7(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.7(e), whether the Company will purchase the
Notes for cash or Common Stock, or, if a combination thereof, the percentages of
the Purchase Price of Notes in respect of which it will pay in cash or Common
Stock; provided that the Company will pay cash for fractional interests in
Common Stock. For purposes of determining the existence of potential fractional
interests, all Notes subject to purchase by the Company held by a Holder shall
be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Notes are purchased pursuant to
10
this Section 3.7 shall receive the same percentage of cash or Common Stock in
payment of the Purchase Price for such Notes, except (i) as provided in Section
3.7(d) with regard to the payment of cash in lieu of fractional shares of Common
Stock and (ii) in the event that the Company is unable to purchase the Notes of
a Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable state securities laws cannot
be obtained, the Company may purchase the Notes of such Holder or Holders for
cash. The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the Company
has given its Company Notice to Holders of the Notes except pursuant to this
Section 3.7(b) or pursuant to Section 3.7(d) in the event of a failure to
satisfy, prior to the close of business on the Purchase Date, any condition to
the payment of the Purchase Price, in whole or in part, in Common Stock.
At least three Business Days before the Company Notice Date, the
Company shall deliver a written notice to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.7(e),
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to
such manner of payment set forth in Section 3.7(d) have been or will
be complied with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.7(e).
(c) Purchase with Cash. On the Purchase Date, at the option of the
Company, the Purchase Price of Notes in respect of which a Purchase Notice
pursuant to Section 3.7(a) has been given, or a specified percentage thereof,
may be paid by the Company with cash equal to the aggregate Purchase Price of
such Notes. If the Company elects to purchase Notes with cash, the Company
Notice, as provided in Section 3.7(e), shall be sent to Holders not less than 20
Business Days prior to such Purchase Date (the "Company Notice Date").
(d) Payment by Issuance of Common Stock. On the Purchase Date, at the
option of the Company, the Purchase Price of Notes in respect of which a
Purchase Notice pursuant to Section 3.7(a) has been given, or a specified
percentage thereof, may be paid by the Company by the issuance of a number of
shares of Common Stock equal to the quotient obtained by dividing (i) the amount
of cash to which the Holders of the Notes would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Notes in cash by (ii) the Average Market Price of a
share of Common Stock, determined with respect to the Purchase Date (and as
certified to the Trustee by the Officer's Certificate of the Company) subject to
the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the current
market value of the fractional share. The current market value of a fraction of
a share shall be determined by multiplying the Average Market Price by such
fraction and rounding the product to the nearest whole cent. It is understood
that if a Holder elects to have more than one Note purchased, the
11
number of shares of Common Stock shall be based on the aggregate amount of Notes
to be purchased.
If the Company elects to purchase the Notes by the issuance of shares
of Common Stock, the Company Notice, as provided in Section 3.7(e), shall be
sent to the Holders not later than the Company Notice Date.
The Company's right to exercise its election to purchase the Notes
pursuant to Section 3.7 through the issuance of shares of Common Stock shall be
conditioned upon:
(i) the Company's not having given its Company Notice of an
election to pay entirely in cash and its giving of timely Company
Notice of election to purchase all or a specified percentage of the
Notes with Common Stock as provided herein;
(ii) the registration of the shares of Common Stock to be issued
in respect of the payment of the Purchase Price under the Securities
Act of 1933, as amended (the "Securities Act"), or the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), in each case,
if required;
(iii) any necessary qualification or registration under
applicable state securities laws or the availability of an exemption
from such qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and
an Opinion of Counsel each stating that (A) the terms of the issuance
of the Common Stock are in conformity with this Indenture and (B) the
shares of Common Stock to be issued by the Company in payment of the
Purchase Price in respect of Notes have been duly authorized and, when
issued and delivered pursuant to the terms of this Indenture in
payment of the Purchase Price in respect of the Notes, will be validly
issued, fully paid and non-assessable and, to the best of such
counsel's knowledge, free from preemptive rights, and, in the case of
such Officers' Certificate, stating that conditions (i), (ii) and
(iii) above and the condition set forth in the second succeeding
sentence have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii) and (iii) above has been
satisfied.
Such Officers' Certificate shall also set forth the number of shares of Common
Stock to be issued for each $1,000 Principal Amount at Maturity of Notes and the
Sale Price of a share of Common Stock on each trading day falling within the
period during which the Average Market Price is calculated, and the Average
Market Price of a share of Common Stock (taking into account any necessary
adjustments pursuant to Article 7). The Company may pay the Purchase Price (or
any portion thereof) in Common Stock only if the information necessary to
calculate the Average Market Price is published in a daily newspaper of national
circulation. If the foregoing conditions are not satisfied with respect to a
Holder or Holders prior to the close of business on the Purchase Date and the
Company has elected to purchase the Notes pursuant to this Section 3.7 through
the issuance of shares of Common Stock, the Company shall pay the entire
Purchase Price of the Notes of such Holder or Holders in cash. The Trustee shall
be under no duty to verify or recalculate any information set forth in such
Officers' Certificate.
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The "Average Market Price" means the average of the Sale Prices of the
Common Stock for the five trading day period ending on the third Business Day
prior to the relevant Purchase Date or the date of the transaction or event with
respect to which the Average Market Price is to be determined, as the case may
be, or if such day is not a trading day then on the last trading day prior to
such day, appropriately adjusted to take into account the occurrence, during the
period commencing on the first of such trading days during such five trading day
period and ending on such Purchase Date, of any event described in Section 7.6,
7.7 or 7.8; subject, however, to the conditions set forth in Sections 7.9 and
7.10. The Trustee shall be entitled to rely conclusively, in good faith, upon
the Company's certification of Average Market Price set forth in the relevant
Officers' Certificate.
"Sale Price" means, for any given day, the last reported per share sale
price (or, if no sale price is reported, the average of the bid and ask prices
or, if more than one in either case, the average of the average bid and average
ask prices) on such day of the Common Stock on the New York Stock Exchange
Composite Tape or, in the event shares of Common Stock are not listed on the New
York Stock Exchange, in the composite transactions for such other national or
regional securities exchange upon which the Common Stock is listed, or, if the
shares of Common Stock are not listed on a national or regional securities
exchange, as quoted on the National Association of Notes Dealers Automated
Quotation System or by the National Quotation Bureau Incorporated. In the
absence of such quotations, the Company shall be entitled to determine the Sale
Price on the basis of such quotations as it considers appropriate. The Trustee
shall be entitled to rely exclusively upon the Company's certification of Sale
Price set forth in the Officer's Certificate provided for above.
(e) Notice of Election. The Company's notice of election to purchase
with cash or Common Stock or any combination thereof shall be sent to the
Holders in the manner provided in Section 9.1 at the time specified in Section
3.7(c) or (d), as applicable (the "Company Notice"). The Company Notice will
also be published in THE WALL STREET JOURNAL and posted on the Company's web
site. Such Company Notice shall state the manner of payment elected and shall
contain the following information:
In the event the Company has elected to pay the Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with an
Average Market Price determined as of a specified date prior to the
Purchase Date equal to such specified percentage of the Purchase Price
of the Notes held by such Holder (except any cash amount to be paid in
lieu of fractional shares);
(2) set forth the method of calculating the Average Market Price
of the Common Stock; and
(3) state that because the Average Market Price of Common Stock
will be determined prior to the Purchase Date, Holders will bear the
market risk with respect to the value of the Common Stock to be
received from the date such Average Market Price is determined to the
Purchase Date.
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In any case, each Company Notice shall include a form of Purchase
Notice to be completed by a Holder of the Notes and shall state:
(i) the Purchase Price and the Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Notes as to which a Purchase Notice has been given may be
converted pursuant to Article 7 hereof only if the applicable Purchase
Notice has been withdrawn in accordance with the terms of this Indenture;
(iv) that Notes must be surrendered (by means of book entry delivery,
if applicable) to the Paying Agent to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following the
later of the Purchase Date and the time of surrender of such Note as
described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 3.7 and a brief description of those rights;
(vii) briefly, the conversion rights of the Notes; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 3.7(a)(1)(D) or Section 3.9).
At the Company's request, the Trustee shall give such Company Notice in
the Company's name and at the Company's expense; provided, however, that, in all
cases, the text of such Company Notice shall be prepared by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount at Maturity of Notes, the Company will
publish such determination on the Company's Web site on the World Wide Web.
(f) Covenants of the Company. All shares of Common Stock delivered upon
purchase of the Notes shall be newly issued shares or treasury shares, shall be
duly authorized, validly issued, fully paid and nonassessable and shall be free
from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted
any shares of Common Stock to be issued to purchase Notes on each national
securities exchange or over-the-counter or other domestic market on which the
Common Stock is then listed or quoted.
(g) Procedure upon Purchase. The Company shall deposit cash (in respect
of a cash purchase under Section 3.7(c) or for fractional interests, as
applicable) or shares of Common Stock, or a combination thereof, as applicable,
at the time and in the manner as provided in Section 3.10, sufficient to pay the
aggregate Purchase Price of all Notes to be
14
purchased pursuant to this Section 3.7. As soon as practicable after the
Purchase Date, the Company shall deliver to each Holder entitled to receive
Common Stock through the Paying Agent, a certificate for the number of full
shares of Common Stock issuable in payment of the Purchase Price and cash in
lieu of any fractional interests. The person in whose name the certificate for
Common Stock is registered shall be treated as a holder of record of shares of
Common Stock on the Business Day following the Purchase Date. Subject to Section
3.7(d), no payment or adjustment will be made for dividends on the Common Stock
the record date for which occurred on or prior to the Purchase Date.
(h) Taxes. If a Holder of a Note is paid in Common Stock, the Company
shall pay any documentary, stamp or similar issue or transfer tax due on such
issue of shares of Common Stock. However, the Holder shall pay any such tax
which is due because the Holder requests the shares of Common Stock to be issued
in a name other than the Holder's name. The Paying Agent may refuse to deliver
the certificates representing the Common Stock being issued in a name other than
the Holder's name until the Paying Agent receives a sum sufficient to pay any
tax which will be due because the shares of Common Stock are to be issued in a
name other than the Holder's name. Nothing herein shall preclude any income tax
withholding required by law or regulations.
Section 3.8. Purchase of Notes at Option of the Holder upon Fundamental
Change. (a) If on or after December 6, 1999 there shall have occurred a
Fundamental Change, Notes shall be purchased by the Company, at the option of
the Holder thereof, at the purchase price specified in paragraph 6 of the Notes
(the "Fundamental Change Purchase Price"), as of the date that is 40 Business
Days after the occurrence of the Fundamental Change (the "Fundamental Change"),
subject to satisfaction by or on behalf of the Holder of the requirements set
forth in Section 3.8(c).
A "Fundamental Change" means the occurrence of any transaction or event
in connection with which all or substantially all Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) consideration which is not all or substantially all common stock
listed (or, upon consummation of or immediately following such transaction or
event which will be listed) on a United States national securities exchange or
approved for quotation on the NASDAQ National Market or any similar United
States system or automated dissemination of quotations of securities prices.
(b) Within 15 Business Days after the occurrence of a Fundamental
Change, the Company shall mail a written notice of Fundamental Change by
first-class mail to the Trustee and to each Holder. The notice shall include a
form of Fundamental Change Purchase Notice to be completed by the Holder of the
Notes and shall state:
(1) briefly, the events causing a Fundamental Change and the date of
such Fundamental Change;
(2) the date by which the Fundamental Change Purchase Notice pursuant
to this Section 3.8 must be given;
15
(3) the Fundamental Change Purchase Date;
(4) the Fundamental Change Purchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent;
(6) the Conversion Rate and any adjustments thereto;
(7) that Notes as to which a Fundamental Change Purchase Notice has
been given may be converted pursuant to Article 7 hereof only if the
Fundamental Change Purchase Notice has been withdrawn in accordance with
the terms of this Indenture;
(8) that Notes must be surrendered by means of book entry delivery to
the Paying Agent to collect payment;
(9) that the Fundamental Change Purchase Price for any Note as to
which a Fundamental Change Purchase Notice has been duly given and not
withdrawn will be paid promptly following the later of the Fundamental
Change Purchase Date and the time of surrender of such Note as described
in (8);
(10) briefly, the procedures the Holder must follow to exercise rights
under this Section 3.8;
(11) briefly, the conversion rights of the Notes; and
(12) the procedures for withdrawing a Fundamental Change Purchase
Notice.
(c) Subject to the provisions of Paragraph 7 of the DTC Letter of
Representations, a Holder may exercise such Holder's rights specified in Section
3.8(a) upon delivery of a written notice of purchase (a "Fundamental Change
Purchase Notice") to the Paying Agent at any time prior to the close of business
on the Fundamental Change Purchase Date, stating:
(1) the certificate number of the Note which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount at Maturity of the Note
which the Holder will deliver to be purchased, which portion must be
$1,000 or an integral multiple thereof; and
(3) that such Note shall be purchased pursuant to the terms and
conditions specified in paragraph 6 of the Notes.
The delivery of such Note to the Paying Agent (or surrender of the
beneficial interest therein pursuant to Paragraph 7 of the DTC Letter of
Representations) prior to, on or after the Fundamental Change Date (together
with all necessary endorsements) at the offices of the Paying Agent shall be a
condition to the receipt by the Holder of the Fundamental Change Purchase Price
therefor; provided, however, that such Fundamental Change Purchase Price shall
16
be so paid pursuant to this Section 3.8 only if the Note so delivered to the
Paying Agent shall conform in all respects to the description thereof set forth
in the related Fundamental Change Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.8, a portion of a Note if the Principal Amount at Maturity of such
portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to the purchase of all of a Note also apply to the purchase
of such portion of such Note.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.8 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Fundamental Change
Purchase Date and the time of delivery of the Note (or surrender of the
beneficial interest therein pursuant to Paragraph 7 of the DTC Letter of
Representations) to the Paying Agent in accordance with this Section 3.8.
Notwithstanding anything herein to the contrary, and subject to the
provisions of the DTC Letter of Representations, any Holder delivering to the
Paying Agent the Fundamental Change Purchase Notice contemplated by this Section
3.8(c) shall have the right to withdraw such Fundamental Change Purchase Notice
at any time prior to the close of business on the Fundamental Change Purchase
Date by delivery of a written notice of withdrawal to the Paying Agent in
accordance with Section 3.9.
The Paying Agent shall promptly notify the Company (and the Trustee, if
different than the Paying Agent) in writing of the receipt by it of any
Fundamental Change Purchase Notice or written withdrawal thereof.
Section 3.9. Effect of Purchase Notice or Fundamental Change Purchase
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Fundamental
Change Purchase Notice specified in Section 3.7(a) or Section 3.8(c), as
applicable, the Holder of the Note in respect of which such Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, was given shall (unless
such Purchase Notice or Fundamental Change Purchase Notice is withdrawn as
specified in the following two paragraphs) thereafter be entitled to receive
solely the Purchase Price or Fundamental Change Purchase Price, as the case may
be, with respect to such Note. Such Purchase Price or Fundamental Change
Purchase Price shall be paid to such Holder, subject to receipts of funds and/or
securities by the Paying Agent, promptly following the later of (x) the Purchase
Date or the Fundamental Change Purchase Date, as the case may be, with respect
to such Note (provided the conditions in Section 3.7 or Section 3.8, as
applicable, have been satisfied) and (y) the time of delivery of such Note to
the Paying Agent (or surrender of the beneficial interest therein pursuant to
Paragraph 7 of the DTC Letter of Representations) by the Holder thereof in the
manner required by Section 3.7 or Section 3.8, as applicable. Notes in respect
of which a Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, has been given by the Holder thereof may not be converted pursuant to
Article 7 hereof on or after the date of the delivery of such Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, unless such Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has first been
validly withdrawn as specified in the following two paragraphs.
17
A Purchase Notice or Fundamental Change Purchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal delivered to
the office of the Paying Agent in accordance with the Purchase Notice or
Fundamental Change Purchase Notice, as the case may be, at any time prior to the
close of business on the Purchase Date or the Fundamental Change Purchase Date,
as the case may be, specifying:
(1) the certificate number of the Note in respect of which such
notice of withdrawal is being submitted,
(2) the Principal Amount at Maturity of the Note with respect to
which such notice of withdrawal is being submitted, and
(3) the Principal Amount at Maturity, if any, of such Note which
remains subject to the original Purchase Notice or Fundamental Change
Purchase Notice, as the case may be, and which has been or will be
delivered for purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form
set forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.7(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.7(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Notes pursuant to Section 3.7 (other
than through the issuance of Common Stock in payment of the Purchase Price,
including cash in lieu of fractional shares) or 3.8 if there has occurred (prior
to, on or after, as the case may be, the giving, by the Holders of such Notes,
of the required Purchase Notice or Fundamental Change Purchase Notice, as the
case may be) and is continuing an Event of Default (other than a default in the
payment of the Purchase Price or Fundamental Change Purchase Price, as the case
may be, with respect to such Notes). The Paying Agent will promptly return to
the respective Holders thereof any Notes (x) with respect to which a Purchase
Notice or Fundamental Change Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Fundamental Change Purchase Price, as the case may be, with
respect to such Notes) in which case, upon such return, the Purchase Notice or
Fundamental Change Purchase Notice with respect thereto shall be deemed to have
been withdrawn.
Section 3.10. Deposit of Purchase Price or Fundamental Change Purchase
Price. Prior to 1:00 p.m. (local time in The City of New York) on the Business
Day following the Purchase Date or the Fundamental Change Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as the Paying Agent, shall segregate and hold in trust as provided in Section
2.4) an amount of money (in immediately available funds if deposited on such
Business Day) or Common Stock, sufficient to pay the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of all the Notes or
portions thereof which are to be purchased as of the Purchase Date or
Fundamental Change Purchase Date, as the case may be.
18
Section 3.11. Covenant to Comply With Securities Laws Upon Purchase of
Notes. In connection with any offer to purchase or purchase of Notes under
Section 3.7 or 3.8 hereof (provided that such offer or purchase constitutes an
"issuer tender offer" for purposes of Rule 13e-4 (which term, as used herein,
includes any successor provision thereto) under the Exchange Act at the time of
such offer or purchase), the Company shall (i) comply with Rule 13e-4 and Rule
14e-1 under the Exchange Act, (ii) file the related Schedule 13E-4 (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 Sections 3.7 and 3.8 to be exercised in the time and in the
manner specified in Sections 3.7 and 3.8.
Section 3.12. Repayment to the Company. The Trustee and the Paying
Agent shall return to the Company any cash or shares of Common Stock that remain
unclaimed as provided in paragraph 13 of the Notes, together with dividends, if
any, received thereon, held by them for the payment of the Purchase Price or
Fundamental Change Purchase Price, as the case may be; provided, however, that
to the extent that the aggregate amount of cash or shares of Common Stock
deposited by the Company pursuant to Section 3.10 exceeds the aggregate Purchase
Price or Fundamental Change Purchase Price, as the case may be, of the Notes or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Fundamental Change Purchase Date, as the case may be, then promptly
after the Business Day following the Purchase Date or Fundamental Change
Purchase Date, as the case may be, the Trustee shall return any such excess to
the Company.
Section 3.13. No Defeasance. The Notes shall not be subject to the
provisions of Article IV of the Base Indenture.
Section 3.14. Payment Terms; Place of Payment. The Principal Amount at
Maturity shall be payable on December 6, 2019 on any Note that has not been
redeemed, purchased or converted pursuant to this Indenture. Original Issue
discount and, if applicable, interest on the Notes shall accrue at the rate and
be payable on the date and on the terms described in Section 1 of the Notes.
Principal of and interest, if any, on the Notes shall be payable by the Paying
Agent at the places described in Section 3 of the Notes.
Section 3.15. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes called for redemption by an agreement with
one or more investment bankers or other purchasers to purchase such Notes by
paying to the Trustee in trust for the Noteholders, on or before the close of
business on the Redemption Date, an amount that, together with any amounts
deposited with the Trustee by the Company for the redemption of such Notes, is
not less than the Redemption Price of such Notes. Notwithstanding anything to
the contrary contained in this Article 3, the obligation of the Company to pay
the Redemption Price of such Notes shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers. If such an
agreement is entered into, any Notes not duly surrendered for conversion by the
Holders thereof may, at the option of the Company, be deemed, to the fullest
extent permitted by law, acquired by such purchasers from such Holders and
surrendered by such purchasers for conversion, all as of immediately prior to
the close of business on the Redemption Date, subject to payment of the above
amount as aforesaid. The Trustee shall hold and pay to the Holders whose Notes
are selected for redemption any such amount paid to it for purchase and
19
conversion in the same manner as it would moneys deposited with it by the
Company for the redemption of Notes.
ARTICLE 4
DEFAULTS
Section 4.1. Events of Default. An "Event of Default" occurs if:
(1) the Company defaults in the payment of the Principal Amount at
Maturity (or, if the Notes have been converted to semiannual coupon notes
following a Tax Event pursuant to Article 6, the Restated Principal
Amount), Redemption Price, Purchase Price or Fundamental Change Purchase
Price on any Note when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for purchase by the
Company or otherwise;
(2) after exercise of its option pursuant to Section 6.1 hereof
following a Tax Event, the Company defaults in the payment of interest upon
any Note when such interest becomes due and payable and such default
continues for a period of 30 days;
(3) the Company fails to comply with any of its agreements in the
Notes or this Indenture (other than those referred to in clauses (1) and
(2) above) and such failure continues for 90 days after receipt by the
Company of a Notice of Default;
(4) the Company pursuant to or under or within the meaning of any
Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against it in an
involuntary case or proceeding or the commencement of any case
against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of or
taking possession by a Custodian; or
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case or
proceeding, or adjudicates the Company insolvent or bankrupt;
20
(B) appoints a Custodian of the Company or for any substantial part
of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days.
"Bankruptcy Law" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
Federal or state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator,
custodian or similar official under any Bankruptcy Law.
A Default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount at Maturity of the Notes at the time outstanding notify the
Company and the Trustee in writing of the Default and the Company does not cure
such Default (and such Default is not waived) within the time specified in
clause (3) 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" (referred to herein as a "Notice of Default").
The Company shall deliver to the Trustee, within 30 days after it
becomes aware of the occurrence thereof, written notice of any event which with
the giving of notice or the lapse of time, or both, would become an Event of
Default under clause (3) above, its status and what action the Company is taking
or proposes to take with respect thereto.
If an Event of Default occurs (and, if required pursuant to this
Section 4.1, is continuing), the Trustee, or the Holders of at least 25% in
aggregate Principal Amount at Maturity of the Notes at the time outstanding, may
declare all the Notes to be due and payable immediately at the Issue Price plus
accrued Original Issue Discount or, if the Company has exercised its option to
convert the Notes pursuant to Section 6.1 of this Supplemental Indenture
following a Tax Event, the Restated Principal Amount plus accrued and unpaid
interest.
ARTICLE 5
MODIFICATION
Section 5.1. Without Consent of Holders. The Company and the Trustee
may amend this Supplemental Indenture or the Notes without the consent of any
Holder of the Notes:
(1) to cure any ambiguity, omission, defect or inconsistency;
(2) to comply with Article VII of the Base Indenture or Section 7.14
hereof;
(3) to provide for uncertificated Notes in addition to certificated
Notes so long as such uncertificated Notes are in registered form
for purposes of the Internal Revenue Code of 1986, as amended;
21
(4) to make any change that does not adversely affect the rights of
any Holder of the Notes;
(5) to add to the Company's covenants or obligations under the
Indenture or surrender any right, power or option conferred by
the Indenture on the Company; or
(6) to make any change to comply with the TIA, or any amendment
thereto, or to comply with any requirement of the SEC in
connection with the qualification of the Indenture under the TIA.
Section 5.2. With Consent of Holders. With the written consent of the
Holders of at least a majority in aggregate Principal Amount at Maturity of the
Notes at the time outstanding, the Company and the Trustee may amend this
Supplemental Indenture or the Notes. However, without the consent of each Holder
of the Notes affected, an amendment to this Supplemental Indenture or the Notes
may not:
(1) make any change in the manner or rate of accrual in connection
with Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Notes, reduce the rate of interest referred to in
Section 6.1 upon the occurrence of a Tax Event, or extend the time for
payment of Original Issue Discount or interest, if any, on any Note;
(2) reduce the Principal Amount at Maturity, Restated Principal Amount
or the Issue Price of or extend the Stated Maturity of any Note;
(3) reduce the Redemption Price, Purchase Price or Fundamental Change
Purchase Price of any Note;
(4) make any Note payable in money or securities other than that
stated in the Note;
(5) make any change that adversely affects the right to convert any
Note
(6) restrict a Holder's right to institute suit for the enforcement of
any payments or conversion; or
(7) make any change that adversely affects the right to require the
Company to purchase the Notes in accordance with the terms thereof and this
Indenture.
It shall not be necessary for the consent of the Holders under this
Section 5.2 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
After an amendment under this Section 5.2 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
Section 5.3. Revocation and Effect of Consents, Waivers and Actions.
Until an amendment, waiver or other action by Holders becomes effective, a
consent thereto by a
22
Holder of a Note hereunder is a continuing consent by the Holder and every
subsequent Holder of that Note or portion of the Note that evidences the same
obligation as the consenting Holder's Note, even if notation of the consent,
waiver or action is not made on the Note. However, any such Holder or subsequent
Holder may revoke the consent, waiver or action as to such Holder's Note or
portion of the Note 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 Holder of the Notes.
Section 5.4. General Requirements. In no instance shall the Trustee be
obligated to enter into, execute or deliver any supplement or amendment hereto
which, in its judgment, adversely affects its obligations, duties, liabilities
or immunities hereunder. In connection with any amendment hereof or supplement
hereto, the Trustee shall be entitled to receive from the Company an Opinion of
Counsel stating that, in such counsel's opinion, such amendment or supplement is
authorized or permitted hereunder, and under the Indenture, as applicable, and
all conditions precedent herein or therein contained and applicable to such
amendment or supplement have been satisfied.
ARTICLE 6
SPECIAL TAX EVENT CONVERSION
Section 6.1. Optional Conversion to Semiannual Coupon Note Upon Tax
Event. At the option of the Company, from and after (i) the date (the "Tax Event
Date") of the occurrence of a Tax Event and (ii) the date the Company exercises
such option, whichever is later (the "Option Exercise Date"), interest in lieu
of future Original Issue Discount shall accrue at the rate of 3.00 % per annum
on a restated principal amount per $1,000 original Principal Amount at Maturity
(the "Restated Principal Amount") equal to the Issue Price plus Original Issue
Discount accrued through the Option Exercise Date and shall be payable
semiannually on June 6 and December 6 of each year (each an "Interest Payment
Date") to holders of record at the close of business on May 22 or November 21
(each a "Regular Record Date") immediately preceding such Interest Payment Date.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months and will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from the Option Exercise Date.
Within 30 days of the occurrence of a Tax Event, the Company shall mail a
written notice of such Tax Event by first-class mail to the Trustee and no later
than 30 days prior to its exercise of such option the Company shall mail a
written notice of the Option Exercise Date by first-class mail to the Trustee
and Holders of the Notes; provided, however, that such notice shall include or
be accompanied by an Officer's Certificate of the Company certifying the
Restated Principal Amount (per $1,000 original Principal Amount at Maturity) and
the amount of interest payable thereon on each Interest Payment Date and at
Stated Maturity as a result of the exercise of such option. The Trustee shall be
under no obligation or duty to recalculate or verify such amounts. From and
after the Option Exercise Date, (i) the Company shall be obligated to pay at
Stated Maturity, in lieu of the Principal Amount at Maturity of a Note, the
Restated Principal Amount thereof and (ii) "Issue Price and accrued Original
Issue Discount," "Issue Price plus Original Issue Discount" or similar words, as
used herein, means Restated Principal Amount plus accrued and unpaid interest
with respect to any Note. Notes authenticated and delivered after the Option
Exercise Date may, and shall if required by the Trustee, bear a notation in a
form approved by
23
the Trustee as to the conversion of the Notes to semiannual coupon notes. On or
after the Option Exercise Date, the Company may require Holders to tender their
Notes to the Trustee in exchange for amended Notes stating the Restated
Principal Amount thereof and reflecting the other changes to the terms of the
Notes specified herein.
Section 6.2. Payment of Interest; Interest Rights Preserved. (a)
Interest on any Note that is payable, and is punctually paid or duly provided
for, on any Interest Payment Date shall be paid to the person in whose name that
Note is registered at the close of business on the Regular Record Date for such
interest at the office or agency of the Company maintained for such purpose.
Each installment of interest on any Note shall be paid in same-day funds by
transfer to an account maintained by the payee located inside the United States.
In the case of a Global Note, interest payable on any Interest Payment Date will
be paid to DTC, with respect to that portion of such permanent Global Note held
for its account by Cede & Co. for the purpose of permitting such party to credit
the interest received by it in respect of such permanent Global Note to the
accounts of the beneficial owners thereof.
(b) Except as otherwise specified with respect to the Notes, any
interest on any Note that is payable, but is not punctually paid or duly
provided for, within 30 days following on any Interest Payment Date (herein
called "Defaulted Interest," which term shall include any accrued and unpaid
interest that has accrued on such defaulted amount in accordance with paragraph
1 of the Notes), shall forthwith cease to be payable to the registered Holder
thereof on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company, as its election
in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the persons in whose names the Notes are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Note and the date of the proposed payment (which shall
not be less than 20 days after such notice is received by the Trustee), and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit on or prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the persons
entitled to such Defaulted Interest as in this clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such
Defaulted Interest which shall be not more than 15 days and not less than
10 days prior to the date of the proposed payment and not less than 10 days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special Record Date and,
in the name and at the expense of the Company, shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder of Notes
at such Holder's address as it appears on the list of Holders of the Notes
maintained pursuant to Section 2.4 not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor having been mailed as
aforesaid, such Defaulted Interest shall be paid to the persons in whose
24
names the Notes are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Notes in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Notes may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.5 of
the Base Indenture, each Note delivered under this Supplemental Indenture upon
registration of transfer of or in exchange for or in lieu of any other Note
shall carry the rights to interest accrued and unpaid, and to accrue, which were
carried by such other Note.
ARTICLE 7
CONVERSION
Section 7.1. Conversion Privilege. A Holder of a Note may convert such
Note into Common Stock at any time during the period stated in paragraph 8 of
the Notes. The number of shares of Common Stock issuable upon conversion of a
Note per $1,000 of Principal Amount at Maturity thereof (the "Conversion Rate")
shall be that set forth in paragraph 8 in the Notes, subject to adjustment as
herein set forth.
A Holder may convert a portion of the Principal Amount at Maturity of a
Note if the portion is $1,000 or an integral multiple of $1,000. Provisions of
this Indenture that apply to conversion of all of a Note also apply to
conversion of a portion of a Note.
Section 7.2. Conversion Procedure. To convert a Note, a Holder must
satisfy the requirements in paragraph 8 of the Notes. The date on which the
Holder satisfies all those requirements is the conversion date (the "Conversion
Date"). As soon as practicable after the Conversion Date, the Company shall
deliver to the Holder, through the Conversion Agent, a certificate for the
number of full shares of Common Stock issuable upon the conversion and cash in
lieu of any fractional share determined pursuant to Section 7.3; and shall
certify to the Conversion Agent and the Trustee the amount of Notes (and related
Holder) so converted, and shall certify that such conversion has been completed
in compliance with the terms hereof. The person in whose name the certificate is
registered shall be treated as a stockholder of record on and after the
Conversion Date; provided, however, that no surrender of a Note on any date when
the stock transfer books of the Company shall be closed shall be effective to
constitute the person or persons entitled to receive the shares of Common Stock
upon such conversion as the record holder or holders of such shares of Common
Stock on such date, but such surrender shall be effective to constitute the
person or persons entitled to receive such shares of Common Stock as the record
holder or holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; such conversion
shall be at the Conversion Rate in effect on the date that such Note shall have
been surrendered for conversion, as if the stock transfer books of the Company
had not been closed. Upon conversion of a Note,
25
such person shall no longer be a Holder of such Note. Neither the Trustee nor
Calculation Agent shall be under any duty or obligation to verify or recalculate
the Company's determination of the number of shares of Common Stock issuable
upon conversion (or cash amount payable in respect of fractional shares).
No payment or adjustment will be made for dividends on, or other
distributions with respect to, any Common Stock except as provided in this
Article 7. On conversion of a Note, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option provided for in
Section 6.1) attributable to the period from the Issue Date (or, if the Company
has exercised the option provided for in Section 6.1, the later of (x) the date
of such exercise and (y) the date on which interest was last paid) of the Note
through the Conversion Date with respect to the converted Note shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Common Stock (together with
the cash payment, if any, in lieu of fractional shares) in exchange for the Note
being converted pursuant to the provisions hereof; and the fair market value of
such shares of Common Stock (together with any such cash payment in lieu of
fractional shares) shall be treated as issued, to the extent thereof, first in
exchange for Original Issue Discount (or interest, if the Company has exercised
its option provided for in Section 6.1) accrued through the Conversion Date, and
the balance, if any, of such fair market value of such Common Stock (and any
such cash payment) shall be treated as issued in exchange for the Issue Price of
the Note being converted pursuant to the provisions hereof.
If the Holder converts more than one Note at the same time, the number
of shares of Common Stock issuable upon the conversion shall be based on the
total Principal Amount at Maturity of the Notes converted.
If the last day on which a Note may be converted is a Legal Holiday,
the Note may be surrendered on the next succeeding day that is not a Legal
Holiday.
Upon surrender of a Note that is converted in part, the Company shall
execute, and upon Company order the Trustee shall authenticate and deliver to
the Holder, a new Note in an authorized denomination equal in Principal Amount
at Maturity to the unconverted portion of the Note surrendered.
Section 7.3. Fractional Shares. The Company will not issue a fractional
share of Common Stock upon conversion of a Note. Instead, the Company will
deliver cash for the current market value of the fractional share. The current
market value of a fractional share shall be determined, to the nearest 1/1,000th
of a share, by multiplying the Sale Price, on the last trading day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
Section 7.4. Taxes on Conversion. If a Holder converts a Note, the
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon the conversion. However, the Holder
shall pay any such tax which is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent
26
receives a sum sufficient to pay any tax which will be due because the shares
are to be issued in a name other than the Holder's name. Nothing herein shall
preclude any tax withholding required by law or regulations.
Section 7.5. Company to Provide Stock. The Company shall, prior to
issuance of any Notes under this Article 7, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Stock a sufficient
number of shares of Common Stock to permit the conversion of the Notes.
All shares of Common Stock delivered upon conversion of the Notes shall
be newly issued shares or treasury shares, shall be duly and validly issued and
fully paid and nonassessable and shall be free from preemptive rights and free
of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Notes, if any, and will list or cause to have quoted such shares
of Common Stock on each national securities exchange or in the over-the-counter
market or such other market on which the Common Stock is then listed or quoted.
Section 7.6. Adjustment for Change in Capital Stock. If, after the
Issue Date of the Notes, the Company:
(1) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(2) subdivides its outstanding shares of Common Stock into a greater
number of shares;
(3) combines its outstanding shares of Common Stock into a smaller
number of shares;
(4) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(5) issues by reclassification of its Common Stock any shares of its
Capital Stock (other than rights, warrants or options for its Capital
Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Note thereafter
converted may receive the number of shares of Capital Stock of the Company which
such Holder would have owned immediately following such action if such Holder
had converted the Note immediately prior to such action.
The adjustment shall become effective immediately after the record date
in the case of a dividend or distribution and immediately after the effective
date in the case of a subdivision, combination or reclassification.
27
If, after an adjustment a Holder of a Note upon conversion of such Note
may receive shares of two or more classes of Capital Stock of the Company, the
Conversion Rate shall thereafter be subject to adjustment upon the occurrence of
an action taken with respect to any such class of Capital Stock as is
contemplated by this Article 7 with respect to the Common Stock, on terms
comparable to those applicable to Common Stock in this Article 7.
Section 7.7. Adjustment for Rights Issue. If, after the Issue Date of
the Notes, the Company distributes any rights, warrants or options to all
holders of its Common Stock entitling them, for a period expiring within 60 days
after the record date for such distribution, to purchase shares of Common Stock
at a price per share less than the Sale Price as of the Time of Determination,
the Conversion Rate shall be adjusted in accordance with the formula:
R' = R x (O + N)
--------
(O + (N x P)/M)
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
O = the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 7.7 is being applied.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of the additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution to
which Section 7.6(4) applies or (ii) a distribution to which
Section 7.8 applies, for which, in each case, (x) the record date
shall occur on or before the record date for the distribution to
which this Section 7.7 applies and (y) the Ex-Dividend Time shall
occur on or after the date of the Time of Determination for the
distribution to which this Section 7.7 applies, the fair market
value (on the record date for the distribution to which this
Section 7.7 applies) of the
(1) Capital Stock of the Company distributed in respect of
each share of Common Stock in such Section 7.6(4) distribution and
(2) assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the Company
distributed in respect of each share of Common Stock in such
Section 7.8 distribution.
"Average Sale Price" means the average of the Sale Prices of the Common
Stock for the shortest of:
28
(i) 30 consecutive trading days ending on the last full trading day
prior to the Time of Determination with respect to the rights, warrants or
options or distribution in respect of which the Average Sale Price is being
calculated,
(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, warrants or options or
(b) the distribution, in each case, in respect of which the Average Sale
Price is being calculated and (y) proceeding through the last full trading
day prior to the Time of Determination with respect to the rights, warrants
or options or distribution in respect of which the Average Sale Price is
being calculated (excluding days within such period, if any, which are not
trading days), or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance of
rights, warrants or options or (b) distribution, in each case, for which an
adjustment is required by the provisions of Section 7.06(4), 7.07 or 7.08
and (y) proceeding through the last full trading day prior to the Time of
Determination with respect to the rights, warrants or options or
distribution in respect of which the Average Sale Price is being calculated
(excluding days within such period, if any, which are not trading days).
In the event that the Ex-Dividend Time (or in the case of a
subdivision, combination or reclassification, the effective date with respect
thereto) with respect to a dividend, subdivision, combination or
reclassification to which Section 7.6(1), (2), (3) or (5) applies occurs during
the period applicable for calculating "Average Sale Price" pursuant to the
definition in the preceding sentence, "Average Sale Price" shall be calculated
for such period in a manner determined by the Board of Directors to reflect the
impact of such dividend, subdivision, combination or reclassification on the
Sale Price of the Common Stock during such period.
"Time of Determination" means the time and date of the earlier of (i)
the determination of stockholders entitled to receive rights, warrants or
options or a distribution, in each case, to which Section 7.7 or 7.8 applies and
(ii) the time ("Ex-Dividend Time") immediately prior to the commencement of
"ex-dividend" trading for such rights, warrants or options or distribution on
the New York Stock Exchange or such other national or regional exchange or
market on which the Common Stock is then listed or quoted.
The Board of Directors shall determine fair market values for the
purposes of this Section 7.7.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the rights, warrants
or options to which this Section 7.7 applies. If all of the shares of Common
Stock subject to such rights, warrants or options have not been issued when such
rights, warrants or options expire, then the Conversion Rate shall promptly be
readjusted to the Conversion Rate which would then be in effect had the
adjustment upon the issuance of such rights, warrants or options been made on
the basis of the actual number of shares of Common Stock issued upon the
exercise of such rights, warrants or options.
29
No adjustment shall be made under this Section 7.7 if the application
of the formula stated above in this Section 7.7 would result in a value of R'
that is equal to or less than the value of R.
Section 7.8. Adjustment for Other Distributions. If, after the Issue
Date of the Notes, the Company distributes to all holders of its Common Stock
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company (including securities or cash, but excluding
(x) distributions of Capital Stock referred to in Section 7.6 and distributions
of rights, warrants or options referred to in Section 7.7 and (y) cash
distributions that are not Extraordinary Cash Dividends) the Conversion Rate
shall be adjusted, subject to the provisions of the last paragraph of this
Section 7.8, in accordance with the formula:
R' = R x M
--------------
M-F
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to
which Section 7.6(4) applies, for which (i) the record date shall
occur on or before the record date for the distribution to which this
Section 7.8 applies and (ii) the Ex-Dividend Time shall occur on or
after the date of the Time of Determination for the distribution to
which this Section 7.8 applies, the fair market value (on the record
date for the distribution to which this Section 7.8 applies) of any
Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 7.6(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 7.8 applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this Section 7.8 is being
applied (including, in the case of cash dividends or other cash
distributions giving rise to an adjustment, all such cash distributed
concurrently).
The Board of Directors shall determine fair market values for the
purposes of this Section 7.8.
The adjustment shall become effective immediately after the record date
for the determination of shareholders entitled to receive the distribution to
which this Section 7.8 applies.
The term "Extraordinary Cash Dividend" means any distribution of cash
with respect to the Common Stock (a) that is made upon a merger or consolidation
or a sale or transfer of all or substantially all of the assets of the Company
or (b) the amount of which, together with (i) the aggregate amount of any other
distributions to all holders of Common Stock made exclusively in cash within the
12 months preceding the date of payment of such distribution and in respect of
which no adjustment pursuant to this Article 7 has been made and (ii) the
aggregate
30
of any cash plus the 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 filed with the Trustee) of consideration payable in respect
of any tender offer by the Company or any of its Subsidiaries for all or any
portion of the Common Stock concluded within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant to
this article 7 has been made, exceeds 12.5% of the product of the Sale Price of
the Common Stock on the date prior to the Ex-Dividend Time with respect to such
distribution times the number of shares of Common Stock outstanding on such
date. Upon the distribution of an Extraordinary Cash Dividend, an adjustment
shall be made pursuant to this Article 7 for an amount equal to the sum of (x)
the amount of such Extraordinary Cash Dividend and (y) any distribution
described in clause (i) or (ii) of the preceding sentence for which no prior
adjustment has been made.
In making the determinations required by items (i) and (ii) above, the
amount of cash dividends paid on a per share basis shall be appropriately
adjusted to reflect the occurrence during such period of any event described in
this Article 7.
In the event that, with respect to any distribution to which this
Section 7.8 would otherwise apply, the difference "M-F" as defined in the above
formula is less than $1.00 or "F" is equal to or greater than "M," then the
adjustment provided by this Section 7.8 shall not be made and in lieu thereof
the provisions of Section 7.14 shall apply to such distribution.
Section 7.9. When Adjustment May Be Deferred. No adjustment in the
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 7 shall be made to the nearest cent
or to the nearest 1/1,000th of a share, as the case may be.
Section 7.10. When No Adjustment Required. No adjustment need be made
for a transaction referred to in Section 7.6, 7.7, 7.8 or 7.14 if Holders of the
Notes are to participate in the transaction on a basis and with notice that the
Board of Directors determines to be fair and appropriate in light of the basis
and notice on which holders of Common Stock participate in the transaction. Such
participation by Holders of the Notes may include participation upon conversion
provided that an adjustment shall be made at such time as the Holders of the
Notes are no longer entitled to participate. Without limiting the generality of
the foregoing, Holders of the Notes shall be deemed to participate in a
distribution of assets described in the first paragraph of Section 7.8 (other
than debt securities or rights, warrants or options to purchase securities of
the Company) on a fair and appropriate basis if the Company enters into a
supplemental indenture providing that the Holder of a Note may convert it into
the kind and amount of securities, cash or other assets which such Holder would
have received immediately after such distribution of assets if such Holder had
converted the Note immediately before the effective date of the transaction and
providing for adjustments in the event of changes in capital stock, rights
issues or other distributions or dilutive events affecting such distributed
assets analogous to those provided for in respect of the Common Stock in this
Article 7 which shall be as nearly equivalent as may be practical to the
adjustments provided for in this Article 7
31
with such notice to Holders of the Notes of the basis upon which they will
participate in the transaction as the Board of Directors determines to be fair
and appropriate.
No adjustment need be made for rights to purchase Common Stock pursuant
to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par
value of the Common Stock.
To the extent the Notes become convertible pursuant to this Article 7
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
Section 7.11. Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall promptly mail to the Trustee and Holders of the
Notes a notice of the adjustment. The Company shall file with the Trustee and
the Conversion Agent such notice and a certificate from the Company's
independent public accountants briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
Section 7.12. Voluntary Increase. The Company from time to time may
increase the Conversion Rate by any amount for any period of time. Whenever the
Conversion Rate is increased, the Company shall mail to Holders of the Notes and
file with the Trustee and the Conversion Agent a notice of the increase. The
Company shall mail the notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased Conversion
Rate and the period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust
the Conversion Rate otherwise in effect for purposes of Section 7.6, 7.7 or 7.8.
Section 7.13. Notice of Certain Transactions. If:
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 7.6, 7.7 or 7.8 (unless no
adjustment is to occur pursuant to Section 7.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 7.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Holders of the Notes and file with the Trustee
and the Conversion Agent a notice stating the proposed record date for a
dividend or distribution or the proposed effective date of a subdivision,
combination, reclassification, consolidation, merger, binding share exchange,
transfer, liquidation or dissolution. The Company shall file and mail the notice
at least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.
32
Section 7.14. Reorganization of Company; Special Distributions. If the
Company is a party to a transaction described in Article VII of the Base
Indenture (other than a sale of all or substantially all of the assets of the
Company in a transaction in which the holders of Common Stock immediately prior
to such transaction do not receive securities, cash or other assets of the
Company or any other person) or a merger or binding share exchange which
reclassifies or changes its outstanding Common Stock, the person obligated to
deliver securities, cash or other assets upon conversion of Notes shall enter
into a supplemental indenture. If the issuer of securities deliverable upon
conversion of Notes is an Affiliate of the successor Company, that issuer shall
join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Note may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Note
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
non-electing Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article 7. The successor Company shall mail to Holders of
the Notes a notice briefly describing the supplemental indenture.
If this Section applies, neither Section 7.6 nor 7.7 applies.
If the Company makes a distribution to all holders of its Common Stock
of any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 7.8, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 7.8, then, from and after
the record date for determining the holders of Common Stock entitled to receive
the distribution, a Holder of a Note that converts such Note in accordance with
the provisions of this Indenture shall upon such conversion be entitled to
receive, in addition to the shares of Common Stock into which the Note is
convertible, the kind and amount of securities, cash or other assets comprising
the distribution that such Holder would have received if such Holder had
converted the Note immediately prior to the record date for determining the
holders of Common Stock entitled to receive the distribution.
Section 7.15. Company Determination Final. Any determination that the
Company or the Board of Directors must make pursuant to Section 7.3, 7.6, 7.7,
7.8, 7.9, 7.10, 7.14 or 7.17 is conclusive.
Section 7.16. Trustee's Adjustment Disclaimer. The Trustee has no duty
to determine when an adjustment under this Article 7 should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 7.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Notes. The Trustee
shall not be responsible for the Company's failure to comply with this Article
7. Each Conversion Agent shall have the same protection under this Section 7.16
as the Trustee.
33
Section 7.17. Simultaneous Adjustments. In the event that this Article
7 requires adjustments to the Conversion Rate under more than one of Section
7.6(4), 7.7 or 7.8, and the record dates for the distributions giving rise to
such adjustments shall occur on the same date, then such adjustments shall be
made by applying, first, the provisions of Section 7.6, second, the provisions
of Section 7.8 and, third, the provisions of Section 7.7.
Section 7.18. Successive Adjustments. After an adjustment to the
Conversion Rate under this Article 7, any subsequent event requiring an
adjustment under this Article 7 shall cause an adjustment to the Conversion Rate
as so adjusted.
Section 7.19. Rights Issued in Respect of Common Stock Issued Upon
Conversion. Each share of Common Stock issued upon conversion of Notes pursuant
to this Article 7 shall be entitled to receive the appropriate number of common
stock or preferred stock purchase rights, as the case may be (the "Rights"), if
any, and the certificates representing the Common Stock issued upon such
conversion shall bear such legends, if any, in each case as may be provided by
the terms of any shareholder rights agreement adopted by the Company, as the
same may be amended from time to time (in each case, a "Rights Agreement").
Provided that such Rights Agreement requires that each share of Common Stock
issued upon conversion of Notes at any time prior to the distribution of
separate certificates representing the Rights be entitled to receive such
Rights, then, notwithstanding anything else to the contrary in this Article 7,
there shall not be any adjustment to the conversion privilege or Conversion Rate
as a result of the issuance of Rights, the distribution of separate certificates
representing the Rights, the exercise or redemption of such Rights in accordance
with any such Rights Agreement, or the termination or invalidation of such
Rights.
ARTICLE 8
SUBORDINATION
Section 8.1. Notes Subordinate to Senior Debt. The Company covenants
and agrees, and each Holder of a Note, by such Holder's acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article (subject to the provisions of Article IV of the Base
Indenture), the indebtedness represented by the Notes, and the payment of the
principal of, interest on and all other amounts, if any, owing with respect to
each and all of the Notes are hereby expressly made subordinate and subject in
right of payment to the prior payment in full in cash or other immediately
available funds of all Senior Debt of the Company. The Notes shall rank pari
passu with the 4% Convertible Subordinated Notes due November 15, 2002 issued
under the Indenture dated as of November 17, 1997 between the Company and State
Street Bank and Trust Company, as trustee.
Section 8.2. Payment Over of Proceeds Upon Dissolution, Etc. In the
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event specified in (a),
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(b) or (c) above (each such event, if any, herein sometimes referred to as a
"Proceeding") the holders of Senior Debt shall be entitled to receive payment in
full of all amounts due or to become due on or in respect of all Senior Debt, in
cash or other immediately available funds or provision shall be made for such
payment in cash or other immediately available funds or otherwise in a manner
satisfactory to each holder of Senior Debt with respect to its indebtedness,
before the Holders of the Notes are entitled to receive any payment or
distribution of any kind or character, whether (i) in cash, property or
securities, on account of principal of, interest on or any other amount, if any,
owing with respect to the Notes or on account of any purchase or other
acquisition of Notes by the Company or any Subsidiary of the Company, (ii) by
way of cancellation, forgiveness or offset of the indebtedness evidenced by the
Notes against any indebtedness owed by a Holder to the Company or (iii) payable
or deliverable by reason of the payment of any other indebtedness of the Company
being subordinated to the payment of the Notes (all such payments,
distributions, purchases and acquisitions herein referred to, individually and
collectively, as a "Notes Payment"), and to that end the holders of all Senior
Debt shall be entitled to receive, for application to the payment thereof, any
Notes Payment which may be payable or deliverable in respect of the Notes in any
such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Note shall have received any Notes
Payment before all Senior Debt is paid in full in cash or other immediately
available funds or otherwise in a manner satisfactory to each holder of Senior
Debt with respect to its indebtedness, and if such fact shall, at or prior to
the time of such Notes Payment, have been made actually known to a responsible
officer of the Trustee or, as the case may be, such Holder, then and in such
event such Notes Payment shall be paid over or delivered forthwith to the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent
or other Person making payment or distribution of assets of the Company for
application to the payment of all Senior Debt, to the extent necessary to pay
all Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include a payment or distribution of stock or securities
of the Company provided for by a plan of reorganization or readjustment giving
effect to these subordination provisions authorized by an order or decree of a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy law or of any other corporation provided for by such plan
of reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Notes are so subordinated as provided in this Article, which shall
require that (A) the final maturity of any such subordinated securities shall
exceed the term of the Senior Debt provided for by such plan of reorganization
or readjustment, and there shall not be any scheduled principal payment in
respect of such subordinated securities prior to that of such Senior Debt and
(B) such subordinated securities shall be unsecured and unguaranteed. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the
conveyance, transfer, sale or lease of all or substantially all of its
properties and assets to another Person upon the terms and conditions set forth
in Article VII of the Base Indenture shall not be deemed a Proceeding for the
purposes of this Section if the Person formed by such consolidation or into
which the Company is merged or the Person which acquires by
35
conveyance, transfer, sale or lease such properties and assets, as the case may
be, shall, as a part of such consolidation, merger, conveyance, transfer, sale
or lease comply with the conditions set forth in the Indenture.
Section 8.3. No Payment When Senior Debt in Default. In the event that
any Notes are declared or otherwise shall become due and payable before their
Stated Maturity (including by reason of a Fundamental Change) and there shall
have occurred (i) a default in the payment of principal, premium, if any, or
interest (including a default under any repurchase or redemption obligation)
with respect to any Senior Debt or (ii) any other event of default with respect
to any Senior Debt, permitting the holders thereof to accelerate the maturity
thereof, then and in such event the holders of the Senior Debt outstanding at
the time such Notes so become due and payable shall be entitled to receive
payment in full of all amounts then due on or in respect of all Senior Debt in
cash or other immediately available funds or otherwise in a manner satisfactory
to the holders of such Senior Debt, before the Holders of the Notes are entitled
to receive any Notes Payment.
In the event and during the continuation of any default in the payment
of any amount owing in respect of any Senior Debt beyond any applicable grace
period with respect thereto, or in the event that any event of default with
respect to any Senior Debt shall have occurred and be continuing permitting the
holders of such Senior Debt (or a trustee or other representative on behalf of
the holders thereof) to declare such Senior Debt due and payable prior to the
date on which it would otherwise have become due and payable, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist and such acceleration shall have been rescinded or annulled, or in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no Notes Payment shall be made.
In the event that, notwithstanding the foregoing, the Company shall
make any Notes Payment to the Trustee or any Holder prohibited by the foregoing
provisions of this Section, and if (1) such fact shall, at or prior to the time
of such Notes Payment, have been made actually known to a responsible officer of
the Trustee or, as the case may be, such Holder or (2) the Notes have been
accelerated, then and in such event such Notes Payment shall be paid over and
delivered forthwith to the Company.
The provisions of this Section shall not apply to any Notes Payment
with respect to which Section 9.2 would be applicable.
Section 8.4. Payment Permitted If No Default. Nothing contained in this
Article or elsewhere in this Indenture or in any of the Notes shall prevent (a)
the Company, at any time except during the pendency of any proceeding referred
to in Section 9.2 or under the conditions described in Section 9.3, from making
Notes Payments, or (b) the application by the Trustee of any money deposited
with it hereunder to Notes Payments or the retention of such Notes Payment by
the Holders, if, at the time of such application by the Trustee, it did not have
actual knowledge that such Notes Payment would have been prohibited by the
provisions of this Article.
36
Section 8.5. Subrogation to Rights of Holders of Senior Debt. Subject
to the payment in full of all amounts due or to become due on or in respect of
Senior Debt, in cash or other immediately available funds or otherwise in a
manner satisfactory to the holders of Senior Debt, the Holders of the Notes
shall be subrogated to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of and interest on the Notes shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Debt of any cash, property or securities to which the
Holders of the Notes or the Trustee would be entitled except for the provisions
of this Article, and no payments over pursuant to the provisions of this Article
to the holders of Senior Debt by Holders of the Notes or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Debt and the
Holders of the Notes, be deemed to be a payment or distribution by the Company
to or on account of the Senior Debt.
Section 8.6. Provisions Solely To Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Notes on the one hand and the
holders of Senior Debt on the other hand. Nothing contained in this Article or
elsewhere in this Supplemental Indenture or in the Notes is intended to or shall
(a) impair, as among the Company, the creditors of the Company other than
holders of Senior Debt and the Holders of the Notes, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Debt, is intended to rank equally
with all other general obligations of the Company), to pay to the Holders of the
Notes the principal of and interest on the Notes as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Notes and creditors of
the Company other than the holders of Senior Debt; or (c) prevent the Trustee or
the Holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article of the holders of Senior Debt to receive cash, property and
securities otherwise payable or deliverable to the Trustee or such Holder.
Section 8.7. Trustee To Effectuate Subordination. Each Holder of a Note
by such Holder's acceptance thereof authorizes and directs the Trustee on such
Holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article and appoints the Trustee
such Holder's attorney-in-fact for any and all such purposes.
Section 8.8. No Waiver of Subordination Provisions. 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 Indenture, 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 Trustee or the Holders of the Notes, without
incurring responsibility to the Holders of the Notes and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Notes to the holders of Senior Debt, do any one
or more of the
37
following: (a) change the manner, place or terms of payment or the time of
payment of, or renew or alter, Senior Debt, or otherwise amend or supplement in
any manner Senior Debt or any instrument evidencing the same or any agreement
under which Senior Debt is outstanding; (b) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Debt; (c)
release any Person liable in any manner for the collection of Senior Debt; and
(d) exercise or refrain from exercising any rights against the Company and any
other Person.
Section 8.9. Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any fact known to the Company which would prohibit the
making of any payment to or by the Trustee in respect of the Notes.
Notwithstanding the provisions of this Article 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 to or by the Trustee in
respect of the Notes, unless and until a responsible officer of the Trustee
shall have received written notice thereof from the Company or a holder of
Senior Debt or from any trustee therefor or representative thereof; and, prior
to the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of,
the principal of or interest on any Note), then, anything herein contained to
the contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date.
The Trustee shall be entitled to rely conclusively on the delivery to
it of a written notice, and proof of ownership acceptable to the Trustee, by a
Person representing himself to be a holder of Senior Debt (or a trustee therefor
or representative thereof) to establish that such notice has been given by a
holder of Senior Debt (or a trustee therefor or representative thereof). 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 Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee 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 Article, 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 8.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Notes shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such Proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Holders of Notes, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of the
Senior Debt and other indebtedness of the Company,
38
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
Section 8.11. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if it shall in good faith and
absent gross negligence or willful misconduct, mistakenly pay over or distribute
to Holders of Notes or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
Section 8.12. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt which
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.8 of the Base Indenture.
Section 8.13. Article Applicable to Paying Agents. In case 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
in such case (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; provided, however, that Sections 8.9 and 8.12 shall
not apply to the Company or any Affiliate of the Company if it or such Affiliate
acts as Paying Agent.
Section 8.14. Subsidiaries. No payment, distribution of assets or other
action may be taken by any Subsidiary of the Company with respect to the Notes
if the Company would be prohibited by this Article IX from taking such action.
Section 8.15. Rescission. The provisions of this Article 8 shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment in respect of any of the Senior Debt is rescinded or must otherwise
be returned by the holder thereof upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
Section 8.16. Payment. For purposes of this Article 8, "payment in
full" of Senior Debt means prior payment in full (including payment of
reimbursement obligations under letters of credit) of such Senior Debt
(including all interest accruing after the commencement of any bankruptcy or
similar proceeding, whether or not a claim for post-petition interest is allowed
as a claim in any such proceeding) in cash or other immediately available funds
and termination, cash collateralization or replacement of contingent obligations
(including all letters of credit issued thereunder but excluding only any
unasserted indemnity obligations) and termination of all commitments thereunder.
39
ARTICLE 9
MISCELLANEOUS
Section 9.1. Notices. Any request, demand, authorization, notice,
waiver, consent or communication shall be in writing and delivered in person or
mailed by first-class mail, postage prepaid, addressed as follows or transmitted
by facsimile transmission (confirmed by guaranteed overnight courier) to the
following facsimile numbers:
if to the Company:
America Online, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
with a copy to:
Attention: General Counsel
if to the Trustee:
State Street Bank and Trust
Company
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No. (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No. (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust Department
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 Holder of the Notes shall be
mailed to the Holder of the Notes, by first-class mail, postage prepaid, at the
Holder's address as it appears on the registration books of the Registrar and
shall be sufficiently given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder of the Notes or
any defect in it shall not affect its sufficiency with respect to other Holders
of the Notes. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not received by the addressee.
40
If the Company mails a notice or communication to the Holders of the
Notes, it shall mail a copy to the Trustee and each Registrar, Paying Agent,
Conversion Agent or co-registrar.
Section 9.2. Communication by Holders with Other Holders. Holders of
the Notes may communicate pursuant to TIA Section 312(b) with other Holders of
the Notes with respect to their rights under this Indenture or the Notes. 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 9.3. Certificate and Opinion as to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 9.4. Statements Required in Certificate or Opinion. Each
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(1) a statement that each person making such Officers' Certificate or
Opinion of Counsel has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such 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
(4) a statement that, in the opinion of such person, such covenant or
condition has been complied with.
Section 9.5. Separability Clause. In case any provision in this
Indenture or in the Notes 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 9.6. Rules by Trustee, Paying Agent, Conversion Agent and
Registrar. The Trustee may make reasonable rules for action by or a meeting of
Holders of the Notes. The Registrar, Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
41
Section 9.7. 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 Notes, no Original Issue Discount or interest, if any, shall
accrue for the intervening period.
Section 9.8. GOVERNING LAW. THE LAWS OF THE STATE OF NEW YORK SHALL
GOVERN THIS INDENTURE AND THE NOTES, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS.
Section 9.9. No Recourse Against Others. A director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Notes or this Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. By
accepting a Note, each Holder of the Notes shall waive and release all such
liability. The waiver and release shall be part of the consideration for the
issue of the Notes.
Section 9.10. Successors. All agreements of the Company in this
Indenture and the Notes shall bind its successor. All agreements of the Trustee
in this Indenture shall bind its successor.
Section 9.11. Multiple Originals. The parties may sign any number of
copies of this Supplemental 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 Supplemental Indenture.
42
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Supplemental Indenture on behalf of the respective parties hereto
as of the date first above written.
` AMERICA ONLINE, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President & Treasurer
Attest: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Corporate Secretary
[SEAL]
STATE STREET BANK AND TRUST COMPANY
By: /s/ Carolina ▇. ▇▇▇▇▇▇▇▇
-------------------------------------
Name: Carolina ▇. ▇▇▇▇▇▇▇▇
Title: Assistant Vice President
Attest:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
[SEAL]
EXHIBIT A
[FORM OF FACE OF GLOBAL NOTE]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE,
THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL
AMOUNT AT MATURITY OF THIS NOTE IS $______, THE ISSUE DATE IS DECEMBER 6, 1999,
THE YIELD TO MATURITY IS 3.00 %.
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.
AMERICA ONLINE INC.
Convertible Subordinated Note due 2019
No. R- CUSIP:
Issue Date: December 6, 1999 Aggregate Principal Amount at Maturity $
Original Issue Discount: $448.74 (for each $1,000 Principal Amount at Maturity)
Issue Price: $551.26 (for each $1,000 Principal Amount at Maturity)
AMERICA ONLINE INC., a Delaware corporation, promises to pay to or
registered assigns, the Principal Amount at Maturity of Dollars on December 6,
2019.
This Note shall not bear interest except as specified on the other side
of this Note. Original Issue Discount will accrue as specified on the other side
of this Note. This Note is convertible as specified on the reverse side of this
Note.
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Additional provisions of this Note are set forth on the reverse side of
this Note.
Dated: AMERICA ONLINE INC.
[SEAL] By:
-----------------------------
Title:
Attest:
---------------------------------
Title:
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
This is one of the Notes referred to
in the within-mentioned Indenture.
[STATE STREET BANK AND TRUST
COMPANY],
as Trustee
By
----------------------------------
Authorized Signatory
Dated:
------------------------------
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[FORM OF REVERSE SIDE OF NOTES]
Convertible Subordinated Note Due 2019
1. Interest.
This Note shall not bear interest, except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount at Maturity hereof
or any portion of such Principal Amount at Maturity is not paid when due
(whether upon acceleration pursuant to Section 4.1 of the Supplemental Indenture
and Section 5.2 of the Base Indenture, upon the date set for payment of the
Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment
of the Purchase Price or Fundamental Change Purchase Price pursuant to paragraph
6 hereof or upon the Stated Maturity of this Note) or if interest due hereon or
any portion of such interest is not paid when due in accordance with paragraph
10 hereof, then in each such case the overdue amount shall, to the extent
permitted by law, bear interest at the rate of 3.00 % per annum, compounded
semi-annually, which interest shall accrue from the date such overdue amount was
originally due to the date payment of such amount, including interest thereon,
has been made or duly provided for. All such interest shall be payable on
demand. The accrual of such interest on overdue amounts shall be in lieu of, and
not in addition to, the continued accrual of Original Issue Discount.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount at Maturity of the Note), in the period during which a Note
remains outstanding, shall accrue at 3.00 % per annum, on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months, from the
Issue Date of this Note.
2. Method of Payment.
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of Redemption Price, Purchase Price, Fundamental Change
Purchase Price and at Stated Maturity to Holders who surrender Notes to a Paying
Agent to collect such payments in respect of the Notes. The Company will pay
cash amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may make
such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar.
Initially, State Street Bank and Trust Company, a Massachusetts trust
company (the "Trustee"), will act as Paying Agent, Conversion Agent and
Registrar. The Company may appoint and change any Paying Agent, Conversion
Agent, Registrar or co-registrar without notice, other than notice to the
Trustee except that the Company will maintain at least one Paying Agent in the
State of New York, City of New York, Borough of Manhattan (which shall initially
be an office of State Street Bank and Trust Company, N.A., an affiliate of the
Trustee). The Company or any of its Subsidiaries or any of their Affiliates may
act as Paying Agent, Conversion Agent, Registrar or co-registrar.
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4. Indenture.
The Company issued the Notes under an Indenture dated as of December 6,
1999 (the "Base Indenture"), between the Company and the Trustee and the
Supplemental Indenture No. 1 thereto dated as of December 6, 1999 (the
"Supplemental Indenture" and, together with the Base Indenture, the
"Indenture"), between the Company and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the TIA. Capitalized terms used herein and not defined herein have
the meanings ascribed thereto in the Indenture. The Notes are subject to all
such terms, and Holders of the Notes are referred to the Indenture and the TIA
for a statement of those terms.
The Notes are subordinated and unsecured obligations of the Company
limited to $ 2,607,663,000 aggregate Principal Amount at Maturity. The Indenture
does not limit other indebtedness of the Company, secured or unsecured.
The defeasance provisions described in Article IV of the Base Indenture
will not apply to the Notes.
5. Redemption at the Option of the Company.
No sinking fund is provided for the Notes. The Notes are not redeemable
prior to December 6, 2002. The Notes are redeemable as a whole, but not in part,
on or after , 2002 and prior to December 6, 2004 at the option of the Company at
the Redemption Price set forth below if the closing price for the Common Stock
on the New York Stock Exchange is equal to or greater than 150 % of the
Conversion Price then in effect for at least 20 trading days in any consecutive
30 trading days preceding such redemption provided that the Company provides
notice of such redemption within five trading days following the last of the 30
days' trading period. The Notes are redeemable in cash as a whole, or from time
to time in part, at any time on or after December 6, 2004 at the option of the
Company at the Redemption Prices set forth below.
The table below shows Redemption Prices of a Note per $1,000 Principal
Amount at Maturity on the dates shown below and at Stated Maturity, which prices
reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Note redeemed between such dates shall include an
additional amount reflecting the additional Original Issue Discount accrued
since the next preceding date in the table.
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(1) (2) (3)
Accrued
Original
Issue Redemption
Notes Discount Price
Redemption Date Issue Price at 3.00 % (1) + (2)
--------------- ----------- --------- ------------
December 6, 2002................. $551.26 51.51 $602.77
December 6, 2003.............. 551.26 69.73 620.99
December 6, 2004.................. 551.26 88.50 639.76
December 6, 2005................. 551.26 107.84 659.10
December 6, 2006.................. 551.26 127.76 679.02
December 6, 2007.................. 551.26 148.28 699.54
December 6, 2008.................. 551.26 169.42 720.68
December 6, 2009.................. 551.26 191.21 742.47
December 6, 2010.................. 551.26 213.65 764.91
December 6, 2011.................. 551.26 236.77 788.03
December 6, 2012.................. 551.26 260.59 811.85
December 6, 2013.................. 551.26 285.12 836.38
December 6, 2014.................. 551.26 310.40 861.66
December 6, 2015.................. 551.26 336.45 887.71
December 6, 2016.................. 551.26 363.28 914.54
December 6, 2017.................. 551.26 390.92 942.18
December 6, 2018.................. 551.26 419.40 970.66
At Stated Maturity................ 551.26 448.74 1,000.00
If converted to a semiannual coupon note following the occurrence of a
Tax Event, this Note will be redeemable at the Restated Principal Amount plus
accrued and unpaid interest from the date of such conversion through the
Redemption Date; but in no event will this Note be redeemable before December 6,
2002.
6. Purchase By the Company at the Option of the Holder.
Subject to the terms and conditions of the Indenture, the Company shall
become obligated to purchase, at the option of the Holder, the Notes held by
such Holder on December 6, 2004 at the Purchase Price of $ 639.76 per $1,000
Principal Amount at Maturity, upon delivery of a Purchase 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 Purchase Date until the close
of business on such Purchase Date and upon delivery of the Notes to the Paying
Agent (or surrender of the beneficial interest therein pursuant to Paragraph 7
of the DTC Letter of Representations) by the Holder as set forth in the
Indenture.
The Purchase Price (equal to the Issue Price plus accrued Original
Issue Discount to the Purchase Date) may be paid, at the option of the Company,
in cash or by the issuance and delivery of shares of Common Stock of the
Company, or in any combination thereof.
If prior to a Purchase Date this Note has been converted to a
semiannual coupon note following the occurrence of a Tax Event, the Purchase
Price will be equal to the Restated
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Principal Amount plus accrued and unpaid interest from the date of conversion to
the Purchase Date.
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase the Notes held by
such Holder 40 Business Days after the occurrence of a Fundamental Change
occurring on or after December 6, 1999 for a Fundamental Change Purchase Price
equal to the Issue Price plus accrued Original Issue Discount to the Fundamental
Change Purchase Date, which Fundamental Change Purchase Price shall be paid, at
the option of the Company, in cash or in Common Stock. If paid in Common Stock,
the Common Stock will be valued at 97.5% of the Average Market Price of the
Common Stock. If prior to a Fundamental Change Purchase Date this Note has been
converted to a semiannual coupon note following the occurrence of a Tax Event,
the Fundamental Change Purchase Price shall be equal to the Restated Principal
Amount plus accrued and unpaid interest from the date of conversion to the
Fundamental Change Purchase Date.
Holders have the right to withdraw any Purchase Notice or Fundamental
Change Purchase Notice, as the case may be, by delivering to the Paying Agent a
written notice of withdrawal in accordance with the provisions of the Indenture.
If cash (and/or Common Stock, if applicable) sufficient to pay the
Purchase Price or Fundamental Change Purchase Price, as the case may be, of all
Notes or portions thereof to be purchased as of the Purchase Date or the
Fundamental Change Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Fundamental
Change Purchase Date, as the case may be, Original Issue Discount ceases to
accrue on such Notes (or portions thereof) immediately after such Purchase Date
or Fundamental Change Purchase Date, as the case may be, and the Holder thereof
shall have no other rights as such (other than the right to receive the Purchase
Price or Fundamental Change Purchase Price, as the case may be, upon surrender
of such Note).
7. Notice of Redemption.
Notice of redemption will be mailed at least 20 Business Days but not
more than 60 days before the Redemption Date to each Holder of Notes to be
redeemed at the Holder's registered address. The Notice of Redemption will also
be published in THE WALL STREET JOURNAL and posted on the Company's web site. If
money sufficient to pay the Redemption Price of all Notes (or portions thereof)
to be redeemed on the Redemption Date is deposited with the Paying Agent prior
to or on the Redemption Date, immediately after such Redemption Date Original
Issue Discount ceases to accrue on such Notes or portions thereof. Notes in
denominations larger than $1,000 of Principal Amount at Maturity may be redeemed
in part but only in integral multiples of $1,000 of Principal Amount at
Maturity.
8. Conversion.
Subject to the next two succeeding sentences, a Holder of a Note may
convert it into Common Stock of the Company at any time before the close of
business on December 6, 2019. If the Note is called for redemption, the Holder
may convert it at any time before the close of business on the Redemption Date.
A Note in respect of which a Holder has delivered a
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Purchase Notice or Fundamental Change Purchase Notice exercising the option of
such Holder to require the Company to purchase such Note may be converted only
if such notice of exercise is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Rate is 5.8338 shares of Common Stock per $1,000
Principal Amount at Maturity, subject to adjustment in certain events described
in the Supplemental Indenture. The Company will deliver cash or a check in lieu
of any fractional share of Common Stock.
In the event the Company exercises its option pursuant to Section 6.1
of the Supplemental Indenture to have interest in lieu of Original Issue
Discount accrue on the Note following a Tax Event, the Holder will be entitled
on conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the Company
exercises such option, Notes surrendered for conversion during the period from
the close of business on any Regular Record Date next preceding any Interest
Payment Date to the opening of business of such Interest Payment Date (except
Notes to be redeemed on a date within such period) must be accompanied by
payment of an amount equal to the interest thereon that the registered Holder is
to receive. Except where Notes surrendered for conversion must be accompanied by
payment as described above, no interest on converted Notes will be payable by
the Company on any Interest Payment Date subsequent to the date of conversion.
To convert a Note, a Holder must (1) complete and manually sign the
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent or, if applicable,
complete and deliver to DTC the appropriate instruction form for conversion, (2)
surrender the Note to the Conversion Agent by book entry delivery unless
physical certificates have been issued, (3) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (4) pay any required transfer or similar tax for which the Holder is
responsible.
A Holder may convert a portion of a Note if the Principal Amount at
Maturity of such portion is $1,000 or an integral multiple of $1,000. No payment
or adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of a Note, that portion of accrued Original
Issue Discount (or interest if the Company has exercised its option provided for
in paragraph 10 hereof) attributable to the period from the Issue Date (or, if
the Company has exercised the option referred to in paragraph 10 hereof, the
later of (x) the date of such exercise and (y) the date on which interest was
last paid) through the Conversion Date with respect to the converted Note shall
not be cancelled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through the delivery of the Common Stock
(together with the cash payment, if any, in lieu of fractional shares) in
exchange for the Note being converted pursuant to the terms hereof; and the fair
market value of such shares of Common Stock (together with any such cash payment
in lieu of fractional shares) shall be treated as issued, to the extent thereof,
first in exchange for Original Issue Discount (or interest, if the Company has
exercised its option provided for in paragraph 10 hereof) accrued through the
Conversion Date, and the balance, if any, of such fair market value of such
Common Stock (and any such cash payment) shall be treated as issued in exchange
for the Issue Price of the Note being converted pursuant to the provisions
hereof.
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The Conversion Rate will be adjusted for dividends or distributions on
Common Stock payable in Common Stock or other Capital Stock; distributions to
all holders of Common Stock of certain rights to purchase Common Stock for a
period expiring within 60 days at less than the Sale Price at the Time of
Determination; subdivisions, combinations or certain reclassifications of Common
Stock; and distributions to such holders of assets or debt securities of the
Company or certain rights to purchase securities of the Company (excluding
certain cash dividends or distributions). However, no adjustment need be made if
Holders may participate in the transaction or in certain other cases. The
Company from time to time may voluntarily increase the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share
exchange or a transfer of all or substantially all of its assets, or upon
certain distributions described in the Indenture, the right to convert a Note
into Common Stock may be changed into a right to convert it into securities,
cash or other assets of the Company or another person.
9. Conversion Arrangement on Call for Redemption.
Any Notes called for redemption, unless surrendered for conversion
before the close of business on the Redemption Date, may be deemed to be
purchased from the Holders of such Notes at an amount not less than the
Redemption Price, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Notes from the Holders, to convert them
into Common Stock of the Company and to make payment for such Notes to the
Trustee in trust for such Holders.
10. Tax Event
(a) At the option of the Company, from and after (i) the date (the "Tax
Event Date") of the occurrence of a Tax Event and (ii) the date the Company
exercises such option, whichever is later (the "Option Exercise Date"), interest
in lieu of future Original Issue Discount shall accrue at the rate of 3.00 % per
annum on a principal amount per Note (the "Restated Principal Amount") equal to
the Issue Price plus Original Issue Discount accrued through the Option Exercise
Date and shall be payable semiannually on June 6 and December 6 of each year
(each an "Interest Payment Date") to holders of record at the close of business
on May 22 or November 21 (each a "Regular Record Date") immediately preceding
such Interest Payment Date. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months and will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from the
Option Exercise Date.
(b) Interest on any Note that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the person in
whose name that Note is registered at the close of business on the Regular
Record Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Note shall be paid in
same-day funds by transfer to an account maintained by the payee located inside
the United States.
(c) Except as otherwise specified with respect to the Notes, any
Defaulted Interest on any Note shall forthwith cease to be payable to the
registered Holder thereof on the
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relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company as provided for in Section 10.2(b)
of the Supplemental Indenture.
11. Denominations; Transfer; Exchange.
The Notes are in fully registered form, without coupons, in
denominations of $1,000 of Principal Amount at Maturity and integral multiples
of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not transfer
or exchange any Notes selected for redemption (except, in the case of a Note to
be redeemed in part, the portion of the Note not to be redeemed) or any Notes in
respect of which a Purchase Notice or Fundamental Change Purchase Notice has
been given and not withdrawn (except, in the case of a Note to be purchased in
part, the portion of the Note not to be purchased) or any Notes for a period of
15 days before a selection of Notes to be redeemed.
12. Persons Deemed Owners.
The registered Holder of this Note may be treated as the owner of this
Note for all purposes.
13. Unclaimed Money or Notes.
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 Notes that remains unclaimed for two years, subject
to applicable unclaimed property law. After return to the Company, Holders
entitled to the money or securities must look to the Company for payment as
general creditors unless an applicable abandoned property law designates another
person.
14. Amendment; Waiver.
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Notes may be amended with the written consent of the Holders of
at least a majority in aggregate Principal Amount at Maturity of the Notes at
the time outstanding and (ii) certain Defaults may be waived with the written
consent of the Holders of a majority in aggregate Principal Amount at Maturity
of the Notes at the time outstanding. Subject to certain exceptions set forth in
the Indenture, without the consent of any Holder of the Notes, the Company and
the Trustee may amend the Indenture or the Notes to cure any ambiguity,
omission, defect or inconsistency, or to comply with Article VII of the Base
Indenture or Section 7.14 of the Supplemental Indenture, to provide for
uncertificated Notes in addition to or in place of certificated Notes or to make
any change that does not adversely affect the rights of any Holder of the Notes,
or to comply with any requirement of the SEC in connection with the
qualification of the Indenture under the TIA.
15. Defaults and Remedies.
Under the Indenture, Events of Default include (i) if the Notes have
been converted to semiannual coupon notes following a Tax Event, default in the
payment of interest
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which default continues for a period of 30 days; (ii) default in payment of the
Principal Amount at Maturity (or, if the Notes have been converted to semiannual
coupon notes following a Tax Event, the Restated Principal Amount), Redemption
Price, Purchase Price or Fundamental Change Purchase Price, as the case may be,
in respect of the Notes when the same becomes due and payable; (iii) failure by
the Company to comply with other agreements in the Indenture or the Notes,
subject to notice and lapse of time; and (iv) certain events of bankruptcy or
insolvency. If an Event of Default occurs and is continuing, the Trustee, or the
Holders of at least 25% in aggregate Principal Amount at Maturity of the Notes
at the time outstanding, may declare all the Notes to be due and payable
immediately at the Issue Price plus accrued Original Issue Discount or, if the
Company has exercised its option to convert the Notes pursuant to Section 6.1 of
this Supplemental Indenture following a Tax Event, the Restated Principal Amount
plus accrued and unpaid interest. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Notes becoming due and payable
immediately upon the occurrence of such Events of Default.
Holders of the Notes may not enforce the Indenture or the Notes except
as provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Notes unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount at
Maturity of the Notes at the time outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders of the
Notes notice of any continuing Default (except a Default in payment of amounts
specified in clause (i) or (ii) above) if it determines that withholding notice
is in their interests.
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 Notes and may otherwise deal with and collect obligations owed to it
by the Company or its Affiliates and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Note, each Holder of the Notes
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Notes.
18. Authentication.
This Note shall not be valid until an authorized officer of the Trustee
manually signs the Trustee's Certificate of Authentication on the other side of
this Note. The statements and recitals in this Note, other than the Trustee's
certificate of authentication, are statements of the Company, and not the
Trustee, and the Trustee is not responsible for their correctness. The Trustee
makes no representation as to the validity or sufficiency of the Indenture or
this Note.
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19. Reductions in Amount.
While this Note is in global form, reductions in the Principal Amount
at Maturity outstanding resulting from any redemption, purchase or conversion of
a portion hereof shall be reflected in accordance with the provisions of the DTC
Letter of Representations or other procedures in effect from time to time at the
depositary for the Notes.
20. Abbreviations.
Customary abbreviations may be used in the name of a Holder of the
Notes or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by
the entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
NOTE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
----------------------
The Company will furnish to any Holder of the Notes upon written
request and without charge a copy of the Indenture which has in it the text of
this Note in larger type. Requests may be made to:
America Online, Inc.
Attention: Investor Relations
▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇@▇▇▇.▇▇▇
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ASSIGNMENT FORM CONVERSION NOTICE
To assign this Note, To convert this Note into the Common Stock
fill form below: of the Company, check the box:
I or we assign and -----
transfer this Note to: : :
-----
-----------------------------------
: :
------------------------------------
To convert only part of this Note, state the
(Insert assignee's Soc. Principal Amount at Maturity to be converted (which
Sec. or tax ID no.) must be $1,000 or an integral multiple of $1,000):
---------------------------------
-------------------------- :$ :
-------------------------- ---------------------------------
--------------------------
If you want the stock certificate made out in
another person's name, fill in the form below
--------------------------
(Print or type assignee's
Name, address and zip code and soc. sec.
Or tax ID no.) --------------------------------
: :
--------------------------------
irrevocably appoint
-------------- agent
to transfer this Note 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 Note)
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