EXHIBIT 4.1
EXECUTION COPY
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LEVEL 3 COMMUNICATIONS, INC.
AND
IBJ WHITEHALL BANK & TRUST COMPANY
as Trustee
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FIRST SUPPLEMENTAL INDENTURE
DATED AS OF SEPTEMBER 20, 1999
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Supplement to Indenture dated as of September 20, 1999
(Subordinated Debt Securities)
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FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE, dated as of September 20, 1999 by and
between LEVEL 3 COMMUNICATIONS, INC., a Delaware corporation (hereinafter called
the "Company"), and IBJ WHITEHALL BANK & TRUST COMPANY, a corporation duly
organized and existing under the laws of the State of New York (hereinafter
called the "Trustee"), having a Corporate Trust Office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, as Trustee under the Indenture (as hereinafter defined).
RECITALS
WHEREAS, the Company and the Trustee have as of September 20, 1999
entered into an Indenture (hereinafter called the "Indenture"), providing for
the issuance by the Company from time to time of its subordinated debt
securities;
WHEREAS, no Securities have been issued under the Indenture and there
do not currently exist any Holders;
WHEREAS, Section 901 of the Indenture provides, among other things,
that the Company, when authorized by or pursuant to a Board Resolution, and the
Trustee may without the consent of any Holders of Securities enter into one or
more indentures supplemental to the Indenture to establish the form or terms of
Securities of any series, including the provisions and procedures providing for
the adjustment of conversion rights with respect to Securities convertible into
Common Stock or to change or eliminate any of the provisions of the Indenture,
provided that any such change or elimination shall become effective only when
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there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
WHEREAS, the Company desires to issue one series of convertible
subordinated debt securities under the Indenture, and has duly authorized the
creation and issuance of such debt securities and the execution and delivery of
this First Supplemental Indenture to modify the Indenture and provide certain
additional provisions as hereinafter described;
WHEREAS, the Company and the Trustee deem it advisable to enter into
this First Supplemental Indenture for the purposes of establishing the terms of
such convertible subordinated debt securities and providing for the rights,
obligations and duties of the Trustee with respect to such debt securities;
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WHEREAS, concurrent with the execution hereof, the Company has
delivered an Officers' Certificate and has caused its counsel to deliver to the
Trustee an Opinion of Counsel or a reliance letter upon an opinion of counsel;
and
WHEREAS, all conditions and requirements of the Indenture necessary to
make this First Supplemental Indenture a valid, binding and legal instrument in
accordance with its terms have been performed and fulfilled by the parties
hereto and the execution and delivery thereof have been in all respects duly
authorized by the parties hereto.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
For and in consideration of the mutual premises and agreements herein
contained, the Company and the Trustee covenant and agree, for the equal and
proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
CREATION OF THE NOTES
SECTION 1.1. DESIGNATION OF SERIES. Pursuant to the terms hereof and
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Sections 201 and 301 of the Indenture, the Company hereby creates a series of
its convertible subordinated debt securities designated as the "6% Convertible
Subordinated Notes due 2009" (the "Notes"), which Notes shall be deemed
"Securities" for all purposes under the Indenture.
SECTION 1.2. FORM OF NOTES. (a) The Notes will be issued in
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permanent global form without coupons and the definitive form of the Notes shall
be substantially in the form set forth in Exhibit A attached hereto, which is
incorporated herein and made part hereof. The Notes shall bear interest, be
payable and have such other terms as are stated in the form of definitive Note
or in the Indenture, as supplemented by this First Supplemental Indenture. The
Stated Maturity of the Notes shall be September 15, 2009.
(b) The fifth paragraph of Section 305 of the Indenture is hereby
amended with respect to the Notes by replacing clause (y) in the fourth sentence
thereof with the following:
"(y) an Event of Default or an event which after notice or lapse of
time or both would be an Event of Default has occurred and is continuing
and the beneficial owners representing a majority in principal amount of
the Notes
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represented by such global Securities advise DTC to cease acting as
depositary for such global Securities or".
SECTION 1.3. LIMIT ON AMOUNT OF SERIES. The Notes shall not exceed
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$862,500,000 in aggregate principal amount, and may, upon the execution and
delivery of this First Supplemental Indenture or from time to time thereafter,
be executed by the Company and delivered to the Trustee for authentication, and
the Trustee shall thereupon authenticate and deliver said Notes to or upon the
written order of the Company, signed by its Chairman of the Board, President or
one of its Vice Presidents and by its Treasurer, one of its Assistant
Treasurers, its Secretary or one of its Assistant Secretaries, without further
action by the Company.
SECTION 1.4. CERTIFICATE OF AUTHENTICATION. The Trustee's
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certificate of authentication to be borne on the Notes shall be substantially as
provided in the Form of Note attached hereto as Exhibit A.
SECTION 1.5. NO SINKING FUND. No sinking fund will be provided with
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respect to the Notes.
SECTION 1.6. NO ADDITIONAL AMOUNTS. No Additional Amounts will be
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payable with respect to the Notes.
SECTION 1.7. DEFINITIONS.
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(a) Capitalized terms used herein and not otherwise defined shall
have the respective meanings assigned thereto in the Indenture.
(b) Solely for purposes of this First Supplemental Indenture and the
Notes, the following definitions are hereby amended in their entirety to read as
follows:
"Person" means any individual, corporation, company, partnership,
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joint venture, limited liability company, association, joint stock company,
trust, unincorporated organization, government or agency or political
subdivision thereof or any other entity.
"Senior Indebtedness" means the principal of, and premium, if any, and
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interest, including all interest accruing subsequent to the commencement of
any bankruptcy or similar proceeding, whether or not a claim for post-
petition interest is allowable as a claim in any such proceeding, on, and
all fees and other amounts payable in connection with, the following,
whether absolute or contingent, secured or unsecured, due or to become due,
outstanding on the date of the Indenture or thereafter created, incurred or
assumed:
(1) indebtedness of the Company evidenced by a credit or loan
agreement, note, bond, debenture or other written obligation,
(2) all obligations of the Company for money borrowed,
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(3) all obligations of the Company evidenced by a note or similar
instrument given in connection with the acquisition of any businesses,
properties or assets of any kind,
(4) obligations of the Company (A) as lessee under leases
required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and (B) as lessee under other
leases for facilities, capital equipment or related assets, whether or
not capitalized, entered into or leased for financing purposes,
(5) all obligations of the Company under interest rate and
currency swaps, caps, floors, collars, hedge agreements, forward
contracts or similar agreements or arrangements,
(6) all obligations of the Company with respect to letters of
credit, bankers' acceptances and similar facilities, including
reimbursement obligations with respect to the foregoing,
(7) all obligations of the Company issued or assumed as the
deferred purchase price of property or services, but excluding trade
accounts payable and accrued liabilities arising in the ordinary
course of business,
(8) all obligations of the type referred to in clauses (1)
through (7) of another Person and all dividends of another person, the
payment of which, in either case, the Company has assumed or
guaranteed, or for which the Company is responsible or liable,
directly or indirectly, jointly or severally, as obligor, guarantor or
otherwise, or which is secured by a lien on the property of the
Company, and
(9) renewals, extensions, modifications, replacements,
restatements and refundings of, or any indebtedness or obligation
issued in exchange for, any such indebtedness or obligation described
in clauses (1) through (8) hereof;
provided, however, that Senior Indebtedness shall not include the Notes or
any such indebtedness or obligation if the terms of such indebtedness or
obligation, or the terms of the instrument under which, or pursuant to
which it is issued expressly provide that such indebtedness or obligation
is not superior in right of payment to the Notes.
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"Subsidiary" of any Person means (i) a corporation more than 50% of
the combined voting power of the outstanding Voting Stock of which is
owned, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person or by such Person and one or more Subsidiaries
thereof or (ii) any other Person (other than a corporation) in which such
Person, or one or more other Subsidiaries of such Person or such Person and
one or more other Subsidiaries thereof, directly or indirectly, has at
least a majority ownership and power to direct the policies, management and
affairs thereof.
(c) Solely for purposes of this First Supplemental Indenture and the
Notes, the following terms shall have the indicated meanings:
"Capital Stock" of any Person means any and all shares, interest,
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participations or other equivalents (however designated) of corporate stock
or equity participations, including partnership interests, whether general
or limited, of such Person and any rights (other than debt securities
convertible or exchangeable into any equity interest), warrants or options
to acquire an equity interest in such person.
"Change of Control" at such time after the original issuance of the
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Notes means the occurrence of the following events:
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(1) if any "person" or group " (as such terms are used in
Sections 13(d) and 14(d) of the Exchange Act or any successor provisions to
either of the foregoing), including any group acting for the purpose of
acquiring, holding, voting or disposing of securities within the meaning of
Rule 13d-5(b)(1) under the Exchange Act, other than any one or more of the
Permitted Holders, becomes the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 35% or more of the total
voting power of the Voting Stock of the Company; provided, however, that
the Permitted Holders are the "beneficial owners" (as defined in Rule 13d-3
under the Exchange Act, except that a person will be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, in the aggregate of a lesser
percentage of the total voting power of the Voting Stock of the Company
than such other person or group (for purposes of this clause (1), such
person or group shall be deemed to beneficially own any voting stock of a
corporation (the "specified corporation") held by any other corporation
(the "parent corporation") so long as such person or group beneficially
owns, directly or indirectly, in the aggregate a majority of the total
voting power of the Voting Stock of such parent corporation); or
(2) the sale, transfer, assignment, lease, conveyance or other
disposition, directly or indirectly, of all or substantially all the assets
of the Company and its subsidiaries, considered as a whole (other than a
disposition of such assets as an entirety or virtually as an entirety to a
wholly owned subsidiary or one or more Permitted Holders) shall have
occurred; or
(3) during any period of two consecutive years, individuals who
at the beginning of such period constituted the Board of Directors of the
Company (together with any new directors whose election or appointment by
such Board or whose nomination for election by the stockholders of the
Company was approved by a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the Board of Directors of the
Company then in office; or
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(4) the stockholders of the Company shall have approved any plan
of liquidation or dissolution of the Company;
provided, however, that a Change of Control shall not be deemed to have
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occurred if the Current Market Price of the Common Stock of the Company for
any five Trading Days within the period of 10 consecutive Trading Days
beginning immediately after the later of the Change of Control or the
public announcement of the Change of Control shall equal or exceed 105% of
the Conversion Price in effect on each such Trading Day; provided further
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that if the Change of Control results in the reclassification, conversion,
exchange of outstanding shares of Common Stock of the Company, such 10
consecutive Trading Day period shall be measured as ending immediately
before the Change of Control.
"Conversion Price" shall equal U.S. $1,000 divided by the Conversion
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Rate (rounded to the nearest cent, with one-half cent being rounded upward)
"Current Market Price" of Common Stock of the Company for any day
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means the last reported per share sale price, regular way on such day, or,
if no sale takes place on such day, the average of the reported closing per
share bid and asked prices on such day, regular way, in either case as
reported on the Nasdaq National Market or, if such Common Stock is not
quoted or admitted to trading on such quotation system, on the principal
national securities exchange or quotation system on which such Common Stock
may be listed or admitted to trading or quoted, or, if not listed or
admitted to trading or quoted on any national securities exchange or
quotation system, the average of the closing per share bid and asked prices
of such Common Stock on the over-the-counter market on the day in question
as reported by the National Quotation Bureau Incorporated, or similar
generally accepted reporting service, or, if not so available in such
manner, as furnished by any Nasdaq member firm selected from time to time
by the Board of Directors of the Company for that purpose, or, if not so
available in such manner, as otherwise determined in good faith by the
Board of Directors of the Company.
"Exchange Act" means the Securities Exchange Act of 1934.
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"Expiration Date" has the meaning specified in "Offer to Purchase"
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below.
"Federal Bankruptcy Code" means the Bankruptcy Act of Title 11 of the
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United States Code, as amended from time to time.
"Indebtedness" means, with respect to a Person:
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(1) indebtedness of such Person evidenced by a credit or loan
agreement, note, bond, debenture or other written obligation,
(2) all obligations of such Person for money borrowed,
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(3) all obligations of such Person evidenced by a note or similar
instrument given in connection with the acquisition of any businesses,
properties or assets of any kind,
(4) obligations of such Person (A) as lessee under leases
required to be capitalized on the balance sheet of the lessee under
generally accepted accounting principles and (B) as lessee under other
leases for facilities, capital equipment or related assets, whether or
not capitalized, entered into or leased for financing purposes,
(5) all obligations of such Person under interest rate and
currency swaps, caps, floors, collars, hedge agreements, forward
contracts or similar agreements or arrangements,
(6) all obligations of such Person with respect to letters of
credit, bankers' acceptances and similar facilities, including
reimbursement obligations with respect to the foregoing,
(7) all obligations of such Person issued or assumed as the
deferred purchase price of property or services, but excluding trade
accounts payable and accrued liabilities arising in the ordinary
course of business,
(8) all obligations of the type referred to in clauses (1)
through (7) of another Person and all dividends of another person, the
payment of which, in either case, such Person has assumed or
guaranteed, or for which such Person is responsible or liable,
directly or indirectly, jointly or severally, as obligor, guarantor or
otherwise, or which is secured by a lien on the property of such
Person, and
(9) renewals, extensions, modifications, replacements,
restatements and refundings of, or any indebtedness or obligation
issued in exchange for, any such indebtedness or obligation described
in clauses (1) through (8) hereof.
"9-1/8% Senior Notes Indenture" means the Indenture dated as of April
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28, 1998, as amended, supplemented or modified from time to time, between
the Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as trustee, relating to
the Company's 9-1/8% Senior Notes Due 2008.
"Offer" has the meaning specified in "Offer to Purchase" below.
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"Offer to Purchase" means a written offer (the "Offer") sent by the
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Company by first-class mail, postage prepaid, to each Holder of Notes at
its address appearing in the Security Register on the date of the Offer
offering to purchase up to the principal amount of Notes specified in such
Offer at the purchase price specified in such Offer (as determined pursuant
to this Indenture). Unless otherwise required by applicable law, the Offer
shall specify an expiration date (the "Expiration Date") of the Offer to
Purchase which shall be, subject to any contrary requirements of applicable
law, not less than 30 days or more than 60 days after the date of such
Offer and a settlement date (the "Purchase Date") for purchase of Notes
within five Business Days after the Expiration Date. The Company shall
notify the Trustee at least 15 Business Days (or such shorter period as is
acceptable to the Trustee) prior to the mailing of the Offer of the
Company's obligation to make an Offer to Purchase, and the Offer shall be
mailed by the Company or, at the Company's request, by the Trustee in the
name and at the expense of the Company. The Offer shall contain
information concerning the business of the Company and its Subsidiaries
which the Company in good faith believes will enable such Holders to make
an informed decision with respect to the Offer to Purchase (which at a
minimum will include (i) the most recent annual and quarterly financial
statements and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained in the documents required to be filed
under the Exchange Act (which requirements may be satisfied by delivery of
such documents together with the Offer), (ii) a description of material
developments in the Company's business subsequent to the date of the latest
of such financial statements referred to in clause (i) (including a
description of the events requiring the Company to make the Offer to
Purchase), (iii) if applicable, appropriate pro forma financial information
concerning the Offer to Purchase and the events requiring the Company to
make the Offer to Purchase and (iv) any other information required by
applicable law to be included therein). The Offer shall contain all
instructions and materials necessary to enable such Holders to tender Notes
pursuant to the Offer to Purchase. The Offer shall also state:
(1) the Section of the Indenture pursuant to which the Offer to
Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the Outstanding Notes
offered to be purchased by the Company pursuant to the Offer to Purchase
(the "Purchase Amount");
(4) the purchase price to be paid by the Company for $1,000
aggregate principal amount of Notes accepted for payment (as specified
pursuant to the Indenture) (the "Purchase Price") and whether the Purchase
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Price shall be paid by the Company in cash or by delivery of shares of
Common Stock of the Company;
(5) that the Holder may tender all or any portion of the Notes
registered in the name of such Holder and that any portion of a Note
tendered must be tendered in a principal amount equal to $5,000 or any
integral multiple of $1,000 in excess thereof;
(6) the place or places where Notes are to be surrendered for
tender pursuant to the Offer to Purchase;
(7) that any Notes not tendered or tendered but not purchased by
the Company will continue to accrue interest;
(8) that on the Purchase Date the Purchase Price will become due
and payable upon each Note being accepted for payment pursuant to the Offer
to Purchase and that interest thereon, if any, shall cease to accrue on and
after the Purchase Date;
(9) that each Holder electing to tender a Note pursuant to the
Offer to Purchase will be required to surrender such Note at the place or
places specified in the Offer prior to the close of business on the
Expiration Date (such Note being, if the Company or the Trustee so
requires, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Trustee duly executed
by, the Holder thereof or his or her attorney duly authorized in writing);
(10) in the event that the Purchase Price shall be paid in shares
of Common Stock of the Company, that each Holder electing to tender a Note
pursuant to the Offer to Purchase will be required to provide written
notification of the name or names (with addresses) in which the certificate
or certificates for shares of such Common Stock shall be issued;
(11) that Holders will be entitled to withdraw all or any portion
of Notes tendered if the Company (or the Paying Agent) receives, not later
than the close of business on the Expiration Date, a telegram, telex,
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Note the Holder tendered, the certificate number of
the Note the Holder tendered and a statement that such Holder is
withdrawing all or a portion of his tender;
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(12) that if Notes in an aggregate principal amount less than or
equal to the Purchase Amount are duly tendered and not withdrawn
pursuant to the Offer to Purchase, the Company shall purchase all such
Notes;
(13) the Conversion Rate then in effect, the date on which the
right to convert the principal amount of the Notes to be repurchased
will terminate and the place or places where such Notes may be
surrendered for conversion; and
(14) that in the case of any Holder whose Note is purchased only
in part, the Company shall execute, and the Trustee shall authenticate
and deliver to the Holder of such Note without service charge, a new
Note or Notes, of any authorized denomination as requested by such
Holder, in an aggregate principal amount equal to and in exchange for
the unpurchased portion of the Note so tendered.
Any Offer to Purchase shall be governed by and effected in accordance
with the Offer for such Offer to Purchase.
"Permitted Holders" means the members of the Company's Board of
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Directors on April 28, 1998 and their respective estates, spouses,
ancestors, and lineal descendants, the legal representatives of any of the
foregoing and the trustees of any bona fide trusts of which the foregoing
are the sole beneficiaries or the grantors, or any person of which the
foregoing "beneficially owns" (as defined in Rule 13d-3 under the Exchange
Act) at least 66 2/3% of the total voting power of the Voting Stock of such
person.
"Property" means, with respect to any Person, any interest of such
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Person in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible, including Capital Stock in, and other
securities of, any other Person.
"Purchase Amount" has the meaning specified in "Offer to Purchase"
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above.
"Purchase Date" has the meaning specified in "Offer to Purchase"
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above.
"Purchase Price" has the meaning specified in "Offer to Purchase"
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above.
"Restricted Subsidiary" means any Restricted Subsidiary under each of
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the 9-1/8% Senior Notes Indenture and the 10-1/2% Senior Discount Notes
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
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"Significant Subsidiary" means any Subsidiary that would be a
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"Significant Subsidiary" of the Company within the meaning of Rule 1-02
under Regulation S-X promulgated by the Commission.
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"10-1/2% Senior Discount Notes Indenture" means the Indenture dated as
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of December 2, 1998, as amended, supplemented or modified from time to
time, between the Company and IBJ ▇▇▇▇▇▇▇▇ Bank & Trust Company, as
trustee, relating to the Company's 10-1/2% Senior Discount Notes Due 2008.
"Trading Day" with respect to the Common Stock of the Company means
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(x) if such Common Stock is listed or admitted for trading on the New York
Stock Exchange or another national securities exchange, a day on which the
New York Stock Exchange or such other national securities exchange is open
for business or (y) if such Common Stock is quoted on the National Market
System of the Nasdaq, a day on which trades may be made on such National
Market System or (z) other wise, any day other than a Saturday or Sunday or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Voting Stock" of any Person means Capital Stock of such Person who
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ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only
for so long as no senior class of securities has such voting power by
reason of any contingency.
ARTICLE TWO
CONVERSION OF NOTES
SECTION 2.1. APPLICABILITY OF CONVERSION PROVISIONS. Pursuant to
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Section 301(24) of the Indenture, the Notes will be convertible in accordance
with the provisions of, and pursuant to, Article Sixteen of the Indenture, as
amended hereby, and the definitive form of the Notes.
SECTION 2.2. CONVERSION RATE. The rate at which shares of Common
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Stock of the Company shall be delivered upon conversion (the "Conversion Rate")
shall be initially 15.3401 shares of Common Stock of the Company for each $1,000
principal amount of Notes. The Conversion Rate shall be adjusted in certain
instances as provided in Section 1605 of the Indenture, as amended hereby.
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SECTION 2.3. AMENDMENTS TO ARTICLE SIXTEEN.
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(a) Section 1605 is amended in its entirety with respect to the Notes
to read as follows:
SECTION 1605. Adjustment Of Conversion Rate.
(1) In case at any time after the date of the issuance of the Notes,
the Company shall pay or make a dividend or other distribution on any class of
Capital Stock of the Company payable in shares of Common Stock of the Company,
the Conversion Rate in effect at the opening of business on the day following
the date fixed for the determination of stockholders entitled to receive such
dividend or other distribution shall be increased by dividing such Conversion
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock of the Company outstanding at the close of business on the date
fixed for such determination and the denominator shall be the sum of such number
of shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. For the
purposes of this paragraph (1), the number of shares of Common Stock of the
Company at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock of the Company held in the treasury of the Company.
(2) In case at any time after the date of the issuance of the Notes,
the Company shall issue rights, options or warrants to all holders of its Common
Stock of the Company (other than any rights, options or warrants that by their
terms will also be issued to any Holder upon conversion of a Note into Common
Stock of the Company without any action required by the Company or any other
person) entitling them to subscribe for or purchase shares of Common Stock of
the Company (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the Average Current Market
Price per share (determined as provided in paragraph (8) of this Section) on the
date fixed for the determination of stockholders entitled to receive such
rights, options or warrants (other than pursuant to a dividend reinvestment
plan), the Conversion Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by dividing
such Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock of the Company outstanding at the close of business on
the date fixed for such determination plus the number of shares of Common Stock
of the Company which the aggregate of the offering price of the total number of
shares of Common Stock of the Company so offered (or the aggregate conversion
price of the convertible securities so offered) for subscription or purchase
would purchase at such Average Current Market Price and the denominator shall be
the number of shares of Common Stock of the Company outstanding at the close of
business on the date fixed for such determination plus the number of shares of
Common Stock of the Company so offered for subscription or purchase (or into
which the convertible
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securities so offered are convertible), such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination. For the purposes of this paragraph (2), the number of
shares of Common Stock of the Company at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock of the Company. The Company will not issue any rights, options or
warrants in respect of shares of Common Stock of the Company held in the
treasury of the Company.
(3) In case at any time after the date of the issuance of the Notes,
outstanding shares of Common Stock of the Company shall be subdivided into a
greater number of shares of Common Stock of the Company, the Conversion Rate in
effect at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately increased, and,
conversely, in case outstanding shares of Common Stock of the Company shall be
combined into a smaller number of shares of Common Stock of the Company, the
Conversion Rate in effect at the opening of business on the day following the
day upon which such combination becomes effective shall be proportionately
reduced, such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(4) In case at any time after the date of the issuance of the Notes,
the Company shall, by dividend or otherwise, distribute to all holders of its
Common Stock, shares of any class of its Capital Stock, evidences of its
indebtedness or other assets (including securities, but excluding any rights,
options or warrants referred to in paragraph (2) of this Section, any dividend
or distribution paid exclusively in cash and any dividend or distribution
referred to in paragraph (1) of this Section), the Conversion Rate shall be
adjusted so that the same shall equal the price determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the Average Current
Market Price per share (determined as provided in paragraph (8) of this Section)
on the date fixed for such determination less the then fair Market Value (as
determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets, shares of capital stock or evidences of indebtedness so distributed
applicable to one share of Common Stock of the Company and the denominator shall
be such Average Current Market Price per share, such adjustment to become
effective immediately prior to the opening of business on the day following the
date fixed for the determination of stockholders entitled to receive such
distribution.
15
(5) In case at any time after the date of the issuance of the Notes,
the Company shall, by dividend or otherwise, make a distribution to all holders
of its Common Stock consisting exclusively of cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 1607 applies or as
part of a distribution referred to in paragraph (4) of this Section) in an
aggregate amount that, combined together with:
(A) the aggregate amount of any other distributions to all holders of its
Common Stock made exclusively in cash within the 12 months preceding
the date of payment of such distribution and in respect of which no
adjustment pursuant to this paragraph (5) has been made, and
(B) the aggregate of any cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of consideration payable in respect
of any tender offer by the Company or any of its Subsidiaries for all
or any portion of the Common Stock of the Company concluded within the
12 months preceding the date of payment of such distribution and in
respect of which no adjustment pursuant to paragraph (6) of this
Section has been made,
(the amount of such cash distribution together with the amounts
described in clauses (A) and (B) above being referred to herein as the
"Aggregate Cash Distribution Amount") exceeds 10% of the product of (I) the
Average Current Market Price per share on the date for the determination of
holders of shares of Common Stock of the Company entitled to receive such cash
distribution, times (II) the number of shares of Common Stock of the Company
outstanding on such date (the amount by which the Aggregate Cash Distribution
Amount exceeds 10% of the product of the amounts described in clauses (I) and
(II) above being referred to herein as the "Excess Amount"), then, and in each
such case, immediately after the close of business on such date for
determination, the Conversion Rate shall be increased in accordance with the
following formula:
AC = CR / (M - (E / O))
--------------
(M)
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate in effect immediately prior to the close of
business on the date fixed for determination of the stockholders
entitled to receive the distribution.
16
M = the Average Current Market Price per share (determined as provided
in paragraph (8) of this Section) on the date fixed for determination
of the stockholders entitled to receive the distribution.
EA = the Excess Amount.
O = the number of shares of Common Stock of the Company outstanding on
the date fixed for determination of the stockholders entitled to
receive the distribution.
(6) In case at any time after the date of the issuance of the Notes,
a tender offer made by the Company or any Subsidiary for all or any portion of
the Common Stock of the Company shall expire and such tender offer (as amended
upon the expiration thereof) shall require the payment to stockholders (based on
the acceptance (up to any maximum specified in the terms of the tender offer) of
Purchased Shares (as defined below)) of an aggregate consideration having a fair
market value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution) that combined together with:
(A) the aggregate of the cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offer,
by the Company or any Subsidiary for all or any portion of the Common
Stock of the Company expiring within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment
pursuant to this paragraph (6) has been made, and
(B) the aggregate amount of any distributions to all holders of the
Company's Common Stock made exclusively in cash within 12 months
preceding the expiration of such tender offer and in respect of which
no adjustment pursuant to paragraph (5) of this Section has been made,
17
exceeds 10% of the product of (I) the Average Current Market Price per share
(determined as provided in paragraph (8) of this Section) as of the last time
(the "Tender Expiration Time") tenders could have been made pursuant to such
tender offer (as it may be amended), times (II) the number of shares of Common
Stock of the Company outstanding (including any tendered shares) on the Tender
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Tender Expiration Time, the
Conversion Rate shall be increased in accordance with the following formula:
AC = CR / ((M x O) - C)
--------------
(M x (O - TS))
Where:
AC = the adjusted Conversion Rate.
CR = the Conversion Rate immediately prior to close of business on the
date of the Tender Expiration Time.
M = the Average Current Market Price per share (determined as provided
in paragraph (8) of this Section) on the date of the Tender Expiration
Time.
O = the number of shares of Common Stock of the Company outstanding
(including any tendered shares) on the Tender Expiration Time.
C = the amount of cash plus the fair market value (as determined by
the Board of Directors, whose determination shall be conclusive and
described in a Board Resolution) of the aggregate consideration
payable to stockholders based on the acceptance (up to any maximum
specified in the terms of the tender offer) of Purchased Shares (as
defined below).
TS = the number of all shares validly tendered and not withdrawn as of
the Tender Expiration Time (the shares deemed so accepted up to any
such maximum, being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock of the Company into
securities including securities other than Common Stock of the Company (other
than any reclassification upon a consolidation or merger to which Section 1607
applies) shall be deemed to involve (a) a distribution of such securities other
than Common Stock of the Company to all holders of Common Stock of the Company
(and the effective date of such reclassification shall be deemed to be "the date
fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for
18
such determination" within the meaning of paragraph (4) of this Section), and
(b) a subdivision or combination, as the case may be, of the number of shares of
Common Stock of the Company outstanding immediately prior to such
reclassification into the number of shares of Common Stock of the Company
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section).
(8) For the purpose of any computation under paragraphs (2), (4), (5)
and (6) of this Section, the Average Current Market Price per share on any date
shall be deemed to be the average of the daily Current Market Prices for the
five consecutive Trading Days selected by the Company commencing not more than
ten Trading Days before, and ending not later than the earlier of, the day in
question and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph, the
term "ex" date, when used with respect to any issuance or distribution, means
the first date on which the Common Stock of the Company trades regular way in
the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (9)) would require an increase or decrease of at least 1% in such
price; provided, however, that any adjustments which by reason of this paragraph
-------- -------
(9) are not required to be made shall be carried forward and taken into account
in any subsequent adjustment. All calculations under this paragraph (9) shall be
made to the nearest cent.
(10) The Company may make such increases in the Conversion Rate, in
addition to those required by this Section, as it considers to be advisable in
order to avoid or diminish any income tax to any holders of shares of Common
Stock of the Company resulting from any dividend or distribution of stock or
issuance of rights or warrants to purchase or subscribe for stock or from any
event treated as such (i) for federal income tax purposes or (ii) for any other
reasons relating to taxes.
(11) To the extent permitted by applicable law, the Company from time
to time may 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 such 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; provided, however, that no such increase shall be taken into account
for purposes of determining whether the Current Market Price for any five
Trading Days within the period of 10 Trading Days (as determined pursuant to the
definition of Change of Control)
19
exceeds the Conversion Price by 105% in connection with an event which would
otherwise be a "Change of Control" or whether the Current Market Price for 20
Trading Days during a period of 30 consecutive Trading Days (as determined
pursuant to Section 6.1 hereof) exceeds the Conversion Price by 140% in
connection with an event which would otherwise allow the Company to cause the
conversion rights of Holders of Notes to expire. Whenever the Conversion Rate is
increased pursuant to the preceding sentence, the Company shall give notice of
the increase to the Holders in the manner provided in Section 106 at least 15
days prior to the date the increased Conversion Rate takes effect, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.
(12) Whenever the Conversion Rate is adjusted, as herein provided,
the Company shall promptly file with the Trustee, at the Corporate Trust Office
of the Trustee, and with the office or agency maintained by the Company for the
conversion of Securities of such series pursuant to Section 1002, an Officers'
Certificate, setting forth the conversion price after such adjustment and
setting forth a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such adjustment.
Neither the Trustee nor any conversion agent shall be under any duty or
responsibility with respect to any such certificate or any facts or computations
set forth therein, except to exhibit said certificate from time to time to any
Holder of a Note desiring to inspect the same. The Company shall promptly cause
a notice setting forth the adjusted conversion price to be mailed to the Holders
of Notes, as their names and addresses appear upon the Security Register of the
Company.
(13) In any case in which this Section 1605 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (y) issuing to the
Holder of any Note converted after such record date and before the occurrence of
such event the additional shares of the Common Stock of the Company issuable
upon such conversion by reason of the adjustment required by such event over and
above the Common Stock of the Company issuable upon such conversion before
giving effect to such adjustment and (z) paying to such Holder any amount in
cash in lieu of any fractional share of Common Stock of the Company pursuant to
Section 1606 of the Indenture.
(b) Section 1606 is hereby amended with respect to the Notes by
deleting the last sentence thereof in its entirety and substituting the
following in its place:
"Instead of a fraction of a share of Common Stock of the Company which
would otherwise be issuable upon conversion of any Note or Notes (or
specified portions thereof), the Company shall pay a cash adjustment
(computed to the nearest cent, with one-half cent being rounded upward) in
respect of such fraction of a share in an amount equal to the same
fractional interest of the Current Market Price of the Common Stock of the
Company on the Trading Day next preceding the day of conversion."
20
(c) Section 1607 is amended by adding the following to the end of the
first sentence thereof:
", assuming (i) such holder of Common Stock of the Company failed to
exercise his or her rights of election, if any, as to the kind or amount of
shares of stock and other securities and property, including cash,
receivable upon such consolidation, merger, sale or transfer (provided that
if the kind or amount of shares of stock and other securities and property,
including cash, receivable upon such consolidation, merger, sale or
transfer is not the same for each share of Common Stock of the Company held
immediately prior to such consolidation, merger, sale or transfer and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this Section the kind and
amount of shares of stock and other securities and property, including
cash, receivable upon such consolidation, merger, sale or transfer by each
non-electing share shall be deemed to be the kind and amount so receivable
per share by a plurality of non-electing shares), and (ii) the Securities
were convertible at the time of such consolidation, merger, sale or
transfer at the initial Conversion Rate specified in the supplemental
indenture establishing such Securities, as adjusted, if applicable, in
accordance with the terms of such supplemental indenture."
(d) Section 1608 is amended with respect to the Notes by deleting the
word "or" from the end of clause (c) thereof and adding the following
immediately after clause (d) thereof:
"(e) the Company or a Subsidiary shall take any other action
that would require an adjustment to the Conversion Rate pursuant to
Section 1605; or
(f) the Company shall take any action that would require a
supplemental indenture pursuant to Section 1607;"
21
ARTICLE THREE
CONSOLIDATION, MERGER, SALE, LEASE OR CONVEYANCE
SECTION 3.1. AMENDMENTS TO ARTICLE EIGHT. Section 801 of the
----------------------------
Indenture is amended in its entirety with respect to the Notes to read as
follows:
The Company may not consolidate with or merge into any other Person or
convey, transfer, sell or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer, sell or lease
such Person's properties and assets substantially as an entirety to the Company,
unless:
(a) the Person formed by such consolidation or into or with which the
Company is merged or the Person to which the properties and assets of the
Company are so conveyed, transferred, sold or leased, is a corporation,
limited liability company, partnership or trust organized and existing
under the laws of the United States, any State thereof or the District of
Columbia and, if other than the Company, shall expressly assume the due and
punctual payment of the principal of and, premium, if any, and interest on
the Notes and the performance of the other covenants of the Company under
the Indenture, and
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing.
ARTICLE FOUR
DEFEASANCE
SECTION 4.1. DEFEASANCE APPLICABLE TO NOTES. Pursuant to Section
-------------------------------
301(19) and Section 1401 of the Indenture, the Company will have the option of
defeasance of the Notes under Section 1402 and 1403 of the Indenture upon the
terms and conditions contained in Article Fourteen of the Indenture, as amended
by this First Supplemental Indenture; provided, however, that the Company's
-------- -------
option of covenant defeasance, as described in Section 1403 of the Indenture,
shall be limited to defeasance of its obligations under Article Eight of this
First Supplemental Indenture.
22
SECTION 4.2. AMENDMENTS TO ARTICLE FOURTEEN.
-------------------------------
(a) Section 1404 is hereby amended with respect to the Notes by
deleting the period from the end of clause (b) thereof and adding the following
thereto:
", shall not be prohibited by Article Seventeen, and shall be permitted by
the terms of all Senior Indebtedness."
(b) Section 1404 is hereby further amended by deleting "91st" in
clause (c) thereof and substituting "123rd" in its place.
(c) Section 1405 is hereby amended by adding the following to the end
of the first paragraph thereof:
"Money and securities so held in trust are not subject to Article Seventeen
of the Indenture."
23
ARTICLE FIVE
EVENTS OF DEFAULT
SECTION 5.1. AMENDMENTS TO SECTION 501.
--------------------------
(a) Clause 5 of Section 501 of the Indenture is amended in its
entirety with respect to the Notes to read as follows:
"(5) default under the terms of any instrument evidencing or securing
Indebtedness of the Company or any Restricted Subsidiary having an
outstanding principal amount of not less than $25,000,000 or its foreign
currency equivalent at the time which default results in the acceleration
of the payment of such Indebtedness or constitutes the failure to pay such
Indebtedness when due (after expiration of any applicable grace period);
or".
(c) Clause 6 of Section 501 of the Indenture is amended in its
entirety with respect to the Notes to read as follows:
"(6) the institution by the Company or any Significant Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it
to the institution of bankruptcy or insolvency proceedings against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under the Federal Bankruptcy Code or any other applicable
federal, state or foreign law, or the consent by it to the filing of any
such petition or to the appointment of a receiver, liquidator, assignee,
trustee, custodian or sequestrator (or other similar official) of the
Company or any Significant Subsidiary or of any substantial part of its
Property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due; or"
(c) Clause 7 of Section 501 of the Indenture is amended in its
entirety with respect to the Notes to read as follows:
24
"(7) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Company or any Significant Subsidiary a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect of
the Company or any Significant Subsidiary under the Federal Bankruptcy Code
or any other applicable federal, state or foreign law, or appointing a
receiver, liquidator, assignee, trustee, custodian or sequestrator (or
other similar official) of the Company or any Significant Subsidiary or of
any substantial part of its Property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days."
SECTION 5.2. ADDITIONAL EVENTS OF DEFAULT. Pursuant to Section
-----------------------------
301(15) of the Indenture, so long as any of the Notes are Outstanding, each of
the following events shall be an Event of Default with respect to the Notes, in
addition to the Events of Default contained in Section 501 of the Indenture, as
amended hereby:
(1) failure to pay when due the Purchase Price of any Notes required
to be repurchased pursuant to Article Eight of this First Supplemental
Indenture, whether or not an Offer to Purchase is prohibited by Article
Seventeen of the Indenture, as amended hereby; or
(2) failure to perform or comply with Article Eight of the Indenture,
as amended hereby; or
(3) the rendering of any judgment or judgments for the payment of
money in an aggregate amount in excess of $25 million or its foreign currency
equivalent at the time that shall be rendered against the Company or any
Restricted Subsidiary and that shall not be waived, satisfied or discharged for
any period of 45 consecutive days during which a stay of enforcement shall not
be in effect.
SECTION 5.3. NOTICE OF DEFAULT OR EVENT OF DEFAULT. The Company shall
--------------------------------------
deliver to the Trustee, as soon as reasonably practicable and in any event
within 30 days after an executive officer of the Company becomes aware of the
occurrence of any Event of Default or any event which, with notice or the lapse
of time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or Default and the action
which the Company proposes to take with respect thereto.
25
ARTICLE SIX
EXPIRATION OF CONVERSION RIGHTS
Pursuant to Section 301(25) of the Indenture, so long as any of the
Notes are Outstanding, the following provisions shall be applicable to the
Notes:
SECTION 6.1. EXPIRATION OF CONVERSION RIGHTS.
--------------------------------
(a) On or after September 15, 2002, the Company may, at its option,
cause the conversion rights of Holders of Notes to expire. The Company may
exercise this option only if for at least 20 Trading Days within any period of
30 consecutive Trading Days, including the last Trading Day of such period, the
Current Market Price of the Common Stock of the Company exceeded 140% of the
Conversion Price (the "Expiration Condition").
(b) In order to exercise its option to cause the conversion rights of
Holders of Notes to expire, the Company must issue a press release for
publication on the Dow ▇▇▇▇▇ News Service (or a comparable news service)
announcing the conversion expiration date (the "Conversion Expiration Date")
prior to the opening of business on the second Trading Day after the Expiration
Condition has been met, but in no event prior to September 15, 2002. The press
release shall announce the Conversion Expiration Date and provide the current
Conversion Price of the Notes and the Current Market Price of the Common Stock
of the Company, in each case as of the close of business on the Trading Day next
preceding the date of the press release.
(c) Notice of the expiration of conversion rights will be given by
the Company to the Holders of the Notes in accordance with Section 106 not more
than four Business Days after the Company issued the press release under
paragraph (b) hereof.
(d) Conversion rights will terminate at the close of business on the
Conversion Expiration Date which will be a date selected by the Company not less
than 30 nor more than 60 days after the date on which the Company issues the
press release under paragraph (b) hereof announcing its intention to terminate
conversion rights of the Notes.
26
ARTICLE SEVEN
SUBORDINATION OF NOTES
Pursuant to Section 301(25) of the Indenture, and in addition to the
other provisions contained in Article Seventeen of the Indenture (which shall be
applicable as amended hereby to the Notes in all respects), so long as any of
the Notes are Outstanding, the following provisions shall be applicable to the
Notes:
SECTION 7.1. AMENDMENT OF SECTION 1701. (a) Section 1701 is hereby
--------------------------
amended by relettering clause (c) in the second paragraph thereof to be clause
(b) and by deleting the following from the second paragraph thereof:
"(b) that a default shall have occurred and be continuing with respect
to the payment of principal of (or premium, if any) or interest on or any
Additional Amounts payable in respect of any Senior Indebtedness, or"
(b) Section 1701(l) is hereby amended by deleting the words "or (b)"
therefrom.
SECTION 7.2. NO PAYMENT IN CERTAIN CIRCUMSTANCES. (a) No payment
------------------------------------
shall be made with respect to the principal of, or premium, if any, or interest
on the Notes (including, but not limited to, the Purchase Price with respect to
Notes submitted for repurchase in accordance with Article Eight hereof), if:
(i) a default in the payment of principal, premium, if any, or
interest (including a default under any repurchase or redemption obligation) or
other amounts with respect to any Senior Indebtedness occurs and is continuing
unless and until such default shall have been cured or waived or shall have
ceased to exist; or
(ii) a default, other than a payment default, on any Senior
Indebtedness occurs and is continuing that then permits holders of such Senior
Indebtedness to accelerate (with notice, lapse of time or both) its maturity
unless and until such default shall have been cured or waived or shall have
ceased to exist if the maturity of such Senior Indebtedness has not been
accelerated.
27
ARTICLE EIGHT
REPURCHASE OF NOTES AT THE OPTION OF THE HOLDER
UPON A CHANGE IN CONTROL
Pursuant to Section 301(7) of the Indenture and in substitution of the
terms of Article Thirteen of the Indenture, so long as any of the Notes are
Outstanding, the following provisions shall be applicable to the Notes:
SECTION 8.1. RIGHT TO REQUIRE REPURCHASE.
----------------------------
(a) Upon the occurrence of a Change in Control, each Holder shall
have the right, at the Holder's option, but subject to the provisions of Section
8.2. hereof, to require the Company to repurchase all of such Holder's Notes or
any portion of the principal amount thereof that is equal to U.S. $5,000 or any
integral multiple of $1,000 in excess thereof (provided that no single Note may
be repurchased in part unless the portion of the principal amount of such Note
to be Outstanding after such repurchase is equal to U.S. $1,000 or integral
multiples of $1,000 in excess thereof), in accordance with the procedures set
forth in this Section 8.1 and this First Supplemental Indenture. The 9-1/8%
Senior Notes Indenture and the 10-1/2% Senior Discount Notes Indenture require
that such Indebtedness be repurchased upon the occurrence of certain of the
events that would constitute a Change of Control. Other future Indebtedness of
the Company may contain prohibitions of certain events which would constitute a
Change of Control or require such Indebtedness to be repurchased upon a Change
of Control. To the extent other Indebtedness of the Company is both subject to
similar repurchase obligations in the event of a Change of Control and ranks
senior in right of payment to the Notes, the Company will repurchase such
Indebtedness required to be repurchased pursuant to the terms thereof before
repurchasing any of the Notes.
(b) Within 30 days of the occurrence of a Change of Control, the
Company will be required to make an Offer to Purchase all Outstanding Notes at a
price, subject to next sentence, in cash equal to 100% of the principal amount
of the Notes on the Purchase Date, plus accrued and unpaid interest (if any) to
such Purchase Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date). At
the option of the Company, the Purchase Price may be paid in cash or, subject to
the fulfillment by the Company of the conditions set forth Section 8.2 hereof,
by delivery of shares of Common Stock of the Company having a fair market value
equal to the Purchase Price.
(c) The Company and the Trustee shall perform their respective
obligations for the Offer to Purchase as specified in the Offer. Prior to the
Purchase Date, the Company shall (i) accept for payment Notes or portions
thereof tendered pursuant to
28
the Offer, (ii) irrevocably deposit with the Paying Agent (or, if the Company is
acting as its own Paying Agent, segregate and hold in trust as provided in
Section 1003) cash or shares of Common Stock of the Company, as provided below,
sufficient to pay the Purchase Price of all Notes or portions thereof so
accepted (provided that such deposit may be made no later than 11:00 A.M. New
York City time on the Purchase Date if the Company elects) and (iii) deliver or
cause to be delivered to the Trustee all Notes so accepted together with an
Officers' Certificate stating the Notes or portions thereof accepted for payment
by the Company. The Paying Agent shall promptly mail or deliver to Holders of
Notes so accepted payment or shares of Common Stock of the Company in an amount
equal to the Purchase Price, and the Trustee shall promptly authenticate and
mail or deliver to such Holders a new Note or Notes equal in principal amount to
any unpurchased portion of the principal amount of the Note surrendered as
requested by the Holder. Any Note not accepted for payment shall be promptly
mailed or delivered by the Company to the Holder thereof. In the event that the
aggregate Purchase Price is less than the amount delivered by the Company to the
Trustee or the Paying Agent, the Trustee or the Paying Agent, as the case may
be, shall deliver the excess to the Company immediately after the Purchase Date.
(d) Any issuance of shares of Common Stock of the Company in respect
of the Purchase Price shall be deemed to have been effected immediately prior to
the close of business on the Purchase Date and the Person or Persons in whose
name or names any certificate or certificates for shares of Common Stock of the
Company shall be issuable upon such repurchase shall be deemed to have become on
the Purchase Date the holder or holders of record of the shares represented
thereby; provided, however, that any surrender for repurchase on a date when the
stock transfer books of the Company shall be closed shall constitute the Person
or Persons in whose name or names the certificate or certificates for such
shares are to be issued as the record holder or holders thereof for all purposes
at the opening of business on the next succeeding day on which such stock
transfer books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock of the Company issued upon repurchase of any
Note declared prior to the Purchase Date.
(e) No fractions of shares shall be issued upon repurchase of Notes.
If more than one Note shall be repurchased from the same Holder and the Purchase
Price shall be payable in shares of Common Stock of the Company, the number of
full shares which shall be issuable upon such repurchase shall be computed on
the basis of the aggregate principal amount of the Notes so repurchased. Instead
of any fractional share of Common Stock of the Company which would otherwise be
issuable on the repurchase of any Note or Notes, the Company will deliver to the
applicable Holder its check for the current market value of such fractional
share. The current market value of a fraction of a share is determined by
multiplying the Current Market Price of a full share on the Trading Day
immediately preceding the Purchase Date by the fraction, and rounding the result
to the nearest cent.
29
(f) Any issuance and delivery of certificates for shares of Common
Stock of the Company on repurchase of Notes shall be made without charge to the
Holder of Notes being repurchased for such certificates or for any tax or duty
in respect of the issuance or delivery of such certificates or the Notes
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock of the Company in a name other than that of the
Holder of the Notes being repurchased, and no such issuance or delivery shall be
made unless and until the Person requesting such issuance or delivery has paid
to the Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(g) Whenever in this First Supplemental Indenture, Exhibit A hereto
or the Indenture (including Article One hereof and Sections 201, 501(1) and 508
of the Indenture) there is a reference, in any context, to the principal of any
Note as of any time, such reference shall be deemed to include reference to the
Purchase Price payable in respect of such Note to the extent that such Purchase
Price is, was or would be so payable at such time, and express mention of the
Purchase Price in any provision of this First Supplemental Indenture shall not
be construed as excluding the Purchase Price in those provisions of this First
Supplemental Indenture when such express mention is not made; provided, however,
-------- -------
that for the purposes of Article Seven such reference shall be deemed to include
reference to the Purchase Price only to the extent the Purchase Price is payable
in cash.
(h) The Company shall not be required to make an Offer to Purchase
upon a Change of Control if a third party makes the Offer to Purchase in the
manner, at the times and otherwise in compliance with the requirements set forth
in the Indenture applicable to an Offer to Purchase made by the Company and
purchases all Notes validly tendered and not withdrawn under such Offer to
Purchase.
(i) In the event that the Company makes an Offer to Purchase, the
Company shall comply with any applicable securities laws and regulations,
including any applicable requirements of Section 14(e) of, and Rule 14e-1 under,
the Exchange Act. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this Section, the Company shall comply
with the applicable securities laws and regulations and shall not be deemed to
have breached its obligations under this Section by virtue thereof.
30
SECTION 8.2. CONDITIONS TO THE COMPANY'S ELECTION TO PAY THE
-----------------------------------------------
REPURCHASE PRICE IN COMMON STOCK. The Company may elect to pay the Purchase
---------------------------------
Price by delivery of shares of Common Stock of the Company pursuant to Section
8.1 if:
(1) The shares of Common Stock of the Company deliverable in payment
of the Purchase Price shall have a fair market value as of the Purchase Date of
not less than the Purchase Price. For purposes of Section 8.1 and this Section
8.2, the fair market value of shares of Common Stock of the Company shall be
determined by the Company and shall be equal to 95% of the average of the
Current Market Price of the Common Stock of the Company for the five consecutive
Trading Days immediately preceding and including the third Trading Day prior to
the Purchase Date;
(2) The shares of Common Stock of the Company to be issued upon
repurchase of Notes hereunder (i) shall not require registration under any
federal securities law before such shares may be freely transferable without
being subject to any transfer restrictions under the Securities Act upon
repurchase or, if such registration is required, such registration shall be
completed and shall become effective prior to the Purchase Date, and (ii) shall
not require registration with or approval of any governmental authority under
any state law or any other federal law before such shares may be validly issued
or delivered upon repurchase or if such registration is required or such
approval must be obtained, such registration shall be completed or such approval
shall be obtained prior to the Purchase Date;
(3) The shares of Common Stock of the Company to be issued upon
repurchase of Notes hereunder are, or shall have been, approved for listing on
the Nasdaq National Market or the New York Stock Exchange or listed on another
national securities exchange, in any case, prior to the Purchase Date; and
(4) All shares of Common Stock of the Company which may be issued upon
repurchase of Notes will be issued out of the Company's authorized but unissued
Common Stock of the Company and, will upon issue, be duly and validly issued and
fully paid and non-assessable and free of any preemptive or similar rights.
If all of the conditions set forth in this Section 8.2 are not
satisfied in accordance with the terms hereof, the Purchase Price shall be paid
by the Company only in cash.
SECTION 8.3. CONSOLIDATION, MERGER, ETC. In the case of any
---------------------------
consolidation, conveyance, sale, transfer or lease of all or substantially all
of the assets of the Company to which Section 1607 of the Indenture applies, in
which the Common Stock of the Company is changed or exchanged as a result into
the right to
31
receive shares of stock and other securities or property or assets (including
cash) which includes shares of Common Stock of the Company or common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such shares of stock and other securities,
property and assets (including cash) (as determined by the Company, which
determination shall be conclusive and binding), then the Person formed by such
consolidation or resulting from such merger or combination or which acquires the
properties or assets (including cash) of the Company, as the case may be, shall
execute and deliver to the Trustee a supplemental indenture (which shall comply
with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this First Supplemental
Indenture relating to the right of Holders to cause the Company to repurchase
the Notes following a Change in Control, including without limitation the
applicable provisions of this Article Eight and the definitions of the Common
Stock and Change in Control, as appropriate, and such other related definitions
set forth herein and in the Indenture as determined in good faith by the Company
(which determination shall be conclusive and binding), to make such provisions
apply in the event of a subsequent Change of Control to the common stock and the
issuer thereof if different from the Company and Common Stock of the Company (in
lieu of the Company and the Common Stock of the Company).
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.1. AMENDMENTS TO ARTICLE NINE. (a) Section 901 is hereby
---------------------------
amended with respect to the Notes by deleting the word "or" from the end of
clause (9) thereof, deleting the "." from the end of clause (10) thereof and
substituting a ";" in its place and by adding the following to the end thereof:
(11) to add guarantees with respect to the Notes; or
(12) to comply with any requirements of the Commission in connection
with qualifying, or maintaining the qualification of, the Indenture under
the Securities Act or the TIA.
(b) Section 902 is hereby amended by inserting "at any time after a
Change of Control has occurred" after the words "Section 504, or" in clause (1)
thereof and by adding the following to the end of the first paragraph of Section
902:
32
(6) modify Article Sixteen or Article Seventeen of the Indenture, as
amended, or Article Six of this First Supplemental Indenture in a manner
adverse to the Holders.
ARTICLE TEN
MEETINGS OF HOLDERS OF SECURITIES
SECTION 10.1. AMENDMENTS TO ARTICLE FIFTEEN. Section 1504 of the
------------------------------
Indenture is amended with respect to the Notes by adding the following to the
end of the first paragraph thereof:
"Subject to the proviso in the first sentence of this paragraph, the
Persons entitled to vote 25% of the principal amount of the
Outstanding Notes shall constitute a quorum for a reconvened meeting
previously adjourned for lack of a quorum."
ARTICLE ELEVEN
MISCELLANEOUS
SECTION 11.1. APPLICATION OF FIRST SUPPLEMENTAL INDENTURE. Each and
--------------------------------------------
every term and condition contained in this First Supplemental Indenture that
modifies, amends or supplements the terms and conditions of the Indenture shall
apply only to the Notes created hereby and not to any future series of Notes
established under the Indenture.
SECTION 11.2. BENEFITS OF FIRST SUPPLEMENTAL INDENTURE. Nothing
-----------------------------------------
contained in this First Supplemental Indenture shall or shall be construed to
confer upon any person other than a Holder of the Notes, the Company and the
Trustee any right or interest to avail itself or himself, as the case may be, of
any benefit under any provision of the Indenture or this First Supplemental
Indenture, except for Holders of Senior Indebtedness as provided in Article
Seven hereof.
SECTION 11.3. EFFECTIVE DATE. This First Supplemental Indenture
---------------
shall be effective as of the date first above written and upon the execution and
delivery hereof by each of the parties hereto.
SECTION 11.4. GOVERNING LAW. This First Supplemental Indenture shall
--------------
be governed by, and construed in accordance with, the laws of the State of New
York.
33
SECTION 11.5. COUNTERPARTS. This First Supplemental Indenture may be
-------------
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed by their respective officers hereunto
duly authorized, all as of the day and year first above written.
LEVEL 3 COMMUNICATIONS, INC.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Dated: September 20, 1999 By: _______________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Attest: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Assistant Vice President
Dated: September 20, 1999
/s/ ▇▇▇▇▇ ▇▇▇
Attest: ▇▇▇▇▇ ▇▇▇
EXHIBIT A
Form of Face of Security
------------------------
[If a Global Security, then insert:] THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY.
THIS SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS SECURITY
(OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITORY TO A
NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY) MAY BE REGISTERED EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[If a Global Security, then insert:] 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.
LEVEL 3 COMMUNICATIONS, INC.
6% Convertible Subordinated Note Due 2009
CUSIP No. ▇▇▇▇▇▇▇▇▇
No. [if a Global security, insert: up to] $
▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to
_____________, or registered assigns, the principal sum of [if a Global
Security, then insert: up to] _________ Dollars [if a Global Security, then
insert: (the outstanding principal amount of which shall be reflected in the
attached Schedule of Increases or Decreases in Global Security and the records
of the Trustee which, taken together with the outstanding principal amounts of
all other Outstanding Securities, shall not exceed $862,500,000 in the aggregate
at any time)] on September 15, 2009, at the office or agency of the Company
referred to below, and to pay interest thereon, in cash in arrears semiannually
on March 15 and September 15 in each year, with payment commencing on March 15,
2000, and interest accruing from September 20, 1999, or from the most recent
Interest Payment Date to which interest has been paid or duly provided for, at
the rate of 6% per annum, until the principal amount hereof is paid or duly
provided for. The Company shall pay interest on overdue principal at the rate
borne by this Security, and it shall pay interest on overdue installments of
interest at the same rate to the extent lawful.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in such Indenture, be paid to the Person
in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be March 1 or September 1 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the Holder on such Regular Record Date, and such defaulted interest,
and (to the extent lawful) interest on such defaulted interest at the rate borne
by the Securities, may be paid to the Person in whose name this Security (or one
or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities not less
than 10 days prior to such Special Record Date, or may be paid at any time in
any other lawful manner, all as more fully provided in said Indenture. Payment
of the principal of (and premium, if any) and interest on this Security will be
made at the office or agency of the Company maintained for that purpose in The
City of New York, or at such other office or agency of the Company as may be
maintained for such purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided,
--------
A-2
however, that payment of interest may be made at the option of the Company by
-------
check mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture, or be valid or
obligatory for any purpose.
A-3
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:_______________ ▇▇▇▇▇ ▇ COMMUNICATIONS, INC.
By:
_______________________
Authorized Signatory
Attest:__________________
A-4
Form of Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company designated as its 6% Convertible Subordinated Notes Due 2009 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $862,500,000, which may be
issued under an indenture (herein called the "Base Indenture") dated as of
September 20, 1999, as supplemented by the First Supplemental Indenture (the
"First Supplemental Indenture" and, together with the Base Indenture, the
"Indenture") dated as of September 20, 1999, in each case between the Company
and IBJ Whitehall Bank & Trust Company, as trustee (herein called the "Trustee",
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Trustee and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
Expiration of Conversion Rights
-------------------------------
On or after September 15, 2002, the Company may, at its option, cause the
conversion rights of Holders of Notes to expire. The Company may exercise this
option only if for at least 20 Trading Days within any period of 30 consecutive
Trading Days, including the last Trading Day of such period, the Current Market
Price of Common Stock of the Company exceeded 140% of the Conversion Price. In
order to exercise its option to cause the conversion rights of Holders of Notes
to expire, the Company must issue a press release for publication on the Dow
▇▇▇▇▇ News Service (or a comparable news service) announcing the Conversion
Expiration Date prior to the opening of business on the second Trading Day after
any period in which the Expiration Condition has been met, but in no event prior
to September 15, 2002. The press release shall announce the Conversion
Expiration Date and provide the current Conversion Price of the Notes and the
Current Market Price of the Common Stock of the Company, in each case as of the
close of business on the Trading Day next preceding the date of the press
release.
Notice of the expiration of conversion rights will be given by the Company
by first-class mail to the Holders of the Notes not more than four business days
after the Company issued the press release. Conversion rights will terminate at
the close of business on the Conversion Expiration Date which will be a date
selected by the Company not less than 30 nor more than 60 days after the date on
which the Company issues the press release announcing its intention to terminate
conversion rights of the Notes.
▇-▇
▇▇▇▇▇▇▇▇▇▇ at the Option of Holders upon a Change of Control
------------------------------------------------------------
Upon the occurrence of a Change of Control, the Holder of this Security may
require the Company, subject to certain limitations provided in the Indenture,
to repurchase this Security at a purchase price in cash in an amount equal to
100% of the principal amount thereof, plus accrued and unpaid interest (if any)
to the Purchase Date (subject to the right of Holders of record on the relevant
record date to receive interest due on the relevant interest payment date).
At the option of the Company, the Purchase Price may be paid in cash or,
subject to the conditions provided in the Indenture, by delivery of shares of
Common Stock of the Company having a fair market value equal to the Purchase
Price. For purposes of this paragraph, the fair market value of shares of Common
Stock of the Company shall be determined by the Company and shall be equal to
95% of the average of the Current Market Price for the five consecutive Trading
Days immediately preceding and including the third Trading Day prior to the
Purchase Date. Whenever in this Note there is a reference, in any context, to
the principal of any Note as of any time, such reference shall be deemed to
include reference to the Purchase Price payable in respect of such Note to the
extent that such Purchase Price is, was or would be so payable at such time, and
express mention of the Purchase Price in any provision of this Note shall not be
construed as excluding the Purchase Price so payable in those provisions of this
Note when such express mention is not made.
In the event of repurchase of this Security in part only, a new Security or
Securities for the unrepurchased portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
Conversion Rights
-----------------
A-6
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Note is entitled, at his or her option, at any time following the
original issue date of the Notes and on or before the close of business on the
Business Day immediately preceding September 15, 2009, or in case the Company
has caused the conversion rights of the Holder hereof to expire or the Holder
hereof has exercised his right to require the Company to repurchase this Note or
such portion hereof, then in respect of this Note until but (unless the Company
defaults in making the payment due upon redemption or repurchase, as the case
may be) not after, the close of business on the Conversion Expiration Date or
the Business Day immediately preceding the Purchase Date, as the case may be, to
convert this Note (or any portion of the principal amount hereof that is an
integral multiple of $1,000, provided that the unconverted portion of such
principal amount is $1,000 or any integral multiple of $1,000 in excess
thereof) into fully paid and nonassessable shares of Common Stock of the Company
at an initial Conversion Rate of 15.3401 shares of Common Stock of the Company
for each $1,000 principal amount of Notes (or at the current adjusted Conversion
Rate if an adjustment has been made as provided in the Indenture) by surrender
of this Note, duly endorsed or assigned to the Company or in blank and, in case
such surrender shall be made during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (except if this Note or portion thereof
repurchasable on a Purchase Date and the conversion rights of this Note, or such
portion thereof, would terminate during the period between such Regular Record
Date and the close of business on such Interest Payment Date), also accompanied
by payment in New York Clearing House or other funds acceptable to the Company
of an amount equal to the interest payable on such Interest Payment Date on the
principal amount of this Note then being converted, and also the conversion
notice hereon duly executed, to the Company at the Corporate Trust Office of the
Trustee, or at such other office or agency of the Company, subject to any laws
or regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below) as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate (each a
"Conversion Agent"), provided, however, that if this Note or portion hereof is
repurchasable on a Purchase Date and the conversion rights of this Note, or such
portion thereof, would terminate during the period between such Regular Record
Date and the close of business on such Interest Payment Date, then the Holder of
this Note on such Regular Record Date will be entitled to receive the interest
accruing on this Note or a portion hereof from the Interest Payment Date next
preceding the date of such conversion to such succeeding Interest Payment Date
and the Holder of this Note who converts this Note or a portion hereof during
such period shall not be required to pay such interest upon surrender of this
Note for conversion. Subject to the provisions of the preceding sentence and, in
the case of a conversion after the close of business on the Regular Record Date
next preceding any Interest Payment Date and on or before the close of business
on such Interest Payment Date, to the right of the Holder of this Note (or any
A-7
Predecessor Security of record as of such Regular Record Date) to receive the
related installment of interest to the extent and under the circumstances
provided in the Indenture, no cash payment or adjustment is to be made on
conversion for interest accrued hereon from the Interest Payment Date next
preceding the day of conversion, or for dividends on the Common Stock of the
Company issued on conversion hereof. The Company shall thereafter deliver to the
Holder the fixed number of shares of Common Stock of the Company (together with
any cash adjustment, as provided in the Indenture) into which this Note is
convertible and such delivery will be deemed to satisfy the Company's obligation
to pay the principal amount of this Note. No fractions of shares or scrip
representing fractions of shares will be issued on conversion, but instead of
any fractional interest the Company shall pay a cash adjustment as provided in
the Indenture. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party (other than a
consolidation or merger that does not result in any reclassification,
conversion, exchange or cancellation of the Common Stock of the Company) or the
conveyance, transfer, sale or lease of all or substantially all of the property
and assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Notes, so that this Note, if then Outstanding, will be
convertible thereafter, during the period this Note shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease by a holder of the number of shares of Common Stock of the Company into
which this Note could have been converted immediately prior to such
consolidation, merger, conveyance, transfer, sale or lease. No adjustment in the
Conversion Rate will be made until such adjustment would require an increase or
decrease of at least one percent of such price, provided that any adjustment
that would otherwise be made will be carried forward and taken into account in
the computation of any subsequent adjustment.
Subordination
-------------
The indebtedness evidenced by this Note is, to the extent and in the manner
provided in the Indenture, subordinate and subject in right of payment to the
prior payment in full in cash of all Senior Indebtedness of the Company, and
this Note is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Note, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
A-8
Events of Default
-----------------
If an Event of Default shall occur and be continuing, the principal amount
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
Defeasance
----------
The Indenture contains provisions for defeasance at any time of (a) the
entire indebtedness of the Company on this Security and (b) its obligation to
repurchase Securities upon the occurrence of a Change of Control and related
Defaults and Events of Default, upon compliance by the Company with certain
conditions set forth therein, which provisions apply to this Security.
Modification and Amendment
--------------------------
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture at any time by the
Company and the Trustee with the consent of the Holders of a majority in
aggregate principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in aggregate principal amount of the Securities at the time
Outstanding, on behalf of the Holders of all the Securities, to waive compliance
by the Company with certain provisions of the Indenture and certain past
defaults under the Indenture and their consequences. Without the consent of any
Holder of Securities, the Company and the Trustee may amend or modify the
Indenture for certain purposes specified therein. Any such consent or waiver by
or on behalf of the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security
issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent or waiver is made upon this
Security.
Miscellaneous
-------------
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of (and premium, if any) and
interest on this Security at the times, place and rate, and in the coin or
currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Security is registerable on the Security Register of
the Company, upon surrender of this Security for registration of transfer at the
office or agency of the
A-9
Company maintained for such purpose in The City of New York, duly endorsed by,
or accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities,
of authorized denominations and for the same aggregate principal amount, will be
issued to the designated transferee or transferees. The Securities are issuable
only in registered form without coupons in denominations of $1,000 principal
amount and any integral multiple thereof. As provided in the Indenture and
subject to certain limitations therein set forth, the Securities are
exchangeable for a like aggregate principal amount of Securities of a different
authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange of the Securities, but the Company may require payment of a sum
sufficient to cover any transfer tax or other similar governmental charge
payable in connection therewith.
Prior to the time of due presentment of this 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 this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any agent shall be affected by notice to the
contrary.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF
CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER
JURISDICTION WOULD BE REQUIRED THEREBY.
All terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
A-10
Form of Trustee's Certificate of Authentication
------------------------------------------------
The Trustee's certificate of authentication shall be in substantially the
following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated: __________________
This is one of the Securities referred to in the within-mentioned
Indenture.
IBJ WHITEHALL BANK & TRUST COMPANY,
as Trustee
By:
_______________________________________
Authorized Signatory
A-11
CONVERSION NOTICE
The undersigned Holder of this Note hereby irrevocably exercises the
option to convert this Note, or any portion of the principal amount hereof
(which is $1,000 or an integral multiple of $1,000 in excess thereof,
PROVIDED that the unconverted portion of such principal amount is $1,000 or
any integral multiple of $1,000 in excess thereof) below designated, into
shares of Common Stock of the Company in accordance with the terms of the
Indenture referred to in this Note, and directs that such shares, together with
a check in payment for any fractional share and any Notes representing any
unconverted principal amount hereof, be delivered to and be registered in the
name of the undersigned unless a different name has been indicated below. If
shares of Common Stock of the Company or Notes are to be registered in the name
of a Person other than the undersigned, (a) the undersigned will pay all
transfer taxes payable with respect thereto and (b) signature(s) must be
guaranteed by an Eligible Guarantor Institution with membership in an approved
signature guarantee program pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934. Any amount required to be paid by the undersigned on
account of interest accompanies this Note.
Dated:__________ ------------------------------------
------------------------------------
Signature(s)
A-12
If shares or Notes are to be registered in the name of a Person other than the
Holder, please print such Person's name and address:
---------------------------------------
Name
---------------------------------------
Address
---------------------------------------
Social Security or other Identification
Number, if any
---------------------------------------
Signature Guaranteed
If only a portion of the Notes is to be converted, please indicate:
1. Principal amount to be converted:
$_________________
2. Principal amount and denomination of Notes representing unconverted
principal amount to be issued:
Amount $
_________________
($1,000 or any integral multiple of $1,000 in excess thereof,
provided that the unconverted portion of such principal amount is $1,000 or
any integral multiple of $1,000 in excess thereof)
A-13
Assignment Form
---------------
If you, the Holder, want to assign this Security, fill in the form below
and have your signature guaranteed:
I or we assign and transfer this Security to_________________________________
(Insert assignee's social security or tax ID number)
_______________________________________________________________________________
(Print or type assignee's name, address and zip code)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
and irrevocably appoint______________________________________________________
of ___________________________________________________________
___________________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for such agent.
Dated: _______________ Your signature: ___________________________________
(Sign exactly as your name appears on
the other side of this Security)
By:
___________________________________
NOTICE: To be executed by an
executive officer
Signature Guarantee: _______________________________________________________
A-14
Option of Holder to Elect Purchase
If you wish to have this Security purchased by the Company pursuant to
Section 8.1 of the First Supplemental Indenture, check the box: [_]
If you wish to have a portion of this Security purchased by the Company
pursuant to Section 8.1 of the First Supplemental Indenture, state the amount:
$___________________.
In the event that the Purchase Price shall be paid in shares of Common
Stock of the Company, provide the name in which the certificate(s) for shares of
Common Stock of the Company are to be issued, together with the address of such
person:
If shares or Notes are to be registered in the name of a Person other than the
Holder, please print such Person's name and address:
(Print or type name, address and zip code)
_______________________________________
Name
_______________________________________
Address
_______________________________________
Dated: ________________ Your Signature:________________________
(Sign exactly as your name appears on the
other side of this Security)
A-15
[TO BE ATTACHED TO GLOBAL SECURITIES]
SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY
The initial principal amount of this Global Security is $[ ].
The following increases or decreases in this Global Security have been made:
Date of Amount of decrease in Amount of increase in Principal amount of this Signature of authorized
Transfer Principal Amount of this Principal Amount of this Global Security following signatory of Trustee or
Global Security Global Security such decrease or increase Security Registrar
A-16
