Exhibit 4.4
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WELLPOINT HEALTH NETWORKS INC.,
as Issuer,
$
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ZERO COUPON CONVERTIBLE
SUBORDINATED DEBENTURES DUE 2019
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INDENTURE
Dated as of July ___, 1999
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The Bank of New York,
as Trustee
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CROSS REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
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3.10 (a)(1)..................................................................................... 7.10
(a)(2)..................................................................................... 7.10
(a)(3)..................................................................................... N.A.**
(a)(4)..................................................................................... N.A.
(b)........................................................................................ 7.08; 7.10
(c)........................................................................................ N.A.
3.11 (a)........................................................................................ 7.11
(b)........................................................................................ 7.11
(c)........................................................................................ N.A.
3.12 (a)........................................................................................ 2.05
(b)........................................................................................ 13.03
(c)........................................................................................ 13.03
(d)........................................................................................ 7.06
3.13 (a)........................................................................................ 7.06
(b)(1)..................................................................................... N.A.
(b)(2)..................................................................................... 7.06
(c)........................................................................................ 13.02
(d)........................................................................................ 7.06
3.14 (a)........................................................................................ 4.02; 13.02
(b)........................................................................................ N.A.
(c)(1)..................................................................................... 13.04
(c)(2)..................................................................................... 13.04
(c)(3)..................................................................................... N.A.
(d)........................................................................................ N.A.
(e)........................................................................................ 13.05
(f)........................................................................................ 4.03
3.15 (a)........................................................................................ 7.01
(b)........................................................................................ 7.05; 13.02
(c)........................................................................................ 7.01
(d)........................................................................................ 7.01
(e)........................................................................................ 6.11
3.16 (a) (last sentence)........................................................................ 2.08
(a)(1)(A).................................................................................. 6.05
(a)(1)(B).................................................................................. 6.04
(a)(2)..................................................................................... N.A.
(b)........................................................................................ 6.07
3.17 (a)(1)..................................................................................... 6.08
(a)(2)..................................................................................... 6.09
(b)........................................................................................ 2.04
3.18 (a)........................................................................................ 13.01
* Note: This Cross Reference Table shall not, for any purpose, be
deemed to be part of the Indenture.
** Note: N.A. means Not Applicable.
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE.............................................................1
SECTION 1.01. DEFINITIONS................................................................................1
SECTION 1.02. OTHER DEFINITIONS..........................................................................7
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT..........................................8
SECTION 1.04. RULES OF CONSTRUCTION......................................................................8
ARTICLE 2. THE SECURITIES.........................................................................................9
SECTION 2.01. FORM AND DATING............................................................................9
SECTION 2.02. EXECUTION AND AUTHENTICATION...............................................................9
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT..............................................10
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST........................................10
SECTION 2.05. HOLDER LISTS..............................................................................11
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES; RESTRICTIONS ON TRANSFERS;
DEPOSITARY..............................................................................11
SECTION 2.07. REPLACEMENT SECURITIES....................................................................13
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS'ACTION..................................14
SECTION 2.09. TEMPORARY SECURITIES......................................................................14
SECTION 2.10. CANCELLATION..............................................................................15
SECTION 2.11. PERSONS DEEMED OWNERS.....................................................................15
SECTION 2.12. CUSIP NUMBERS.............................................................................15
SECTION 2.13. RESTICTIONS ON TRANSFER...................................................................16
ARTICLE 3. REDEMPTION AND REPURCHASES............................................................................18
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.......................................................18
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED....................................................18
SECTION 3.03. NOTICE OF REDEMPTION......................................................................18
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION............................................................19
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE...............................................................19
SECTION 3.06. SECURITIES REDEEMED IN PART...............................................................20
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.............................................20
SECTION 3.08. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER..........................................21
SECTION 3.09. REPURCHASE AT OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE..............................26
SECTION 3.10. EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE
REPURCHASE NOTICE.......................................................................27
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE PURCHASE PRICE............................28
SECTION 3.12. SECURITIES REPURCHASED OR REDEEMED IN PART................................................28
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS UPON REPURCHASE
OF SECURITIES...........................................................................28
SECTION 3.14. REPAYMENT TO THE COMPANY..................................................................29
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ARTICLE 4. COVENANTS.............................................................................................29
SECTION 4.01. PAYMENT OF SECURITIES.....................................................................29
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS........................................................29
SECTION 4.03. COMPLIANCE CERTIFICATE....................................................................30
SECTION 4.04. FURTHER INSTRUMENTS AND ACTS..............................................................31
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY...........................................................31
SECTION 4.06. EXISTENCE.................................................................................31
SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT....................................................32
ARTICLE 5. SUCCESSOR CORPORATION.................................................................................32
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.............................................32
ARTICLE 6. DEFAULTS AND REMEDIES.................................................................................33
SECTION 6.01. EVENTS OF DEFAULT.........................................................................33
SECTION 6.02. ACCELERATION..............................................................................34
SECTION 6.03. OTHER REMEDIES............................................................................34
SECTION 6.04. WAIVER OF PAST DEFAULTS...................................................................35
SECTION 6.05. CONTROL BY MAJORITY.......................................................................35
SECTION 6.06. LIMITATION ON SUITS.......................................................................35
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT......................................................36
SECTION 6.08. COLLECTION SUIT BY TRUSTEE................................................................36
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM..........................................................36
SECTION 6.10. PRIORITIES................................................................................37
SECTION 6.11. UNDERTAKING FOR COSTS.....................................................................37
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS...................................................38
ARTICLE 7. TRUSTEE...............................................................................................38
SECTION 7.01. DUTIES OF TRUSTEE.........................................................................38
SECTION 7.02. RIGHTS OF TRUSTEE.........................................................................39
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE..............................................................40
SECTION 7.04. TRUSTEE'S DISCLAIMER......................................................................41
SECTION 7.05. NOTICE OF DEFAULTS........................................................................41
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.............................................................41
SECTION 7.07. COMPENSATION AND INDEMNITY................................................................41
SECTION 7.08. REPLACEMENT OF TRUSTEE....................................................................42
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER...............................................................43
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.............................................................43
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.........................................44
ARTICLE 8. DISCHARGE OF INDENTURE................................................................................44
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES......................................................44
SECTION 8.02. REPAYMENT TO THE COMPANY..................................................................44
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ARTICLE 9. AMENDMENTS............................................................................................44
SECTION 9.01. WITHOUT CONSENT OF HOLDERS................................................................44
SECTION 9.02. WITH CONSENT OF HOLDERS...................................................................45
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.......................................................46
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS....................................46
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.....................................................46
SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES...................................................47
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.........................................................47
ARTICLE 10. SUBORDINATION........................................................................................47
SECTION 10.01. AGREEMENT OF SUBORDINATION...............................................................47
SECTION 10.02. PAYMENTS TO HOLDERS......................................................................47
SECTION 10.03. SUBROGATION OF SECURITIES................................................................50
SECTION 10.04. AUTHORIZATION BY HOLDERS.................................................................51
SECTION 10.05. NOTICE TO TRUSTEE........................................................................51
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS................................................52
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION...........................................................52
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS...............................................................53
SECTION 10.09. REINSTATEMENT OF SUBORDINATION...........................................................53
SECTION 10.10. PERMITTED PAYMENTS.......................................................................53
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS......................................................54
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS.........................................................54
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT...........................54
ARTICLE 11. CONVERSION...........................................................................................55
SECTION 11.01. CONVERSION PRIVILEGE.....................................................................55
SECTION 11.02. CONVERSION PROCEDURE.....................................................................55
SECTION 11.03. FRACTIONAL SHARES........................................................................56
SECTION 11.04. TAXES ON CONVERSION......................................................................57
SECTION 11.05. COMPANY TO PROVIDE STOCK.................................................................57
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK...................................................57
SECTION 11.07. ADJUSTMENT FOR RIGHTS OR WARRANTS........................................................58
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.......................................................58
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED..........................................................62
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED..............................................................62
SECTION 11.11. NOTICE OF ADJUSTMENT.....................................................................62
SECTION 11.12. VOLUNTARY INCREASE.......................................................................62
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS...........................................................63
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE................................63
SECTION 11.15. COMPANY DETERMINATION FINAL..............................................................64
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER..........................................................64
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SECTION 11.17. SIMULTANEOUS ADJUSTMENTS.................................................................64
SECTION 11.18. SUCCESSIVE ADJUSTMENTS...................................................................64
SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK ISSUED UPON CONVERSION..........................64
SECTION 11.20. GENERAL CONSIDERATIONS...................................................................65
ARTICLE 12. SPECIAL TAX EVENT....................................................................................65
SECTION 12.01. OPTIONAL CONVERSION TO SEMIANNUAL COUPON DEBENTURE
UPON TAX EVENT.........................................................................65
SECTION 12.02. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED...........................................66
ARTICLE 13. MISCELLANEOUS........................................................................................67
SECTION 13.01. TRUST INDENTURE ACT......................................................................67
SECTION 13.02. NOTICES..................................................................................67
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS..............................................68
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.......................................68
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION............................................68
SECTION 13.06. SEPARABILITY CLAUSE......................................................................69
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND REGISTRAR...........................69
SECTION 13.08. GOVERNING LAW............................................................................69
SECTION 13.09. NO RECOURSE AGAINST OTHERS...............................................................69
SECTION 13.10. SUCCESSORS...............................................................................69
SECTION 13.11. MULTIPLE ORIGINALS.......................................................................70
EXHIBIT A--Form of Security
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INDENTURE, dated as of ________________________, 1999, between WellPoint
Health Networks Inc., a Delaware corporation (the "COMPANY"), and The Bank of
New York, a New York banking corporation, as trustee (the "TRUSTEE").
Each party agrees as follows for the benefit of the other parties and
for the equal and ratable benefit of the Holders of the Company's Zero Coupon
Convertible Subordinated Debentures due 2019:
ARTICLE 1.
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"BANKRUPTCY LAW" means ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code, or any similar
Federal or state law for the relief of debtors.
"BOARD OF DIRECTORS" means either the board of directors of the Company
or any duly authorized committee of such board.
"BUSINESS DAY" means each day of the year on which banking institutions
are not required or authorized to close in The City of New York or the city
in which the Corporate Trust Office is located.
"COMMON STOCK" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the
Company and which is not subject to redemption by the Company. Subject to the
provisions of Section 11.14 hereof, however, shares issuable upon conversion
of the Securities shall include only shares of Common Stock, par value of
$.01 per share, of the Company as such shares exist on the date of this
Indenture or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which
are not subject to redemption by the Company; PROVIDED that if at any time
there shall be more than one such resulting class, the shares of each such
class then so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"COMPANY" means the party named as the "Company" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and,
thereafter, shall mean such successor. The foregoing sentence shall
likewise apply to any subsequent such successor or successors.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Company by its Chairman of the Board, a Vice
Chairman, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"CORPORATE TRUST OFFICE" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be
principally administered, which office is, at the date as of which this
Indenture is dated, located at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Corporate Trust Trustee Administration.
"CUSTODIAN" shall mean The Bank of New York, as custodian with respect
to the Securities in global form, or any successor entity thereto.
"DEFAULT" means any event which is, or after notice or passage of time
or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Securities issuable or issued in
whole or in part in global form, the Person specified in Section 2.06 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"DESIGNATED SENIOR INDEBTEDNESS" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which
the Company is a party) expressly provides that such Senior Indebtedness
shall be "Designated Senior Indebtedness" for purposes of this Indenture;
PROVIDED that such instrument, agreement or other document may place
limitations and conditions on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"FUNDAMENTAL CHANGE" means the occurrence of any transaction or event in
connection with which all or substantially all Common Stock shall be
exchanged for, converted into, acquired for or constitute solely the right to
receive (whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) consideration which is not all or substantially all common stock
listed (or, upon consummation of or immediately following such transaction or
event, which will be listed) on a United States national securities exchange
or approved for quotation on the NYSE or any similar United States system of
automated dissemination of quotations of securities prices.
"HOLDER" means a Person in whose name a Security is registered on the
Registrar's books.
2
"INDEBTEDNESS" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof), (b) all reimbursement
obligations and other liabilities (contingent or otherwise) of such Person
with respect to letters of credit, bank guarantees or bankers' acceptances,
(c) all obligations and liabilities (contingent or otherwise) in respect of
leases of such Person (i) required, in conformity with generally accepted
accounting principles, to be accounted for as capitalized lease obligations
on the balance sheet of such Person, or (ii) required, in conformity with
generally accepted accounting principles, to be accounted for as an operating
lease, provided either (A) such operating lease requires, at the end of the
term thereof, that such Person make any payment other than accrued periodic
rent in the event that such Person does not acquire the leased real property
and related fixtures subject to such lease, or (B) such Person has an option
to acquire the leased real property and related fixtures, whether such option
is exercisable at any time or under specific circumstances, (d) all
obligations of such Person (contingent or otherwise) with respect to an
interest rate swap, cap or collar agreement or other similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by
such Person in respect of, and obligations or liabilities (contingent or
otherwise) of such Person to purchase or otherwise acquire or otherwise
assure a creditor against loss in respect of, indebtedness, obligations or
liabilities of another Person of the kind described in clauses (a) through
(d), (f) any indebtedness or other obligations described in clauses (a)
through (d) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person and (g) any and all deferrals, renewals, extensions
and refundings of, or amendments, modifications or supplements to, any
indebtedness, obligation or liability of the kind described in clauses (a)
through (f).
"INDENTURE" means this Indenture, as amended or supplemented from time
to time in accordance with the terms hereof.
"ISSUE DATE" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"ISSUE PRICE" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is
issued as set forth on the face of the Security.
"LEGAL HOLIDAY" is any day other than a Business Day. If any specified
date (including a date for giving notice) is a Legal Holiday, the action
shall be taken on the next succeeding date that is not a Legal Holiday, and
to the extent applicable no Original Issue Discount or interest, if any,
shall accrue for the intervening period.
"MARKET PRICE" means, as of any Repurchase Date or date of determination,
the average of the Sale Prices of the Common Stock for the five Trading Day
period ending on the third
3
Business Day prior to the applicable Repurchase Date or date of
determination (if the third Business Day prior to the applicable Repurchase
Date or date of determination is a Trading Day or, if it is not a Trading
Day, then on the last Trading Day prior to such third Business Day),
appropriately adjusted to take into account the occurrence, during the period
commencing on the first of such Trading Days during such five Trading Day
period and ending on such Repurchase Date or date of determination, of any
event described in Sections 11.06, 11.07 or 11.08 hereof; subject, however,
to the conditions set forth in Sections 11.09 and 11.10 hereof.
"NASDAQ NATIONAL MARKET" means the electronic inter-dealer quotation
system operated by NASDAQ Stock Market, Inc., a subsidiary of the National
Association of Securities Dealers, Inc.
"NYSE" means The New York Stock Exchange, Inc.
"OFFICER" means the Chairman of the Board, any Vice Chairman, the
President, any Vice President, the Treasurer or the Secretary or any
Assistant Treasurer or Assistant Secretary of the Company.
"OFFICERS' CERTIFICATE" means a written certificate containing the
information specified in Sections 13.04 and 13.05, signed in the name of the
Company by its Chairman of the Board, a Vice Chairman, its President or a
Vice President, and by its Treasurer, an Assistant Treasurer, its Secretary
or an Assistant Secretary, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion containing the information
specified in Sections 13.04 and 13.05, from legal counsel who is acceptable
to the Trustee. The counsel may be an employee of, or counsel to, the Company
or the Trustee.
"ORIGINAL ISSUE DISCOUNT" of any Security means the difference between
the Principal Amount and the Issue Price of the Security as set forth on the
face of the Security. For purposes of this Indenture and the Securities,
accrual of Original Issue Discount shall be calculated on the basis of a
360-day year of twelve 30-day months.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, or government or any agency or political
subdivision thereof.
"PRINCIPAL" or "PRINCIPAL AMOUNT" of a Security means the principal
amount at Stated Maturity as set forth on the face of such Security, or on
Schedule A thereto in the case of a Security in global form.
"REDEMPTION DATE" means a date specified for redemption of the
Securities in accordance with the terms of the Securities and Section 3.01 of
this Indenture.
"REDEMPTION PRICE" shall have the meaning set forth in paragraph 5 of
the Securities.
"REPRESENTATIVE" means the (a) indenture trustee or other trustee, agent
or representative for any Senior Indebtedness or (b) with respect to any
Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued
4
pursuant to an agreement providing for voting arrangements as among the
holders or owners of such Senior Indebtedness, any holder or owner of such
Senior Indebtedness acting with the consent of the required Persons necessary
to bind such holders or owners of such Senior Indebtedness and (ii) in the
case of all other such Senior Indebtedness, the holder or owner of such
Senior Indebtedness.
"SALE PRICE OF THE COMMON STOCK" means, on any date, the closing per
share sale price, or if no closing sale price is reported, the average bid
and ask prices or, if more than one, in either case, the average of the
average bid and average ask prices, on such date as reported in the composite
transactions for the principal United States securities exchange on which the
common stock is traded or, if the common stock is not listed on a United
States national or regional stock exchange, as reported by The NASDAQ
National Market.
"SEC" means the Securities and Exchange Commission.
"SECURITIES" means the Company's Zero Coupon Convertible Subordinated
Debentures due 2019; PROVIDED, HOWEVER, that if the Company exercises the
option provided for in Section 12.01 hereof, on and after the Option Exercise
Date all references herein to Securities shall be deemed to mean the
Semiannual Coupon Debentures, unless the context otherwise indicates.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
"SENIOR INDEBTEDNESS" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding), rent and end of
term payments payable on or in connection with, and, to the extent not
included in the foregoing, all amounts payable as fees, costs, expenses,
liquidated damages, indemnities, repurchase and other put obligations and
other amounts to the extent accrued or due on or in connection with,
Indebtedness of the Company, whether outstanding on the date of this
Indenture or thereafter created, incurred, assumed, guaranteed or in effect
guaranteed by the Company (including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, the
foregoing). Notwithstanding the foregoing, the term Senior Indebtedness shall
not include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness
of the Company to any subsidiary of the Company, a majority of the voting
stock of which is owned, directly or indirectly, by the Company, (iii)
accounts payable or other indebtedness to trade creditors created or assumed
by the Company in the ordinary course of business and (iv) any particular
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness
shall not be senior in right of payment to, or is PARI PASSU with, or is
subordinated or junior to, the Securities.
"SIGNIFICANT SUBSIDIARY" means, with respect to any Person, a Subsidiary
of such Person organized under the laws of the United States of America, any
state thereof, or the District of
5
Columbia that would constitute a "significant subsidiary" as such term is
defined under Rule 1-02 of Regulation S-X of the SEC.
"STATED MATURITY," when used with respect to any Security, means the
date specified in such Security as the fixed date on which an amount equal to
the Principal of such Security is due and payable.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of capital stock entitled (without regard to the
occurrence of any contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or one or more subsidiaries of such Person (or any combination
thereof).
"TAX EVENT" means that the Company has received an opinion from
independent tax counsel experienced in such matters to the effect that, as a
result of: (1) an amendment to, or change or announced prospective change in,
the laws or regulations of the U.S. or any political subdivision or taxing
authority thereof or therein; or (2) any amendment to, or change in, an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken, on or after
the date hereof, there is more than an insubstantial risk that interest,
including original issue discount, payable on the Securities either (a) would
not be deductible on a current accrual basis or (b) would not be deductible
under any other method, in either case in whole or in part, by the Company by
reason of deferral, disallowance or otherwise for U.S. federal income tax
purposes.
"TIA" means the Trust Indenture Act of 1939, as amended, as in effect on
the date of this Indenture, except as provided in Section 9.03.
"TRADING DAY" means a day during which trading in securities generally
occurs on the NYSE or, if the applicable security is not listed on the NYSE,
on the NASDAQ National Market, or if the applicable security is not quoted on
the NASDAQ National Market, on the principal other national or regional
securities exchange on which the applicable security is then listed or, if
the applicable security is not listed on a national or regional securities
exchange, on the principal other market on which the applicable security is
then traded.
"TRUST OFFICER" means any officer within the corporate trust department
of the Trustee, including any vice president, assistant vice president,
assistance secretary, assistant treasurer, trust officer or any other officer
of the Trustee who customarily performs functions similar to those performed
by the Persons who at the time shall be such officers, respectively, or to
whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
6
"TRUSTEE" means the party named as the "Trustee" in the first paragraph
of this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"VOTING STOCK" means stock of any class or classes, however designated,
having ordinary voting power for the election of a majority of the board of
directors of a corporation, other than stock having such power only by reason
of the occurrence of a contingency.
SECTION 1.02. OTHER DEFINITIONS.
DEFINED
TERM IN SECTION
---- ----------
"BCBSA" .................................................................... 2.13(a)
"CASH"...................................................................... 3.08(b)
"CERTIFICATE OF INCORPORATION............................................... 2.13(a)
"COMPANY NOTICE"............................................................ 3.08(e)
"COMPANY NOTICE DATE"....................................................... 3.08(c)
"CONVERSION AGENT".......................................................... 2.03
"CONVERSION DATE" .......................................................... 11.02
"CONVERSION RATE" .......................................................... 11.01
"DEFAULTED INTEREST"........................................................ 12.02(b)
"DISTRIBUTED SECURITIES".................................................... 11.08(a)
"EXPIRATION TIME"........................................................... 11.08(c)
"EXTRAPOLATED PURCHASE PRICE" .............................................. 2.13(a)
"EVENT OF DEFAULT".......................................................... 6.01
"FUNDAMENTAL CHANGE PURCHASE PRICE"......................................... 3.09(a)
"FUNDAMENTAL CHANGE REPURCHASE DATE"........................................ 3.09(a)
"FUNDAMENTAL CHANGE REPURCHASE NOTICE"...................................... 3.09(a)
"INTEREST PAYMENT DATE"..................................................... 12.01
"LICENSE ADDENDUM" ......................................................... 2.13(a)
"LICENSE AGREEMENT" ........................................................ 2.13(a)
"NOTICE OF DEFAULT"......................................................... 6.01
"OPTION EXERCISE DATE"...................................................... 12.01
"OVER-ALLOTMENT OPTION"..................................................... 2.02
"OWNERSHIP LIMIT" .......................................................... 2.13(a)
"PAYING AGENT".............................................................. 2.03
"PAYMENT BLOCKAGE NOTICE" .................................................. 10.02
"PURCHASE PRICE"............................................................ 3.08(a)
"PURCHASED SHARES".......................................................... 11.08(c)
"REGISTRAR"................................................................. 2.03
"REGULAR RECORD DATE"....................................................... 12.01
"REPURCHASE DATE"........................................................... 3.08(a)
"REPURCHASE NOTICE"......................................................... 3.08(a)
"RESTATED PRINCIPAL AMOUNT"................................................. 12.01
7
DEFINED
TERM IN SECTION
---- ----------
"SEMIANNUAL COUPON DEBENTURE"............................................... 12.01
"SPECIAL RECORD DATE"....................................................... 12.02(a)
"TAX EVENT DATE"............................................................ 12.01
"TENDER EXPIRATION TIME".................................................... 11.08(d)
"TENDER PURCHASED SHARES"................................................... 11.08(d)
"TRIGGER EVENT"............................................................. 11.19
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"Indenture Securities" means the Securities.
"Indenture Security Holder" means a Holder.
"Indenture to be Qualified" means this Indenture.
Indenture Trustee" or "Institutional Trustee" means the Trustee.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rules have the
meanings assigned to them by such definitions.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles as
in effect from time to time;
(3) "or" is not exclusive;
(4) "including" means including, without limitation; and
(5) words in the singular include the plural, and words
in the plural include the singular.
8
ARTICLE 2.
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Securities and the Trustee's certificate of authentication for the
Securities shall be substantially in the form of EXHIBIT A, which is a part
of this Indenture. The Securities may have notations, legends or endorsements
required by law, stock exchange rule or usage, PROVIDED that any such
notation, legend or endorsement required by usage is in a form acceptable to
the Company. The Company shall provide any such notations, legends or
endorsements to the Trustee in writing. Each Security shall be dated the date
of its authentication.
Any Security in global form shall represent such of the outstanding
Securities as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Securities from time to time
endorsed thereon and that the aggregate amount of outstanding Securities
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Security in
global form to reflect the amount of any increase or decrease in the amount
of outstanding Security represented thereby shall be made by the Trustee or
the Custodian, at the direction of the Trustee, in such manner and upon
instructions given by the Holder of such Security in accordance with this
Indenture. Payment of Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Fundamental Change Purchase Price
or interest, if any, on any Security in global form shall be made to the
Holder of such Security.
SECTION 2.02. EXECUTION AND AUTHENTICATION.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, one of its Vice Chairmen, its President or one of its
Vice Presidents, and attested by its Treasurer or Secretary or one of its
Assistant Treasurers or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did
not hold such offices at the date of authentication of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
duly executed by the Trustee by manual signature of an authorized signatory,
and such certificate upon any Security shall be conclusive evidence, and the
only evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue
in an aggregate Principal Amount of $285,000,000 upon a Company Order without
any further action by the Company (or an aggregate Principal Amount not to
exceed $327,750,000 if the over-allotment option ("OVER-ALLOTMENT OPTION")
set forth in Section 2 of the Underwriting Agreement dated
9
___________, 1999 (as amended from time to time by the parties thereto) by
and between the Company and the Underwriters is exercised in full). The
aggregate Principal Amount of Securities outstanding at any time may not
exceed the amount set forth in the foregoing sentence, except as provided in
Section 2.07 hereof.
SECTION 2.03. REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("REGISTRAR"), an
office or agency where Securities may be presented for purchase or payment
("PAYING AGENT") and an office or agency where Securities may be presented
for conversion into Common Stock ("CONVERSION AGENT"). The Registrar shall
keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars, one or more additional paying
agents and one or more additional conversion agents. The term Paying Agent
includes any additional paying agent. The term Conversion Agent includes any
additional conversion agent, including any named pursuant to Section 4.05
hereof.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar (if not the Trustee
or an Affiliate of the Trustee). The agreement shall implement the provisions
of this Indenture that relate to such agent and the relevant Security. The
Company shall notify the Trustee of the name and address of any such agent.
If the Company fails to maintain a Registrar, Paying Agent or Conversion
Agent, the Trustee shall act as such and shall be entitled to appropriate
compensation therefor pursuant to Section 7.07 hereof. The Company or an
Affiliate of the Company may act as Paying Agent, Registrar, Conversion Agent
or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion
Agent and Paying Agent in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY AND SECURITIES IN TRUST.
Except as otherwise provided herein, prior to or on each due date of
payments in respect of any Security, the Company shall deposit with the
Paying Agent a sum of money or securities sufficient to make such payments
when such payments are due. The Company shall require the Paying Agent (if
not the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Holders or the Trustee all money and securities held
by the Paying Agent for the making of payments in respect of the Securities
and shall notify the Trustee of any default by the Company in making any such
payment. At any time during the continuance of any such default, the Paying
Agent shall, upon the written request of the Trustee, forthwith pay to the
Trustee all money and securities so held in trust. If the Company or an
Affiliate of the Company acts as Paying Agent, it shall segregate the money
and securities held by it as Paying Agent and hold it as a separate trust
fund. The Company at any time may require the Paying Agent to pay all money
and securities held by it to the Trustee and to account for any funds and
securities disbursed by it. Upon doing so, the Paying Agent shall have no
further liability for such money or securities.
10
SECTION 2.05. HOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders. If the Trustee is not the Registrar, the Company shall cause to
be furnished to the Trustee at least semiannually on February 10 and August
10 a listing of Holders dated within 15 days of the date on which the list is
furnished and at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require,
of the names and addresses of Holders.
SECTION 2.06. EXCHANGE AND REGISTRATION OF TRANSFER OF SECURITIES;
RESTRICTIONS ON TRANSFERS; DEPOSITARY.
(a) Upon surrender for registration of transfer of any Security at
any office or agency of the Company designated as Registrar or co-registrar
pursuant to Section 2.03 hereof and satisfaction of the requirements for such
transfer set forth in this Section 2.06, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of any authorized
denominations and of a like aggregate Principal Amount and bearing such
restrictive legends as may be required by this Indenture.
Securities may be exchanged for a like aggregate Principal Amount of
Securities of other authorized denominations. Securities to be exchanged
shall be surrendered at any office or agency to be maintained by the Company
designated as Registrar or co-registrar pursuant to Section 2.03 hereof and
the Company shall execute and register, and the Trustee shall authenticate
and deliver in exchange therefor, the Security or Securities which the Holder
making the exchange shall be entitled to receive, bearing registration
numbers not contemporaneously outstanding.
All Securities presented for registration of transfer or for exchange
into like Securities, repurchase, redemption or conversion into Common Stock
or payment shall (if so required by the Company, the Trustee, the Registrar
or any co-registrar) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee, duly executed by the Holder or such Holder's attorney duly
authorized in writing.
No service charge shall be charged to the Holder for any exchange for
like Securities or registration of transfer of Securities, but the Company
may require payment of a sum sufficient to cover any tax, assessments or
other governmental charges that may be imposed in connection therewith.
None of the Company, the Trustee, the Registrar or any co-registrar
shall be required to exchange for like Securities or register a transfer of
(a) any Securities for a period of 15 days next preceding the mailing of
notice of Securities to be redeemed, or (b) any Securities or portions
thereof selected or called for redemption, or (c) any Securities or portion
thereof surrendered for conversion into Common Stock, or (d) any Securities
or portion thereof surrendered for repurchase or redemption (and not
withdrawn) pursuant to Sections 3.08 or 3.09 hereof, respectively.
11
All Securities issued upon any transfer or exchange for like Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture as the Securities
surrendered upon such exchange or transfer.
(b) So long as the Securities are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all
Securities that are so eligible may be represented by a Security in global
form registered in the name of the Depositary or the nominee of the
Depositary, except as otherwise specified below. The transfer and exchange of
beneficial interests in such Security in global form shall be effected
through the Depositary in accordance with this Indenture and the procedures
of the Depositary therefor.
Transfers of interests in a Security in global form will be made in
accordance with the standing instructions and procedures of the Depositary
and its participants. The Trustee shall make appropriate endorsements to
reflect increases or decreases in the Principal Amounts of such Securities in
global form as set forth on the face of the Security in global form to
reflect any such transfers.
Except as provided below, beneficial owners of a Security in global form
shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Securities in
global form.
(c) Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in this Section 2.06(c)), a Security in global
form may not be transferred as a whole except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee or to a successor Depositary or a nominee of such successor
Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Securities in global form. Initially, a
Security in global form shall be issued to the Depositary, registered in the
name of Cede & Co., as the nominee of the Depositary, and deposited with the
Custodian for Cede & Co.
If at any time the Depositary for a Security in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such
Security, the Company may appoint a successor Depositary with respect to such
Security. If a successor Depositary for the Security is not appointed by the
Company within 90 days after the Company receives such notice, the Company
will execute, and the Trustee, upon receipt of an Officers' Certificate for
authentication and delivery of Securities, will authenticate and deliver,
Securities in certificated form, in an aggregate Principal Amount equal to
the Principal Amount of the Security in global form, in exchange for such
Security in global form.
Securities in certificated form issued in exchange for all
or a part of a Security in global form pursuant to this Section 2.06 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect participants
or otherwise, shall instruct the Trustee. Upon execution and authentication,
the Trustee shall
12
deliver such Securities in certificated form to the Persons in whose names
such Securities in certificated form are so registered.
At such time as all interests in a Security in global form have been
redeemed, converted, exchanged, repurchased or canceled for Securities in
certificated form, or transferred to a transferee who receives Securities in
certificated form, such Security in global form shall be, upon receipt
thereof, canceled by the Trustee in accordance with the standing procedures
and instructions existing between the Custodian and Depositary. At any time
prior to such cancellation, if any interest in a Security in global form is
exchanged for Securities in certificated form, redeemed, converted,
exchanged, repurchased by the Company or canceled, or transferred for part of
a Security in global form, the Principal Amount of such Security in global
form shall, in accordance with the standing procedures and instructions
existing between the Custodian and the Depositary, be reduced or increased,
as the case may be, and an endorsement shall be made on such Security in
global form, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction or increase.
SECTION 2.07. REPLACEMENT SECURITIES.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice to the Company
or the Trustee that such Security has been acquired by a bona fide purchaser,
the Company shall execute and, upon its written request, the Trustee shall
authenticate and deliver, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a new Security of like
tenor and Principal Amount, bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be repurchased
or redeemed by the Company pursuant to Article 3 hereof, the Company in its
discretion may, instead of issuing a new Security, pay, repurchase or redeem
such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may, as a condition to such issuance, require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto and any other expenses (including the fees and expenses
of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the
mutilated destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and shall be entitled to all benefits of this Indenture equally
and proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section 2.07 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
13
SECTION 2.08. OUTSTANDING SECURITIES; DETERMINATIONS OF HOLDERS' ACTION.
Securities outstanding at any time are all the Securities authenticated
by the Trustee except for those canceled by it, those delivered to it for
cancellation, those paid pursuant to Section 4.01 hereof, those replaced or
paid pursuant to Section 2.07 hereof and those described in this Section 2.08
as not outstanding. A Security does not cease to be outstanding because the
Company or an Affiliate thereof holds the Security; PROVIDED, HOWEVER, that
in determining whether the Holders of the requisite Principal Amount of
Securities have given or concurred in any request, demand, authorization,
direction, notice, consent or waiver hereunder, Securities owned by the
Company or any Affiliate of the Company shall be disregarded and deemed not
to be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trust Officer actually
knows to be so owned shall be so disregarded unless written notice of such
ownership is received by the Trustee at the Corporate Trust Office of the
Trustee in accordance with Section 13.02 hereof and such notice references
the Securities and this Indenture. Subject to the foregoing, only Securities
outstanding at the time of such determination shall be considered in any such
determination (including, without limitation, determinations pursuant to
Articles 6 and 9 hereof).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Repurchase Date or a
Fundamental Change Repurchase Date, or on Stated Maturity, money or
securities, if permitted hereunder, sufficient to pay Securities payable on
that date, then on and after that date such Securities shall cease to be
outstanding and Original Issue Discount and interest, if any, on such
Securities shall cease to accrue; PROVIDED, that, if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 11 hereof, then
from and after such conversion such Security shall cease to be outstanding
and Original Issue Discount and interest, if any, shall cease to accrue on
such Security.
SECTION 2.09. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause definitive
Securities to be prepared without unreasonable delay. After the preparation
of definitive Securities, the
14
temporary Securities shall be exchangeable for definitive Securities upon
surrender of the temporary Securities at the office or agency of the Company
designated for such purpose pursuant to Section 2.03 hereof, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like Principal Amount of definitive Securities
of authorized denominations. Until so exchanged, the temporary Securities
shall in all respects be entitled to the same benefits under this Indenture
as definitive Securities.
SECTION 2.10. CANCELLATION.
All Securities surrendered for payment, purchase, conversion, redemption
or registration of transfer or exchange for the Securities shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly canceled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly canceled by the
Trustee. The Company may not issue new Securities to replace Securities it
has paid for or delivered to the Trustee for cancellation or that any Holder
has converted pursuant to Article 11 hereof. No Securities shall be
authenticated in lieu of or in exchange for any Securities canceled as
provided in this Section 2.10, except as expressly permitted by this
Indenture. All canceled Securities held by the Trustee shall be disposed of
by the Trustee in accordance with its customary procedures.
SECTION 2.11. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of Principal Amount, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price and interest, if any, in respect thereof,
for the purpose of conversion and for all other purposes whatsoever, whether
or not such Security be overdue, and none of the Company, the Trustee or any
agent of the Company or the Trustee shall be affected by notice to the
contrary.
SECTION 2.12. CUSIP NUMBERS.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption as a convenience to Holders; PROVIDED, that any such
notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be
affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
15
SECTION 2.13. RESTICTIONS ON TRANSFER.
(a) Pursuant to the Company's Restated Certificate of Incorporation
(the "CERTIFICATE OF INCORPORATION"), the Company's Capital Stock (as defined
in the Certificate of Incorporation) is subject to certain restriction on
ownership and transfer. These provisions have been implemented in connection
with the License Agreement dated as of August 4, 1997 (the "LICENSE
AGREEMENT") by and between the Company and the Blue Cross Blue Shield
Association (the "BCBSA"), as amended by that certain California Blue Cross
License Addendum dated as of June 12, 1998 (the "LICENSE ADDENDUM"). Subject
to certain limited exceptions, Beneficial Ownership (as defined in the
Certificate of Incorporation) of 5% or more (or, in the case of certain
institutional investors as specified in the License Agreement, 10% or more)
of the outstanding shares of any class of Capital Stock will exceed the
ownership limit set forth in the Certificate of Incorporation (the "OWNERSHIP
LIMIT"). These provisions have been designed to insure that the Company will
not violate the terms of the License Agreement and the License Addendum.
Pursuant to the terms of the letter of even date herewith, the Company and
the BCBSA have agreed to certain provisions with respect to the treatment of
the Securities for purposes of computing the Beneficial Ownership of Capital
Stock of any Holder. For these purposes, a Holder of any particular Principal
Amount of Securities will be deemed to Beneficially Own shares of Common
Stock on any particular date equal to the greater of (i) the number of shares
of Common Stock issuable in the event of conversion for that particular
Principal Amount of Securities at the conversion Rate in effect on such date
or (ii) the quotient determined by dividing the Extrapolated Purchase Price
(as defined below) for that particular Principal Amount of Securities at the
particular date by the Market Price (calculated as if that particular date
were a Repurchase Date). For these purposes, the "EXTRAPOLATED PURCHASE
PRICE" shall be the sum of the Issue Price of the particular Principal Amount
of Securities PLUS the amount of the Original Issue Discount accrued to and
including such date. The purchase by any Holder of any Securities shall
constitute acknowledgment and acceptance by such Holder of such restrictions
on ownership and transfer.
(b) Any Securities shall bear a legend in substantially the
following form:
The Securities represented by this certificate are subject to
restrictions on ownership and transfer. No Holder shall Beneficially
Own shares of Capital Stock in excess of the Ownership Limit (as
defined in Article VII, Section 14 of the Restated Certificate of
Incorporation of the Corporation). Subject to certain limited
specific exemptions, Beneficial Ownership of 5% or more (or, in the
case of certain institutional investors as specified in the License
Agreement, 10% or more) of the outstanding shares of any class of
Capital Stock will exceed the Ownership Limit. For these purposes of
computing the Beneficial Ownership of Capital Stock, a Holder of any
particular Principal Amount of Securities will be deemed to
Beneficially own shares of Common Stock on any particular date equal
to the greater of (i) the number of shares of Common Stock issuable
in the event of conversion for that
16
particular Principal Amount of Securities at the Conversion Rate in
effect on such date or (ii) the quotient determined by dividing the
Extrapolated Purchase Price (as defined below) for that particular
Principal Amount of Securities at that particular date by the Market
Price (calculated as if that particular date were a Repurchase
Date). For these purposes, the "Extrapolated Purchase Price" shall
be the sum of the Issue Price of the particular Principal Amount of
Securities plus the amount of the Original Issue Discount accrued to
and including such date. These provisions have been designed to
ensure that the Corporation will not violate the terms of the
License Agreement between the Corporation and the Blue Cross and
Blue Shield Association (the "BCBSA"). The Corporation maintains at
its principal executive office a copy of the applicable requirements
of the BCBSA relating to such restrictions on ownership and
transfer, as such requirements may be amended from time to time,
which are open to inspection by the stockholders, at all reasonable
times during office hours. Any Holder who attempts to Beneficially
Own Securities in violation of this limitation must immediately
notify the Corporation. Except as otherwise noted, all capitalized
terms in this legend have the meaning ascribed to them in the
Corporation's Restated Certificate of Incorporation, as the same may
be amended from time to time, a copy of which, including the
restrictions on ownership and transfer, will be sent without charge
to each Holder who so requests. Upon the occurrence of any event
that would cause any Holder to exceed the Ownership Limit, all
Securities and shares of Capital Stock Beneficially Owned by such
Holder in excess of the Ownership Limit will automatically be deemed
Excess Shares and be transferred immediately to the Share Escrow
Agent and be subject to the provisions of the Corporation's Restated
Certificate of Incorporation and the Share Escrow Agent Agreement, a
copy of which the Corporation maintains at its principal executive
offices. The foregoing summary of the restrictions on ownership and
transfer is qualified in its entirety by reference to the
Corporation's Restated Certificate of Incorporation. The purchase by
or transfer to any Holder of any Securities shall constitute
acknowledgment and acceptance by such holder of such restrictions on
ownership and transfer.
(c) Any stock certificate representing the Common Stock
issued upon conversion of a Security shall bear any legend then used by the
Company pertaining to the foregoing restriction on ownership and Transfer.
17
ARTICLE 3.
REDEMPTION AND REPURCHASES
SECTION 3.01. RIGHT TO REDEEM; NOTICES TO TRUSTEE.
The Company, at its option, may redeem the Securities in accordance with
the provisions of paragraphs 5 and 7 of the Securities. If the Company elects
to redeem Securities pursuant to paragraph 5 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 in the case of any redemption of the Securities, at least 30
days before the Redemption Date unless a shorter notice shall be satisfactory
to the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
If less than all the Securities held in definitive form are to be
redeemed pursuant to Section 3.01, the Trustee shall select the definitive
Securities to be redeemed PRO RATA or by lot or by a method the Trustee
considers fair and appropriate (as long as such method is not prohibited by
the rules of any securities exchange or quotation system on which the
Securities are then listed or quoted). The Trustee shall make the selection
at least 25 days, but not more than 65 days, before the Redemption Date from
outstanding definitive Securities not previously called for redemption. The
Trustee may select for redemption portions of the Principal Amount of
Securities that have denominations larger than $1,000. Securities and
portions of them the Trustee selects shall be in Principal Amounts of $1,000
or an integral multiple of $1,000. Except as expressly stated otherwise,
provisions of this Indenture that apply to definitive Securities called for
redemption also apply to portions of definitive Securities called for
redemption. The Trustee shall notify the Company promptly of the definitive
Securities or portions of definitive Securities to be redeemed.
Any interest in a Security held in global form by and registered in the
name of the Depositary or its nominee to be redeemed in whole or in part will
be redeemed in accordance with the procedures of the Depositary.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed
(so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed may
be treated by the Trustee as outstanding for the purpose of such selection.
SECTION 3.03. NOTICE OF REDEMPTION.
At least 20 days but not more than 60 days before a Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage
prepaid, to each Holder of Securities to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
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(1) the Redemption Date;
(2) the Redemption Price;
(3) the Conversion Rate;
(4) the name and address of the Paying Agent and Conversion
Agent;
(5) that Securities called for redemption may be converted
at any time before the close of business on the last Trading Day prior to the
Redemption Date;
(6) that Holders who want to convert Securities must satisfy
the requirements set forth in paragraph 9 of the Securities;
(7) that Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
(8) if fewer than all the outstanding Securities are to be
redeemed, the certificate number and Principal Amounts of the particular
Securities to be redeemed;
(9) that Original Issue Discount and interest, if any, on
Securities called for redemption will cease to accrue on and after the
Redemption Date; and
(10) the CUSIP number or numbers for the Securities.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the Holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the Holder of any Security designated for redemption as a whole or
in part shall not affect the validity of the proceedings for the redemption
of any other Security.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is given, pursuant to Section 3.03 hereof,
Securities called for redemption become due and payable on the Redemption
Date and at the Redemption Price stated in the notice except for Securities
which are converted in accordance with the terms of this Indenture.
Upon the later of the Redemption Date or the date such Securities are
surrendered to the Paying Agent, such Securities shall be paid at the
Redemption Price stated in the notice.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
Prior to 10 a.m., New York City time, on the Redemption Date, the
Company shall deposit with the Paying Agent (or if the Company or an
Affiliate of the Company is the Paying
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Agent, shall segregate and hold in trust) money sufficient to pay the
Redemption Price of all Securities to be redeemed on that date other than
Securities or portions of Securities called for redemption which prior
thereto have been delivered by the Company to the Trustee for cancellation or
have been converted into Common Stock, and on or after the Redemption Date
(unless the Company shall default in the payment of the Securities at the
Redemption Price), Original Issue Discount and interest, if any, on the
Securities or portion of Securities called for redemption shall cease to
accrue and such Securities shall cease after the close of business on the
Business Day immediately preceding the Redemption Date to be convertible into
Common Stock and, except as provided in Section 8.02 hereof, to be entitled
to any benefit or security under this Indenture, and the Holders thereof
shall have no right in respect of such Securities except the right to receive
the Redemption Price thereof and unpaid interest to (but excluding) the
Redemption Date. The Paying Agent shall as promptly as practicable return to
the Company any money, with interest, if any, thereon, not required for that
purpose because of conversion of Securities. If such money is then held by
the Company in trust and is not required for such purpose, it shall be
discharged from such trust.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and the Trustee shall authenticate and deliver to the Holder a new
Security in an authorized denomination equal in Principal Amount to the
unredeemed portion of the Security surrendered.
SECTION 3.07. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION.
In connection with any redemption of Securities, the Company may arrange
for the purchase and conversion into Common Stock of any Securities called
for redemption by an agreement with one or more investment bankers or other
purchasers to purchase such Securities by paying to the Paying Agent in trust
for the Holders, on or before the close of business on the Redemption Date,
an amount that, together with any amounts deposited with the Paying Agent by
the Company for the redemption of the Securities, is not less than the
Redemption Price to the Redemption Date, of such Securities. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the Redemption Price of such Securities shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Securities not duly
surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such Holders and (notwithstanding anything to the contrary
contained in Article 11) surrendered by such purchasers for conversion, all
immediately prior to the close of business on the Redemption Date, subject to
payment of the above amount as aforesaid. The Paying Agent shall hold and pay
to the Holders whose Securities are selected for redemption any such amount
paid to it in the same manner as it would money deposited with it by the
Company for the redemption of Securities. Without the Paying Agent's prior
written consent, no arrangement between the Company and such purchasers for
the purchase and conversion of any Securities shall increase or otherwise
affect any of the powers, duties, responsibilities or obligations of the
Paying Agent as set forth in this Indenture, and the Company agrees to
indemnify the Paying Agent from, and hold it harmless against, any loss,
liability or expense arising out of or in connection with any such
arrangement for the purchase
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and conversion of any Securities between the Company and such purchasers,
including the costs and expenses incurred by the Paying Agent in the defense
of any claim or liability arising out of or in connection with the exercise
or performance of any of its powers, duties, responsibilities or obligations
under this Indenture.
SECTION 3.08. REPURCHASE OF SECURITIES AT OPTION OF THE HOLDER.
(a) GENERAL. Securities shall be repurchased by the Company
pursuant to paragraph 6 of the Securities as of ___________, 2002,
___________, 2009 and _________, 2014 (each, a "REPURCHASE DATE"), at the
purchase price specified therein (each, a "PURCHASE PRICE") at the option of
the Holder thereof, upon:
(1) delivery to the Paying Agent by the Holder of a written
notice of purchase (a "REPURCHASE NOTICE") at any time from the opening of
business on the date that is 20 Business Days prior to a Repurchase Date
until the close of business on such Repurchase Date, stating:
(A) the certificate number of the Security which the
Holder will deliver to be repurchased;
(B) the portion of the Principal Amount of the Security
which the Holder will deliver to be repurchased, which portion must be $1,000
in Principal Amount or a multiple thereof;
(C) that such Security shall be repurchased as of the
Repurchase Date pursuant to the terms and conditions specified in paragraph 6
of the Securities and in this Indenture; and
(D) if the Company elects, pursuant to a Company
Notice, to pay the Purchase Price to be paid as of such Repurchase Date, in
whole or in part, in Common Stock but such portion of the Purchase Price
shall ultimately be payable to such Holder in Cash because any of the
conditions to the payment of the Purchase Price in Common Stock are not
satisfied prior to or on the Repurchase Date, as set forth in Section 3.08(d)
hereof, whether such Holder elects (x) to withdraw such Repurchase Notice as
to some or all of the Securities to which such Repurchase Notice relates
(stating the Principal Amount and certificate numbers of the Securities as to
which such withdrawal shall relate), or (y) to receive Cash in respect of the
entire Purchase Price for all Securities (or portions thereof) to which such
Repurchase Notice relates; and
(2) delivery of such Security to the Paying Agent prior to,
on or after the Repurchase Date (together with all necessary endorsements) at
the offices of the Paying Agent, such delivery being a condition to receipt
by the Holder of the Purchase Price therefor; PROVIDED, HOWEVER, that such
Purchase Price shall be so paid pursuant to this Section 3.08 only if the
Security so delivered to the Paying Agent shall conform in all respects to
the description thereof in the related Repurchase Notice.
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If a Holder, in such Holder's Repurchase Notice (and, in any written
notice of withdrawal of a portion of such Holder's Securities previously
submitted for repurchase pursuant to a Repurchase Notice, the portion that
remains subject to the Repurchase Notice), fails to indicate such Holder's
choice with respect to the election set forth in clause (D) of Section
3.08(a)(1), such Holder shall be deemed to have elected to receive Cash in
respect of the entire Purchase Price for all Securities subject to such
Repurchase Notice in the circumstances set forth in such clause (D).
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion
is $1,000 or an integral multiple of $1,000. Provisions of this Indenture
that apply to the purchase of all of a Security also apply to the repurchase
of such portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of
this Section 3.08 shall be consummated by the delivery of the consideration
to be received by the Holder promptly following the later of the Repurchase
Date and the time of delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Repurchase Notice contemplated by this Section
3.08(a) shall have the right at any time prior to the close of business on
the Repurchase Date to withdraw such Repurchase Notice by delivery of a
written notice of withdrawal to the Paying Agent in accordance with Section
3.10 hereof.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Repurchase Notice or written notice of withdrawal thereof.
(b) COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF PURCHASE PRICE.
The Company may elect with respect to any Repurchase Date to pay the Purchase
Price in respect of the Securities to be purchased pursuant to Section
3.08(a) as of such Repurchase Date, in U.S. legal tender ("CASH") or Common
Stock, or in any combination of Cash and Common Stock, subject to the
conditions set forth in Sections 3.08(c) and (d). The Company shall
designate, in the Company Notice delivered pursuant to Section 3.08(e),
whether the Company will repurchase the Securities for Cash or Common Stock,
or, if a combination thereof, the percentages of the Purchase Price of
Securities in respect of which it will pay in Cash and/or Common Stock;
PROVIDED that the Company will pay Cash for fractional interests in shares of
Common Stock. For purposes of determining the existence of potential
fractional interests, all Securities subject to repurchase by the Company
held by a Holder shall be considered together (no matter how many separate
certificates are to be presented). Each Holder whose Securities are
repurchased pursuant to this Section 3.08 shall receive the same percentage
of Cash and/or Common Stock in payment of the Purchase Price for such
Securities, except (i) as provided in Section 3.08(d) with regard to the
payment of Cash in lieu of fractional interests in shares of Common Stock and
(ii) in the event that the Company is unable to repurchase the Securities of
a Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable federal or state
securities laws cannot be obtained, the Company may repurchase the Securities
of such Holder or Holders for Cash. The Company may not change its election
with respect to the consideration (or components or percentages of components
thereof)
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to be paid once the Company has given its Company Notice to Holders except
pursuant to this Section 3.08(b) or Section 3.08(d).
At least one Business Day before the Company Notice Date
(as defined in Section 3.08(c)), the Company shall deliver an Officers'
Certificate to the Trustee specifying:
(i) the manner of payment selected by the Company,
(ii) the information required by Section 3.08(e),
(iii) if the Company elects to pay the Purchase Price, or a
specified percentage thereof, in Common Stock, that the conditions to such
manner of payment set forth in Section 3.08(d) have been or will be complied
with, and
(iv) whether the Company desires the Trustee to give the Company
Notice required by Section 3.08(e).
(c) REPURCHASE WITH CASH. At the option of the Company, the
Purchase Price of Securities in respect of which a Repurchase Notice pursuant
to Section 3.08(a) has been given, or a specified percentage thereof, may be
paid by the Company with Cash equal to the aggregate Purchase Price, or such
specified percentage thereof, as the case may be, of such Securities. If the
Company elects to repurchase Securities with Cash, a Company Notice as
provided in Section 3.08(e) shall be sent to Holders (and to beneficial
owners as required by applicable law) not less than 20 Business Days prior to
the Repurchase Date (the "COMPANY NOTICE DATE").
(d) PAYMENT BY ISSUANCE OF COMMON STOCK. At the option of the
Company, the Purchase Price of Securities in respect of which a Repurchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be paid by the Company by the issuance of a number of shares of
Common Stock equal to the quotient obtained by dividing (i) the amount of
Cash to which the Holders would have been entitled had the Company elected to
pay all or such specified percentage, as the case may be, of the Purchase
Price of such Securities in Cash by (ii) the Market Price of a share of
Common Stock, subject to the next succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment
of the Purchase Price. Instead the Company will pay Cash for the current
market value of the fractional share. The current market value of a fraction
of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent. It is understood
that if a Holder elects to have more than one Security repurchased, the
number of shares of Common Stock shall be based on the aggregate amount of
Securities to be repurchased.
If the Company elects to repurchase the Securities by the issuance of
shares of Common Stock, a Company Notice as provided in Section 3.08(e) shall
be sent to the Holders (and to beneficial owners as required by applicable
law) not later than the Company Notice Date.
The Company's right to exercise its election to repurchase the
Securities pursuant to Section 3.08 through the issuance of shares of Common
Stock shall be conditioned upon:
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(i) the Company having given timely Company Notice of election to
purchase all or a specified percentage of the Securities with Common Stock as
provided herein;
(ii) the registration of the shares of Common Stock to be issued
in respect of the payment of the specified percentage of the Purchase Price
under the Securities Act; unless the shares of Common Stock so issued can be
freely resold by the Holder (unless such Holder is the Company or an
Affiliate of the Company) receiving such shares without registration under
the Securities Act;
(iii) any necessary qualification or registration under applicable
state securities laws or the availability of an exemption from such
qualification and registration; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of
Common Stock to be issued by the Company in payment of the specified
percentage of the Purchase Price in respect of Securities have been duly
authorized and, when issued and delivered pursuant to the terms of this
Indenture in payment of the specified percentage of the Purchase Price in
respect of Securities, will be validly issued, fully paid and nonassessable,
and, in the case of such Officers' Certificate, stating that conditions (i),
(ii) and (iii) above have been satisfied and, in the case of such Opinion of
Counsel, stating that conditions (ii) and (iii) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and
the Sale Price of a share of Common Stock on each Trading Day during the
period during which the Market Price is calculated and ending on the
Repurchase Date. The Company may elect to pay the Purchase Price (or any
portion thereof) in Common Stock only if the information necessary to
calculate the Market Price is reported in a daily newspaper of national
circulation. If such conditions are not satisfied with respect to a Holder or
Holders prior to or on the Repurchase Date and the Company elected to
repurchase the Securities to be repurchased as of such Repurchase Date
pursuant to this Section 3.08 through the issuance of shares of Common Stock,
the Company shall pay the entire Purchase Price in respect of such Securities
of such Holder or Holders in Cash.
(e) NOTICE OF ELECTION. The Company's notices of election to
repurchase with Cash or Common Stock, or any combination thereof, shall be
sent to the Holders (and to beneficial owners as required by applicable law)
in the manner provided in Section 13.02 hereof at the time specified in
Section 3.08(c) or (d) hereof, as applicable (each, a "COMPANY NOTICE").
Such Company Notices shall state the manner of payment elected and shall
contain the following information:
In the event the Company has elected to pay a Purchase Price (or a
specified percentage thereof) with Common Stock, the Company Notice shall:
(1) state that each Holder will receive Common Stock with a
Market Price determined as of a specified date prior to the Repurchase Date
equal to such specified
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percentage of the Purchase Price of the Securities held by such Holder
(except any Cash amount to be paid in lieu of a fractional share); and
(2) set forth the method of calculating the Market Price and
state that because the Market Price of Common Stock will be determined prior
to the Repurchase Date, the Holders will bear the market risk with respect to
the value of the Common Stock to be received from the date such Market Price
is determined to the Repurchase Date.
In any case, each Company Notice shall include a form of Repurchase
Notice to be completed by a Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion
Agent;
(iii) that Securities as to which a Repurchase Notice has been
given may be converted only if the applicable Repurchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent to
collect payment;
(v) that the Purchase Price for any Security as to which a
Repurchase Notice has been given and not withdrawn will be paid promptly
following the later of the Repurchase Date and the time of surrender of such
Security as described in clause (iv) above;
(vi) the procedures the Holder must follow under Section 3.08
hereof;
(vii) briefly, the conversion rights of the Securities; and
(viii) the procedures for withdrawing a Repurchase Notice
(including, without limitation, for a conditional withdrawal pursuant to the
terms of Section 3.08(a)(1)(D) or Section 3.10 hereof).
At the Company's request, the Trustee shall give the Company Notice in
the Company's name and at the Company's expense; PROVIDED, HOWEVER, that, in
all cases, the text of the Company Notice shall be prepared by the Company.
(f) COVENANTS OF THE COMPANY. All shares of Common Stock delivered
upon conversion or repurchase of the Securities shall be newly issued shares
or treasury shares, shall be fully paid and nonassessable and shall be free
from preemptive rights and free of any lien or adverse claim.
The Company shall use its best efforts to list or cause to have quoted
all such shares of Common Stock on each United States national securities
exchange or over-the-counter or other domestic market on which the Common
Stock is then listed or quoted.
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(g) PROCEDURE UPON PURCHASE. On the Business Day following the
Repurchase Date, the Company shall deposit with the Paying Agent Cash (in
respect of a Cash purchase under Section 3.08(c) hereof or for fractional
interests, as applicable), or shares of Common Stock, or a combination
thereof, as applicable, sufficient to pay the aggregate Purchase Price in
respect of the Securities to be repurchased pursuant to this Section 3.08.
As soon as practicable after the Repurchase Date, the Company shall deliver
to each Holder entitled to receive Common Stock, through the Paying Agent, a
certificate for the number of full shares of Common Stock, as applicable,
issuable in payment of such Purchase Price and Cash in lieu of any fractional
interests. The Person in whose name the certificate for Common Stock is
registered shall be treated as a holder of record following the Repurchase
Date. Subject to Section 3.08(d) hereof, no payment or adjustment will be
made for dividends on the Common Stock the record date for which occurred on
or prior to the Repurchase Date.
(h) TAXES. If a Holder of a Security is paid in Common Stock, the
Company shall pay any documentary, stamp or similar issue or transfer tax due
on such issue of shares of Common Stock. However, the Holder shall pay any
such tax which is due because the Holder requests the shares of Common Stock
to be issued in a name other than the Holder's name. The Paying Agent may
refuse to deliver the certificates representing the Common Stock being issued
in a name other than the Holder's name until the Paying Agent receives a sum
sufficient to pay any tax which will be due because the shares of Common
Stock are to be issued in a name other than the Holder's name. Nothing
herein shall preclude any income tax withholding required by law or
regulations.
SECTION 3.09. REPURCHASE AT OPTION OF THE HOLDER UPON A FUNDAMENTAL
CHANGE.
(a) If a Fundamental Change shall occur at any time prior to
__________, 2019, each Holder of Securities shall have the right, at such
Holder's option, to require the Company to repurchase any or all of Holder's
Securities on the date that is 45 days after the date of the Company's notice
of such Fundamental Change (the "FUNDAMENTAL CHANGE REPURCHASE DATE") (or if
such date is not a Business Day, the next succeeding Business Day). The
Securities may be repurchased in integral multiples of $1,000 of Principal
Amount. The Company shall repurchase such Securities at a price (the
"FUNDAMENTAL CHANGE PURCHASE PRICE") equal to the Issue Price plus accrued
Original Issue Discount and interest, if any, to the Fundamental Change
Repurchase Date. No Securities may be repurchased at the option of the
Holders as a result of a Fundamental Change if there has occurred and is
continuing an Event of Default (other than a default in the payment of the
Fundamental Change Purchase Price with respect to such Securities).
(b) The Company, or at its request (which must be received by the
Trustee at least three Business Days prior to the date the Trustee is
requested to give such notice as described below) the Trustee in the name of
and at the expense of the Company, shall mail to all Holders of record of the
Securities a notice (a "FUNDAMENTAL CHANGE REPURCHASE NOTICE") of the
occurrence of a Fundamental Change and of the repurchase right arising as a
result thereof on or before the tenth day after the occurrence of such
Fundamental Change. The Company shall promptly furnish the Trustee a copy of
such notice.
(c) For a Security to be so repurchased at the option of the
Holder, the Paying
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Agent must receive such Security with the form entitled "Option to Elect
Repurchase Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Security duly endorsed for transfer, on or before the 45th
day after the date of such notice (or if such 45th day is not a Business Day,
the immediately preceding Business Day). All questions as to the validity,
eligibility (including time of receipt) and acceptance of any Security for
repurchase shall be determined by the Company, whose determination shall be
final and binding.
SECTION 3.10. EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE
REPURCHASE NOTICE.
Upon receipt by the Company of the Repurchase Notice or Fundamental
Change Repurchase Notice specified in Section 3.08(a) hereof or Section
3.09(b) hereof, as applicable, the Holder of the Security in respect of which
such Repurchase Notice or Fundamental Change Repurchase Notice, as the case
may be, was given shall (unless such Repurchase Notice or Fundamental Change
Repurchase Notice is withdrawn as specified in the following two paragraphs)
thereafter be entitled to receive solely the Purchase Price or Fundamental
Change Purchase Price, as the case may be, with respect to such Security.
Such Purchase Price or Fundamental Change Purchase Price shall be paid to
such Holder promptly following the later of (x) the Repurchase Date or the
Fundamental Change Repurchase Date, as the case may be, with respect to such
Security (provided the conditions in Section 3.08(a) hereof or Section
3.09(c) hereof, as applicable, have been satisfied) and (y) the time of
delivery of such Security to the Paying Agent by the Holder thereof in the
manner required by Section 3.08(a) hereof or Section 3.09(c) hereof, as
applicable. Securities in respect of which a Repurchase Notice or Fundamental
Change Repurchase Notice, as the case may be, has been given by the Holder
thereof may not be converted for shares of Common Stock on or after the date
of the delivery of such Repurchase Notice (or Fundamental Change Repurchase
Notice, as the case may be), unless such Repurchase Notice (or Fundamental
Change Repurchase Notice, as the case may be) has first been validly
withdrawn as specified in the following two paragraphs.
A Repurchase Notice or Fundamental Change Repurchase Notice, as the case
may be, may be withdrawn by means of a written notice of withdrawal delivered
to the office of the Paying Agent at any time prior to the close of business
on the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, to which it relates specifying:
(1) the certificate number of the Security in respect of
which such notice of withdrawal is being submitted,
(2) the Principal Amount of the Security with
respect to which such notice of withdrawal is being
submitted, and
(3) the Principal Amount, if any, of such Security which
remains subject to the original Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be, and which has been or will be
delivered for purchase or redemption by the Company.
A written notice of withdrawal of a Repurchase Notice may be in the form
of (i) a conditional withdrawal contained in a Repurchase Notice pursuant to
the terms of Section 3.08(a)(1)(D) hereof or (ii) a conditional withdrawal
containing the information set forth
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in Section 3.08(a)(1)(D) hereof and the preceding paragraph and contained in
a written notice of withdrawal delivered to the Paying Agent as set forth in
the preceding paragraph.
There shall be no repurchase of any Securities pursuant to Section 3.08
hereof (other than through the issuance of Common Stock in payment of the
Purchase Price, including Cash in lieu of any fractional shares) or
repurchase pursuant to Section 3.09 hereof if there has occurred (prior to,
on or after, as the case may be, the giving, by the Holders of such
Securities, of the required Repurchase Notice or Fundamental Change
Repurchase Notice, as the case may be) and is continuing an Event of Default
(other than a default in the payment of the Purchase Price or Fundamental
Change Purchase Price, as the case may be, with respect to such Securities).
SECTION 3.11. DEPOSIT OF PURCHASE PRICE OR FUNDAMENTAL CHANGE PURCHASE
PRICE.
At or before 10 a.m., New York City time, on the Business Day following
a Repurchase Date or a Fundamental Change Repurchase Date, as the case may
be, the Company shall deposit with the Trustee or with the Paying Agent (or,
if the Company or an Affiliate of the Company is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 2.04 hereof) an
amount of money and/or securities, if permitted hereunder, sufficient to pay
the aggregate Purchase Price or Fundamental Change Purchase Price, as the
case may be, of all the Securities or portions thereof which are to be
purchased as of such Repurchase Date or Fundamental Change Repurchase Date,
as the case may be.
SECTION 3.12. SECURITIES REPURCHASED IN PART.
Any Security that is to be repurchased only in part shall be surrendered
at the office of the Paying Agent (with, if the Company or the Trustee so
requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Security, without service charge, a new Security or Securities, of any
authorized denomination as requested by such Holder in aggregate Principal
Amount equal to, and in exchange for, the portion of the Principal Amount of
the Security so surrendered which is not repurchased.
SECTION 3.13. COVENANT TO COMPLY WITH SECURITIES LAWS PON REPURCHASE OF
SECURITIES.
In connection with any repurchase of Securities under Sections 3.08 or
3.09 hereof, the Company shall (i) comply with Rule 13e-4 (which term, as
used herein, includes any successor provision thereto) under the Exchange
Act, if applicable, (ii) file the related Schedule 13E-4 (or any successor
schedule, form or report) under the Exchange Act, if applicable, and (iii)
otherwise comply with all Federal and state securities laws so as to permit
the rights and obligations under Sections 3.08 and 3.09 to be exercised in
the time and in the manner specified in Sections 3.08 and 3.09.
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SECTION 3.14. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company any Cash or
shares of Common Stock that remain unclaimed as provided in paragraph 14 of
the Securities, together with interest or dividends, if any, thereon, held by
them for the payment of a Purchase Price or Fundamental Change Purchase
Price, as the case may be; PROVIDED, HOWEVER, that to the extent that the
aggregate amount of Cash or shares of Common Stock deposited by the Company
pursuant to Section 3.11 hereof exceeds the aggregate Purchase Price or
Fundamental Change Purchase Price, as the case may be, of the Securities or
portions thereof which the Company is obligated to repurchase as of the
Repurchase Date or Fundamental Change Repurchase Date, as the case may be,
then promptly after the Business Day following the Repurchase Date or
Fundamental Change Repurchase Date, as the case may be, the Trustee and the
Paying Agent shall return any such excess to the Company together with
interest or dividends, if any, thereon.
ARTICLE 4.
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
The Company shall promptly pay or cause to be paid all payments in
respect of the Securities on the dates and in the manner provided in the
Securities or pursuant to this Indenture. Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price and interest, if any, shall be considered
paid on the applicable date due or, in the case of a Purchase Price or
Fundamental Change Purchase Price, on the Business Day following the
applicable Repurchase Date or Fundamental Change Repurchase Date, as the case
may be, if on such date the Trustee or the Paying Agent holds, in accordance
with this Indenture, money or securities, if permitted hereunder, sufficient
to pay all such amount then due.
The Company shall pay interest on overdue amounts at the rate set forth
in paragraph 1 of the Securities and it shall pay interest on overdue
interest at the same rate compounded semiannually (to the extent that the
payment of such interest shall be legally enforceable), which interest on
overdue interest shall accrue from the date such amounts became overdue and
shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
SECTION 4.02. FINANCIAL INFORMATION; SEC REPORTS.
The Company will deliver to the Trustee (a) as soon as available and in
any event within 90 days after the end of each fiscal year of the Company (i)
a consolidated balance sheet of the Company and its Subsidiaries as of the
end of such fiscal year and the related consolidated statements of
operations, stockholders' equity and cash flows for such fiscal year, all
reported on by an independent public accountant of nationally recognized
standing and (ii) a report containing a management's discussion and analysis
of the financial condition and results of operations and a description of the
business and properties of the Company and (b) as soon as available and in
any event within 45 days after the end of each of the first three quarters of
each fiscal year of the Company (i) an unaudited consolidated financial
report for such quarter and (ii) a report containing a management's
discussion and analysis of the financial condition and
29
results of operations of the Company; PROVIDED that the foregoing shall not
be required for any fiscal year or quarter, as the case may be, with respect
to which the Company files or expects to file with the Trustee an annual
report or quarterly report, as the case may be, pursuant to the third
paragraph of this Section 4.02.
At any time the Company is not subject to either Section 13 or 15(d) of
the Exchange Act, the Company shall at the request of any Holder (or holders
of Common Stock issued upon conversion of the Securities) provide to such
Holder (or holders of such Common Stock) and any prospective purchaser
designated by such Holders (or holders of such Common Stock), as the case may
be, such information, if any, required by Rule 144A(d)(4) under the
Securities Act.
The Company shall file with the Trustee, within 15 days after it files
such annual and quarterly reports, information, documents and other reports
with the SEC, copies of its annual report and of the information, documents
and other reports (or copies of such portions of any of the foregoing as the
SEC may by rules and regulations prescribe) which the Company is required to
file with the SEC pursuant to Section 13 or 15(d) of the Exchange Act.
Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from the information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
SECTION 4.03. COMPLIANCE CERTIFICATE.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company, an Officers' Certificate in which one of
the two Officers signing such certificate is either the principal executive
officer, principal financial officer or principal accounting officer of the
Company, stating whether or not to the knowledge of the signers thereof the
Company is in Default in the performance and observance of any of the terms,
provisions and conditions of this Indenture (without regard to any period of
grace or requirement of notice provided hereunder) and, if the Company shall
be in Default, specifying all such Defaults and the nature and status thereof
of which the signers may have knowledge.
The Company will deliver to the Trustee, as soon as possible and in any
event within five days, upon becoming aware of any Default in the performance
or observance of any covenant, agreement or condition contained in this
Indenture, or any Event of Default, an Officers' Certificate specifying with
particularity such Default or Event of Default and further stating what
action the Company has taken, is taking or proposes to take with respect
thereto.
Any notice required to be given under this Section 4.03 shall be
delivered to the Trustee at its Corporate Trust Office.
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SECTION 4.04. FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purposes of this Indenture.
SECTION 4.05. MAINTENANCE OF OFFICE OR AGENCY.
The Company will appoint in the Borough of Manhattan, The City of New
York, an office or agency where Securities may be presented or surrendered
for payment, where Securities may be surrendered for registration of
transfer, exchange, purchase, redemption or conversion and where notices and
demands to or upon the Company in respect of the Securities and this
Indenture may be served. The office or agency in the Borough of Manhattan,
The City of New York, shall be the Corporate Trust Office of the Trustee,
and shall be the office or agency for all of the aforesaid purposes unless
the Company shall appoint some other office or agency for such purposes and
shall give prompt written notice to the Trustee of the location, and any
change in the location, of such other office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall
fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
PROVIDED, HOWEVER, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in the
Borough of Manhattan, The City of New York, for such purposes.
SECTION 4.06. EXISTENCE.
Subject to Article 5 hereof, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence under the laws of its jurisdiction of incorporation, and to
maintain all qualifications, permits and licenses (including, without
limitation, all licenses and certifications required pursuant to any health
maintenance organization regulation in connection with the ownership or
operation of health maintenance organizations and the conduct of the health
care, managed care and health insurance businesses and businesses incidental
thereto) necessary in the normal conduct of its business; PROVIDED, HOWEVER,
that the Company shall not be required to maintain any such qualification,
permit or license if the Company shall determine that the maintenance thereof
is no longer desirable in the conduct of the business of the Company and that
the loss thereof is not disadvantageous in any material respect to the
Holders.
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SECTION 4.07. CALCULATION OF ORIGINAL ISSUE DISCOUNT.
The Company shall file with the Trustee promptly at the end of each
calendar year (i) a written notice specifying the amount of Original Issue
Discount (including daily rates and accrual periods) accrued on the
outstanding Securities as of the end of such year and (ii) such other
specific information relating to such Original Issue Discount as may then be
relevant under the Internal Revenue Code of 1986, as amended from time to
time.
ARTICLE 5.
SUCCESSOR CORPORATION
SECTION 5.01. WHEN THE COMPANY MAY MERGE OR TRANSFER ASSETS.
The Company shall not consolidate with or merge with or into any other
Person (other than in a merger or consolidation in which the Company is the
surviving Person) or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, unless:
(i) the Person (if other than the Company) formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or lease the properties and assets of the
Company substantially as an entirety shall be a corporation, limited
liability company, partnership or trust organized and validly existing under
the laws of the United States or any State thereof or the District of
Columbia, and shall expressly assume by an indenture supplemental hereto,
executed and delivered to the Trustee in form reasonably satisfactory to the
Trustee, the due and punctual payment of the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price or interest, if any, on the Securities,
according to their tenor, and the due and punctual performance of all of the
covenants and obligations of the Company under the Securities and this
Indenture, and shall have provided for conversion rights in accordance with
this Indenture;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing; and
(iii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, conveyance, transfer or lease and, if a supplemental indenture is
required in connection with such transaction, such
32
supplemental indenture, comply with this Article 5 and that all conditions
precedent herein provided for relating to such transaction have been
satisfied.
The successor Person formed by such consolidation or into which the
Company is merged or the successor Person to which such conveyance, transfer
or lease is made shall succeed to, and be substituted for, and may exercise
every right and power of, the Company under this Indenture with the same
effect as if such successor had been named as the Company herein; and
thereafter, except in the case of a lease, the Company shall be discharged
from all obligations and covenants under this Indenture and the Securities.
ARTICLE 6.
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" occurs if:
(1) the Company defaults in the payment of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price or a Fundamental Change Purchase Price on any Security when
the same becomes due and payable at its Stated Maturity, upon redemption,
upon declaration, when due for repurchase by the Company or otherwise,
whether or not such payment shall be prohibited by Article 10 hereof;
(2) after exercise of the option provided for in Section
12.01 hereof following a Tax Event, the Company defaults in the payment of
interest upon any Security when such interest becomes due and payable, and
such default continues for a period of 30 days;
(3) failure of the Company to perform or comply with the
provisions of Section 11.02 hereof, and such failure continues for a period
of 10 days;
(4) the Company fails to comply with any of its agreements
or covenants in the Securities or this Indenture (other than those referred
to in clauses (1) through (3) above) and such failure continues for 60 days
after receipt by the Company of a Notice of Default;
(5) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking reorganization
of the Company under any Bankruptcy Law, and such decree or order shall have
continued undischarged and unstayed for a period of 60 consecutive days; or a
decree or order of a court having jurisdiction in the premises of the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy
or insolvency of the Company or of its property, or for the winding-up or
liquidation of its affairs, shall have been entered, and such decree or order
shall have remained in force undischarged and unstayed of a period of 60
consecutive days; or
(6) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or answer or
consent seeking reorganization under any Bankruptcy Law, or shall consent to
the filing of any such petition, or shall consent to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of
it or of its property or shall make an
33
assignment for the benefit of creditors, or shall admit in writing its
inability to pay its debts generally as they become due.
A Default under clause (4) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
(and such Default is not waived) within the time specified in clause (2)
above after actual receipt of such notice (a "NOTICE OF DEFAULT"). Any such
notice must specify the Default, demand that it be remedied and state that
such notice is a Notice of Default.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
Section 6.01(5) or (6) hereof) occurs and is continuing, the Trustee by
notice to the Company, or the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding by notice to the Company and
the Trustee, may declare the Issue Price and accrued Original Issue Discount
(or, if the Securities have been converted to Semiannual Coupon Debentures,
the Restated Principal Amount, plus accrued and unpaid interest) to the date
of declaration on all the Securities to be immediately due and payable. Upon
such a declaration, such Issue Price and accrued Original Issue Discount (or,
if the Securities have been converted to Semiannual Coupon Debentures, the
Restated Principal Amount, plus accrued and unpaid interest) shall become and
be due and payable immediately. If an Event of Default specified in Section
6.01(5) or (6) hereof occurs and is continuing, the Issue Price and accrued
Original Issue Discount (or, if the Securities have been converted to
Semiannual Coupon Debentures, the Restated Principal Amount, plus accrued and
unpaid interest) on all the Securities shall become and be immediately due
and payable without any declaration or other act on the part of the Trustee
or any Holders. The Holders of a majority in aggregate Principal Amount of
the Securities at the time outstanding, by notice to the Company and the
Trustee (and without notice to any other Holder), may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment
or decree and if all existing Events of Default have been cured or waived
except nonpayment of the Issue Price and accrued Original Issue Discount (or,
if the Securities have been converted to Semiannual Coupon Debentures, the
Restated Principal Amount, plus accrued and unpaid interest) that have become
due solely as a result of acceleration and if all amounts due to the Trustee
under Section 7.07 hereof have been paid. No such rescission shall affect any
subsequent or other Default or Event of Default or impair any consequent
right.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy to collect the payment of the Issue Price and accrued
Original Issue Discount (or, if the Securities have been converted to
Semiannual Coupon Debentures, the Restated Principal Amount, plus accrued and
unpaid interest) on the Securities or to enforce the performance of any
provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not
possess any of the Securities or does not produce any of the Securities in
the proceeding. A delay or omission by the Trustee or any Holder in
exercising any right or remedy accruing upon an Event of Default
34
shall not impair the right or remedy or constitute a waiver of, or
acquiescence in, the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding, by notice to the Company and the Trustee
(and without notice to any other Holder), may waive an existing Default or
Event of Default and its consequences except (1) an Event of Default
described in Section 6.01(l) or (2) hereof, (2) a Default in respect of a
provision that under Section 9.02 hereof cannot be amended without the
consent of each Holder affected or (3) a Default that constitutes a failure
to convert any Security in accordance with the terms of Article 11 hereof.
When a Default or Event of Default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other Default or Event of Default or
impair any consequent right.
SECTION 6.05. CONTROL BY MAJORITY.
The Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee
may refuse to follow any direction that conflicts with any law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial
to the rights of other Holders or would involve the Trustee in personal
liability unless the Trustee is offered indemnity reasonably satisfactory to
it.
SECTION 6.06. LIMITATION ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or the
Securities unless:
(1) the Holder gives to the Company and the Trustee written
notice stating that an Event of Default is continuing;
(2) the Holders of at least 25% in aggregate Principal
Amount of the Securities at the time outstanding make a written request to
the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense satisfactory to
the Trustee;
(4) the Trustee does not comply with the request within 60
days after receipt of the notice, the request and the offer of security or
indemnity; and
(5) the Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60 day period.
A Holder may not use this Indenture to prejudice the rights of
any other Holder or to obtain a preference or priority over any other Holder.
35
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, but subject to
Article 10, the right of any Holder to receive payment of the Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price or interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any date of redemption, or to bring suit
for the enforcement of any such payment on or after such respective dates or
the right to convert the Securities in accordance with Article 11, shall not
be impaired or affected adversely without the consent of each such Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default described in Section 6.01(1) or (2) hereof occurs
and is continuing, the Trustee may recover judgment in its own name and as
trustee of an express trust against the Company for the whole amount owing
with respect to the Securities and the amounts provided for in Section 7.07
hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the Principal Amount, Issue
Price, accrued Original Issue Discount, Redemption Price, Purchase Price,
Fundamental Change Purchase Price or interest, if any, in respect of the
Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of any such amount) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest, if any,
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 7.07 hereof.
36
If the Trustee does not file a claim or proof of debt in the form
required in such proceedings prior to 30 days before the expiration of the
time to file such claims or proofs, then any holder or holders of Senior
Indebtedness or their representative or representatives shall have the right
to demand, ▇▇▇ for, collect, receive and receipt for the payments and
distributions in respect of the Securities which are required to be paid or
delivered to the holders of Senior Indebtedness as provided in this Article
and to file and prove all claims therefor and to take all such other action
in the name of the holders or otherwise as such holders of Senior
Indebtedness or the Representative thereof may determine to be necessary or
appropriate for the enforcement of the provisions of this Article.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee
to vote in respect of the claims of any Holder in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee collects any money pursuant to this Article 6, it shall
pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.07 hereof;
SECOND: to holders of Senior Indebtedness to the extent required by
Article 10 hereof;
THIRD: to Holders for amounts due and unpaid on the Securities for the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest, if any,
as the case may be, ratably, without preference or priority of any kind,
according to such amounts due and payable on the Securities; and
FOURTH: the balance, if any, to the Company.
The Trustee may fix a proposed record date and payment date for any
payment to Holders pursuant to this Section 6.10 and shall notify the Company
in writing with respect to such proposed record date and payment date. At
least 15 days before such record date, the Company (or the Trustee at the
request of the Company) shall mail to each Holder and the Trustee a notice
that states the record date, the payment date and amount to be paid.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted
by it as Trustee, a court in its discretion may require the filing by any
party litigant (other than the Trustee) in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees and expenses, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not
apply to a suit by the Trustee, any suit by a Holder for the enforcement of
37
the payment of the Principal Amount, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest, if any, on or after the due date expressed in such Security or to
any suit for the enforcement of the right to convert the Security pursuant to
Article 11, or a suit by Holders of more than 10% in aggregate Principal
Amount of the Securities at the time outstanding.
SECTION 6.12. WAIVER OF STAY, EXTENSION OR USURY LAWS.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law or any usury
or other law wherever enacted, now or at any time hereafter in force, which
would prohibit or forgive the Company from paying all or any portion of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price or Fundamental Change Purchase Price in respect of
Securities, or any interest on any such amounts, as contemplated herein, or
which may affect the covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such laws and covenants that it will not
hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE 7.
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise the rights and powers vested in it by this Indenture
and use the same degree of care and skill in its exercise as a prudent person
would exercise or use under the circumstances in the conduct of his or her
own affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are
specifically set forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture. However, in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
This Section 7.01(b) shall be in lieu of Section 315(a) of the TIA and such
Section 315(a) is hereby expressly excluded from this Indenture, as permitted
by the TIA.
38
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) this paragraph (c) does not limit the effect of paragraph
(b) of this Section 7.01;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Trust Officer unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
Subparagraphs (c)(1),(2) and (3) shall be in lieu of Sections 315(d)(1),
315(d)(2) and 315(d)(3) of the TIA and such Sections 315(d)(1), 315(d)(2) and
315(d)(3) are hereby expressly excluded from this Indenture, as permitted by
the TIA.
(d) Every provision of this Indenture that in any way relates to
the Trustee is subject to paragraphs (a), (b), (c) and (e) of this Section
7.01.
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any
financial liability unless it receives indemnity reasonably satisfactory to
it against any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely on any document reasonably
believed by it to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Trustee acts or refrains from acting, it may
require a Company Order, an Officers' Certificate or an Opinion of Counsel.
The Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on a Company Order, Officers' Certificate or Opinion
of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) Subject to the provisions of Section 7.01(c), the Trustee
shall not be liable for any action it takes or omits to take in good faith
which it believes to be authorized or within its rights or powers.
(e) The Trustee may consult with counsel selected by it and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any
39
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such advice or Opinion of Counsel.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture, unless the Holders shall
have offered to the Trustee reasonable security or indemnity reasonably
satisfactory to it against the costs, expenses and liabilities which may be
incurred therein or thereby.
(g) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such further inquiry
or investigation into facts or matters as it may see fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the sole cost of the Company and shall
incur no liability or additional liability of any kind by reason of such
inquiry or investigation.
(h) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any negligent act on
the part of any agent or attorney appointed with due care by it hereunder.
(i) The Trustee shall not be deemed to have notice of any Default
or Event of Default unless a Trust Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact such
a default is received by the Trustee at the Corporate Trust Office of the
Trustee in accordance with Section 13.02 hereof, and such notice references
the Securities and this Indenture.
(j) The rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in
each of its capacities hereunder, and to each agent, custodian and other
Person employed to act hereunder.
(k) The Trustee shall be under no obligation to expend or risk its
own funds or to exercise, at the request or direction of any of the Holders,
any of the rights or powers vested in it by this Indenture pursuant to this
Indenture.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or its
Affiliates with the same rights it would have if it were not Trustee. Any
Paying Agent, Registrar, Conversion Agent or co-registrar may do the same
with the like rights. However, the Trustee must comply with Sections 7.10 and
7.11 hereof.
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SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities; it shall not be accountable for Company's
use of the proceeds from the Securities; and it shall not be responsible for
any statement in the prospectus for the Securities or in this Indenture or
the Securities (other than its certificate of authentication), the acts of a
prior Trustee hereunder, or the determination as to which beneficial owners
are entitled to receive any notices hereunder.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is actually known by a
Trust Officer or if written notice of any event which is in fact such a
default is received by the Trustee at the Corporate Trust Office of the
Trustee in accordance with Section 13.02 hereof, and such notice references
the Securities and this Indenture, the Trustee shall give to each Holder
notice of the Default within 90 days after it occurs. Except in the case of a
Default described in Section 6.01(1) or (2) hereof, the Trustee may withhold
the notice if and so long as a committee of its Trust Officers in good faith
determines that withholding the notice is in the interests of Holders. The
second sentence of this Section 7.05 shall be in lieu of the proviso to
Section 315(b) of the TIA and such provision is hereby expressly excluded
from this Indenture, as permitted by the TIA. The Trustee shall not give
notice of a Default pursuant to Section 6.01(4) until at least 60 days have
passed since its occurrence.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS.
Within 60 days after each May 1, beginning with the May 1 following the
date of this Indenture, the Trustee shall mail to each Holder a brief report
dated as of such May 1 that complies with TIA Section 313(a), if required by
such Section 313(a). The Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Holders shall be
filed with the SEC and each securities exchange on which the Securities are
listed. The Company agrees to promptly notify the Trustee whenever the
Securities become listed on any securities exchange and of any delisting
thereof.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Company agrees:
(a) to pay to the Trustee from time to time such compensation as
the Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(b) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the compensation
and the expense, advances and disbursements of its
41
agents and counsel), except any such expense, disbursement or advance as may
be attributable to its negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any and all loss, damage, claims, liability or expense (including taxes other
than taxes based upon, measured by, or determined by the income of the
Trustee) incurred without negligence or bad faith on its part, arising out of
or in connection with the acceptance or administration of this trust,
including the costs and expenses of defending itself against any claim
(whether asserted by the Company, any Holder or any other Person) or
liability in connection with the exercise or performance of any of its powers
or duties hereunder.
To secure the Company's payment obligations in this Section 7.07, the
Trustee shall have a lien prior to the Securities on all money or property
held or collected by the Trustee, except that held in trust to pay the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest, if any,
as the case may be, on particular Securities.
The Company's payment obligations pursuant to this Section 7.07 shall
survive the discharge of this Indenture. When the Trustee incurs expenses
after the occurrence of a Default specified in Section 6.01(5) or (6), the
expenses are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company; PROVIDED, HOWEVER,
that no such resignation shall be effective until a successor Trustee has
accepted its appointment pursuant to this Section 7.08. The Holders of a
majority in aggregate Principal Amount of the Securities at the time
outstanding may remove the Trustee by so notifying the Trustee and may
appoint a successor Trustee. The Company shall remove the Trustee if:
(1) the Trustee fails to comply with, or ceases to be
eligible under, Section 7.10 hereof;
(2) the Trustee is adjudged bankrupt or insolvent;
(3) a receiver or public officer takes charge or control of
the Trustee or its property or affairs; or
(4) the Trustee otherwise in the Company's reasonable
judgment becomes incapable of acting.
In addition, the Company may remove the Trustee if the Company
determines that the services provided by the Trustee hereunder may be
obtained at a substantially lower cost to the Company, determined in the sole
discretion of the Company.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint, by
resolution of its Board of Directors, a successor Trustee.
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Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor Trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee; but, on the request of the
Company or the successor Trustee, such retiring Trustee shall, upon payment
of its charges, execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the retiring Trustee
and shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder, subject to the
lien provided for in Section 7.07 hereof. Upon request of any such successor
Trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts. No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee shall be
eligible under this Article.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or
the Holders of a majority in aggregate Principal Amount of the Securities at
the time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee at the expense of the Company.
If the Trustee fails to comply with Section 7.10 hereof, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all its corporate trust business (including the trust
created by this Indenture) or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee hereunder, PROVIDED such corporation shall be otherwise
eligible under this Article, without the execution or filing of any paper or
any further act on the part of any of the parties hereto. In case any
Securities shall have been authenticated, but not delivered, by the Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
The Trustee shall at all times satisfy the requirements of TIA Sections
310(a)(1) and 310(b). The Trustee shall have a combined capital and surplus
of at least $50,000,000 (or if the Trustee is a member of a bank holding
company system, its bank holding company shall have a combined capital and
surplus of at least $50,000,000) as set forth in its most recent published
annual report of conditions. Nothing herein contained shall prevent the
Trustee from filing with the SEC the application referred to in the
penultimate paragraph of TIA Section 310(b). If at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section 7.10,
it shall correct such ineligibility or resign immediately in the manner and
with the effect specified in this Article 7.
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SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE 8.
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.
When (i) the Company delivers to the Trustee all outstanding Securities
(other than Securities replaced pursuant to Section 2.07 hereof) for
cancellation or (ii) all outstanding Securities have become due and payable
and the Company deposits with the Trustee Cash and/or securities, as
permitted by the terms hereof, sufficient to pay at Stated Maturity the
Principal Amount of all outstanding Securities (other than Securities
replaced pursuant to Section 2.07 hereof), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture
shall, subject to Section 7.07 hereof, cease to be of further effect. The
Trustee shall join in the execution of a document prepared by the Company
acknowledging satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and Opinion of Counsel and at
the cost and expense of the Company.
SECTION 8.02. REPAYMENT TO THE COMPANY.
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years;
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such return, shall, in the event that the Securities are
no longer held in global form, at the expense of the Company cause to be
published once in a newspaper of general circulation in The City of New York
or mail to each such Holder notice that such money or securities remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company. After
return to the Company, Holders entitled to the money or securities must look
to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person.
ARTICLE 9.
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend this Indenture and the Securities
without the consent of any Holder:
(1) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions
44
with regard to matters or questions arising under this Indenture which shall
not materially adversely affect the interests of the Holders;
(2) to provide for the assumption of the Company's
obligations to the Holders of the Debentures in case of a merger or
consolidation or sale of all or substantially all of the Company's assets;
(3) to provide for uncertificated Securities in addition to
certificated Securities so long as such uncertificated Securities are in
registered form for purposes of the Internal Revenue Code of 1986, as amended;
(4) to make any change that does not adversely affect the
right of any Holder; or
(5) to make any change to comply with the TIA, or any
amendment thereto, or to comply with any requirement of the SEC in connection
with the qualification, if any, of the Indenture under the TIA.
SECTION 9.02. WITH CONSENT OF HOLDERS.
The Company and the Trustee, with the written consent of the Holders of
at least a majority in aggregate Principal Amount of the Securities at the
time outstanding, may amend this Indenture or the Securities. However,
without the consent of each Holder affected, an amendment or supplement to
this Indenture or the Securities may not:
(1) make any change to the Principal Amount of Securities
whose Holders must consent to an amendment;
(2) make any change to the manner or rate of accrual in
connection with Original Issue Discount or interest, if any, reduce the rate
of interest referred to in paragraph 1 of the Securities or extend the time
for payment of Original Issue Discount or interest, if any, on any Security;
(3) reduce the Principal Amount or the Issue Price of or
extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or
Fundamental Change Purchase Price of any Security;
(5) make any Security payable in money or securities other
than that stated in the Security;
(6) make any change in Article 10 hereof that adversely
affects the rights of any Holder;
(7) make any change in Sections 6.04 or 6.07 hereof or this
Section 9.02, except to increase the percentage of Holders referenced in
Sections 6.04 or 6.07 hereof, as applicable;
45
(8) make any change that adversely affects the right of
Holders to convert any Security; or
(9) make any change that adversely affects the right of
Holders to require the Company to repurchase the Securities, or the right to
require the Company to repurchase the Securities upon a Fundamental Change,
in accordance with the terms thereof and this Indenture.
It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent approves the substance thereof.
An amendment under this Section 9.02 or Section 9.01 hereof may not make
any change that adversely affects the rights under Article 10 hereof of any
holder of Senior Indebtedness then outstanding unless the requisite holders
of such Senior Indebtedness consent to such change pursuant to the terms of
such Senior Indebtedness.
After an amendment under this Section 9.02 becomes effective, the
Company shall mail to each Holder a notice briefly describing the amendment.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article 9 shall
comply with the TIA as then in effect, if then required to so comply.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS, WAIVERS AND ACTIONS.
Until an amendment, waiver or other action becomes effective, a consent
to it or any other action by a Holder of a Security is a continuing consent
by the Holder and every subsequent Holder of that Security or portion of the
Security that evidences the same obligation as the consenting Holder's
Security, even if notation of the consent, waiver or action is not made on
the Security. However, any such Holder or subsequent Holder may revoke the
consent, waiver or action as to such Holder's Security or portion of the
Security if the Trustee receives the notice of revocation before the date the
amendment, waiver or action becomes effective. After an amendment, waiver or
action becomes effective, it shall bind every Holder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 9 may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for outstanding Securities.
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SECTION 9.06. TRUSTEE TO SIGN SUPPLEMENTAL INDENTURES.
The Trustee shall sign any supplemental indenture authorized pursuant to
this Article 9 if the amendment does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but
need not, sign such supplemental indenture. In signing such amendment the
Trustee shall be entitled to receive, and (subject to the provisions of
Section 7.01 hereof) shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
SECTION 9.07. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article 9,
this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
ARTICLE 10.
SUBORDINATION
SECTION 10.01. AGREEMENT OF SUBORDINATION.
The Company covenants and agrees for itself and its successors, and each
Holder of Securities issued hereunder by such Holder's acceptance thereof
likewise covenants and agrees, that all Securities shall be issued subject to
the provisions of this Article 10, and each Person holding any such Security
whether upon original issue or upon transfer or assignment thereof, accepts
and agrees to be bound by such provisions.
The payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Fundamental Change Purchase
Price, interest and any other amounts payable, if any, in respect of all
Securities issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full in Cash or other payment satisfactory to the holders of
Senior Indebtedness of all Senior Indebtedness of the Company, whether
outstanding at the date of this Indenture or thereafter incurred, or
thereafter created, assumed or guaranteed.
No provision of this Article 10 shall prevent the occurrence of any
Default or Event of Default hereunder.
SECTION 10.02. PAYMENTS TO HOLDERS.
No payment shall be made with respect to the payment of Principal
Amount, Issue Price, accrued Original Issue Discount, Redemption Price,
Purchase Price, Fundamental Change Purchase Price, interest and any other
amounts payable, if any, on the Securities, except payments and distributions
made by the Trustee as permitted by Section 10.05, if:
(i) a default in any payment obligations in respect of Designated
Senior Indebtedness occurs and is continuing, without regard to any
applicable period of grace (whether at maturity or at a date fixed for
payment or by declaration or otherwise); or
47
(ii) any other default occurs and is continuing with respect to
Designated Senior Indebtedness that permits the holders of such Designated
Senior Indebtedness as to which such default relates to accelerate its
maturity and the Trustee receives a notice of the default (a "PAYMENT
BLOCKAGE NOTICE") from a holder of Designated Senior Indebtedness or a
Representative of Designated Senior Indebtedness.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No nonpayment default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be the
basis for a subsequent Payment Blockage Notice (it being acknowledged that
(x) any action of the Company or any of its Subsidiaries occurring subsequent
to delivery of a Payment Blockage Notice that would give rise to any event of
default pursuant to any provision of Senior Indebtedness under which an event
of default previously existed (or was continuing at the time of delivery of
such Payment Blockage Notice) shall constitute a new event of default for
this purpose and (y) any breach of a financial covenant giving rise to a
nonpayment default for a period ending subsequent to the date of delivery of
the respective Payment Blockage Notice shall constitute a new event of
default for this purpose).
The Company may and shall resume payments on and distributions in
respect of the Securities:
(1) in case of a default referred to in clause (i) above,
the earlier of the date upon which the default is cured or waived in
accordance with the terms of the governing instrument or ceases to exist, or
(2) in the case of a default referred to in clause (ii)
above, the earlier of the date upon which the default is cured, waived in
accordance with the terms of the governing instrument or ceases to exist or
179 days pass after the applicable Payment Blockage Notice is received if the
maturity of such Designated Senior Indebtedness has not been accelerated,
unless this Article 10 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company or distribution of assets of the Company
of any kind or character, whether in Cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization
or bankruptcy of the Company, whether voluntary or involuntary, or
insolvency, receivership or similar proceedings relating to the Company or
its property, or an assignment for the benefit of creditors or any marshaling
of the Company's assets or liabilities, all amounts due or to become due upon
all Senior Indebtedness of the Company shall first be paid in full in Cash or
other payment satisfactory to the holders of such Senior Indebtedness before
any payment is made on account of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price, interest or any other amounts payable, if any, in respect of
the Securities (except payments made pursuant to Article 8 hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
dissolution or winding-up or liquidation or reorganization
48
or bankruptcy of the Company, whether voluntary or involuntary or insolvency,
receivership or similar proceedings relating to the Company or its property,
or an assignment of the benefit of creditors or any marshaling of the
Company's assets or liabilities), and upon any such dissolution or winding-up
or liquidation or reorganization or bankruptcy of the Company, whether
voluntary or involuntary or insolvency, receivership or similar proceedings
relating to the Company or its property, or an assignment of the benefit of
creditors or any marshaling of the Company's assets or liabilities, any
payment by the Company, or distribution of assets of the Company of any kind
or character, whether in Cash, property or securities, to which the Holders
of the Securities or the Trustee would be entitled, except for the provisions
of this Article 10, shall (except as aforesaid) be paid by the Company or by
any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the Holders of the
Securities or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness of the Company as their
interests may appear or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing any such Senior Indebtedness may have been issued, as their
respective interests may appear to the extent necessary to pay all such
Senior Indebtedness in full in Cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness,
before any payment or distribution is made to the Holders of the Securities
or to the Trustee.
In the event that any Securities are declared due and payable before
their Stated Maturity pursuant to Section 6.02 hereof, then and in such event
the Company shall promptly notify holders of its Designated Senior
Indebtedness of such acceleration. The Company may not pay the Securities
until five days have passed after such acceleration occurs and may thereafter
pay the Securities only to the extent that this Article 10 permits the
payment at that time.
In the event that, notwithstanding the foregoing provisions, any payment
or distribution of assets of the Company of any kind or character, whether in
Cash, property or securities (including, without limitation, by way of setoff
or otherwise), prohibited by the foregoing provisions in this Section 10.02,
shall be received by the Trustee or the Holders of the Securities before all
Senior Indebtedness of the Company is paid in full in Cash or other payment
satisfactory to the holders of such Senior Indebtedness, such payment or
distribution shall be held in trust for the benefit of and shall be paid over
or delivered to the holders of Senior Indebtedness of the Company or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any such Senior
Indebtedness may have been issued, as their respective interests may appear,
as calculated by the Company, for application to the payment of all such
Senior Indebtedness remaining unpaid to the extent necessary to pay all such
Senior Indebtedness in full in Cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
For purposes of this Article 10, the words "Cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article 10 with respect to the Securities to the payment of all Senior
Indebtedness of the Company which may at
49
the time be outstanding; PROVIDED that (i) such Senior Indebtedness is
assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (ii) the rights of the holders of such
Senior Indebtedness (other than leases that are not assumed by the Company or
the new corporation, as the case may be) are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or
the liquidation or dissolution of the Company following the conveyance or
transfer of its property as an entirety, or substantially as an entirety, to
another corporation upon the terms and conditions provided for in Article 5
hereof shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 10.02 if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 5 hereof.
Nothing in this Section 10.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 7.07 hereof. This Section 10.02
shall be subject to the further provisions of Section 10.05 hereof.
SECTION 10.03. SUBROGATION OF SECURITIES.
Subject to the payment in full in Cash or other payment satisfactory to
the holders of Senior Indebtedness of all Senior Indebtedness of the Company,
the rights of the Holders of the Securities shall be subrogated to the rights
of the holders of such Senior Indebtedness to receive payments or
distributions of Cash, property or securities of the Company applicable to
such Senior Indebtedness until the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price and interest, if any, in respect of the Securities shall be
paid in full; and, for the purposes of such subrogation, no payments or
distributions to the holders of such Senior Indebtedness of any Cash,
property or securities to which the Holders of the Securities or the Trustee
would be entitled except for the provisions of this Article 10, and no
payment over pursuant to the provisions of this Article 10, to or for the
benefit of the holders of such Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of its Senior Indebtedness, and the Holders of the Securities be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of Cash, property or
securities to or for the benefit of the holders of the Securities pursuant to
the subrogation provisions of this Article 10, which would otherwise have
been paid to the holders of Senior Indebtedness shall be deemed to be a
payment by the Company to or for the account of the Securities. It is
understood that the provisions of this Article 10 are and are intended solely
for the purpose of defining the relative rights of the Holders of the
Securities, on the one hand, and the holders of Senior Indebtedness, on the
other hand.
Nothing contained in this Article 10 or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of its Senior Indebtedness and the Holders
of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the Holders of the Securities the Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price, Fundamental Change Purchase Price and interest, if any, in respect of
the Securities as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the
50
relative rights of the Holders of the Securities and creditors of the Company
other than the holders of its Senior Indebtedness, nor shall anything herein
or therein prevent the Trustee or the Holder of any Security from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 10 of the
holders of Senior Indebtedness in respect of Cash, property or securities of
the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee, subject to the provisions of Section 7.01
hereof, and the Holders of the Securities shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are
pending, or a certificate of the receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, delivered
to the Trustee, to the Holders of the Securities for the purpose of
ascertaining the Persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 10.
SECTION 10.04. AUTHORIZATION BY HOLDERS.
Each Holder of a Security by such Holder's acceptance thereof authorizes
and directs the Trustee in his behalf to take such action as may be necessary
or appropriate to effectuate the subordination provided in this Article 10
and appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 10.05. NOTICE TO TRUSTEE.
The Company shall give prompt written notice in a form of an Officers'
Certificate to a Trust Officer of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any
Paying Agent in respect of the Securities pursuant to the provisions of this
Article 10, but failure to give such notice shall not affect the
subordination of the Securities to the Senior Indebtedness as provided in
this Article 10. Notwithstanding the provisions of this Article 10 or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the making of
any payment of monies to or by the Trustee in respect of the Securities
pursuant to the provisions of this Article 10, unless and until a Trust
Officer shall have actually received written notice thereof at the Corporate
Trust Office from the Company (in the form of an Officers' Certificate) or a
holder or holders of Senior Indebtedness or a Representative or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 7.01 hereof, shall be entitled
in all respects to assume that no such facts exist; PROVIDED that if on a
date not fewer than two Business Days prior to the date upon which by the
terms hereof any such monies may become payable for any purpose (including,
without limitation, the payment of the Principal Amount, Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price, Fundamental Change
Purchase Price, interest or any other amounts payable, if any, in respect of
any Security) the Trustee shall not have received, with respect to such
monies, the notice provided for in this Section 10.05, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power
and authority to
51
receive such monies and to apply the same to the purpose for which they were
received, and shall not be affected by any notice to the contrary which may
be received by it on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing shall
prevent any payment of amounts deposited with the Trustee pursuant to Section
8.01 hereof so long as the Trustee had no notice that such amounts when so
deposited were prohibited pursuant to the provisions of Section 10.02 hereof.
The Trustee, subject to the provisions of Section 7.01, shall be
entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder or a Representative of Designated Senior
Indebtedness or a Representative of Senior Indebtedness of the Company (or a
trustee on behalf of such holder) to establish that such notice has been
given by a holder or a Representative of Designated Senior Indebtedness or a
Representative of such Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith
that further evidence is required with respect to the right of any Person as
a holder of Senior Indebtedness of the Company to participate in any payment
or distribution pursuant to this Article 10, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as
to the amount of such Senior Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution
and any other facts pertinent to the rights of such Person under this Article
10, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person
to receive such payment.
SECTION 10.06. TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article 10 in respect of any Senior Indebtedness of
the Company at any time held by it, to the same extent as any other holder of
such Senior Indebtedness, and nothing in this Article 10 or elsewhere in this
Indenture shall deprive the Trustee of any of its rights as such holder. The
provisions of this Article 10 shall not apply to the Trustee's rights under
Section 7.07 hereof.
With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article 10, and no implied
covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture against the Trustee. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness of the Company and, subject to the provisions of Section
7.01 hereof, the Trustee shall not be liable to any holder of such Senior
Indebtedness if it shall pay over or deliver to Holders of Securities, the
Company or any other Person money or assets to which any holder of Senior
Indebtedness of the Company shall be entitled by virtue of this Article 10 or
otherwise.
SECTION 10.07. NO IMPAIRMENT OF SUBORDINATION.
No right of any present or future holder of any Senior Indebtedness of
the Company to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by (i) any amendment of or addition or
supplement to any such Senior Indebtedness or any
52
instrument or agreement relating thereto (unless otherwise expressly provided
therein), or (ii) any act or failure to act on the part of the Company or by
any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of the
instrument, regardless of any knowledge thereof which any such holder may
have or otherwise be charged with or (iii) a failure to act by any Holders of
Securities or the failure of such Holder to comply with this Indenture.
SECTION 10.08. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS ON
SUBORDINATION PROVISIONS.
Each Holder of Securities by such Holder's acceptance thereof,
acknowledges and agrees that the foregoing subordination provisions are, and
are intended to be, an inducement and a consideration to each holder of any
Senior Indebtedness of the Company, whether such Senior Indebtedness was
created, assumed or acquired before or after the issuance of the Securities,
to acquire and continue to hold, or to continue to hold, such Senior
Indebtedness and such holder of Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness, and
no amendment or modification of the provisions contained herein shall
diminish the rights of such holder or holders unless such holder or holders
shall have agreed in writing thereto.
SECTION 10.09. REINSTATEMENT OF SUBORDINATION.
If, at any time, all or part of any payment of any Senior Indebtedness
theretofore made by the Company or any other Person is rescinded or must
otherwise be returned by the holders of such Senior Indebtedness for any
reason whatsoever (including, without limitation, the insolvency, bankruptcy
or reorganization of the Company or such other Person), these subordination
provisions shall continue to be effective or be reinstated, as the case may
be, all as though such payment had not been made.
SECTION 10.10. PERMITTED PAYMENTS.
Nothing contained in this Article 10 or elsewhere in this Indenture, or
in the Securities shall prevent (a) the Company at any time, except under the
conditions described in Section 10.02 hereof, from making payments at any
time of Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Fundamental Change Purchase Price or
interest or any other amounts payable, if any, in respect of the Securities,
or from depositing with the Trustee or any Paying Agent money for such
payments, or (b) the application by the Trustee or Paying Agent of any moneys
deposited with it under this Indenture to the payment of or on account of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Fundamental Change Purchase Price or interest or any
other amounts payable, if any, in respect of the Securities to the Holders of
the Securities entitled thereto to the beneficiaries thereof, if such payment
would not have been prohibited by the provisions of Section 10.02 hereof.
53
SECTION 10.11. ARTICLE APPLICABLE TO PAYING AGENTS.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Company and be then acting hereunder, the term "Trustee" as
used in this Article 10 shall (unless the context otherwise requires) be
construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in
this Article 10 in addition to or in place of the Trustee; PROVIDED, HOWEVER,
that the first paragraph of Section 10.05 hereof shall not apply to the
Company or any Affiliate of the Company if it or such Affiliate acts as
Paying Agent.
SECTION 10.12. TREATMENT OF CONVERSION PAYMENTS.
Notwithstanding anything in this Indenture to the contrary, neither the
issuance and delivery of junior securities upon conversion of the Securities
in accordance with Article 11 nor the payment of Cash in lieu of fractional
shares of Common Stock in accordance with Article 11 shall be deemed to
constitute a payment or distribution on account of the Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price or Fundamental
Change Purchase Price or interest or any other amounts payable, if any, in
respect of the Securities. For the purposes of this paragraph, the term
"junior securities" means (a) shares of any stock of any class of the
Company, (b) securities of the Company which are subordinated in right of
payment to all Senior Indebtedness of the Company which may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article 10, and (c) any securities into which the Securities
become convertible pursuant to Section 11.14 hereof which are securities of a
Person required to enter into a supplemental indenture pursuant to such
section (or Section 5.01 hereof) and are either (x) shares of any stock of
any class of such Person, or (y) securities of such Person which are
subordinated in right of payment to all Senior Indebtedness of such Person
which may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than,
the Securities or, are so subordinated as provided in this Article 10.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of
the Securities, the right, which is absolute and unconditional, of the holder
of any Security to convert such Security in accordance with Article 11 hereof.
SECTION 10.13. RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT.
Upon any payment or distribution of assets of the Company referred to in
this Article 10, the Trustee and the Holders of Securities shall be entitled
to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, liquidating trustee,
custodian, receiver, assignee for the benefit of creditors, agent or other
Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities, for the purpose of ascertaining the Persons
entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof
or payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this Article 10.
54
ARTICLE 11.
CONVERSION
SECTION 11.01. CONVERSION PRIVILEGE.
A Holder of a Security may convert such Security for Common Stock at any
time during the period stated in paragraph 9 of the Securities. The number of
shares of Common Stock issuable upon conversion of a Security per $1,000 of
Principal Amount thereof (the "CONVERSION RATE") shall be that set forth in
paragraph 9 in the Securities, subject to adjustment as herein set forth.
The Holders' right to convert Securities into shares of Common Stock is
subject to the Company's right to elect to instead pay such Holder the amount
of Cash set forth in the next succeeding sentence, in lieu of delivering such
shares of Common Stock; PROVIDED, HOWEVER, that if such payment of Cash is
not permitted pursuant to the provisions of this Indenture or the provisions
of any other agreement or instrument to which the Company is a party or by
which it is bound or otherwise, the Company shall deliver shares of Common
Stock (and Cash in lieu of fractional shares of Common Stock) in accordance
with this Article 11, whether or not the Company has delivered a notice
pursuant to Section 11.02 hereof to the effect that the Securities would be
paid in Cash. The amount of Cash to be paid pursuant to Section 11.02 hereof
for each $1,000 of Principal Amount of a Security upon conversion shall be
equal to the Sale Price of the Common Stock on the Trading Day immediately
prior to the related Conversion Date multiplied by the Conversion Rate in
effect on such Trading Day. The Company shall not pay Cash in lieu of
delivering shares of Common Stock upon the conversion of any Security
pursuant to the terms of this Article 11 (other than Cash in lieu of
fractional shares pursuant to Section 11.03 hereof) if there has occurred
(prior to, on or after, as the case may be, the Conversion Date or the date
on which the Company delivers its notice of whether such Security shall be
converted into shares of Common Stock or Cash pursuant to Section 11.02
hereof) and is continuing an Event of Default (other than a default in a Cash
payment upon conversion of such Securities), PROVIDED, HOWEVER, that this
sentence shall not apply in the event that an Event of Default occurs after
such Cash is paid.
A Holder may convert a portion of the Principal Amount of a Security if
the portion is $1,000 or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Security also apply to
conversion of a portion of a Security.
SECTION 11.02. CONVERSION PROCEDURE.
To convert a Security a Holder must satisfy the requirements in
paragraph 9 of the Securities. The date on which the Holder of Securities
satisfies all those requirements is the conversion date (the "CONVERSION
DATE"). Within two Business Days following the Conversion Date, the Company
shall deliver to the Holder, through the Conversion Agent, written notice of
whether such Security shall be converted into shares of Common Stock or paid
in Cash. If the Company shall have notified the Holder that such Security
shall be converted into shares of Common Stock, the Company shall deliver to
the Holder no later than the seventh Business Day following the Conversion
Date a certificate for the number of full shares of Common Stock issuable
upon the conversion and Cash in lieu of any fractional share determined
pursuant to
55
Section 11.03 hereof. Except as provided in Section 11.01 hereof, if the
Company shall have notified the Holder that such Security shall be paid in
Cash, the Company shall deliver to the Holder surrendering such Security the
amount of Cash payable with respect to such Security on the fifth Business
Day following such Conversion Date. Except as provided in Section 11.01
hereof, the Company may not change its election with respect to the
consideration to be delivered upon conversion of a Security once the Company
has notified the Holder in accordance with this paragraph. The Person in
whose name the certificate is registered shall be treated as the stockholder
of record on and after the Conversion Date; PROVIDED, HOWEVER, that no
surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the Person or
Persons entitled to receive the shares of Common Stock upon such conversion
as the record holder or holders of such shares of Common Stock on such date,
but such surrender shall be effective to constitute the Person or Persons
entitled to receive such shares of Common Stock as the record holder or
holders thereof for all purposes at the close of business on the next
succeeding day on which such stock transfer books are open; such conversion
shall be at the Conversion Rate in effect on the date that such Security
shall have been surrendered for conversion, as if the stock transfer books of
the Company had not been closed. Upon conversion of a Security, such Person
shall no longer be a Holder of such Security.
No payment on the Securities or adjustment of the Conversion Rate will
be made for dividends on or other distributions with respect to any Common
Stock except as provided in this Article 11. On conversion of a Security,
that portion of accrued Original Issue Discount (or interest, if the Company
has exercised the option provided for in Section 12.01 hereof) attributable
to the period from the Issue Date (or, if the Company has exercised the
option provided for in Section 12.01 hereof, the later of (x) the date of
such exercise and (y) the date on which interest was last paid) to the
Conversion Date with respect to the converted Security shall not be canceled,
extinguished or forfeited, but rather shall be deemed to be paid in full to
the Holder thereof through delivery of the Common Stock (together with the
Cash payment, if any, in lieu of fractional shares) in exchange for the
Security being converted pursuant to the provisions hereof.
If a Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable or Cash paid upon the conversion shall be
based on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder,
a new Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday
in a place where a Conversion Agent is located, the Security may be
surrendered to that Conversion Agent on the next succeeding day that it is
not a Legal Holiday.
SECTION 11.03. FRACTIONAL SHARES.
The Company will not issue a fractional share of Common Stock upon
conversion of a Security. Instead the Company will deliver Cash for the
current market value of the fractional share. The current market value of a
fractional share shall be determined to the nearest
56
1/10,000th of a share by multiplying the last reported sale price (determined
as set forth in the definition of Market Price) on the last Trading Day prior
to the Conversion Date of a full share by the fractional amount and rounding
the product to the nearest whole cent.
SECTION 11.04. TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon the conversion. However, the Holder shall pay any such tax which
is due because the Holder requests the shares to be issued in a name other
than the Holder's name. The Conversion Agent may refuse to deliver the
certificates representing the Common Stock being issued in a name other than
the Holder's name until the Conversion Agent receives a sum sufficient to pay
any tax which will be due because the shares are to be issued in a name other
than the Holder's name. Nothing herein shall preclude any tax withholding
required by law or regulations.
SECTION 11.05. COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve out of its authorized but
unissued Common Stock a sufficient number of shares of Common Stock to permit
the conversion of the Securities.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive
rights and free of any lien or adverse claim.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Securities hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon conversion, the Company will in
good faith and as expeditiously as possible endeavor to secure such
registration or approval, as the case may be.
The Company further covenants that if at any time the Common Stock shall
be quoted or listed on the NASDAQ National Market or the NYSE or any other
automated quotation system or national securities exchange or the Company
will, if permitted by the rules of such automated quotation system or
exchange, list and keep listed, so long as the Common Stock shall be so
listed on such automated quotation system or exchange, all shares of Common
Stock issuable upon conversion of the Securities; PROVIDED, HOWEVER, that if
the rules of such automated quotation system or exchange permit the Company
to defer the listing of such Common Stock until the first conversion of the
Securities into Common Stock in accordance with the provisions of this
Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such
automated quotation system or exchange at such time.
SECTION 11.06. ADJUSTMENT FOR CHANGE IN CAPITAL STOCK.
In case the Company shall (i) pay a dividend, or make a distribution, in
shares of its Common Stock, on its Common Stock, (ii) subdivide its
outstanding Common Stock into a
57
greater number of shares, or (iii) combine its outstanding Common Stock into
a smaller number of shares, the Conversion Rate in effect immediately prior
thereto shall be adjusted so that the Holder of any Security thereafter
surrendered for conversion shall be entitled to receive the number of shares
of Common Stock which such Holder would have owned or have been entitled to
receive after the occurrence of any of the events described above had such
Security been converted immediately prior to the occurrence of such event. If
any dividend or distribution of the type described in clause (i) above is not
so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate which would then be in effect if such dividend as
distribution had not been declared. An adjustment made pursuant to this
Section 11.06 shall become effective immediately after the record date in the
case of a dividend and shall become effective immediately after the effective
date in the case of a subdivision or combination.
SECTION 11.07. ADJUSTMENT FOR RIGHTS OR WARRANTS.
In case the Company shall issue rights or warrants to all holders of its
Common Stock entitling them (for a period expiring within 45 days after the
record date mentioned below) to subscribe for or purchase Common Stock at a
price per share less than the Market Price per share of Common Stock at the
record date for the determination of stockholders entitled to receive such
rights or warrants, the Conversion Rate in effect immediately prior thereto
shall be adjusted so that the same shall equal the Conversion Rate determined
by multiplying the Conversion Rate in effect immediately prior to the date of
issuance of such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding on the date of
issuance of such rights or warrants plus the number of additional shares of
Common Stock offered to holders of Common Stock for subscription or purchase,
and of which the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of shares of Common Stock which the aggregate offering price of the
total number of shares so offered would purchase at such Market Price. Such
adjustment shall be made successively whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of
business on the day following the record date for the determination of the
stockholders entitled to receive such rights or warrants. To the extent that
shares of Common Stock are not delivered after the expiration of such rights
or warrants, the Conversion Rate shall be readjusted to the Conversion Rate
which would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made on the basis of delivery of only the number
of shares of Common Stock actually delivered. If such rights or warrants are
not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such record date for the
determination of stockholders entitled to receive such rights or warrants had
not been fixed. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at less than such
Market Price of such Common Stock, and in determining the aggregate offering
price of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value
of such consideration, if other than Cash, to be determined by the Board of
Directors.
SECTION 11.08. ADJUSTMENT FOR OTHER DISTRIBUTIONS.
(a) In case the Company shall distribute to all holders of its
Common Stock
58
(excluding any distribution in connection with the liquidation, dissolution
or winding up of the Company, whether voluntary or involuntary) any shares of
any class of capital stock of the Company (other than Common Stock), or
evidences of indebtedness of the Company or of assets (other than Cash and
other than dividends, distributions or rights or warrants to subscribe for or
purchase any of its securities referred to in Section 11.07 hereof) (any of
the foregoing hereinafter in this Section 11.08(a) called the "DISTRIBUTED
SECURITIES"), then, the Conversion Rate shall be adjusted so that the same
shall equal the Conversion Rate determined by multiplying the Conversion Rate
in effect immediately prior to the date of such distribution by a fraction of
which the numerator shall be the Market Price per share of the Common Stock
on the record date mentioned below, and the denominator shall be the Market
Price per share of the Common Stock on such record date less the fair market
value on such record date (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a
certificate filed with the Trustee) of the Distributed Securities so
distributed applicable to one share of Common Stock. Such adjustment shall
become effective immediately after the record date for the determination of
stockholders entitled to receive such distribution. Notwithstanding the
foregoing, in the event that the then fair market value (as so determined) of
the portion of the Distributed Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Market Price of the
Common Stock on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Holder shall have the right to
receive upon conversion the amount of Distributed Securities such Holder
would have received had such Holder converted each Security immediately prior
to such record date. In the event that such distribution is not so paid or
made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such distribution had not been declared. If
the Board of Directors determines the fair market value of any distribution
for purposes of this Section 11.08(a) by reference to the actual or when
issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Market Price
of the Common Stock.
Notwithstanding the foregoing provisions of this Section 11.08(a), no
adjustment shall be made thereunder for any distribution of Distributed
Securities if the Company makes proper provision so that each Holder of a
Security who converts such Security (or any portion thereof) after the record
date for such distribution shall be entitled to receive upon such conversion,
in addition to the shares of Common Stock issuable upon such conversion, the
amount and kind of Distributed Securities that such Holder would have been
entitled to receive if such Holder had, immediately prior to such record
date, converted such Security for Common Stock; PROVIDED that, with respect
to any Distributed Securities that are convertible, exchangeable or
exercisable, the foregoing provision shall only apply to the extent (and so
long as) the Distributed Securities receivable upon conversion of such
Security would be convertible, exchangeable or exercisable, as applicable,
without any loss of rights or privileges for a period of at least 60 days
following conversion of such Security.
(b) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock Cash (excluding (x) any
quarterly Cash dividend on the Common Stock to the extent the aggregate Cash
dividend per share of Common Stock in any fiscal quarter does not exceed the
greater of (A) the amount per share of Common Stock of the next preceding
quarterly Cash dividend on the Common Stock to the extent such preceding
quarterly dividend
59
did not require any adjustment of the Conversion Rate pursuant to this
Section 11.08(b) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the average of the last reported sales price
of the Common Stock (determined as provided in the definition of Market
Price) during the ten Trading Days immediately prior to the date of
declaration of such dividend and (y) any dividend or distribution in
connection with the liquidation, dissolution or winding up of the Company,
whether voluntary or involuntary), then, in such case, unless the Company
elects to reserve such Cash for distribution to the Holders of the Securities
upon the conversion of the Securities so that any such Holder converting
Securities will receive upon such conversion in addition to the shares of
Common Stock to which such Holder is entitled, the amount of Cash which such
Holder would have received if such Holder had, immediately prior to the
record date for such distribution of Cash, converted its Securities for
Common Stock, the Conversion Rate shall be increased so that the same shall
equal the Conversion Rate determined by multiplying the Conversion Rate in
effect immediately prior to the record date by a fraction of which the
numerator shall be such Market Price of the Common Stock and the denominator
shall be the Market Price of the Common Stock on the record date less the
amount of Cash so distributed (and not excluded as provided above) applicable
to one share of Common Stock, such increase to be effective immediately prior
to the opening of business on the day following the record date; PROVIDED,
HOWEVER, that in the event that the portion of the Cash so distributed
applicable to one share of Common Stock is equal to or greater than the
Market Price of the Common Stock on the record date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Holder shall have
the right to receive upon conversion the amount of Cash such Holder would
have received had such Holder converted each Security on the record date. If
such dividend or distribution is not so paid or made, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in
effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 11.08(b) as a
result of a distribution that is a quarterly dividend, such adjustment shall
be based upon the amount by which such distribution exceeds the amount of the
quarterly Cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 11.08(b) above
as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(c) In case a tender or exchange offer made by the Company or any
Subsidiary of the Company for all or any portion of the Common Stock shall
expire and such tender or exchange offer shall involve the payment by the
Company or such Subsidiary of consideration per share of Common Stock having
a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive, and described in a resolution of such
Board of Directors at the last time (the "EXPIRATION TIME") tenders or
exchanges may be made pursuant to such tender or exchange offer (as it shall
have been amended)) at the Expiration Time that exceeds the Market Price of
the Common Stock on the Trading Day next succeeding the Expiration Time, the
Conversion Rate shall be increased so that the same shall equal the
Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction of which (i) the
numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to holders of Common Stock
based on the acceptance (up to any maximum specified in the terms of the
tender or exchange offer) of all shares of Common Stock validly tendered or
exchanged and not
60
withdrawn as of the Expiration Time, other than shares of Common Stock
tendered by the California HealthCare Foundation (the shares deemed so
accepted up to any such maximum, being referred to as the "PURCHASED SHARES")
and (y) the product of the number of shares of Common Stock outstanding (less
any Purchased Shares) on the Expiration Time and the Market Price of the
Common Stock on the Trading Day next succeeding the Expiration Time, and (ii)
the denominator shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Expiration Time
multiplied by the Market Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such increase to become effective immediately
prior to the opening of business on the day following the Expiration Time. In
the event that the Company is obligated to purchase shares pursuant to any
such tender or exchange offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be effect if such tender or exchange offer had not been
made.
(d) In case of a tender or exchange offer by a Person other than
the Company or any Subsidiary for an amount which increases the offeror's
ownership of Common Stock to more than 25% of the Common Stock outstanding
and shall involve the payment by such Person of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors at the last time (the "TENDER EXPIRATION
TIME") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended)) at the Tender Expiration Time that
exceeds the Market Price of the Common Stock on the Trading Day next
succeeding the Tender Expiration Time, and in which, as of the Tender
Expiration Time the Board of Directors is not recommending rejection of the
offer, the Conversion Rate shall be increased so that the same shall equal
the Conversion Rate determined by multiplying the Conversion Rate in effect
immediately prior to the Tender Expiration Time by a fraction of which (i)
the numerator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to holders of Common Stock
based on the acceptance (up to a maximum specified in the terms of the tender
or exchange offer) of all shares of Common Stock validly tendered or
exchanged and not withdrawn as of the Tender Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "TENDER
PURCHASED SHARES") and (y) the product of the number of shares of Common
Stock outstanding (less any Tender Purchased Shares) on the Tender Expiration
Time and the Market Price of the Common Stock on the Trading Day next
succeeding the Tender Expiration Time, and (ii) the denominator shall be the
number of shares of Common Stock outstanding (including any tendered or
exchanged shares) on the Tender Expiration Time multiplied by the Market
Price of the Common Stock on the Trading Day next succeeding the Tender
Expiration Time, such increase to become effective immediately prior to the
opening of business on the day following the Tender Expiration Time. In the
event that such Person is obligated to purchase shares pursuant to any such
tender or exchange offer, but such Person is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Rate shall again be adjusted to be the Conversion
Rate which would then be in effect if such tender or exchange offer had not
been made. Notwithstanding the foregoing, the adjustment described in this
Section 11.08(d) shall not be made if, as of the Tender Expiration
61
Time, the offering documents with respect to such offer disclose a plan or
intention to cause the Company to engage in any transaction described in
Article 5 hereof.
SECTION 11.09. WHEN ADJUSTMENT MAY BE DEFERRED.
No adjustment in the Conversion Rate need be made unless the adjustment
would require an increase or decrease of at least 1% in the Conversion Rate.
Any adjustments that are made shall be carried forward and taken into account
any subsequent adjustment.
All calculations under this Article 11 shall be made to the nearest cent
or to the nearest 1/10,000th of a share, as the case may be.
SECTION 11.10. WHEN NO ADJUSTMENT REQUIRED.
No adjustment need be made for rights to purchase Common Stock pursuant
to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value
of the Common Stock.
To the extent the Securities become convertible into Cash, assets,
property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the Cash, assets, property or such
securities. Interest will not accrue on the Cash.
SECTION 11.11. NOTICE OF ADJUSTMENT.
Whenever the Conversion Rate is adjusted, the Company shall promptly
mail to Holders a notice of the adjustment. The Company shall file with the
Trustee and the Conversion Agent such notice. The certificate shall, absent
manifest error, be conclusive evidence that the adjustment is correct.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate except to exhibit the
same to any Holder desiring inspection thereof.
SECTION 11.12. VOLUNTARY INCREASE.
The Company may make such increases in the Conversion Rate, in addition
to those required by Sections 11.06, 11.07 and 11.08 hereof, as the Board of
Directors considers to be advisable to avoid or diminish any income tax to
holders of Common Stock or rights to purchase Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any
event treated as such for income tax purposes. To the extent permitted by
applicable law, the Company may from time to time increase the Conversion
Rate by any amount for any period of time if the period is at least 20 days,
the increase is irrevocable during the period and the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Company, which determination shall be conclusive. Whenever
the Conversion Rate is so increased, the Company shall mail to Holders and
file with the Trustee and the Conversion Agent a notice of such increase. The
Company shall mail such notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased Conversion
Rate and the period it will be in effect.
62
SECTION 11.13. NOTICE OF CERTAIN TRANSACTIONS.
If:
(1) the Company makes any distribution or dividend that
would require an adjustment in the Conversion Rate pursuant to Section 11.06,
11.07 or 11.08 hereof; or
(2) the Company takes any action that would require a
supplemental indenture pursuant to Section 11.14 hereof; or
(3) there is a liquidation, dissolution or winding-up of the
Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution or the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. The Company shall file and mail the notice at
least 15 days before such date. Failure to file or mail the notice or any
defect in it shall not affect the validity of the transaction.
SECTION 11.14. EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE.
If any of the following events occur, namely (i) any reclassification or
change of outstanding shares of Common Stock (other than a change in par
value, or from par value to no par value, or from no par value to par value,
or as a result of a subdivision or combination), (ii) any consolidation,
merger or combination of the Company with another corporation as a result of
which holders of Common Stock shall be entitled to receive stock, securities
or other property or assets (including Cash) with respect to or in exchange
for such Common Stock, or (iii) any sale or conveyance of the properties and
assets of the Company as, or substantially as, an entirety to any other
corporation as a result of which holders of Common Stock shall be entitled to
receive stock, securities or other property or assets (including Cash) with
respect to or in exchange for such Common Stock, then the Company or the
successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture, providing that each Security shall be
convertible into the kind and amount of shares of stock and other securities
or property or assets (including Cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance by a holder of
a number of shares of Common Stock issuable upon conversion of such
Securities immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance. Such supplemental indenture shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Securities, at such Holder's address
appearing on the Security register provided for in Section 2.03 hereof.
The above provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers, combinations, and sales.
63
If this Section applies, none of Sections 11.06, 11.07 nor 11.08 hereof
apply.
SECTION 11.15. COMPANY DETERMINATION FINAL.
Any determination that the Company or the Board of Directors must make
pursuant to Sections 11.03, 11.06, 11.07, 11.08, 11.09, 11.10, 11.14 or 11.17
hereof is conclusive.
SECTION 11.16. TRUSTEE'S ADJUSTMENT DISCLAIMER.
The Trustee has no duty to determine when an adjustment under this
Article 11 should be made, how it should be made or what it should be. The
Trustee has no duty to determine whether a supplemental indenture under
Section 11.14 hereof need be entered into or whether any provisions of any
supplemental indenture are correct. The Trustee shall not be accountable for
and makes no representation as to the validity or value of any securities or
assets issued upon conversion of Securities. The Trustee shall not be
responsible for the Company's failure to comply with this Article 11, and
shall not be deemed to have knowledge of any adjustment unless and until it
shall have received a notice of adjustment pursuant to Section 11.11 hereof.
Each Conversion Agent shall have the same protection under this Section 11.16
as the Trustee.
SECTION 11.17. SIMULTANEOUS ADJUSTMENTS.
In the event that this Article 11 requires adjustments to the Conversion
Rate under more than one of Sections 11.06, 11.07, 11.08(a) or 11.08(b)
hereof, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made
by applying, first, the provisions of Section 11.08(a) hereof, second, the
provisions of Section 11.08(b) hereof, third, the provisions of Section 11.06
hereof and, fourth, the provisions of Section 11.07 hereof.
SECTION 11.18. SUCCESSIVE ADJUSTMENTS.
After an adjustment to the Conversion Rate under this Article 11, any
subsequent event requiring an adjustment under this Article 11 shall cause an
adjustment to the Conversion Rate as so adjusted.
SECTION 11.19. RIGHTS ISSUED IN RESPECT OF COMMON STOCK
ISSUED UPON CONVERSION.
Notwithstanding any other provision hereof, in the event that the
Company implements a stockholders' rights plan, such rights plan shall
provide that upon conversion of the Securities the Holders will receive, in
addition to the Common Stock issuable upon such conversion, such rights
whether or not such rights have separated from the Common Stock at the time
of such conversion.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of
the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("TRIGGER EVENT"):
(i) are deemed to be transferred with such shares of Common Stock,
64
(ii) are not exercisable, and
(iii) are also issued in respect of future issuances of Common
Stock,
shall not be deemed distributed for purposes of Section 11.08(a) hereof until
the occurrence of the earliest Trigger Event. In addition, in the event of
any distribution of rights or warrants, or any Trigger Event with respect
thereto, that shall have resulted in an adjustment to the Conversion Rate
under Section 11.08(a) hereof, (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Rate shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to
the per share redemption or repurchase price received by a holder of Common
Stock with respect to such rights or warrants (assuming such holder had
retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of any such
rights or warrants all of which shall have expired without exercise by any
holder thereof, the Conversion Rate shall be readjusted as if such issuance
had not occurred.
SECTION 11.20. GENERAL CONSIDERATIONS.
Whenever successive adjustments to the Conversion Rate are called for
pursuant to this Article 11, such adjustments shall be made to the Market
Price as may be necessary or appropriate to effectuate the intent of this
Article 11 and to avoid unjust or inequitable results as determined in good
faith by the Board of Directors.
ARTICLE 12.
SPECIAL TAX EVENT
SECTION 12.01. OPTIONAL CONVERSION TO SEMIANNUAL COUPON DEBENTURE UPON
TAX EVENT.
From and after the date (the "TAX EVENT DATE") of the occurrence of a
Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount shall accrue at ___% per annum on a principal amount per
Security (the "RESTATED PRINCIPAL AMOUNT") equal to the Issue Price plus
Original Issue Discount accrued to the date immediately prior to the Tax
Event Date or the date on which the Company exercises the option described
herein (to convert the Security into a Semiannual Coupon Debenture),
whichever is later (such date, the "OPTION EXERCISE DATE"). Such interest
shall accrue from the Option Exercise Date and shall be payable semiannually
on _________ and _________ of each year (each an "INTEREST PAYMENT DATE") to
Holders of record at the close of business on ______ or _________ (each a
"REGULAR RECORD DATE") immediately preceding such Interest Payment Date.
Interest will be computed on the basis of a 360-day year comprised of twelve
30-day months and will accrue from the most recent date on which interest has
been paid or, if no interest has been paid, from the Option Exercise Date.
Within 15 days of the occurrence of a Tax Event, the Company shall mail a
written notice of such Tax Event by first-class mail to the Trustee.
65
SECTION 12.02. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security is registered at the close of business on
the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose. Each installment of interest on any
Security shall be paid in same-day funds by transfer to an account maintained
by the payee located inside the United States. In the case of a permanent
global Security, interest payable on any Interest Payment Date will be paid
to the Depositary, Euroclear and/or CEDEL, as the case may be, with respect
to that portion of such permanent global Security held for its account by
Cede & Co. or the London office of a depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
(b) Except as otherwise specified with respect to the Securities,
any interest on any Security that is payable, but is not punctually paid or
duly provided for, within 30 days following any Interest Payment Date (herein
called "DEFAULTED INTEREST") shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue of
having been such Holder, and such Defaulted Interest may be paid by the
Company, as its election in each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the persons in whose names the Securities are
registered at the close of business on a Special Record Date for
the payment of such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each
Security and the date of the proposed payment (which shall not be
less than 20 days after such notice is received by the Trustee),
and at the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the
date of proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall
fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10
days prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the proposed
payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Securities
at his address as it appears on the list of Holders maintained
pursuant to Section 2.05 hereof not less than 10 days prior to such
Special Record Date. The Trustee may, in its discretion, in the
name and at the expense of the Company, cause a similar notice to
be published at least once in an Authorized Newspaper in each place
of payment, but such publications shall not be a condition
precedent to the establishment of such
66
Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names the Securities are registered at the close
of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on
the Securities in any other lawful manner not inconsistent with the
requirements of any securities exchange on which such Securities
may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 2.06
hereof, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry
the rights to interest accrued and unpaid, and to accrue, which were carried
by such other Security.
ARTICLE 13.
MISCELLANEOUS
SECTION 13.01. TRUST INDENTURE ACT.
This Indenture is hereby made subject to, and shall be governed by, the
provisions of the TIA required to be part of and to govern indentures
qualified under the TIA; PROVIDED, HOWEVER that this Section 13.01 shall not
require this Indenture or the Trustee to be qualified under the TIA prior to
the time such qualification is in fact required under the terms of the TIA,
nor shall it constitute any admission or acknowledgment by any party that any
such qualification is required prior to the time such qualification is in
fact required under the terms of the TIA. If any provision hereof limits,
qualifies or conflicts with another provision hereof which is required to be
included in an indenture qualified under the TIA, such required provision
shall control.
SECTION 13.02. NOTICES.
Any request, demand, authorization, notice, waiver, consent or
communication shall be in writing and delivered in Person or mailed by first
class mail, postage prepaid, addressed as follows or transmitted by facsimile
transmission (confirmed by overnight courier) to the following facsimile
numbers:
if to the Company:
WellPoint Health Networks Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: General Counsel
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
67
if to the Trustee:
The Bank of New York
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: Corporate Trust Trustee Administration
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication given to a Holder shall be mailed to the
Holder, by first class mail, postage prepaid, at the Holder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Holders, it shall
mail a copy to the Trustee and each Registrar, Paying Agent, Conversion Agent
or co-registrar.
SECTION 13.03. COMMUNICATION BY HOLDERS WITH OTHER HOLDERS.
Holders may communicate pursuant to TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Company, the Trustee, the Registrar, the Paying Agent, the Conversion
Agent and anyone else shall have the protection of TIA Section 312(c).
SECTION 13.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Company to the Trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 13.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each Officers' Certificate or Opinion of Counsel with respect to
compliance with a covenant or condition provided for in this Indenture shall
include:
(1) a statement that each individual making such Officers'
Certificate or Opinion of Counsel has read such covenant or condition;
68
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained
in such Officers' Certificate or Opinion of Counsel are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or investigation as is
necessary to enable him or her to express an informed opinion as to whether
or not such covenant or condition has been complied with; and
(4) a statement that, in the opinion of such individual,
such covenant or condition has been complied with.
SECTION 13.06. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 13.07. RULES BY TRUSTEE, PAYING AGENT, CONVERSION AGENT AND
REGISTRAR.
The Trustee may make reasonable rules for action by or a meeting of
Holders. The Registrar, Conversion Agent and the Paying Agent may make
reasonable rules for their functions.
SECTION 13.08. GOVERNING LAW.
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THIS INDENTURE AND THE
SECURITIES, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
SECTION 13.09. NO RECOURSE AGAINST OTHERS.
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or this Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder shall waive and release all such liability. The waiver and release
shall be part of the consideration for the issue of the Securities.
SECTION 13.10. SUCCESSORS.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
69
SECTION 13.11. MULTIPLE ORIGINALS.
The parties may sign any number of copies of this Indenture. Each signed
copy shall be an original, but all of them together represent the same
agreement. One signed copy is enough to prove this Indenture.
(SIGNATURE PAGE FOLLOWS)
70
IN WITNESS WHEREOF, the undersigned, being duly authorized, have
executed this Indenture on behalf of the respective parties hereto as of the
date first written above.
Dated as of _____, 1999
WELLPOINT HEALTH NETWORKS INC.
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By:
------------------------------------
Name:
Title:
S - 1
EXHIBIT A
[FORM OF FACE OF SECURITY]
FOR UNITED STATES FEDERAL INCOME TAX PURPOSES, THIS SECURITY BEARS ORIGINAL
ISSUE DISCOUNT. INFORMATION INCLUDING THE ISSUE PRICE, AMOUNT OF ORIGINAL
ISSUE DISCOUNT, THE ISSUE DATE, AND THE YIELD TO MATURITY WILL BE MADE
AVAILABLE TO HOLDERS UPON REQUEST TO R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ OF THE COMPANY, AT
(▇▇▇) ▇▇▇-▇▇▇▇.
[FORM OF LEGEND FOR GLOBAL SECURITY]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC) , ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON
OWNERSHIP AND TRANSFER. NO HOLDER SHALL BENEFICIALLY OWN SHARES OF CAPITAL
STOCK IN EXCESS OF THE OWNERSHIP LIMIT (AS DEFINED IN ARTICLE VII, SECTION 14
OF THE RESTATED CERTIFICATE OF INCORPORATION OF THE CORPORATION). SUBJECT TO
CERTAIN LIMITED SPECIFIC EXEMPTIONS, BENEFICIAL OWNERSHIP OF 5% OR MORE (OR,
IN THE CASE OF CERTAIN INSTITUTIONAL INVESTORS AS SPECIFIED IN THE LICENSE
AGREEMENT, 10% OR MORE) OF THE OUTSTANDING SHARES OF ANY CLASS OF CAPITAL
STOCK WILL EXCEED THE OWNERSHIP LIMIT. FOR THESE PURPOSES OF COMPUTING THE
BENEFICIAL OWNERSHIP OF CAPITAL STOCK, A HOLDER OF ANY PARTICULAR PRINCIPAL
AMOUNT OF SECURITIES WILL BE DEEMED TO BENEFICIALLY OWN SHARES OF COMMON
STOCK ON ANY PARTICULAR DATE EQUAL TO THE GREATER OF (I) THE NUMBER OF SHARES
OF COMMON STOCK ISSUABLE IN THE EVENT OF CONVERSION FOR THAT PARTICULAR
PRINCIPAL AMOUNT OF SECURITIES AT THE CONVERSION RATE IN EFFECT ON SUCH DATE
OR (II) THE QUOTIENT DETERMINED BY DIVIDING THE EXTRAPOLATED PURCHASE PRICE
(AS DEFINED BELOW) FOR THAT PARTICULAR PRINCIPAL AMOUNT OF SECURITIES AT THAT
PARTICULAR DATE BY THE MARKET PRICE (CALCULATED AS IF THAT PARTICULAR DATE
WERE A REPURCHASE DATE). FOR THESE PURPOSES, THE "EXTRAPOLATED PURCHASE
PRICE" SHALL BE THE SUM OF THE ISSUE PRICE OF THE PARTICULAR PRINCIPAL AMOUNT
OF SECURITIES PLUS THE AMOUNT OF THE ORIGINAL ISSUE DISCOUNT ACCRUED TO AND
INCLUDING SUCH DATE.
A - 1
THESE PROVISIONS HAVE BEEN DESIGNED TO ENSURE THAT THE CORPORATION WILL NOT
VIOLATE THE TERMS OF THE LICENSE AGREEMENT BETWEEN THE CORPORATION AND THE
BLUE CROSS AND BLUE SHIELD ASSOCIATION (THE "BCBSA"). THE CORPORATION
MAINTAINS AT ITS PRINCIPAL EXECUTIVE OFFICE A COPY OF THE APPLICABLE
REQUIREMENTS OF THE BCBSA RELATING TO SUCH RESTRICTIONS ON OWNERSHIP AND
TRANSFER, AS SUCH REQUIREMENTS MAY BE AMENDED FROM TIME TO TIME, WHICH ARE
OPEN TO INSPECTION BY THE STOCKHOLDERS, AT ALL REASONABLE TIMES DURING OFFICE
HOURS. ANY HOLDER WHO ATTEMPTS TO BENEFICIALLY OWN SECURITIES IN VIOLATION OF
THIS LIMITATION MUST IMMEDIATELY NOTIFY THE CORPORATION. EXCEPT AS OTHERWISE
NOTED, ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANING ASCRIBED TO THEM
IN THE CORPORATION'S RESTATED CERTIFICATE OF INCORPORATION, AS THE SAME MAY
BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON
OWNERSHIP AND TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH HOLDER WHO SO
REQUESTS. UPON THE OCCURRENCE OF ANY EVENT THAT WOULD CAUSE ANY HOLDER TO
EXCEED THE OWNERSHIP LIMIT, ALL SECURITIES AND SHARES OF CAPITAL STOCK
BENEFICIALLY OWNED BY SUCH HOLDER IN EXCESS OF THE OWNERSHIP LIMIT WILL
AUTOMATICALLY BE DEEMED EXCESS SHARES AND BE TRANSFERRED IMMEDIATELY TO THE
SHARE ESCROW AGENT AND BE SUBJECT TO THE PROVISIONS OF THE CORPORATION'S
RESTATED CERTIFICATE OF INCORPORATION AND THE SHARE ESCROW AGENT AGREEMENT, A
COPY OF WHICH THE CORPORATION MAINTAINS AT ITS PRINCIPAL EXECUTIVE OFFICES.
THE FOREGOING SUMMARY OF THE RESTRICTIONS ON OWNERSHIP AND TRANSFER IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE CORPORATION'S RESTATED
CERTIFICATE OF INCORPORATION. THE PURCHASE BY OR TRANSFER TO ANY HOLDER OF
ANY SECURITIES SHALL CONSTITUTE ACKNOWLEDGMENT AND ACCEPTANCE BY SUCH HOLDER
OF SUCH RESTRICTIONS ON OWNERSHIP AND TRANSFER.
A - 2
WELLPOINT HEALTH NETWORKS INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2019
No.
Issue Date: __________, 1999 Original Issue Discount: $_______
Issue Price: $________ (for each $1,000 Principal Amount)
(for each $1,000 Principal Amount)
CUSIP:
WellPoint Health Networks Inc., a Delaware corporation, promises to pay
to _________________ or registered assigns, on __________, 2019 [the Principal
Amount of _______________________________ Dollars ($__________)] .(1)
This Security shall not bear interest except as specified on the other
side of this Security. Original Issue Discount will accrue as specified on
the other side of this Security. This Security is convertible as specified on
the other side of this Security.
Additional provisions of this Security are set forth on the other side
of this Security.
IN WITNESS WHEREOF, WellPoint Health Networks Inc. has caused this
instrument to be duly executed.
WELLPOINT HEALTH NETWORKS INC.
By _____________________________________
Name: __________________________________
Title: _________________________________
________________________________________
By _____________________________________
Name: __________________________________
Title: _________________________________
Dated: _________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
THE BANK OF NEW YORK, as Trustee, certifies that this is one of the
Securities referred to in the within-mentioned Indenture.
By ___________________________________
Authorized Signatory
------------------------
(1) The global Security will read instead: "The Principal Amount then shown
on Schedule A hereto."
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[FORM OF REVERSE SIDE OF SECURITY]
WELLPOINT HEALTH NETWORKS INC.
ZERO COUPON CONVERTIBLE SUBORDINATED DEBENTURE DUE 2019
1. INTEREST
This Security shall not bear interest except as specified in this
paragraph or in paragraph 10 hereof. If the Principal Amount hereof or any
portion of such Principal Amount is not paid when due (whether upon
acceleration pursuant to Section 6.02 of the Indenture, upon the date set for
payment of the Redemption Price pursuant to paragraph 5 hereof, upon the date
set for payment of a Purchase Price or Fundamental Change Purchase Price
pursuant to paragraph 6 hereof or upon the Stated Maturity of this Security),
then in each such case the overdue amount shall bear interest at the rate of
___% per annum, compounded semiannually (to the extent that the payment of
such interest shall be legally enforceable), which interest shall accrue from
the date such overdue amount was due to the date payment of such amount,
including interest thereon, has been made or duly provided for. All such
interest shall be payable on demand. The accrual of such interest on overdue
amounts shall be in lieu of, and not in addition to, the continued accrual of
Original Issue Discount.
The Original Issue Discount (the difference between the Issue Price and
the Principal Amount of the Security) in the period during which a Security
remains outstanding, shall accrue at ___% per annum, on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months,
commencing on the Issue Date of this Security. Original Issue Discount shall
cease to accrue on the earlier of (a) the date on which the Principal Amount
hereof or any portion of such Principal Amount becomes due and payable and
(b) any Redemption Date, Conversion Date, Fundamental Change Repurchase Date,
Repurchase Date or other date on which such Original Issue Discount (or, if
such Securities have been converted to Semiannual Coupon Debentures following
the occurrence of a Tax Event, interest on such debentures) shall cease to
accrue in accordance with Section 2.08 of the Indenture.
2. METHOD OF PAYMENT
Subject to the terms and conditions of the Indenture, the Company will
make payments in respect of the Securities to the Persons who are registered
Holders of Securities at the close of business on the Business Day preceding
the Redemption Date or Stated Maturity, as the case may be, or at the close
of business on a Repurchase Date or Fundamental Change Repurchase Date, as
the case may be. Holders must surrender Securities to the Paying Agent to
collect such payments in respect of the Securities. The Company will pay cash
amounts in money of the United States that at the time of payment is legal
tender for payment of public and private debts. However, the Company may make
such cash payments by check payable in such money.
3. PAYING AGENT, CONVERSION AGENT AND REGISTRAR
Initially, The Bank of New York., a New York banking corporation (the
"TRUSTEE"), will act as Paying Agent, Conversion Agent and Registrar. The
Company may appoint and change
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any Paying Agent, Conversion Agent, Registrar or co-registrar without notice,
other than notice to the Trustee. The Company or any of its Subsidiaries or
any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar
or co-registrar.
4. INDENTURE
The Company issued the Securities under an Indenture (the "INDENTURE"),
dated as of ____________________, 1999, between the Company and the Trustee.
Capitalized terms used herein and not defined herein have the meanings
ascribed thereto in the Indenture. The Securities are subject to all such
terms, and Holders are referred to the Indenture for a statement of those
terms.
The Securities are general unsecured obligations of the Company limited
to $327,750,000 aggregate Principal Amount (subject to Sections 2.02 and 2.07
of the Indenture). The Indenture does not limit other indebtedness of the
Company, secured or unsecured, including Senior Indebtedness of the Company.
5. REDEMPTION AT THE OPTION OF THE COMPANY
No sinking fund is provided for the Securities. The Securities are
redeemable as a whole, or from time to time in part, at any time at the
option of the Company at the Redemption Prices set forth below, provided that
the Securities are not redeemable prior to __________, 2002.
The table below shows Redemption Prices of a Security per $1,000
Principal Amount on the dates shown below and at Stated Maturity, which
prices reflect accrued Original Issue Discount calculated to each such date.
The Redemption Price of a Security redeemed between such dates would include
an additional amount reflecting the additional Original Issue Discount
accrued since the next preceding date in the table to the actual Redemption
Date.
ACCRUED
ORIGINAL ISSUE REDEMPTION
SECURITY DISCOUNT PRICE
REDEMPTION DATE ISSUE PRICE AT ____% (1) + (2)
--------------- ----------- -------------- ----------
__________, 2002
__________, 2003
__________, 2004
__________, 2005
__________, 2006
__________, 2007
__________, 2008
__________, 2009
__________, 2010
__________, 2011
__________, 2012
__________, 2013
__________, 2014
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__________, 2015
__________, 2016
__________, 2017
__________, 2018
At maturity
If converted to a Semiannual Coupon Debenture following the occurrence
of a Tax Event, this Security will be redeemable at the Restated Principal
Amount plus interest accrued and unpaid from, and including, the date of such
conversion to, but excluding, the Redemption Date.
6. REPURCHASE BY THE COMPANY AT THE OPTION OF THE HOLDER; REPURCHASE AT
THE OPTION OF THE HOLDER UPON A FUNDAMENTAL CHANGE
(a) Subject to the terms and conditions of the Indenture, the
Company shall become obligated to repurchase, at the option of the Holder,
the Securities held by such Holder on the following Repurchase Dates and at
the following Purchase Prices per $1,000 Principal Amount, upon delivery of a
Repurchase Notice containing the information set forth in the Indenture, from
the opening of business on the date that is 20 Business Days prior to such
Repurchase Date until the close of business on such Repurchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in
the Indenture. Such Purchase Prices may be paid, at the option of the
Company, in Cash or by the issuance and delivery of shares of Common Stock of
the Company, or in any combination thereof.
REPURCHASE DATE PURCHASE PRICE
--------------- --------------
__________________, 2002 $_______________
__________________, 2009 $_______________
__________________, 2014 $_______________
Securities in denominations larger than $1,000 of Principal Amount may
be repurchased in part, but only in integral multiples of $1,000 of Principal
Amount.
(b) If prior to a Repurchase Date this Security has been converted
to a Semiannual Coupon Debenture following the occurrence of a Tax Event, the
Purchase Price will be equal to the Restated Principal Amount plus accrued
and unpaid interest from, and including, the date of conversion to, but
excluding, the Repurchase Date.
(c) At the option of the Holder and subject to the terms and
conditions of the Indenture, the Company shall become obligated to repurchase
the Securities held by such Holder and delivered to the Company or its
designated agent on or before 45 days after the date of the Company's notice
of a Fundamental Change occurring on or prior to __________, 2019 for a
Fundamental Change Purchase Price equal to the Issue Price plus accrued
Original Issue Discount and interest, if any, to the Fundamental Change
Repurchase Date which Fundamental Change Purchase Price shall be paid in
Cash. Securities in denominations larger than $1,000 of Principal Amount may
be repurchased in part in connection with a Fundamental Change, but only in
integral multiples of $1,000 of Principal Amount. If, prior to a Fundamental
Change Repurchase Date, this Security has been converted to a Semiannual
Coupon Debenture following
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the occurrence of a Tax Event, the Purchase Price will be equal to the
Restated Principal Amount plus accrued and unpaid interest from, and
including, the date of conversion to, but excluding, the Fundamental Change
Repurchase Date.
(d) Holders have the right to withdraw any Repurchase Notice or
Fundamental Change Repurchase Notice, as the case may be, by delivering to
the Paying Agent a written notice of withdrawal in accordance with the
provisions of the Indenture.
(e) If Cash (and/or securities if permitted under the Indenture)
sufficient to pay a Purchase Price or Fundamental Change Purchase Price, as
the case may be, of all Securities or portions thereof to be repurchased as
of the Repurchase Date or the Fundamental Change Repurchase Date, as the case
may be, is deposited with the Paying Agent on the Business Day following the
Repurchase Date or the Fundamental Change Repurchase Date, as the case may
be, Original Issue Discount (or interest upon conversion to a Semiannual
Coupon Debenture following the occurrence of a Tax Event) ceases to accrue on
such Securities (or portions thereof) on and after such date, and the Holder
thereof shall have no other rights as such (other than the right to receive
the Purchase Price or Fundamental Change Purchase Price, as the case may be,
upon surrender of such Security).
7. NOTICE OF REDEMPTION AT THE OPTION OF THE COMPANY
Notice of redemption at the option of the Company will be mailed at
least 20 days but not more than 60 days before the Redemption Date to each
Holder of Securities to be redeemed at the Holder's registered address. If
money sufficient to pay the Redemption Price of all Securities (or portions
thereof) to be redeemed on the Redemption Date is deposited with the Paying
Agent prior to or on the Redemption Date, on and after such date Original
Issue Discount (or interest upon conversion to a Semiannual Coupon Debenture
following the occurrence of a Tax Event) ceases to accrue on such Securities
or portions thereof. Securities in denominations larger than $1,000 of
Principal Amount may be redeemed in part but only in multiples of $1,000 of
Principal Amount.
8. SUBORDINATION
The Securities are subordinated to all existing and future Senior
Indebtedness of the Company. To the extent provided in the Indenture, Senior
Indebtedness of the Company must be paid before the Securities may be paid.
The Indenture does not limit the present or future amount of Senior
Indebtedness that the Company may have. The Company agrees, and each Holder
by accepting a Security agrees, to the subordination and authorizes the
Trustee to give it effect and appoints the Trustee as attorney-in-fact for
such purpose.
9. CONVERSION
Subject to the next two succeeding sentences, a Holder of a Security may
convert this Security for Common Stock of the Company at any time prior to
maturity. If this Security is called for redemption, the Holder may convert
it at any time before the close of the last Trading Day prior to the
Redemption Date. A Security in respect of which a Holder has delivered a
notice of exercise of the option to require the Company to repurchase such
Security or to
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repurchase such Security in the event of a Fundamental Change may be
converted only if the notice of exercise is withdrawn in accordance with the
terms of the Indenture.
The initial Conversion Rate is _______ shares of Common Stock per $1,000
Principal Amount, subject to adjustment in certain events described in the
Indenture. The Company will deliver Cash or a check in lieu of any fractional
share of Common Stock.
The Holders' right to convert Securities into shares of Common Stock is
subject to the Company's right to elect to instead pay such Holder the amount
of Cash set forth in the next succeeding sentence in lieu of delivering such
shares of Common Stock; PROVIDED, HOWEVER, that if such payment of Cash is
not permitted pursuant to the provisions of the Indenture or the provisions
of any other agreement or instrument to which the Company is a party or by
which it is bound or otherwise, the Company shall deliver shares of Common
Stock (and Cash in lieu of fractional shares of Common Stock) in accordance
with Article 11 of the Indenture, whether or not the Company has delivered a
notice pursuant to Section 11.02 to the effect that the Securities will he
paid in Cash. The amount of Cash to he paid for each $1,000 Principal Amount
of a Security shall be equal to the Sale Price of a share of Common Stock on
the Trading Day immediately prior to the related Conversion Date multiplied
by the Conversion Rate in effect on such Trading Day.
The Company shall not pay Cash in lieu of delivering shares of Common
Stock upon the conversion of any Security pursuant to the terms of Article 11
of the Indenture (other than Cash in lieu of fractional shares) if there has
occurred (prior to, on or after, as the case may be, the Conversion Date or
the date on which the Company delivers its notice of whether each Security
shall he converted into shares of Common Stock or Cash) and is continuing an
Event of Default (other than a default in such payment on such Securities),
provided, however, that this sentence shall not apply in the event that an
Event of Default occurs after such Cash is paid.
In the event the Company exercises its option pursuant to Section 12.01
of the Indenture to have interest in lieu of Original Issue Discount accrue
on the Security following a Tax Event, the Holder will be entitled on
conversion to receive the same number of shares of Common Stock such Holder
would have received if the Company had not exercised such option. If the
Company exercises such option, Securities surrendered for conversion during
the period from the close of business on any Regular Record Date next
preceding any Interest Payment Date to the opening of business of such
Interest Payment Date (except Securities to be redeemed on the next Interest
Payment Date) must be accompanied by payment of an amount equal to the
interest thereon that the registered Holder is to receive. Except where
Securities surrendered for conversion must he accompanied by payment as
described above, no interest on converted Securities will he payable by the
Company on any Interest Payment Date subsequent to the date of conversion.
To convert this Security a Holder must (1) complete and manually sign
the conversion notice on the back of this Security (or complete and manually
sign a facsimile of such notice) and deliver such notice to the Conversion
Agent, (2) surrender this Security to the Conversion Agent, (3) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if
required.
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A Holder may convert a portion of this Security if the Principal Amount
of such portion is $1,000 or an integral multiple of $1,000. No payment or
adjustment will be made for dividends on the Common Stock except as provided
in the Indenture. On conversion of this Security, that portion of accrued
Original Issue Discount attributable to the period from the Issue Date to the
Conversion Date with respect to the converted portion of this Security shall
not be canceled, extinguished or forfeited, but rather shall be deemed to be
paid in full to the Holder thereof through the delivery of the Common Stock
(together with any cash payment in lieu of fractional shares) in exchange for
the portion of this Security being converted pursuant to the terms hereof.
10. TAX EVENT
(a) From and after the date (the "TAX EVENT DATE") of the
occurrence of a Tax Event, at the option of the Company, interest in lieu of
future Original Issue Discount shall accrue at _____% per annum on a
principal amount per Security (the "RESTATED PRINCIPAL AMOUNT") equal to the
Issue Price plus Original Issue Discount accrued to the date immediately
prior to the Tax Event Date and shall be payable semiannually on _____ and
______ of each year (each an "INTEREST PAYMENT DATE") to Holders of record at
the close of business on ______ or ______ (each a "REGULAR RECORD DATE")
immediately preceding such Interest Payment Date. Interest will be computed
on the basis of a 360-day year comprised of twelve 30-day months and will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the Tax Event Date.
(b) Interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security is registered at the close of business on
the Regular Record Date for such interest at the office or agency of the
Company maintained for such purpose. Each installment of interest on any
Security shall be paid in same-day funds by transfer to an account maintained
by the payee located inside the United States. In the case of a permanent
global Security, interest payable on any Interest Payment Date will be paid
to the Depositary, Euroclear and/or Cedel, as the case may be, with respect
to that portion of such permanent global Security held for its account by
Cede & Co. or the London office of a depositary, as the case may be, for the
purpose of permitting such party to credit the interest received by it in
respect of such permanent global Security to the accounts of the beneficial
owners thereof.
(c) Except as otherwise specified with respect to the Securities,
any interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "DEFAULTED
INTEREST") shall forthwith cease to be payable to the registered Holder
thereof on the relevant Regular Record Date by virtue of having been such
Holder, and such Defaulted Interest may be paid by the Company as provided
for in Section 12.02(b) of the Indenture.
11. CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION
Any Securities called for redemption, unless surrendered for conversion
before the close of business on the last Trading Day prior to the Redemption
Date, may be deemed to be purchased from the Holders of such Securities at an
amount not less than the Redemption Price,
A - 9
by one or more investment bankers or other purchasers who may agree with the
Company to purchase such Securities from the Holders, to convert them for
Common Stock and to make payment for such Securities to the Trustee in trust
for such Holders.
12. DENOMINATIONS; TRANSFER; EXCHANGE
The Securities are in registered form, without coupons, in denominations
of $1,000 of Principal Amount and integral multiples of $1,000. A Holder may
transfer or convert Securities in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees required by
law or permitted by the Indenture. The Registrar need not transfer or
exchange any Securities selected for redemption (except, in the case of a
Security to be redeemed in part, the portion of the Security not to be
redeemed) or any Securities in respect of which a Repurchase Notice or
Fundamental Change Repurchase Notice has been given and not withdrawn
(except, in the case of a Security to be purchased in part, the portion of
the Security not to be purchased) or any Securities for a period of 15 days
before the mailing of notice of Securities to be redeemed.
13. PERSONS DEEMED OWNERS
The registered Holder of this Security may be treated as the owner of
this Security for all purposes.
14. UNCLAIMED MONEY OR SECURITIES
The Trustee and the Paying Agent shall return to the Company upon
written request any money or securities held by them for the payment of any
amount with respect to the Securities that remains unclaimed for two years,
PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before being
required to make any such return, shall at the expense of the Company cause
to be published once in a newspaper of general circulation in The City of New
York or mail to each such Holder notice that such money or securities remains
unclaimed and that, after a date specified therein, which shall not be less
than 30 days from the date of such publication or mailing, any unclaimed
money or securities then remaining will be returned to the Company. After
return to the Company, Holders entitled to the money or securities must look
to the Company for payment as general creditors unless an applicable
abandoned property law designates another Person.
15. AMENDMENT; WAIVER
Subject to certain exceptions set forth in the Indenture, (i) the
Indenture or the Securities may be amended with the written consent of the
Holders of at least a majority in aggregate Principal Amount of the
Securities at the time outstanding and (ii) certain Defaults and Events of
Defaults may be waived with the written consent of the Holders of a majority
in aggregate Principal Amount of the Securities at the time outstanding.
Subject to certain exceptions set forth in the Indenture, without the consent
of any Holder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to provide for
the assumption of the Company's obligations to the Holders of the Securities
in case of a merger or consolidation or sale of all or substantially all of
the Company's assets; to provide
A - 10
for uncertificated Securities in addition to or in place of certificated
Securities or to make any change that does not adversely affect the rights of
any Holder or to comply with any requirement of the SEC in connection with
the qualification of the Indenture under the TIA.
16. DEFAULTS AND REMEDIES
Under the Indenture, Events of Default include (i) the Company defaults
in the payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price or a Fundamental Change Purchase
Price on any Security when the same becomes due and payable at its Stated
Maturity, upon redemption, upon declaration, when due for repurchase by the
Company or otherwise, whether or not such payment shall be prohibited by
Article 10 of the Indenture; (ii) after exercise of its option pursuant to
Section 12.01 of the Indenture following a Tax Event, the Company defaults in
the payment of interest upon any security when such interest becomes due and
payable, and such default continues for a period of 30 days; (iii) failure of
the Company to perform or comply with the provisions of Section 11.02 of the
Indenture, and such failure continues for a period of 10 days; (iv) the
Company fails to comply with any of its agreements or covenants in this
Security or the Indenture (other than those referred to in clauses (i)
through (iii) above) and such failure continues for 60 days after receipt by
the Company of a Notice of Default; and (v) certain events of bankruptcy or
insolvency as set forth in the Indenture. If an Event of Default occurs and
is continuing, the Trustee, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding, may declare all
the Securities to be due and payable immediately. Certain events of
bankruptcy or insolvency are Events of Default which will result in the
Securities being declared due and payable immediately upon the occurrence of
such Events of Default.
Holders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject
to certain limitations, Holders of a majority in aggregate Principal Amount
of the Securities at the time outstanding may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Holders notice
of any continuing Default (except a Default in payment of amounts specified
in clause (i) and (ii) above) if it determines that withholding notice is in
their interests.
17. TRUSTEE DEALINGS WITH THE COMPANY
The Trustee under the Indenture, in its individual or any other
capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates
and may otherwise deal with the Company or its Affiliates with the same
rights it would have if it were not Trustee.
18. NO RECOURSE AGAINST OTHERS
A director, officer, employee or stockholder, as such, of the Company
shall not have any liability for any obligations of the Company under the
Securities or the Indenture or for any claim based on, in respect of or by
reason of such obligations or their creation. By accepting a Security, each
Holder waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Securities.
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19. AUTHENTICATION
This Security shall not be valid until an authorized signatory of the
Trustee manually signs the Trustee's Certificate of Authentication on the
other side of this Security.
20. ABBREVIATIONS
Customary abbreviations may be used in the name of a Holder or an
assignee, such as TEN COM (=tenants in common), TENANT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).
21. GOVERNING LAW
THE LAWS OF THE STATE OF NEW YORK SHALL GOVERN THE INDENTURE AND THIS
SECURITY, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Requests may be made to:
WellPoint Health Networks Inc.
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
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[FORM OF CONVERSION NOTICE]
CONVERSION NOTICE
To: WellPoint Health Networks Inc.
The undersigned registered holder of this Security hereby irrevocably
exercises the option to convert this Security, or portion hereof (which is
$1,000 principal amount or an integral multiple thereof) below designated,
for shares of Common Stock of WellPoint Health Networks Inc. in accordance
with the terms of the Indenture referred to in this Security, and directs
that the shares issuable and deliverable upon such conversion, together with
any check in payment for fractional shares and any Securities representing
any unconverted principal amount hereof, be issued and delivered to the
registered holder hereof unless a different name has been indicated below. If
shares or any portion of this Security not converted are to be issued in the
name of a Person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto.
Dated:
-------------------------------------------------
-------------------------------------------------
Signature(s)
Fill in for registration of shares
if to be delivered, and Securities
if to be issued other than to and in
the name of the registered holder:
------------------------------------------
(Name)
------------------------------------------
(Street Address)
------------------------------------------
(City, state and zip code)
Please print name and address
Principal amount to be converted
(if less than all):
$_________,000
Social Security or Other Taxpayer
Identification Number
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[FORM OF OPTION TO ELECT REPURCHASE
UPON A FUNDAMENTAL CHANGE]
To: WellPoint Health Networks Inc.
The undersigned registered holder of this Security hereby acknowledges
receipt of a notice from WellPoint Health Networks Inc. (the "COMPANY") as to
the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repurchase this Security, or the
portion hereof (which is $1,000 Principal Amount or an integral multiple
thereof) below designated, in accordance with the terms of the Indenture
referred to in this Security.
Dated:
-------------------------------------------------
-------------------------------------------------
Signature(s)
Principal amount to be repurchased
(if less than all):
$_______,000
Social Security or Other Taxpayer
Identification Number
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ASSIGNMENT
For value received ________________________ hereby sell(s), assign(s)
and transfer(s) unto _____________________ (Please insert social security or
other Taxpayer Identification Number of assignee) the within Security, and
hereby irrevocably constitutes and appoints _____________ attorney to
transfer the said Security on the books of the Company, with full power of
substitution in the premises.
Dated: ___________________________
_______________________________________
_______________________________________
Signature(s)
Signature(s) must be guaranteed by an eligible Guarantor
Institution (a bank, a stock broker, a savings and loan
association or a credit union) with membership in an approved
signature guarantee program pursuant to Securities and Exchange
Commission Rule 17Ad-15) if shares of Common Stock are to be
issued, or Securities to be delivered, other than to or in the
name of the registered holder.
_______________________________________
Signature Guarantee
NOTICE: The above signatures of the holder(s) hereof must correspond with the
name as written upon the face of the Security in every particular without
alteration or enlargement or any change whatever.
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[FORM OF SCHEDULE FOR ENDORSEMENTS ON GLOBAL SECURITY
TO REFLECT CHANGES IN PRINCIPAL AMOUNT]
Schedule A
Changes to Principal Amount of Global Security
PRINCIPAL AMOUNT OF SECURITIES
BY WHICH THIS GLOBAL SECURITY
IS TO BE REDUCED OR INCREASED, AND
REASON FOR REMAINING PRINCIPAL AMOUNT OF NOTATION
DATE REDUCTION OR INCREASE THIS GLOBAL SECURITY MADE BY
---- ----------------------------------- ----------------------------- ---------
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