<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) FEBRUARY 11, 2000
---------------------------------
AMAZON.COM, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 000-22513 91-1646860
- --------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
1200 - 12TH AVENUE SOUTH, SUITE 1200, SEATTLE, WASHINGTON 98144
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (206) 266-1000
------------------------------
N/A
- --------------------------------------------------------------------------------
(Former name and former address, if changed since last report.)
<PAGE> 2
ITEM 5. OTHER EVENTS.
On February 11, 2000, Amazon.com, Inc., a Delaware corporation .
("Amazon.com"), entered into an Underwriting Agreement (the "Underwriting
Agreement") with Morgan Stanley & Co. International Limited ("Morgan Stanley"),
Credit Suisse First Boston (Europe) Limited ("CSFB") and Donaldson, Lufkin &
Jenrette International ("DLJ" and together with Morgan Stanley and CSFB, the
"Underwriters"). Pursuant to the Underwriting Agreement, Amazon.com proposes to
issue and sell to the "Underwriters" E690,000,000 principal amount at
maturity of its 6.875% Convertible Subordinated Notes due 2010 (the "Notes").
The Notes will be convertible into shares of common stock of Amazon.com, par
value $0.01 per share. The Underwriting Agreement is filed as Exhibit 1.1 to
this Current Report.
The Notes will be issued pursuant to the provisions of an Indenture,
dated as of February 16, 2000 (the "Indenture"), between Amazon.com and The Bank
of New York, as trustee. The Indenture is filed as Exhibit 4.1 to this Current
Report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
1.1 Underwriting Agreement, dated February 11, 2000, among Amazon.com,
Inc., Morgan Stanley & Co. International Limited, Credit Suisse First Boston
(Europe) Limited and Donaldson, Lufkin & Jenrette International.
4.1 Indenture, dated February 16, 2000, between Amazon.com, Inc. and The
Bank of New York.
2
<PAGE> 3
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
AMAZON.COM, INC.
Dated: February 15, 2000 By:
----------------- --------------------------------------
L. Michelle Wilson
3
<PAGE> 1
EXECUTION COPY
_690,000,000
AMAZON.COM, INC.
6.875% CONVERTIBLE SUBORDINATED NOTES DUE 2010
UNDERWRITING AGREEMENT
February 11, 2000
<PAGE> 2
February 11, 2000
Morgan Stanley & Co. International Limited
Credit Suisse First Boston (Europe) Limited
Donaldson, Lufkin & Jenrette International
c\o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
Dear Sirs and Mesdames:
Amazon.com, Inc., a Delaware corporation (the "Company"), proposes to
issue and sell to the several purchasers named in Schedule I hereto (the
"Underwriters") _690,000,000 principal amount at maturity of its 6.875%
Convertible Subordinated Notes due 2010 (the "Securities") to be issued pursuant
to the provisions of an Indenture dated as of February 16, 2000 (the
"Indenture") between the Company and The Bank of New York as Trustee (the
"Trustee"). The Securities will be convertible into shares of common stock of
the Company, par value $0.01 per share (the "Underlying Securities").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (registration no. 333-78797), including a
prospectus, relating to certain securities and has filed with, or transmitted
for filing to, or shall promptly hereafter file with or transmit for filing to,
the Commission a preliminary prospectus supplement and a final prospectus
supplement (with the preliminary prospectus supplement, each a "Prospectus
Supplement") specifically relating to the Securities pursuant to Rule 424 under
the Securities Act of 1933, as amended (the "Securities Act"). The term
"Registration Statement" means the registration statement, including the
exhibits thereto, as amended to the date of this Agreement. The term "Basic
Prospectus" means the prospectus included in the Registration Statement. The
term "Prospectus" means the Basic Prospectus together with the Prospectus
Supplement. The term "preliminary prospectus" means a preliminary prospectus
supplement specifically relating to the Securities, together with the Basic
Prospectus. As used herein, the terms "Basic Prospectus," "Prospectus" and
"preliminary prospectus" shall include in each case the documents, if any,
incorporated by reference therein. The terms "supplement," "amendment" and
"amend" as used herein shall include all documents deemed to be incorporated by
reference in the Prospectus that are filed subsequent to the date of the Basic
Prospectus by the Company with the Commission pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act").
1. Representations and Warranties. The Company represents and warrants
to, and agrees with, you that:
<PAGE> 3
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or, to the knowledge of the
Company or its counsel, threatened by the Commission.
(b) (i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations of the Commission thereunder, (ii) each part of
the Registration Statement, when such part became effective, did not contain,
and each such part, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (iii) the Registration Statement and the Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material respects
with the Securities Act and the applicable rules and regulations of the
Commission thereunder and (iv) the Prospectus does not contain and, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that the representations and warranties set forth in this
paragraph do not apply (A) to statements or omissions in the Registration
Statement or the Prospectus based upon information relating to any Underwriter
furnished to the Company in writing by such Underwriter expressly for use
therein or (B) to that part of the Registration Statement that constitutes the
Statement of Eligibility (Form T-1) under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), of the Trustee.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified to
transact business and in good standing in each jurisdiction in which the conduct
of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) The Company's material subsidiaries consist of Amazon.com.
Holdings, Inc. and Amazon.com LLC. Each such subsidiary has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as currently conducted
and is duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material adverse effect
on the Company and its subsidiaries, taken as whole; all of the issued shares of
capital stock of each such subsidiary have been duly and validly authorized and
issued, are fully paid and non-assessable, and are owned of record directly or
indirectly by the Company, free and clear of all liens, encumbrances, equities
or claims; except to the extent that the failure of such issued shares and
capital stock to be so duly and validly authorized and issued,
2
<PAGE> 4
fully paid and non-assessable and owned of record directly or indirectly by the
Company would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(e) This Agreement has been duly authorized, executed and delivered
by the Company.
(f) The shares of Common Stock outstanding on the date hereof have
been duly authorized and are validly issued, fully paid and non-assessable.
(g) The authorized capital stock of the Company was, as of the date
so indicated, as set forth in the Prospectus under the caption "Capitalization"
and conforms as to legal matters to the description thereof contained in the
Prospectus.
(h) The Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters in accordance with the terms of this
Agreement, will be valid and binding obligations of the Company, enforceable in
accordance with their terms, subject to applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally and general principles of
equity, and will be entitled to the benefits of the Indenture.
(i) The Underlying Securities reserved for issuance upon conversion
of the Securities have been duly authorized and reserved and, when issued upon
conversion of the Securities in accordance with the terms of the Securities,
will be validly issued, fully paid and non-assessable, and the issuance of the
Underlying Securities will not be subject to any preemptive or similar rights.
(j) The Indenture has been duly authorized and, on the Closing Date,
will be duly qualified under the Trust Indenture Act and will be duly executed
and delivered by the Company, and be a valid and binding agreement of the
Company, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
general principles of equity.
(k) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement, the
Indenture and the Securities will not (a) contravene any provision of applicable
law or the Company's Restated Certificate of Incorporation or Bylaws, (b)
contravene any agreement or other instrument binding upon the Company or any of
its subsidiaries that is material to the Company and its subsidiaries, taken as
a whole, or any judgment, order or decree of any governmental body, agency or
court having jurisdiction over the Company or any subsidiary, and no consent,
approval, authorization or order of, or qualification with, any governmental
body or agency is required for the performance by the Company of its obligations
under this Agreement, the Indenture or the Securities, except such as may be
required by the securities or Blue Sky laws of the various states in connection
with the offer and sale of the Securities.
3
<PAGE> 5
(l) There has not occurred any material adverse change (including,
without limitation, a change in management resulting from the resignation or
termination of employment of Jeff Bezos), or any development involving a
prospective material adverse change, in the condition, financial or otherwise,
or in the earnings, business or operations of the Company and its subsidiaries,
taken as a whole, from that set forth in the Prospectus.
(m) There are no (A) legal or governmental proceedings pending or,
to the Company's knowledge, threatened to which the Company or any of its
subsidiaries is a party or to which any of the properties of the Company or any
of its subsidiaries is subject that (i) are required to be described in the
Registration Statement or the Prospectus and that are not so described, or (ii)
limit the power or ability of the Company to perform its obligations under this
Agreement, the Indenture or the Securities or to consummate the transactions
contemplated by the Prospectus; or (B) statutes, regulations, contracts or other
documents that are required to be described in the Registration Statement or the
Prospectus or to be filed or incorporated by reference as exhibits to the
Registration Statement that are not described, filed or incorporated as
required.
(n) Each preliminary prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(o) The Company is not and, after giving effect to the offering and
sale of the Securities and the application of the proceeds thereof as described
in the Prospectus, will not be an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(p) The Company and its subsidiaries (i) are in compliance with any
and all applicable foreign, federal, state and local laws and regulations
relating to the protection of human health and safety, the environment or
hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses and (iii) are in compliance with all terms and conditions
of any such permit, license or approval, except where such noncompliance with
Environmental Laws, failure to receive required permits, licenses or other
approvals or failure to comply with the terms and conditions of such permits,
licenses or approvals, would not, singly or in the aggregate, have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(q) The Company and each of its subsidiaries has good and marketable
title to all personal property owned by it, in each case free and clear of any
security interests, liens, encumbrances, equities, claims and other defects,
except such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such property
by the Company or its subsidiaries, and any real property and buildings held
under lease by the Company are held under valid, subsisting and enforceable
leases, with such
4
<PAGE> 6
exceptions as are not material to the Company and its subsidiaries, taken as a
whole, and do not materially or adversely interfere with the use made or
proposed to be made of such property and buildings by the Company or its
subsidiaries.
(r) To the Company's knowledge, each of the Company and its
subsidiaries owns or possesses, or can acquire on reasonable terms, all material
patents, patent applications, trademarks, service marks, trade names, licenses,
know-how, copyrights, trade secrets and proprietary or other confidential
information necessary to operate the business now operated by it. Neither the
Company nor any of its subsidiaries has received any notice of infringement of
or conflict with asserted rights of any third party with respect to any of the
foregoing which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a material adverse effect on the Company
and its subsidiaries, taken as a whole, except as disclosed in the Prospectus.
(s) Each of the Company and its subsidiaries possesses all material
consents, licenses, certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of any such certificate, authorization or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would have a material adverse effect on the Company and its
subsidiaries, taken as a whole, except as described in the Prospectus.
(t) Ernst & Young, who have certified certain financial statements
of the Company and each of its subsidiaries and delivered their report with
respect to the audited financial statements incorporated by reference in the
Prospectus, are independent public accountants within the meaning of such term
for purposes of the Securities Act and the applicable rules and regulations
thereunder.
(u) The financial statements of the Company included in (or
incorporated by reference in) the Prospectus were prepared in accordance with
generally accepted accounting principles ("GAAP") consistently applied
throughout the periods involved (except as otherwise noted therein) and they
present fairly the financial condition of the Company as of the dates at which
they were prepared and the results of operations of the Company in respect of
the periods for which they were prepared.
(v) The Company and each of its subsidiaries has filed all foreign,
federal, state and local tax returns that are required to be filed or has
requested extensions thereof and has paid all taxes required to be paid by it
and any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for (i) any such assessment,
fine or penalty that is currently being contested in good faith, (ii) in any
case in which the failure so to file or pay would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole, or (iii) as
described in or contemplated by the Prospectus.
5
<PAGE> 7
(w) Except as disclosed in the Prospectus, the Company and each of
its subsidiaries is insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as are prudent and customary
in the businesses in which it is engaged; and, to the knowledge of the Company,
neither the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for.
(x) (i) The Company and each of its subsidiaries is in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations of general applicability thereunder ("ERISA");
(ii) no "reportable event" (as defined in Section 4043(c) of ERISA) for which
the 30-day notice requirement of Section 4043 of ERISA has not been waived by
statute, regulation or otherwise has occurred with respect to any "pension plan"
(as defined in Section 3(2) of ERISA) that is covered by Title IV of ERISA for
which the Company and its subsidiaries would have any liability; (iii) neither
the Company nor any of its subsidiaries has incurred or expects to incur any
liability under (A) Title IV of ERISA with respect to termination of, or
withdrawal from, any "pension plan" or (B) Section 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations of general application thereunder (the "Code");in each case of
(ii) and (iii), such that individually or in the aggregate, would have a
material adverse effect on the Company and its subsidiaries, taken as a whole;
and (iv) each "pension plan" for which the Company or any of its subsidiaries
would have any liability that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by action or by
failure to act, which would cause the loss of such qualification, except for the
failure to so qualify or the loss of such qualification that would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(y) No default exists, and no event has occurred which, with notice
or lapse of time or both, would constitute a default in the due performance and
observance of any material term, covenant or condition of any material
indenture, mortgage, deed of trust, lease or other material agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries is bound.
(z) (i) No receiver or liquidator (or similar person) has been
appointed in respect of the Company or any of its subsidiaries or in respect of
any part of the assets of the Company or any of its subsidiaries; (ii) no
resolution, order of any court, regulatory body, governmental body or otherwise,
or petition or application for an order, has been passed, made or presented for
the winding up of the Company or any of its subsidiaries or for the protection
of the Company or any of its subsidiaries from its creditors; and (iii) neither
the Company nor any of its subsidiaries has stopped or suspended payments of its
debts, become unable to pay its debts or otherwise become insolvent, in each
case of (i) through (iii), with respect to the subsidiaries of the Company that
are not material, such that it would have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
6
<PAGE> 8
2. Agreements to Sell and Purchase. The Company hereby agrees to sell to
several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective principal amount of Securities set forth in Schedule I
hereto opposite its name at a purchase price of 97.5% of the principal amount
thereof (the "Purchase Price") plus accrued interest, if any, to the Closing
Date.
The Company hereby agrees that, without your prior written consent, it
will not, during the period beginning on the date hereof and continuing to and
including the Closing Date, offer, sell, contract to sell or otherwise dispose
of any debt of the Company or warrants to purchase debt of the Company
substantially similar to the Securities (other than the sale of the Securities
under this Agreement).
The Company and certain of its executive officers and directors have
agreed that they will not (a) offer, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock, or (b) enter into any swap or
other agreement that transfers, in whole or in part, any of the economic
consequences of ownership of the Common Stock, whether any such transaction
described in clause (a) or (b) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise for a 90-day period after
the date of the Prospectus Supplement, without the prior written consent of
Morgan Stanley & Co. International Limited, except that (i) the Company may,
without such consent issue Common Stock (A) upon the exercise of outstanding
stock options or warrants or upon the conversion of any other security
outstanding on the date of the Prospectus and may grant options to employees,
directors and consultants of the Company provided such options are not
exercisable during such 90-day period and (B) in connection with acquisitions of
businesses or portions thereof, provided the parties receiving Common Stock in
any such acquisition agree to be bound by the foregoing restrictions and (ii)
certain executive officers and directors of the Company as a group may, with the
approval of the Company, sell or otherwise dispose of in the aggregate 600,000
shares of Common Stock without the consent of Morgan Stanley & Co. International
Limited.
3. Terms of Offering. The Company is advised that the Underwriters propose
to make an offering of their respective portions of the Underwriters' Securities
(including a public offering in the United States) as soon as practicable after
this Agreement has been entered into as in their judgment is advisable. The
terms of such offering of the Underwriters' Securities are set forth in the
Prospectus. The Underwriters shall effect sales of Securities into the United
States through their respective US broker-dealer affiliates (the "US Underwriter
Affiliates"). The provisions of Sections 1 and 7 of this Agreement shall be for
the benefit of the US Underwriter Affiliates as well as the Underwriters.
4. Payment and Delivery. Payment for the Securities shall be made to the
Company in Federal or other funds immediately available in New York City against
delivery of such
7
<PAGE> 9
Securities for the respective accounts of the several Underwriters at 10:00
a.m., New York City time, on February 16, 2000, or at such other time on the
same or such other date, not later than February 16, 2000, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Closing Date."
Certificates for the Securities shall be in definitive form or global
form, as specified by you, and registered in such names and in such
denominations as you shall request in writing not later than one full business
day prior to the Closing Date. The certificates evidencing the Securities shall
be delivered to you on the Closing Date, as the case may be for respective the
accounts of the several Underwriters, with any transfer taxes payable in
connection with the transfer of the Securities to the Underwriters duly paid,
against payment of the Purchase Price therefor plus accrued interest, if any, to
the date of payment and delivery.
5. Conditions to the Underwriter's Obligations. The obligation of the
Underwriters to purchase and pay for the Securities on the Closing Date is
subject to the following conditions:
(a)(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading, in the rating
accorded any of the Company's securities by any "nationally recognized
statistical rating organization," as such term is defined for purposes of Rule
436(g)(2) under the Securities Act; and
(ii) subsequent to the execution and delivery of this Agreement
and prior to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of this
Agreement) that, in your judgment, is material and adverse and that makes it, in
your judgment, impracticable to market the Securities on the terms and in the
manner contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date a
certificate, dated the Closing Date and signed by a duly authorized officer of
the Company, to the effect set forth in Section 5(a)(ii) above and to the effect
that the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the Company has
complied in all material respects with all of the agreements and satisfied all
of the conditions on its part to be performed or satisfied hereunder on or
before the Closing Date.
(c) The Underwriters shall have received on the Closing Date an
opinion of Gibson, Dunn and Crutcher LLP, outside counsel for the Company, dated
the Closing Date, to the effect set forth in Exhibit A. Such opinion shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
8
<PAGE> 10
(d) The Underwriters shall have received on the Closing Date an
opinion of Shearman & Sterling, counsel for the Underwriters, dated the Closing
Date, in form and substance satisfactory to you.
(e) The Underwriters shall have received on each of the date hereof
and the Closing Date a letter, dated the date hereof or the Closing Date, as the
case may be, in form and substance satisfactory to the Underwriters, from Ernst
& Young LLP, independent public accountants, containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in or incorporated by reference into the Prospectus,
provided that the letter delivered on the Closing Date shall use a "cut-off
date" not earlier than three days prior to the date hereof.
(f) The "lock-up" agreements, each substantially in the form of
Exhibit B, hereto, between you and certain officers and directors of the Company
relating to sales and certain other dispositions of shares of Common Stock or
certain other securities shall be in full force and effect on the Closing Date.
(g) The Underwriters shall have received such other documents and
certificates as are reasonably requested by you or your counsel.
(h) The Underlying Securities shall have been approved for listing
on the Nasdaq National Market.
6. Covenants of the Company. In further consideration of the agreements of
the Underwriters contained in this Agreement, the Company covenants with the
Underwriters as follows.
(a) To furnish to Morgan Stanley & Co. International Limited, on
behalf of the Underwriters, without charge, a signed copy of the Registration
Statement (including exhibits thereto) and for delivery to each other
Underwriter a conformed copy of the Registration Statement (without exhibits
thereto) and to furnish to Morgan Stanley & Co. International Limited, on behalf
of the Underwriters in New York City, without charge, prior to 10:00 a.m. New
York City time on the business day next succeeding the date of this Agreement
and during the period mentioned in Section 6(c) below, as many copies of the
Prospectus, any documents incorporated by reference therein and any supplements
and amendments thereto or to the Registration Statement as the Morgan Stanley &
Co. International Limited may reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the first date of the public
offering of the Securities as in the opinion of counsel for the Underwriters the
Prospectus is required by law to
9
<PAGE> 11
be delivered in connection with sales by an Underwriter or dealer, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in the light
of the circumstances when the Prospectus is delivered to a purchaser, not
misleading, or if, in the opinion of counsel for the Underwriters, after
reasonable consultation with counsel for the Company, it is necessary to amend
or supplement the Prospectus to comply with applicable law, forthwith to
prepare, file with the Commission and furnish, at its own expense, to the
Underwriters and to the dealers (whose names and addresses Morgan Stanley & Co.
International Limited will furnish to the Company) to which Securities may have
been sold by Morgan Stanley & Co. International Limited on behalf of the
Underwriters and to any other dealers upon request, either amendments or
supplements to the Prospectus so that the statements in the Prospectus as so
amended or supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the Prospectus,
as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Securities for offer and sale under
the securities or Blue Sky laws of such jurisdictions as you shall reasonably
request.
(e) To make generally available to the Company's security holders
and to the Underwriters as soon as practicable an earning statement covering a
twelve month period beginning on the first day of the first full fiscal quarter
after the date of this Agreement, which earning statement shall satisfy the
provisions of Section 11(a) of the Securities Act and the rules and regulations
of the Commission thereunder. If such fiscal quarter is the last fiscal quarter
of the Company's fiscal year, such earning statement shall be made available not
later than 90 days after the close of the period covered thereby and in all
other cases shall be made available not later than 45 days after the close of
the period covered thereby.
(f) During the period beginning on the date of this Agreement and
continuing to and including the Closing Date, not to offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company or warrants to
purchase debt securities of the Company substantially similar to the Securities
(other than (i) the Securities and (ii) commercial paper issued in the ordinary
course of business), without the prior written consent of Morgan Stanley & Co.
International Limited.
(g) Use its reasonable efforts to take all actions necessary to have
the Notes approved for listing on the Luxembourg Stock Exchange.
(h) Whether or not the transactions contemplated in this Agreement
are consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this Agreement,
including: (i) the fees, disbursements and expenses of the Company's counsel and
the Company's accountants in connection with the registration and delivery of
the Securities under the Securities Act and all other fees or expenses in
connection with the preparation and filing of the Registration Statement, any
preliminary prospectus, the Prospectus and amendments and supplements to any of
the foregoing, including all printing costs associated therewith, and the
mailing and delivering of copies thereof to the
10
<PAGE> 12
Underwriters and dealers, in the quantities hereinabove specified, (ii) all
costs and expenses related to the transfer and delivery of the Securities to the
Underwriters, including any transfer or other taxes payable thereon, (iii) all
expenses in connection with the qualification of the Securities for offer and
sale under state law as provided in Section 6(d) hereof, including filing fees,
(iv) the fees and disbursements of the Company's counsel and accountants and of
the Trustee and its counsel, (v) all filing fees and the reasonable fees and
disbursements of counsel to the Underwriters incurred in connection with the
review and qualification of the offering of the Securities by the National
Association of Securities Dealers, Inc., (vi) any fees charged by the rating
agencies for the rating of the Securities, (vii) all fees and expenses in
connection with the preparation and filing of the registration statement on Form
8-A relating to the Securities and all costs and expenses incident to listing
the Securities on the Luxembourg Stock Exchange and the Underlying Securities on
the NASDAQ National Market and (viii) all other costs and expenses incident to
the performance of the obligations of the Company hereunder for which provision
is not otherwise made in this Section. It is understood, however, that except as
provided in this Section, Section 8 entitled "Indemnity and Contribution", and
the last paragraph of Section 10 below, the Underwriters will pay all of their
costs and expenses, including fees and disbursements of their counsel, and any
advertising expenses connected with any offers they may make.
7. Indemnity and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each Person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages and liabilities
(including, without limitation, any legal or other expenses reasonably incurred
in connection with defending or investigating any such action or claim) caused
by any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement or any amendment thereof, any preliminary
prospectus as the Prospectus (as amended or supplemented if the Company shall
have furnished any amendments or supplements thereto), or caused by any omission
or alleged omission to state therein a material fact necessary to make the
statements therein in the light of the circumstances under which they were made
not misleading, except insofar as such losses, claims, damages or liabilities
are caused by any such untrue statement or omission or alleged untrue statement
or omission based upon information relating to any Underwriter furnished to the
Company in writing by such Underwriter expressly for use therein.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers and each person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
in writing by such Underwriter through you expressly for use in the Registration
Statement, any preliminary prospectus, the Prospectus or any amendments or
supplements thereto.
11
<PAGE> 13
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to Section 7(a) or 7(b), such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley & Co. International Limited, in the case
of parties indemnified pursuant to Section 8(a), and by the Company, in the case
of parties indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its written
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a)
or 7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to therein, then each
indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Underwriters on the
other hand from the offering of the Securities or (ii) if the
12
<PAGE> 14
allocation provided by clause 7(d)(i) above is not permitted by applicable law,
in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause 8(d)(i) above but also the relative fault of the Company
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand in connection with the offering of the Securities shall be
deemed to be in the same respective proportions as the net proceeds from the
offering of the Securities (before deducting expenses) received by the Company
and the total discounts and commissions received by the Underwriters, in each
case as set forth on the cover of the Prospectus Supplement, bear to the
aggregate offering price of the Securities. The relative fault of the Company on
the one hand and of the Underwriters on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 8 are several in proportion
to the respective principal amount of Securities they have purchased hereunder,
and not joint.
(e) The Company and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation or by any other method of allocation that does not take account
of the equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in Section 7(d) shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities resold by it in the initial
placement of such Securities were offered to investors exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies provided
for in this Section 8 are not exclusive and shall not limit any rights or
remedies which may otherwise be available to any indemnified party at law or in
equity.
The indemnity and contribution provisions contained in this Section
8 and the representations, warranties and other statements of the Company
contained in this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation made
by or on behalf of any Underwriters or any person controlling any Underwriter or
the Company, its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Securities.
13
<PAGE> 15
8. Termination. This Agreement shall be subject to termination by notice
given by you to the Company, if (a) after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the National Association of
Securities Dealers, Inc. or the Chicago Board of Options Exchange, (ii) trading
of any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 9(a)(i) through 9(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Securities on the terms and in the manner contemplated in the
Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date, any one or more of the Underwriters shall fail or
refuse to purchase Securities that it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Securities which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of Securities to be
purchased on such date, the other Underwriters shall be obligated severally in
the proportions that the principal amount of Securities set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of
Securities set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as you may specify, to purchase the Securities
which such defaulting Underwriter or Underwriters agreed but failed or refused
to purchase on such date; provided that in no event shall the principal amount
of Securities that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 10 by an amount in excess of
one-ninth of such principal amount of Securities without the written consent of
such Underwriter. If, on the Closing Date any Underwriter or Underwriters shall
fail or refuse to purchase Securities which it or they have agreed to purchase
hereunder on such date and the aggregate principal amount of Securities with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Securities to be purchased on such date, and arrangements
satisfactory to you and the Company for the purchase of such Securities are not
made within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter or of the Company. In
any such case either you or the Company shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and in the Prospectus or
in any other documents or arrangements may be effected. Any action taken under
this paragraph shall not relieve any defaulting Underwriter from liability in
respect of any default of such Underwriter under this Agreement.
14
<PAGE> 16
If this Agreement shall be terminated by the Underwriters, or any of them
because of any failure or refusal on the part of the Company to comply with the
terms or to fulfill any of the conditions of this Agreement, or if for any
reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters, or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and disbursements of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a part of
this Agreement.
15
<PAGE> 17
Very truly yours,
AMAZON.COM, INC.
By:
----------------------------------------
Name:
Title:
Accepted as of the date hereof
MORGAN STANLEY & CO. INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
DONALDSON, LUFKIN & JENRETTE INTERNATIONAL
Acting severally on behalf of
themselves and the several Underwriters
named in Schedule I hereto.
By: Morgan Stanley & Co. International Limited
By:
-----------------------------------------
Name:
Title:
<PAGE> 18
SCHEDULE I
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT OF
SECURITIES TO BE
UNDERWRITER PURCHASED
----------- -------------------
<S> <C>
Morgan Stanley & Co. International Limited _414,000,000
Credit Suisse First Boston (Europe) Limited _138,000,000
Donaldson, Lufkin & Jenrette International _138,000,000
------------
Total:............................. _690,000,000
============
</TABLE>
<PAGE> 19
EXHIBIT A
OPINION OF GIBSON, DUNN & CRUTCHER
<PAGE> 20
EXHIBIT B
FORM OF LOCK-UP LETTER FOR DIRECTORS AND OFFICERS
February ___, 2000
Morgan Stanley & Co. International Limited
as Lead Manager of the Underwriters
c/o Morgan Stanley & Co. International Limited
25 Cabot Square
Canary Wharf
London E14 4QA
Dear Sirs and Mesdames:
The undersigned understands that Morgan Stanley & Co. International
Limited ("Morgan Stanley") proposes to enter into an Underwriting Agreement (the
"Underwriting Agreement") with Amazon.com, Inc., a Delaware corporation (the
"Company"), providing for the offering (the "Offering") by the several
Underwriters, including Morgan Stanley (the "Underwriters"), of _690,000,000
principal amount of Convertible Subordinated Notes due 2010 of the Company (the
"Securities"). The Securities will be convertible into shares of common stock,
par value $0.01 per share (including par value) of the Company (the "Common
Stock").
To induce the Underwriters that may participate in the Offering to
continue their efforts in connection with the Offering, the undersigned hereby
agrees that, without the prior written consent of Morgan Stanley on behalf of
the Underwriters, it will not, during the period commencing on the date hereof
and ending 90 days after the date of the final prospectus supplement relating to
the Offering (the "Prospectus Supplement"), (1) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock*
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of the Common
Stock, whether any such transaction described in clause (1) or (2) above is to
be settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to transactions relating to
shares of Common Stock or other securities acquired in open market transactions
after the completion of the Offering. In addition, the undersigned agrees
- --------
* except in the case of Jeff Bezos, Tom Alberg, Richard Dalzell, Mark Britto,
Scott Cook and John Risher as agreed between the Company and the Underwriters
B3-1
<PAGE> 21
that, without the prior written consent of Morgan Stanley on behalf of the
Underwriters, it will not, during the period commencing on the date hereof and
ending 90 days after the date of the Prospectus Supplement, make any demand for
or exercise any right with respect to, the registration of any shares of Common
Stock or any security convertible into or exercisable or exchangeable for Common
Stock.
Whether or not the Offering actually occurs depends on a number of
factors, including market conditions. Any Offering will be made only pursuant to
the Underwriting Agreement, the terms of which are subject to negotiation
between the Company and the Underwriters.
Very truly yours,
----------------------------------------
Name:
----------------------------------------
(Address)
B3-2
<PAGE> 1
S&S DRAFT
2/14/00
INDENTURE
INDENTURE, dated as of February 16, 2000, between Amazon.com, Inc., a
Delaware corporation (hereinafter sometimes called the "Company," as more fully
set forth in Section 1.1), and The Bank of New York, a New York banking
corporation, as trustee hereunder (hereinafter sometimes called the "Trustee,"
as more fully set forth in Section 1.1).
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly authorized
the issue of its 6.875% Convertible Subordinated Notes due 2010 (hereinafter
sometimes called the "Notes"), in an aggregate principal amount not to exceed
E690,000,000 and, to provide the terms and conditions upon which the Notes
are to be authenticated, issued and delivered, the Company has duly authorized
the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by the
Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed by
the Company and authenticated and delivered by the Trustee or a duly authorized
authenticating agent, as in this Indenture provided, the valid, binding and
legal obligations of the Company, and to constitute these presents a valid
agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes are,
and are to be, authenticated, issued and delivered, and in consideration of the
premises and of the purchase and acceptance of the Notes by the holders thereof,
the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. The terms defined in this Section 1.1 (except as
herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
AFFILIATE: The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
<PAGE> 2
BOARD OF DIRECTORS: The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
BUSINESS DAY: The term "Business Day" shall mean each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
CLOSING PRICE: The term "Closing Price" shall have the meaning
specified in Section 15.6(h)(1).
COMMISSION: The term "Commission" shall mean the Securities and
Exchange Commission.
COMMON STOCK: The term "Common Stock" shall mean any stock of any
class of the Company which has no preference in respect of dividends or of
amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which is not subject to redemption
by the Company. Subject to the provisions of Section 15.7, however, shares
issuable on conversion of Notes shall include only shares of the class
designated as common stock of the Company at the date of this Indenture or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable shall be
substantially in the proportion which the total number of shares of such class
resulting from all such reclassifications bears to the total number of shares of
all such classes resulting from all such reclassifications.
COMPANY: The term "Company" shall mean Amazon.com, Inc., a Delaware
corporation, having its principal office at 1200 12th Avenue SE, Seattle,
Washington 98144 and, subject to the provisions of Article XII, shall include
its successors and assigns.
CONVERSION PRICE: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
CORPORATE TRUST OFFICE: The term "Corporate Trust Office" or other
similar term, shall mean the principal office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office is, at the date as of which this Indenture is dated, located at 101
Barclay Street, 21st Floor West, New York, New York 10286, Attention: Corporate
Trust Administration (Amazon.com, Inc. 6.875% Convertible Subordinated Notes due
2010).
CURRENT MARKET PRICE: The term "Current Market Price" shall have the
meaning specified in Section 15.6(h)(2).
CUSTODIAN: The term "Custodian" shall mean The Bank of New York, as
custodian with respect to the Notes in global form, or any successor entity
thereto.
DEFAULT: The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
DEFAULTED INTEREST: The term "Defaulted Interest" shall have the
meaning specified in Section 2.3.
DEPOSITARY: The term "Depositary" shall mean, with respect to the
Notes issuable or issued in whole or in part in global form, the Person
specified in Section 2.5(c) as the Depositary with respect to such Notes, until
a successor shall have been appointed and become such pursuant to the applicable
provisions of this Indenture, and thereafter, "Depositary" shall mean or include
such successor.
DESIGNATED SENIOR INDEBTEDNESS: The term "Designated Senior
Indebtedness" shall mean any Senior Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee
2
<PAGE> 3
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Indebtedness shall be "Designated Senior
Indebtedness" for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right of
such Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness). If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Designated Senior Indebtedness
effective as of the date of such recission or return.
EVENT OF DEFAULT: The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d) or (e).
EXCHANGE ACT: The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
FAIR MARKET VALUE : The term "fair market value" shall have the
meaning specified in Section 15.6(h)(3).
FUNDAMENTAL CHANGE: The term "Fundamental Change" shall mean the
occurrence of any transaction or event in connection with which all or
substantially all of the Common Stock shall be exchanged for, converted into,
acquired for or constitute solely the right to receive consideration (whether by
means of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) which is not all
or substantially all common stock listed (or, upon consummation of or
immediately following such transaction or event, which will be listed) on a
United States national securities exchange (or approved or, upon consummation of
or immediately following such transaction or event, which will be approved) for
quotation on the Nasdaq National Market or any similar United States system of
automated dissemination of quotations of securities prices.
GLOBAL NOTE: The term "Global Note" shall have the meaning set forth
in Section 2.5(b).
INDEBTEDNESS: The term "Indebtedness" shall mean, with respect to any
Person, and without duplication, (a) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments, and all commitment, standby and other fees due and payable
to financial institutions with respect to credit facilities available to such
Person) or evidenced by bonds, debentures, notes or similar instruments (whether
or not the recourse of the lender is to the whole of the assets of such Person
or to only a portion thereof), other than any account payable or other accrued
current liability or obligation incurred in the ordinary course of business in
connection with the obtaining of materials or services; (b) all reimbursement
obligations and other liabilities (contingent or otherwise) of such Person with
respect to letters of credit, bank guarantees or bankers' acceptances; (c) all
obligations and liabilities (contingent or otherwise) in respect of leases of
real or personal property or other assets of such Person required, in conformity
with generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person and all
obligations and other liabilities (contingent or otherwise) under any lease or
related document (including a purchase agreement) in connection with the lease
of real property which provides that such Person is contractually obligated to
purchase or cause a third party to purchase the leased property and thereby
guarantee a minimum residual value of the leased property to the lessor and the
obligations of such Person under such lease or related document to purchase or
to cause a third party to purchase such leased property; (d) all obligations of
such Person (contingent or otherwise) with respect to an interest rate or other
swap, cap or collar agreement or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;
(e) all direct or indirect guaranties or similar agreements by such Person in
respect of, and obligations or liabilities (contingent or otherwise) of such
Person to purchase or otherwise acquire or otherwise assure a creditor against
loss in respect of, indebtedness, obligations or liabilities of another Person
of the kind described in clauses (a) through (d); (f) any
3
<PAGE> 4
indebtedness or other obligations described in clauses (a) through (e) secured
by any mortgage, pledge, lien or other encumbrance existing on property which is
owned or held by such Person, regardless of whether the indebtedness or other
obligation secured thereby shall have been assumed by such Person; and (g) any
and all deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (f).
INDENTURE: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
NOTE or NOTES: The term "Note" or "Notes" shall mean any Note or
Notes, as the case may be, authenticated and delivered under this Indenture,
including the Global Note.
NOTE REGISTER: The term "Note register" shall have the meaning
specified in Section 2.5(a).
NOTEHOLDER or HOLDER: The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any Person in whose name at the time a particular Note is registered
on the Notes registrar's books.
NOTICE DATE: The term "Notice Date" shall have the meaning specified
in Section 15.8(b).
OFFICERS' CERTIFICATE: The term "Officers' Certificate," when used
with respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer, Executive or Senior Vice President or
any Vice President (whether or not designated by a number or number or words or
words added before or after the title "Vice President") and (b) the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company.
OPINION OF COUNSEL: The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company.
OPTIONAL REDEMPTION: The term "Optional Redemption" shall have the
meaning specified in Section 3.1.
OUTSTANDING: The term "outstanding," when used with reference to
Notes, shall, subject to the provisions of Section 9.4, mean, as of any
particular time, all Notes authenticated and delivered by the Trustee under this
Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes, or portions thereof, (i) for the redemption of which
monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) which shall
have been otherwise defeased in accordance with Article XIII;
(c) Notes in lieu of which, or in substitution for which, other
Notes shall have been authenticated and delivered pursuant to the terms of
Section 2.6; and
(d) Notes converted into Common Stock pursuant to Article XV and
Notes deemed not outstanding pursuant to Article III.
PAYMENT BLOCKAGE NOTICE: The term "Payment Blockage Notice" shall have
the meaning specified in Section 4.2.
PERSON: The term "Person" shall mean a corporation, an association, a
partnership, a limited liability corporation, an individual, a joint venture, a
joint stock company, a trust, an unincorporated organization or a government or
an agency or a political subdivision thereof.
4
<PAGE> 5
PREDECESSOR NOTE: The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note that it replaces.
RECORD DATE: The term "Record Date" shall have the meaning specified
in Section 15.6(h)(4).
REPRESENTATIVE: The term "Representative" shall mean, when used with
respect to the Trustee, any officer within the corporate trust department of the
Trustee, including any vice president, assistant vice president, assistant
secretary.
RESPONSIBLE OFFICER: The term "Responsible Officer," when used with
respect to the Trustee, shall mean any officer within the corporate trust
department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
SECURITIES ACT: The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
SENIOR INDEBTEDNESS: The term "Senior Indebtedness" shall mean the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent or termination payment payable on or in connection with,
and all fees, costs, expenses and other amounts accrued or due on or in
connection with, Indebtedness of the Company, whether outstanding on the date of
this Indenture or thereafter created, incurred, assumed, guaranteed or in effect
guaranteed by the Company (including all deferrals, renewals, extensions or
refundings of, or amendments, modifications or supplements to, the foregoing),
unless in the case of any particular Indebtedness the instrument creating or
evidencing the same or the assumption or guarantee thereof expressly provides
that such Indebtedness shall not be senior in right of payment to the Notes or
expressly provides that such Indebtedness is "pari passu" or "junior" to the
Notes. Notwithstanding the foregoing, the term "Senior Indebtedness" shall not
include any Indebtedness of the Company to any subsidiary of the Company, a
majority of the voting stock of which is owned, directly or indirectly, by the
Company. If any payment made to any holder of any Senior Indebtedness or its
Representative with respect to such Senior Indebtedness is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Company or otherwise, the reinstated
Indebtedness of the Company arising as a result of such rescission or return
shall constitute Senior Indebtedness effective as of the date of such rescission
or return.
SIGNIFICANT SUBSIDIARY: The term "Significant Subsidiary" shall mean,
as of any date of determination, a Subsidiary of the Company that would
constitute a "significant subsidiary" as such term is defined under Rule 1-02 of
Regulation S-X of the Commission.
SUBSIDIARY: The term "Subsidiary" shall mean, with respect to any
Person, (i) any corporation, association or other business entity of which more
than 50% of the total voting power of shares of capital stock entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
TRADING DAY: The term "Trading Day" shall have the meaning specified
in Section 15.6(h)(5).
TRIGGER EVENT: The term "Trigger Event" shall have the meaning
specified in Section 15.6(d).
5
<PAGE> 6
TRUST INDENTURE ACT: The term "Trust Indenture Act" shall mean the
Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.7;
provided, however, that, in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
TRUSTEE: The term "Trustee" shall mean The Bank of New York and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
UNDERWRITERS: The term "Underwriters" shall mean Morgan Stanley & Co.
International Limited, Credit Suisse First Boston (Europe) Limited and
Donaldson, Lufkin & Jenrette International.
WITHDRAWAL DATE: The term "Withdrawal Date" shall have the meaning
specified in Section 15.8(b).
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES
SECTION 2.1 DESIGNATION AMOUNT AND ISSUE OF NOTES. The Notes shall be
designated as "6.875% Convertible Subordinated Notes due 2010." Notes not to
exceed the aggregate principal amount of E690,000,000 upon the execution of
this Indenture, or from time to time thereafter, may 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 (a) Chief Executive Officer, President, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.
SECTION 2.2 FORM OF NOTES. The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification (including applicable CUSIP/ISIN Numbers) and such notations,
legends and endorsements as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not
inconsistent with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any securities exchange or automated quotation system
on which the Notes may be listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes as
shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest, on any
Note in global form shall be made to the holder of such Note.
The terms and provisions contained in the form of Note attached as Exhibit
A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
6
<PAGE> 7
SECTION 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF INTEREST. The
Notes shall be issuable in registered form without coupons in denominations of
E1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve (12) 30-day months.
The Person in whose name any Note (or its Predecessor Note) is registered
on the Note register at the close of business on any record date with respect to
any interest payment date shall be entitled to receive the interest payable on
such interest payment date, except (i) that the interest payable upon redemption
(unless the date of redemption is an interest payment date) will be payable to
the Person to whom principal is payable and (ii) as set forth in the next
succeeding sentence. In the case of any Note (or portion thereof) which is
converted into Common Stock during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date either (i) if such
Note (or portion thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in connection with a
Fundamental Change on a Repurchase Date (as defined in Section 3.5) which occurs
during such period, the Company shall not be required to pay interest on such
interest payment date in respect of any such Note (or portion thereof) except to
the extent required to be paid upon redemption of such Note or portion thereof
pursuant to Section 3.3 or 3.5 hereof or (ii) if otherwise, any Note (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted. In the case where the Company fixes the
Withdrawal Date on a date during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date, the Company shall
not be required to pay interest on such interest payment except to the extent
required to pay the Make-Whole Payment pursuant to Section 15.8(c). Interest
shall be payable at the office of the Company maintained by the Company for such
purposes in the Borough of Manhattan, The City of New York, which shall
initially be an office or agency of the Trustee and may, as the Company shall
specify to the paying agent in writing by each record date, be paid either (i)
by check mailed to the address of the Person entitled thereto as it appears in
the Note register (provided that the holder of Notes with an aggregate principal
amount in excess of E10,000,000 shall, at the written election of such
holder, be paid by wire transfer in immediately available funds) or (ii) by
transfer to an account maintained by such Person located in the United States;
provided, however, that payments to the Depositary will be made by wire transfer
of immediately available funds to the account of the Depositary or its nominee.
The term "record date" with respect to any interest payment date shall mean
February 1 preceding the relevant February 16.
Any interest on any Note which is payable, but is not punctually paid or
duly provided for, on any February __ (herein called "Defaulted Interest") shall
forthwith cease to be payable to the Noteholder on the relevant record date by
virtue of his having been such Noteholder; and such Defaulted Interest shall be
paid by the Company, at its election in each case, as provided in clause (1) or
(2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Notes (or their respective Predecessor Notes)
are registered at the close of business on a special record date for the payment
of such Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted Interest
to be paid on each Note and the date of the payment (which shall be not less
than twenty-five (25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent in writing to an earlier date), and at the same
time the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Person entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall be not more than fifteen (15) days and
not less than ten (10) days prior to the date of the proposed payment, and not
less than ten (10) days after actual receipt by a Responsible Officer of the
Trustee of the notice of the proposed payment. The Trustee shall promptly notify
the Company of such special record date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the special record date therefor to be mailed, first-class postage
prepaid, to each Noteholder at his address as it appears in the Note register,
not less than ten (10) days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been so mailed, such
7
<PAGE> 8
Defaulted Interest shall be paid to the Persons in whose names the Notes (or
their respective Predecessor Notes) were registered at the close of business on
such special record date and shall no longer be payable pursuant to the
following clause (2) of this Section 2.3.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Notes may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after written notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be practicable to the Trustee.
SECTION 2.4 EXECUTION OF NOTES. The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its Chief
Executive Officer, President, any Executive or Senior Vice President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") or Treasurer and attested by
the manual or facsimile signature of its Secretary or any of its Assistant
Secretaries or its Finance Director or any of its Assistant Treasurers (which
may be printed, engraved or otherwise reproduced thereon, by facsimile or
otherwise). Only such Notes as shall bear thereon a certificate of
authentication substantially in the form set forth on the form of Note attached
as Exhibit A hereto, manually executed by the Trustee (or an authenticating
agent appointed by the Trustee as provided by Section 16.11), shall be entitled
to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture.
In case any officer of the Company who shall have signed any of the Notes
shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
SECTION 2.5 EXCHANGE AND REGISTRATION OF TRANSFER OF NOTES; DEPOSITARY
(a) The Company shall cause to be kept at the Corporate Trust
Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time. The Trustee is hereby appointed "Note
register" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations and
of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
8
<PAGE> 9
All Notes issued upon any registration of transfer or exchange of Notes
shall be the legal, valid and binding obligations of the Company, evidencing the
same debt, and entitled to the same benefits under this Indenture, as the Notes
surrendered upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed or (b)
any Notes or portions thereof called for redemption pursuant to Section 3.2 or
(c) any Notes or portions thereof surrendered for conversion pursuant to Article
XV or (d) any Notes or portions thereof tendered for redemption (and not
withdrawn) pursuant to Section 3.5.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Notes will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the "Global Note"), except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Global Note shall be effected through the Depositary in accordance with
this Indenture and the procedures of the Depositary therefor. The Trustee shall
make appropriate endorsements to reflect increases or decreases in the principal
amounts of any such Global Note as set forth on the face of the Note ("Principal
Amount") to reflect any such transfers. Except as provided below, beneficial
owners of a Global Note shall not be entitled to have certificates registered in
their names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such Notes
in global form.
The registered holder of a Global Note may grant proxies and
otherwise authorize any Person, including members of, or participants in the
Depository ("Agent Members") and Persons that may hold interests through Agent
Members, to take any action which a holder is entitled to take under this
Indenture or the Notes.
(c) Each Global Note shall bear the following legend on the face
thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, 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 TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY
(AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 2.5
OF THE INDENTURE.
9
<PAGE> 10
Notwithstanding any other provisions of this Indenture, a Note in global
form may not be transferred as a whole or in part except by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.
Permanent certificated Notes in registered form shall be transferred to all
beneficial owners in exchange for their beneficial interests in the Global Notes
(i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Global Notes and a successor depositary is not
appointed by the Company within 90 days of such notice, (ii) is an Event of
Default has occurred and is continuing and the Registrar has received a request
therefor from the Depositary; (iii) if at any time The Depositary Trust Company
ceases to be a clearing agency registered under the Securities Exchange Act of
1934 and the Company does not appoint a successor within 90 days after becoming
aware that DTC has ceased to registered as a clearing agency. In addition, the
Company may at any time and in its sole discretion determine that the Notes
shall no longer be represented by the Global Notes.
If a Note in certificated form is issued in exchange for any portion of a
Note in global form after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business at
such office or agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of such Note, but
will be payable on such interest payment date, subject to the provisions of
Section 2.3, only to the Person to whom interest in respect of such portion of
such Note in global form is payable in accordance with the provisions of this
Indenture.
Notes in certificated form issued in exchange for all or a part of a Note
in global form pursuant to this Section 2.5 shall be registered in such names
and in such authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee. Upon execution and authentication, the Trustee shall deliver such Notes
in certificated form to the Persons in whose names such Notes in certificated
form are so registered.
At such time as all interests in a Note in global form have been redeemed,
converted, canceled, exchanged for Notes in certificated form, or transferred to
a transferee who receives Notes in certificated form thereof, such Note in
global form shall, upon receipt thereof, be canceled by the Trustee in
accordance with standing procedures and instructions existing between the
Depositary and the Custodian. At any time prior to such cancellation, if any
interest in a global Note is exchanged for Notes in certificated form, redeemed,
converted, repurchased or canceled, exchanged for Notes in certificated form or
transferred to a transferee who receives Notes in certificated form therefor or
any Note in certificated form is exchanged or transferred for part of a Note in
global form, the principal amount of such Note in global form shall, in
accordance with the standing procedures and instructions existing between the
Depositary and the Custodian, be appropriately reduced or increased, as the case
may be, and an endorsement shall be made on such Note in global form, by the
Trustee or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
SECTION 2.6 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. In case any Note
shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
10
<PAGE> 11
Following receipt by the Trustee or such authenticating agent, as the case
may be, of satisfactory security or indemnity and evidence, as described in the
preceding paragraph, the Trustee or such authenticating agent may authenticate
any such substituted Note and make available for delivery such Note. Upon the
issuance of any substituted Note, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses connected therewith. In case any Note
which has matured or is about to mature or has been called for redemption or has
been tendered for redemption (and not withdrawn) or is about to be converted
into Common Stock shall become mutilated or be destroyed, lost or stolen, the
Company may, instead of issuing a substitute Note, pay or authorize the payment
of or convert or authorize the conversion of the same (without surrender thereof
except in the case of a mutilated Note), as the case may be, if the applicant
for such payment or conversion shall furnish to the Company, to the Trustee and,
if applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or connected with such substitution, and, in case of
destruction, loss or theft, evidence satisfactory to the Company, the Trustee
and, if applicable, any paying agent or conversion agent of the destruction,
loss or theft of such Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section 2.6
by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
SECTION 2.7 TEMPORARY NOTES. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Note in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.
SECTION 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
SECTION 2.9 CUSIP NUMBERS. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Noteholders;
provided that any such notice may state that no representation is made as to the
correctness of such
11
<PAGE> 12
numbers either as printed on the Notes or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Notes, and any such redemption shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION OF NOTES
SECTION 3.1 OPTIONAL REDEMPTION BY THE COMPANY. At any time on or after
February 20, 2003, and prior to maturity, the Notes may be redeemed at the
option of the Company (an "Optional Redemption"), in whole or in part, upon
notice as set forth in Section 3.2, at the principal amount thereof, together in
each case with accrued and unpaid interest, if any to, but excluding, the date
fixed for redemption.
SECTION 3.2 NOTICE OF REDEMPTIONS; SELECTION OF NOTES. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than forty-five (45) days prior (or such shorter period of time as may be
acceptable to the Trustee) to the date fixed for redemption, the Trustee in the
name of and at the expense of the Company, shall mail or cause to be mailed a
notice of such redemption not fewer than thirty (30) nor more than sixty (60)
days prior to the date fixed for redemption to the holders of Notes so to be
redeemed as a whole or in part at their last addresses as the same appear on the
Note register; provided that if the Company shall give such notice, it shall
also give written notice, and written notice of the Notes to be redeemed, to the
Trustee. The Company may not give notice of any redemption of the Notes if a
default in payment of interest on the Notes has occurred and is continuing. Such
mailing shall be by first class mail. The notice if mailed in the manner herein
provided shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice. In any case, failure to give such notice by
mail or any defect in the notice to the holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal amount
of Notes to be redeemed, the CUSIP number or numbers, if any, of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed (including CUSIP numbers, if any). In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after the
date fixed for redemption, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued. The
Company shall, concurrently with the giving of notice of redemption to the
holders, publish such notice of redemption in Luxembourg and submit the terms of
the redemption to the Luxembourg Stock Exchange as required by the Luxembourg
Stock Exchange.
On or prior to the redemption date specified in the notice of redemption
given as provided in this Section 3.2, the Company will deposit with the Trustee
or with one or more paying agents (or, if the Company is acting as its own
paying agent, set aside, segregate and hold in trust as provided in Section 5.4)
an amount of money in immediately available funds sufficient to redeem on the
redemption date all the Notes (or portions thereof) so called for redemption
(other than those theretofore surrendered for conversion into Common Stock) at
the appropriate redemption price, together with accrued interest to, but
excluding, the date fixed for redemption; provided that if such payment is made
on the redemption date it must be received by the Trustee or paying agent, as
the case may be, by 10:00 a.m. New York City time on such date. If any Note
called for redemption is converted pursuant hereto prior to such redemption, any
money deposited with the Trustee or any paying agent or so
12
<PAGE> 13
segregated and held in trust for the redemption of such Note shall be paid to
the Company upon its written request, or, if then held by the Company, shall be
discharged from such trust. Whenever any Notes are to be converted, the Company
will give the Trustee written notice in the form of an Officers' Certificate not
fewer than forty-five (45) days (or such shorter period of time as may be
acceptable to the Trustee) prior to the redemption date as to the aggregate
principal amount of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof of the Global Note or the Notes in certificated
form to be redeemed (in principal amounts of E1,000 or integral multiples
thereof), by lot, on a pro rata basis or by another method the Trustee deems
fair and appropriate.
Upon any redemption of fewer than all Notes, the Company and the Trustee
may (but need not) solely for purposes of determining the pro rata allocation
among such Notes as are unconverted and outstanding at the time of redemption,
treat as outstanding any Notes surrendered for conversion during the period of
fifteen (15) days next preceding the mailing of a notice of redemption and may
(but need not) treat as outstanding any Note authenticated and delivered during
such period in exchange for the unconverted portion of any Note converted in
part during such period.
SECTION 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
interest accrued to said date) interest on the Notes or portion of Notes so
called for redemption shall cease to accrue and such Notes shall cease after the
close of business on the Business Day next preceding the date fixed for
redemption to be convertible into Common Stock and, except as provided in
Sections 8.5 and 13.4, shall cease to be entitled to any benefit or security
under this Indenture, and the holders thereof shall have no right in respect of
such Notes except the right to receive the redemption price thereof and unpaid
interest to (but excluding) the date fixed for redemption. Upon presentation and
surrender of such Notes at a place of payment in said notice specified, the said
Notes or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to (but excluding) the date fixed for redemption; provided that, if the
applicable redemption date is an interest payment date, the annual payment of
interest becoming due on such date shall be payable to the holders of such Notes
registered as such on the relevant record date instead of the holders
surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of optional redemption during the continuance of a default in
payment of interest on the Notes. If any Note called for redemption shall not be
so paid upon surrender thereof for redemption, the principal, shall, until paid
or duly provided for, bear interest from the date fixed for redemption at the
rate borne by the Note and such Note shall remain convertible into Common Stock
until the principal shall have been paid or duly provided for.
SECTION 3.4 CONVERSION ARRANGEMENT ON CALL FOR REDEMPTION. In connection
with any redemption of Notes, the Company may arrange for the purchase and
conversion of any Notes by an agreement with one or more investment bankers or
other purchasers to purchase such Notes by paying to the Trustee in trust for
the Noteholders, on or before the date fixed for redemption, an amount not less
than the applicable redemption price, together with interest accrued to (but
excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, a copy of which will be filed
with the Trustee prior to the date fixed for redemption, any
13
<PAGE> 14
Notes not duly surrendered for conversion by the holders thereof may, at the
option of the Company, be deemed, to the fullest extent permitted by law,
acquired by such purchasers from such holders and (notwithstanding anything to
the contrary contained in Article XV) surrendered by such purchasers for
conversion, all as of immediately prior to the close of business on the date
fixed for redemption (and the right to convert any such Notes shall be extended
through such time), subject to payment of the above amount as aforesaid. At the
direction of the Company, the Trustee shall hold and dispose of any such amount
paid to it in the same manner as it would monies deposited with it by the
Company for the redemption of Notes. Without the Trustee's prior written
consent, no arrangement between the Company and such purchasers for the purchase
and conversion of any Notes shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture.
SECTION 3.5 REDEMPTION AT OPTION OF HOLDERS.
(a) If there shall occur a Fundamental Change at any time prior to
maturity of the Notes, then each Noteholder shall have the right, at such
holder's option, to require the Company to redeem such holder's Notes, in whole
but not in part, in integral multiples of E1,000 principal amount, or any
portion thereof that is an integral multiple of $1,000 principal amount, on the
date (the "Repurchase Date") that is thirty (30) days after the date of the
Company Notice (as defined in Section 3.5(b) below) of such Fundamental Change
(or, if such 30th day is not a Business Day, the immediately preceding Business
Day) at a redemption price equal to 100% of the principal amount thereof,
together with accrued interest to (but excluding) the Repurchase Date; provided
that, if such Repurchase Date is February 16, then the interest payable on such
date shall be paid to the holders of record of the Notes on the next preceding
February 1.
(b) On or before the tenth day after the occurrence of a Fundamental
Change, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Fundamental Change a notice (the "Company Notice") of the occurrence
of such Fundamental Change and of the redemption right at the option of the
holders arising as a result thereof. Such notice shall be mailed in the manner
and with the effect set forth in the first paragraph of Section 3.2 (without
regard for the time limits set forth therein). If the Company shall give such
notice, the Company shall also deliver a copy of the Company Notice to the
Trustee at such time as it is mailed to Noteholders.
Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, that the holder must exercise the redemption right on
or prior to the close of business on the Repurchase Date (the "Fundamental
Change Expiration Time"), that the holder shall have the right to withdraw any
Notes surrendered prior to the Fundamental Change Expiration Time, a description
of the procedure which a Noteholder must follow to exercise such redemption
right and to withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder's Notes, and the amount of interest accrued
on each Note to the Repurchase Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.5.
(c) For a Note to be so repaid at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such holder, the Corporate Trust Office, such Note
with the form entitled "Option to Elect Repayment Upon A Fundamental Change" on
the reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
(d) On or prior to the Repurchase Date, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in
14
<PAGE> 15
trust as provided in Section 5.4) an amount of money sufficient to repay on the
Repurchase Date all the Notes to be repaid on such date at the appropriate
redemption price, together with accrued interest to (but excluding) the
Repurchase Date; provided that if such payment is made on the Repurchase Date it
must be received by the Trustee or paying agent, as the case may be, by 10:00
a.m. New York City time, on such date. Payment for Notes surrendered for
redemption (and not withdrawn) prior to the Fundamental Change Expiration Time
will be made promptly (but in no event more than five (5) Business Days)
following the Repurchase Date by mailing checks for the amount payable to the
holders of such Notes entitled thereto as they shall appear on the registry
books of the Company.
(e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.7 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or 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 stock, securities or other property or 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
which acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Notes to cause the
Company to repurchase the Notes following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.5 and the
definitions of Common Stock and Fundamental Change, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply 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).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the redemption rights of the holders of Notes in the event of a
Fundamental Change.
ARTICLE IV
SUBORDINATION OF NOTES
SECTION 4.1 AGREEMENT OF SUBORDINATION. The Company covenants and
agrees, and each holder of Notes issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article IV; and each Person holding any Note, whether upon
original issue or upon registration of transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
The payment of the principal of, interest and the Make-Whole Payment, if
any, on, all Notes (including, but not limited to, the redemption price with
respect to the Notes called for redemption in accordance with Section 3.2 or
submitted for redemption in accordance with Section 3.5, as the case may be, as
provided in this Indenture) shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full in cash or other payment satisfactory to the holders of Senior
Indebtedness of all Senior Indebtedness, whether outstanding at the date of this
Indenture or thereafter incurred.
No provision of this Article IV shall prevent the occurrence of any default
or Event of Default hereunder.
SECTION 4.2 PAYMENTS TO NOTEHOLDERS. No payment shall be made with
respect to the principal of, interest and Make-Whole Payment, if any, on the
Notes (including, but not limited to, the redemption price with respect to the
Notes to be called for redemption in accordance with Section 3.2 or submitted
for redemption in
15
<PAGE> 16
accordance with Section 3.5, as the case may be, as provided in this Indenture),
except payments and distributions made by the Trustee as permitted by the first
or second paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Designated Senior Indebtedness
occurs and is continuing (a "Payment Default"), unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist; or
(ii) a default, other than a Payment Default, on any Designated
Senior Indebtedness occurs and is continuing that then permit holders of such
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a holder of
Designated Senior Indebtedness, a Representative of Designated Senior
Indebtedness or the Company (a "Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant to clause (ii)
above, no subsequent Payment Blockage Notice shall be effective for purposes of
this Section 4.2 unless and until (A) at least 365 days shall have elapsed since
the initial effectiveness of the immediately prior Payment Blockage Notice and
(B) all scheduled payments of principal of, interest and the Make-Whole Payment,
if any, on, the Notes that have come due have been paid in full in cash. No
Non-Payment Default that existed or was continuing on the date of delivery of
any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice, unless such Non-Payment Default is based
upon facts or events arising after the date of delivery of such Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in respect
of the Notes upon:
(1) in the case of a Payment Default, the date upon which any such
Payment Default is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default, the earlier of (a) the date
upon which such default is cured or waived or ceases to exist and
(b) 179 days after the applicable Payment Blockage Notice is
received by the Trustee if the maturity of such Designated Senior
Indebtedness has not been accelerated and no Payment Default with
respect to any Designated Senior Indebtedness has occurred which
has not been cured or waived (in which case clause (1) shall be
applicable),
unless this Article IV otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Indebtedness before any payment is made on account of
the principal of, interest or Make-Whole Payment, if any, on, the Notes (except
payments made pursuant to Article XIII from monies deposited with the Trustee
pursuant thereto prior to commencement of proceedings for such dissolution,
winding up, liquidation or reorganization); and upon any such dissolution or
winding up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other proceeding, any payment by the Company, or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, to which the holders of the Notes or the Trustee would
be entitled, except for the provisions of this Article IV, shall (except as
aforesaid) be paid by the Company or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
or by the holders of the Notes or by the Trustee under this Indenture if
received by them or it, directly to the holders of Senior Indebtedness (pro rata
to such holders on the basis of the respective amounts of Senior Indebtedness
held by such holders, or as otherwise required by law or a court order) or their
Representative or Representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any
16
<PAGE> 17
concurrent payment or distribution to or for the holders of Senior Indebtedness,
before any payment or distribution is made to the holders of the Notes or to the
Trustee.
For purposes of this Article IV, the words, "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article IV with respect to
the Notes to the payment of all Senior Indebtedness which may at the time be
outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article XII shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.2 if such other
Person shall, as a part of such consolidation, merger, conveyance or transfer,
comply with the conditions stated in Article XII.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, interest or the Make-Whole Payment, if
any, on, the Notes (including, but not limited to, the redemption price with
respect to the Notes called for redemption in accordance with Section 3.2 or
submitted for redemption at the option of the holder in accordance with Section
3.5, as the case may be, as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 4.5, until all Senior Indebtedness has been paid in full in cash or
other payment satisfactory to the holders of Senior Indebtedness or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Notes is accelerated because of an Event of Default, the Company
or the Trustee shall promptly notify holders of Designated Senior Indebtedness
of the acceleration.
In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing provisions in this Section 4.2, shall be
received by the Trustee or the holders of the Notes before all Senior
Indebtedness is paid in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, or provision is made for such payment
thereof in accordance with its terms in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of any Senior Indebtedness remaining unpaid to the extent necessary to
pay all Senior Indebtedness in full in cash or other payment satisfactory to the
holders of such Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject to
the further provisions of Section 4.5.
SECTION 4.3 SUBROGATION OF NOTES. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Notes shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Indebtedness pursuant to the provisions of this Article IV (equally and
ratably with the holders of all indebtedness of the Company that by its express
terms, is subordinated to other indebtedness of the Company to substantially the
same extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Senior Indebtedness until the principal of, interest and
Make-Whole Payment, if any, on the Notes shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the holders of
the Notes or the Trustee would be entitled except for the provisions of this
Article IV, and no payment
17
<PAGE> 18
over pursuant to the provisions of this Article IV, to or for the benefit of the
holders of Senior Indebtedness by holders of the Notes or the Trustee, shall, as
among the Company, its creditors other than holders of Senior Indebtedness, and
the holders of the Notes, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the holders of the Notes
pursuant to the subrogation provisions of this Article IV, which would otherwise
have been paid to the holders of Senior Indebtedness, shall be deemed to be a
payment by the Company to or for the account of the Notes. It is understood that
the provisions of this Article IV are and are intended solely for the purposes
of defining the relative rights of the holders of the Notes, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or in
the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, interest and Make-Whole Payment, if any,
on the Notes as and when the same shall become due and payable in accordance
with their terms, or is intended to or shall affect the relative rights of the
holders of the Notes and creditors of the Company other than the holders of the
Senior Indebtedness, nor shall anything herein or therein prevent the Trustee or
the holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article IV, the Trustee, subject to the provisions of Section 8.1, and the
holders of the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which such bankruptcy, dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article IV.
SECTION 4.4 AUTHORIZATION TO EFFECT SUBORDINATION. Each holder of a
Note, by its acceptance thereof, authorizes and directs the Trustee on the
holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.2 at least thirty (30) days before the expiration of the time to file such
claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
SECTION 4.5 NOTICE TO TRUSTEE. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article IV,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness or from any trustee thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.1,
shall be entitled in all respects to assume that no such facts exist; provided
that if on a date not less than two Business Days prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, interest and
Make-Whole Payment, if any, on any Note) the Trustee shall not have received,
with respect to such monies, the notice provided for in this Section 4.5, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to apply monies received to the
18
<PAGE> 19
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary, nothing shall
prevent any payment by the Trustee to the Noteholders of monies deposited with
it pursuant to Section 13.1, and any such payment shall not be subject to the
provisions of Section 4.1 or 4.2.
The Trustee, subject to the provisions of Section 8.1, shall be entitled to
rely on the delivery to if of a written notice by a Representative or a person
representing himself to be a holder of Senior Indebtedness (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Indebtedness or a trustee on behalf of any
such holder or holders. The Trustee shall not be required to make any payment or
distribution to or on behalf of a holder of Senior Indebtedness pursuant to this
Article IV unless it has received satisfactory evidence as to the amount of
Senior Indebtedness held by such Person, the extent to which such Person is
entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article IV.
SECTION 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS. The Trustee, in
its individual capacity, shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver to holders of Notes, the
Company or any other Person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article IV or otherwise.
SECTION 4.7 NO IMPAIRMENT OF SUBORDINATION. No right of any present or
future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
SECTION 4.8 CERTAIN CONVERSIONS NOT DEEMED PAYMENT. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of, interest or
Make-Whole Payment on, the Notes or on account of the purchase or other
acquisition of Notes, and (2) the payment, issuance or delivery of cash (except
in satisfaction of fractional shares pursuant to Section 15.3), property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of, or interest or
Make-Whole Payment on, such Note. For the purposes of this Section 4.8, the term
"junior securities" means (a) shares of any stock of any class of the Company or
(b) securities of the Company that are subordinated in right of payment to all
Senior Indebtedness that may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Notes are so subordinated as provided in this Article. Nothing
contained in this Article IV or elsewhere in this Indenture or in the Notes is
intended to or shall impair, as among the Company, its creditors (other than
holders of Senior Indebtedness) and the Noteholders, the right, which is
absolute and unconditional, of the Holder of any Note to convert such Note in
accordance with Article XV.
SECTION 4.9 ARTICLE APPLICABLE TO PAYING AGENTS. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article in
19
<PAGE> 20
addition to or in place of the Trustee; provided, however, that the first
paragraph of Section 4.5 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of any
other paying agents (including the Company if acting as its own paying agent)
and shall have no control of any funds held by such other paying agents.
SECTION 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY. The holders of Senior
Indebtedness (including, without limitation, Designated Senior Indebtedness)
shall have the right to rely upon this Article IV, and no amendment or
modification of the provisions contained herein shall diminish the rights of
such holders unless such holders shall have agreed in writing thereto.
SECTION 4.11 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING
AGENT. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Noteholders shall be entitled to rely upon any
order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, distribution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
dissolution, delivered to the Trustee or to the Noteholders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
SECTION 5.1 PAYMENT OF PRINCIPAL AND INTEREST. The Company covenants and
agrees that it will duly and punctually pay or cause to be paid the principal of
(including the redemption price upon redemption pursuant to Article III),
interest and Make-Whole Payment, if any, on, each of the Notes at the places, at
the respective times and in the manner provided herein and in the Notes.
SECTION 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain
an office or agency in The Borough of Manhattan, The City of New York, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for conversion or redemption and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office of the Trustee in the
Borough of Manhattan, The City of New York.
The Company may also from time to time designate co-registrars and one or
more offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice of any such designation or rescission
and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent, Note
registrar, Custodian and conversion agent and the Corporate Trust Office of the
Trustee in The Borough of Manhattan, The City of New York as the office or
agency of the Company for each of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to mail,
or cause to be mailed, the notices set forth in Section 8.10(a) and the third
paragraph of Section 8.11. If co-registrars have been appointed in accordance
with this Section, the Trustee shall mail such notices only to the Company and
the holders of Notes it can identify from its records.
20
<PAGE> 21
SECTION 5.3 APPOINTMENTS TO FILL VACANCIES IN TRUSTEE'S OFFICE. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
SECTION 5.4 PROVISIONS AS TO PAYING AGENT.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, the Company will
cause such paying agent to execute and deliver to the Trustee an instrument in
which such agent shall agree with the Trustee, subject to the provisions of this
Section 5.4:
(1) that it will hold all sums held by it as such agent for the
payment of the principal of, interest or Make-Whole Payment, if any, on, the
Notes (whether such sums have been paid to it by the Company or by any other
obligor on the Notes) in trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on the Notes) to make any payment of the
principal of, interest or Make-Whole Payment, if any, on the Notes when the same
shall be due and payable; and
(3) that at any time during the continuance of an Event of
Default, upon request of the Trustee, it will forthwith pay to the Trustee all
sums so held in trust.
The Company shall, on or before each due date of the principal of, interest
or Make-Whole Payment, if any, on, the Notes, deposit with the paying agent a
sum sufficient to pay such principal, interest or Make-Whole Payment, if any,
and (unless such paying agent is the Trustee) the Company will promptly notify
the Trustee of any failure to take such action; provided that if such deposit is
made on the due date, such deposit shall be received by the paying agent by
10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, interest or Make-Whole Payment, if
any, on, the Notes, set aside, segregate and hold in trust for the benefit of
the holders of the Notes a sum sufficient to pay such principal, interest or
Make-Whole Payment, if any, so becoming due and will promptly notify the Trustee
of any failure to take such action and of any failure by the Company (or any
other obligor under the Notes) to make any payment of the principal of, interest
or Make-Whole Payment, if any, on, the Notes when the same shall become due and
payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
(d) Anything is this Section 5.4 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.4 is subject to
Sections 13.3 and 13.4.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
SECTION 5.5 EXISTENCE. Subject to Article XII, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the holders.
SECTION 5.6 MAINTENANCE OF PROPERTIES. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good
21
<PAGE> 22
condition, repair and working order and supplied with all necessary equipment
and will cause to be made all necessary repairs, renewals, replacements,
betterments and improvements thereof, all as in the judgment of the Company may
be necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this Section shall prevent the Company from discontinuing the
operation or maintenance of any of such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Significant Subsidiary and not disadvantageous in any material
respect to the holders.
SECTION 5.7 PAYMENT OF TAXES AND OTHER CLAIMS. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Significant Subsidiary or upon the income,
profits or property of the Company or any Significant Subsidiary, (ii) all
claims for labor, materials and supplies which, if unpaid, might by law become a
lien or charge upon the property of the Company or any Significant Subsidiary
and (iii) all stamps and other duties, if any, which may be imposed by the
United States or any political subdivision thereof or therein in connection with
the issuance, transfer, exchange or conversion of any Notes or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company and
its subsidiaries, taken as a whole, or (B) if the amount, applicability or
validity is being contested in good faith by appropriate proceedings.
SECTION 5.8 STAY, EXTENSION AND USURY LAWS. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, or
interest or Make-Whole Payment, if any, on, the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture and the Company (to the extent it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not, by resort to any such law, hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
SECTION 5.9 COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company, a certificate signed by either the principal executive officer,
principal financial officer, principal accounting officer or other duly
authorized officer of the Company, stating whether or not to the best knowledge
of the signer thereof the Company is in default in the performance and
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and the status thereof of which the signer may have knowledge.
The Company will deliver to the Trustee, forthwith (and in any event within
five Business Days) upon becoming aware of any default in the performance or
observance of any covenant, agreement or condition contained in this Indenture,
any event which, with notice or the lapse of time or both, would constitute an
Event of Default or any Event of Default, an Officers' Certificate specifying
with particularity such default or Event of Default and further stating what
action the Company has taken, is taking or proposes to take with respect
thereto.
Any notice required to be given under this Section 5.9 shall be delivered
to a Responsible Officer of the Trustee at its Corporate Trust Office.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 6.1 NOTEHOLDERS' LISTS. The Company covenants and agrees that it
will furnish or cause to be furnished to the Trustee, annually, not more than
fifteen (15) days after each February 1 in each year beginning
22
<PAGE> 23
with February 1, 2001, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Note registrar.
SECTION 6.2 PRESERVATION AND DISCLOSURE OF LISTS.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Notes contained in the most recent list furnished to it as provided in Section
6.1 or maintained by the Trustee in its capacity as Note registrar or
co-registrar in respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.1 upon receipt of a new list so
furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
SECTION 6.3 REPORTS BY TRUSTEE.
(a) Within sixty (60) days after May 15 of each year commencing with
the year 2001, the Trustee shall transmit to holders of Notes such reports dated
as of May 15 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will promptly notify the Trustee in writing when the Notes are listed on
any stock exchange or automated quotation system or delisted therefrom.
SECTION 6.4 REPORTS BY COMPANY. The Company shall file with the Trustee
(and the Commission if at any time after the Indenture becomes qualified under
the Trust Indenture Act), and transmit to holders of Notes, such information,
documents and other reports and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant to such Act, whether or not the Notes are governed by such Act;
provided that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act shall be
filed with the Trustee within fifteen (15) days after the same is so required to
be filed with the Commission. Delivery of such reports, information and
documents to the Trustee is for informational purposes only and the Trustee's
receipt of such shall not constitute constructive notice of any information
contained therein or determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder (as to which the
Trustee is entitled to rely exclusively on Officers' Certificates).
23
<PAGE> 24
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
SECTION 7.1 EVENTS OF DEFAULT. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest (including
the Make-Whole Payment, if any is due and payable) upon any of the Notes as and
when the same shall become due and payable, and continuance of such default for
a period of thirty (30) days, whether or not such payment is permitted under
Article IV hereof; or
(b) default in the payment of the principal of any of the Notes as
and when the same shall become due and payable either at maturity or in
connection with any redemption pursuant to Article III, by acceleration or
otherwise, whether or not such payment is permitted under Article IV hereof; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4; or
(d) the Company or any Significant Subsidiary shall commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or any Significant Subsidiary or its or such
Significant Subsidiary's debts under any bankruptcy, insolvency or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
Significant Subsidiary or any substantial part of the property of the Company or
any Significant Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it or any Significant Subsidiary, or shall
make a general assignment for the benefit of creditors, or shall fail generally
to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company or any Significant Subsidiary seeking liquidation,
reorganization or other relief with respect to it or any Significant Subsidiary
or its or such Significant Subsidiary's debts under any bankruptcy, insolvency
or other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
Significant Subsidiary or any substantial part of the property of the Company or
any Significant Subsidiary, and such involuntary case or other proceeding shall
remain undismissed and unstayed for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(d) or (e) with respect to the Company), unless the principal of
all of the Notes shall have already become due and payable, either the Trustee
or the holders of not less than twenty-five percent (25%) in aggregate principal
amount of the Notes then outstanding hereunder determined in accordance with
Section 9.4, by notice in writing to the Company (and to the Trustee if given by
Noteholders), may declare the principal of, and any interest accrued thereon
(including the Make-Whole Payment, if due and payable), on all the Notes to be
due and payable immediately, and upon any such declaration the same shall become
and shall be immediately due and payable, anything in this Indenture or in the
Notes contained to the contrary notwithstanding. If an Event of Default
specified in Section 7.1(d) or (e) with respect to the Company occurs, the
principal of all the Notes, and the interest accrued thereon (including the
Make-Whole Payment, if due and payable), shall be immediately and automatically
due and payable without
24
<PAGE> 25
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall pay or shall deposit with the Trustee a sum sufficient to pay
all matured installments of interest upon all Notes (including the Make-Whole
Payment, if due and payable) and the principal of any and all Notes which shall
have become due otherwise than by acceleration (with interest on overdue
installments of interest and the Make-Whole Payment, if due and payable (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal at the rate borne by the Notes, to the date of such payment or
deposit), and amounts due to the Trustee pursuant to Section 8.6, and if any and
all defaults under this Indenture, other than the nonpayment of principal of,
and accrued interest (including the Make-Whole Payment, if due and payable) on,
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.7, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee, promptly
(and in any event within five Business Days) upon becoming aware thereof, of any
Event of Default.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such waiver or rescission and annulment or for any other reason or shall have
been determined adversely to the Trustee, then and in every such case the
Company, the holders of Notes, and the Trustee shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the holders of Notes, and the Trustee shall continue as
though no such proceeding had been taken.
SECTION 7.2 PAYMENTS OF NOTES ON DEFAULT; SUIT THEREFOR. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest or the Make-Whole Payment, if due and payable, upon any
of the Notes as and when the same shall become due and payable, and such default
shall have continued for a period of thirty (30) days, or (b) in case default
shall be made in the payment of the principal of any of the Notes as and when
the same shall have become due and payable, whether at maturity of the Notes or
in connection with any redemption, by or under this Indenture or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Notes, the whole amount that then shall have
become due and payable on all such Notes for principal or interest or the
Make-Whole Payment, if due and payable, as the case may be, with interest upon
the overdue principal and (to the extent that payment of such interest is
enforceable under applicable law) upon the overdue installments of interest or
the Make-Whole Payment, if due and payable, at the rate borne by the Notes; and,
in addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable compensation to the
Trustee, its agents, attorneys and counsel, and all other amounts due the
Trustee under Section 8.6. Until such demand by the Trustee, the Company may pay
the principal of, interest and Make-Whole Payment, if due and payable, on the
Notes to the registered holders, whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Notes under Title 11
of the United States Code, or any other applicable law, or in case a receiver,
assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or
similar official shall have been appointed for or taken possession of the
Company or such other obligor, the property of the Company or such other
obligor, or in the case of any other judicial proceedings relative to the
Company or such other obligor upon the Notes, or to the creditors or property of
the Company or such other obligor, the Trustee, irrespective of whether
25
<PAGE> 26
the principal of the Notes shall then be due and payable as therein expressed or
by declaration or otherwise and irrespective of whether the Trustee shall have
made any demand pursuant to the provisions of this Section 7.2, shall be
entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, interest and
the Make-Whole Payment, if due and payable, owing and unpaid in respect of the
Notes, and, in case of any judicial proceedings, to file such proofs of claim
and other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee and of the Noteholders allowed in such judicial
proceedings relative to the Company or any other obligor on the Notes, its or
their creditors, or its or their property, and to collect and receive any monies
or other property payable or deliverable on any such claims, and to distribute
the same after the deduction of any amounts due the Trustee under Section 8.6;
and any receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, custodian or similar official is hereby authorized by each of the
Noteholders to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments directly to the
Noteholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including counsel fees
incurred by it up to the date of such distribution. To the extent that such
payment of reasonable compensation, expenses, advances and disbursements out of
the estate in any such proceedings shall be denied for any reason, payment of
the same shall be secured by a lien on, and shall be paid out of, any and all
distributions, dividends, monies, securities and other property which the
holders of the Notes may be entitled to receive in such proceedings, whether in
liquidation or under any plan of reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or under
any of the Notes, may be enforced by the Trustee without the possession of any
of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings involving
the interpretation of any provision of this Indenture to which the Trustee shall
be a party) the Trustee shall be held to represent all the holders of the Notes,
and it shall not be necessary to make any holders of the Notes parties to any
such proceedings.
SECTION 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
8.6;
SECOND: Subject to the provisions of Article IV, in case the
Make-Whole Payment shall have become due and be unpaid, to the payment of
the Make-Whole Payment, with interest (to the extent that such interest has
been collected by the Trustee) upon the overdue Make-Whole Payment at the
rate borne by the Notes, such payments to be made ratably to the Persons
entitled thereto;
THIRD: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall not have become due and be unpaid, to the
payment of interest on the Notes in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments
of interest at the rate borne by the Notes, such payments to be made
ratably to the Persons entitled thereto;
FOURTH: Subject to the provisions of Article IV, in case the principal
of the outstanding Notes shall have become due, by declaration or
otherwise, and be unpaid, to the payment of the whole amount then owing and
unpaid upon the Notes for principal and interest, with interest on the
overdue principal, (to the extent that such interest has been collected by
the Trustee) upon overdue installments of interest at the rate borne by the
Notes; and in case such monies shall be insufficient to pay in full the
whole amounts so due and unpaid upon the Notes, then to the payment of such
principal and interest without preference or priority of principal over
interest or of interest over principal or of any installment of interest
over any
26
<PAGE> 27
other installment of interest, or of any Note over any other Note, ratably
to the aggregate of such principal and accrued and unpaid interest; and
FIFTH: Subject to the provisions of Article IV, to the payment of the
remainder, if any, to the Company.
SECTION 7.4 PROCEEDINGS BY NOTEHOLDER. No holder of any Note shall have
any right by virtue of or by availing itself of any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 7.7; it being understood and intended, and being expressly
covenanted by the taker and holder of every Note with every other taker and
holder and the Trustee, that no one or more holders of Notes shall have any
right in any manner whatever by virtue of or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Notes, or to obtain or seek to obtain priority over or preference to any other
such holder, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all holders of
Notes (except as otherwise provided herein). For the protection and enforcement
of this Section 7.4, each and every Noteholder and the Trustee shall be entitled
to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision of
any Note, the right of any holder of any Note to receive payment of the
principal of (including the redemption price upon redemption pursuant to Article
III), and accrued interest and the Make-Whole Payment, if due and payable on,
such Note, on or after the respective due dates expressed in such Note or in the
event of redemption, or to institute suit for the enforcement of any such
payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary notwithstanding,
the holder of any Note, without the consent of either the Trustee or the holder
of any other Note, in its own behalf and for its own benefit, may enforce, and
may institute and maintain any proceeding suitable to enforce, its rights of
conversion as provided herein.
SECTION 7.5 PROCEEDINGS BY TRUSTEE. In case of an Event of Default, the
Trustee may, in its discretion, proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
SECTION 7.6 REMEDIES CUMULATIVE AND CONTINUING. Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or any acquiescence therein; and, subject to the provisions of Section
7.4, every power and remedy given by this Article VII or by law to the Trustee
or to the Noteholders may be exercised from time to time, and as often as shall
be deemed expedient, by the Trustee or by the Noteholders.
27
<PAGE> 28
SECTION 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS BY MAJORITY
OF NOTEHOLDERS. The holders of a majority in aggregate principal amount of the
Notes at the time outstanding determined in accordance with Section 9.4 shall
have the right to direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust or power
conferred on the Trustee; provided, however, that (a) such direction shall not
be in conflict with any rule of law or with this Indenture, (b) the Trustee may
take any other action which is not inconsistent with such direction and (c) the
Trustee may decline to take any action that would benefit some Noteholder to the
detriment of other Noteholders. The holders of a majority in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 9.4 may, on behalf of the holders of all of the Notes, waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest on, or the principal of the Notes, (ii) a failure by
the Company to convert any Notes into Common Stock, (iii) a default in the
payment of redemption price pursuant to Article III or a default in the payment
of the Make-Whole Payment pursuant to Article XV or (iv) a default in respect of
a covenant or provisions hereof which under Article XI cannot be modified or
amended without the consent of the holders of each or all Notes then outstanding
or affected thereby. Upon any such waiver, the Company, the Trustee and the
holders of the Notes shall be restored to their former positions and rights
hereunder; but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
7.7, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
SECTION 7.8 NOTICE OF DEFAULTS. The Trustee shall, within ninety (90)
days after a Responsible Officer of the Trustee has actual knowledge of the
occurrence of a default, mail to all Noteholders, as the names and addresses of
such holders appear upon the Note register, notice of all defaults actually
known to a Responsible Officer, unless such defaults shall have been cured or
waived before the giving of such notice; and provided that, except in the case
of default in the payment of the principal of, or interest or Make-Whole
Payment, if due and payable on, any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
SECTION 7.9 UNDERTAKING TO PAY COSTS. All parties to this Indenture
agree, and each holder of any Note by his acceptance thereof shall be deemed to
have agreed, that any court may, in its discretion, require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit and
that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; provided that the provisions of this Section 7.9
(to the extent permitted by law) shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than ten percent in principal amount of the Notes
at the time outstanding determined in accordance with Section 9.4, or to any
suit instituted by any Noteholder for the enforcement of the payment of the
principal of, or interest or Make-Whole Payment, if due and payable, on, any
Note on or after the due date expressed in such Note or to any suit for the
enforcement of the right to convert any Note in accordance with the provisions
of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
SECTION 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE. The Trustee, prior
to the occurrence of an Event of Default and after the curing of all Events of
Default which may have occurred, undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture. In case an Event of
Default has occurred (which has not been cured or waived), the Trustee shall
exercise such of the rights and powers vested in it by this
28
<PAGE> 29
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the Trust
Indenture Act, and the Trustee shall not be liable except for the performance of
such duties and obligations as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this Indenture and the
Trust Indenture Act against the Trustee; and
(2) in the absence of bad faith and willful misconduct on the
part of the Trustee, the Trustee may conclusively rely as to the truth of the
statements and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any such certificates or
opinions which by any provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirement of this Indenture
but need not confirm or investigate the accuracy of any mathematical
calculations or other facts stated therein;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Notes at the time outstanding determined as provided in Section 9.4 relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section
8.1;
(e) the Trustee shall not be liable in respect of any payment (as to
the correctness of amount, entitlement to receive or any other matters relating
to payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes; and
(f) if any party fails to deliver a notice relating to an event the
fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
SECTION 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC. Except as otherwise
provided in Section 8.1:
(a) the Trustee may conclusively rely and shall be fully protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
29
<PAGE> 30
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture or
other paper or document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and premises
of the Company, personally or by agent or attorney at the expense of the Company
and shall incur no liability or additional liability of any kind by reason of
such inquiry or investigation;
(f) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder; and
(g) the Trustee shall not be charged with knowledge of any default,
Event of Default or Fundamental Change unless either (1) a Responsible Officer
shall have actual knowledge of such default, Event of Default or Fundamental
Change or (2) written notice of such default, Event of Default or Fundamental
Change shall have been given to a Responsible Officer of the Trustee by the
Company or any other obligor on the Notes or by any holder of the Notes.
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
SECTION 8.3 NO RESPONSIBILITY FOR RECITALS, ETC. The recitals contained
herein and in the Notes (except in the Trustee's certificate of authentication)
shall be taken as the statements of the Company, and the Trustee assumes no
responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
SECTION 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR REGISTRAR MAY
OWN NOTES. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
SECTION 8.5 MONIES TO BE HELD IN TRUST. Subject to the provisions of
Section 13.4 and Section 4.2, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as may be agreed in writing from time to time by the Company and the
Trustee.
30
<PAGE> 31
SECTION 8.6 COMPENSATION AND EXPENSES OF TRUSTEE. The Company covenants
and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, compensation for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust) as mutually agreed to from time
to time in writing between the Company and the Trustee, and the Company will pay
or reimburse the Trustee upon its request for all expenses, disbursements and
advances reasonably incurred or made by the Trustee in accordance with any of
the provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ) except any such expense, disbursement or advance as may arise from
its negligence or willful misconduct. The Company also covenants to fully
indemnify the Trustee (or any officer, director or employee of the Trustee) and
any predecessor Trustee, in any capacity under this Indenture and its agents and
any authenticating agent for, and to hold them harmless against, any and all
loss, liability, claim, damage or expense (including taxes other than taxes
based on the income of the Trustee) incurred without negligence or willful
misconduct on the part of the Trustee or such officers, directors, employees and
agent or authenticating agent, as the case may be, and arising out of or in
connection with the acceptance or administration of this trust or in any other
capacity hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of the Company
under this Section 8.6 to compensate or indemnify the Trustee and to pay or
reimburse the Trustee for expenses, disbursements and advances shall be secured
by a lien prior to that of the Notes upon all property and funds held or
collected by the Trustee as such, except funds held in trust for the benefit of
the holders of particular Notes. The obligation of the Company under this
Section shall survive the resignation or removal of the Trustee and the
satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur expenses
or render services after an Event of Default specified in Section 7.1(d) or (e)
with respect to the Company occurs, the expenses and the compensation for the
services are intended to constitute expenses of administration under any
bankruptcy, insolvency or similar laws.
SECTION 8.7 OFFICERS' CERTIFICATE AS EVIDENCE. Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
SECTION 8.8 CONFLICTING INTERESTS OF TRUSTEE. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 8.9 ELIGIBILITY OF TRUSTEE. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section 8.9, the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall cease to be eligible in accordance with the provisions of this
Section 8.9, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article VIII.
SECTION 8.10 RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
31
<PAGE> 32
such notice of resignation to the Noteholders, the resigning Trustee may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor trustee, or, if any Noteholder who has been a
bona fide holder of a Note or Notes for at least six (6) months may, subject to
the provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section 8.8
afterwritten request therefor by the Company or by any Noteholder who has been a
bona fide holder of a Note or Notes for at least six (6) months; or
(2) the Trustee shall cease to be eligible in accordance with
the provisions of Section 8.9 and shall fail to resign after written request
therefor by the Company or by any such Noteholder, or
(3) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided
that, if no successor Trustee shall have been appointed and have accepted
appointment sixty (60) days after either the Company or the Noteholders has
removed the Trustee, the Trustee so removed may petition, at the expense of the
Company, any court of competent jurisdiction for an appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Notes at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
SECTION 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it and its agents and counsel pursuant to
the provisions of Section 8.6, execute and deliver an instrument transferring to
such successor trustee all the rights and powers of the trustee so ceasing to
act. Upon request of any such successor trustee, the Company shall execute any
and all instruments in writing for more fully and certainly vesting in and
confirming to such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property and funds
held or collected by such trustee as such, except for funds held in trust for
the benefit of holders of particular Notes, to secure any amounts then due it
pursuant to the provisions of Section 8.6.
32
<PAGE> 33
No successor trustee shall accept appointment as provided in this Section
8.11 unless, at the time of such acceptance, such successor trustee shall be
qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in this
Section 8.11, the Company (or the former trustee, at the expense of and at the
written direction of the Company) shall mail or cause to be mailed notice of the
succession of such trustee hereunder to the holders of Notes at their addresses
as they shall appear on the Note register. If the Company fails to mail such
notice within ten (10) days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
SECTION 8.12 SUCCESSION BY MERGER, ETC. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that, in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 8.8 and eligible
under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
SECTION 8.13 PREFERENTIAL COLLECTION OF CLAIMS. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Notes), the Trustee shall be subject to the provisions of the Trust Indenture
Act regarding the collection of the claims against the Company (or any such
other obligor).
SECTION 8.14 TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY. Any
application by the Trustee for written instructions from the Company (other than
with regard to any action proposed to be taken or omitted to be taken by the
Trustee that affects the rights of the holders of the Notes or holders of Senior
Indebtedness under this Indenture, including, without limitation, under Article
IV) may, at the option of the Trustee, set forth in writing any action proposed
to be taken or omitted by the Trustee under this Indenture and the date on
and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
ARTICLE IX
CONCERNING THE NOTEHOLDERS
SECTION 9.1 ACTION BY NOTEHOLDERS. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the
33
<PAGE> 34
time of taking any such action, the holders of such specified percentage have
joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by Noteholders in person or by agent or
proxy appointed in writing, or (b) by the record of the holders of Notes voting
in favor thereof at any meeting of Noteholders duly called and held in
accordance with the provisions of Article X, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of Noteholders.
Whenever the Company or the Trustee solicits the taking of any action by the
holders of the Notes, the Company or the Trustee may fix in advance of such
solicitation, a date as the record date for determining holders entitled to take
such action. The record date shall be not more than fifteen (15) days prior to
the date of commencement of solicitation of such action.
SECTION 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to the provisions
of Sections 8.1, 8.2 and 10.5, proof of the execution of any instrument by a
Noteholder or its agent or proxy shall be sufficient if made in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. The holding of Notes shall
be proved by the registry of such Notes or by a certificate of the Note
registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.
SECTION 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
Person in whose name such Note shall be registered upon the Note register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, and interest and Make-Whole Payment, if any, on, such Note, for conversion
of such Note and for all other purposes; and neither the Company nor the Trustee
nor any paying agent nor any conversion agent nor any Note registrar shall be
affected by any notice to the contrary. All such payments so made to any holder
for the time being, or upon his order, shall be valid, and, to the extent of the
sum or sums so paid, effectual to satisfy and discharge the liability for monies
payable upon any such Note.
SECTION 9.4 COMPANY-OWNED NOTES DISREGARDED. In determining whether the
holders of the requisite aggregate principal amount of Notes have concurred in
any direction, consent, waiver or other action under this Indenture, Notes which
are owned by the Company or any other obligor on the Notes or any Affiliate of
the Company or any other obligor on the Notes shall be disregarded and deemed
not to be outstanding for the purpose of any such determination; provided that,
for the purposes of determining whether the Trustee shall be protected in
relying on any such direction, consent, waiver or other action, only Notes which
a Responsible Officer actually knows are so owned shall be so disregarded. Notes
so owned which have been pledged in good faith may be regarded as outstanding
for the purposes of this Section 9.4 if the pledgee shall establish to the
satisfaction of the Trustee the pledgee's right to vote such Notes and that the
pledgee is not the Company, any other obligor on the Notes or any Affiliate of
the Company or any such other obligor. In the case of a dispute as to such
right, any decision by the Trustee taken upon the advice of counsel shall be
full protection to the Trustee. Upon request of the Trustee, the Company shall
furnish to the Trustee promptly an Officers' Certificate listing and identifying
all Notes, if any, known by the Company to be owned or held by or for the
account of any of the above described Persons; and, subject to Section 8.1, the
Trustee shall be entitled to accept such Officers' Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.
SECTION 9.5 REVOCATION OF CONSENTS; FUTURE HOLDERS BOUND. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
34
<PAGE> 35
ARTICLE X
NOTEHOLDERS' MEETINGS
SECTION 10.1 PURPOSE OF MEETINGS. A meeting of Noteholders may be called
at any time and from time to time pursuant to the provisions of this Article X
for any of the following purposes:
(1) to give any notice to the Company or to the Trustee or
to give any directions to the Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of Default hereunder and its
consequences, or to take any other action authorized to be taken by Noteholders
pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor trustee
pursuant to the provisions of Article VIII;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section 11.2; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of the
Notes under any other provision of this Indenture or under applicable law.
SECTION 10.2 CALL OF MEETINGS BY TRUSTEE. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 9.1, shall be mailed to
holders of Notes at their addresses as they shall appear on the Note register.
Such notice shall also be mailed to the Company. Such notices shall be mailed
not less than twenty (20) nor more than ninety (90) days prior to the date fixed
for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders of
all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
SECTION 10.3 CALL OF MEETINGS BY COMPANY OR NOTEHOLDERS. In case at any
time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.1, by mailing notice thereof as provided in Section 10.2.
SECTION 10.4 QUALIFICATIONS FOR VOTING. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
SECTION 10.5 REGULATIONS. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors
35
<PAGE> 36
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each Noteholder or
proxyholder shall be entitled to one vote for each E1,000 principal amount of
Notes held or represented by him; provided, however, that no vote shall be cast
or counted at any meeting in respect of any Note challenged as not outstanding
and ruled by the chairman of the meeting to be not outstanding. The chairman of
the meeting shall have no right to vote other than by virtue of Notes held by
him or instruments in writing as aforesaid duly designating him as the proxy to
vote on behalf of other Noteholders. Any meeting of Noteholders duly called
pursuant to the provisions of Section 10.2 or 10.3 may be adjourned from time to
time by the holders of a majority of the aggregate principal amount of Notes
represented at the meeting, whether or not constituting a quorum, and the
meeting may be held as so adjourned without further notice.
SECTION 10.6 VOTING. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.7 NO DELAY OF RIGHTS BY MEETING. Nothing contained in this
Article X shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
SECTION 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS. The
Company, when authorized by the resolutions of the Board of Directors, and the
Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.7 and the redemption
obligations of the Company pursuant to the requirements of Section 3.5(e);
36
<PAGE> 37
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article XII;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the Trust Indenture Act, or under any similar federal statute
hereafter enacted.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
SECTION 11.2 SUPPLEMENTAL INDENTURE WITH CONSENT OF NOTEHOLDERS. Subject
to Section 11.1, with the consent (evidenced as provided in Article IX) of the
holders of not less than a majority in aggregate principal amount of the Notes
at the time outstanding, the Company, when authorized by the resolutions of the
Board of Directors, and the Trustee may, from time to time and at any time,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture or any supplemental indenture or of modifying in
any manner the rights of the holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Note, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof, or reduce any amount payable on redemption thereof, or
impair the right of any Noteholder to institute suit for the payment thereof, or
make the principal thereof, or interest thereon payable in any coin or currency
other than that provided in the Notes, or modify the provisions of this
Indenture with respect to the subordination of the
37
<PAGE> 38
Notes in a manner adverse to the Noteholders in any material respect, or change
the obligation of the Company to redeem any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth
herein, including Section 15.7, in each case, without the consent of the holder
of each Note so affected, or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary and authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
SECTION 11.3 EFFECT OF SUPPLEMENTAL INDENTURE. Any supplemental indenture
executed pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in effect, provided that this Section 11.3 shall
not require such supplemental indenture or the Trustee to be qualified under the
Trust Indenture Act prior to the time such qualification is in fact required
under the terms of the Trust Indenture Act or the Indenture has been qualified
under the Trust Indenture Act, nor shall it constitute any admission or
acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article XI, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the term and conditions of
any such supplemental indenture shall be and be deemed to be part of the terms
and conditions of this Indenture for any and all purposes.
SECTION 11.4 NOTATION ON NOTES. Notes authenticated and delivered after
the execution of any supplemental indenture pursuant to the provisions of this
Article XI may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Notes so modified as to conform, to any modification of this
Indenture contained in any such supplemental indenture may, at the Company's
expense, be prepared and executed by the Company, authenticated by the Trustee
(or an authenticating agent duly appointed by the Trustee pursuant to Section
16.11) and delivered in exchange for the Notes then outstanding, upon surrender
of such Notes then outstanding.
SECTION 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL INDENTURE TO BE
FURNISHED TO TRUSTEE. Prior to entering into any supplemental indenture, the
Trustee may request, and if it so requests shall be provided with, an Officers'
Certificate and an Opinion of Counsel meeting the requirements set forth in
Section 16.5 as conclusive evidence that any supplemental indenture executed
pursuant hereto complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 12.1 COMPANY MAY CONSOLIDATE, ETC., ON CERTAIN TERMS. Subject to
the provisions of Section 12.2, nothing contained in this Indenture or in any of
the Notes shall prevent any consolidation or merger
38
<PAGE> 39
of the Company with or into any other Person or Persons (whether or not
affiliated with the Company), or successive consolidations or mergers in which
the Company or its successor or successors shall be a party or parties, or shall
prevent any sale, conveyance or lease (or successive sales, conveyances or
leases) of all or substantially all of the property of the Company, to any other
Person (whether or not affiliated with the Company), authorized to acquire and
operate the same and that shall be organized under the laws of the United States
of America, any state thereof or the District of Columbia; provided that upon
any such consolation, merger, sale, conveyance or lease, the due and punctual
payment of the principal of, interest and Make-Whole Payment, if any, on, all of
the Notes, according to their tenor and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the Person (if other than the Company) formed by such consolidation, or into
which the Company shall have been merged, or by the Person that shall have
acquired or leased such property, and such supplemental indenture shall provide
for the applicable conversion rights set forth in Section 15.7.
SECTION 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED. In case of any such
consolidation, merger, sale, conveyance or lease and upon the assumption by the
successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of, and interest and Make-Whole Payment, if any, on, all of the
Notes and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
Person shall succeed to and be substituted for the Company, with the same effect
as if it had been named herein as the party of this first part. Such successor
Person thereupon may cause to be signed, and may issue either in its own name or
in the name of Amazon.com, Inc. any or all of the Notes, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In the event of any such consolidation, merger, sale, conveyance or lease, the
Person named as the "Company" in the first paragraph of this Indenture or any
successor that shall thereafter have become such in the manner prescribed in
this Article XII may be dissolved, wound up and liquidated at any time
thereafter and such Person shall be released from its liabilities as obligor and
maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease, such
changes in phraseology and form (but not in substance) may be made in the Notes
thereafter to be issued as may be appropriate.
SECTION 12.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 13.1 DISCHARGE OF INDENTURE. When (a) the Company shall deliver
to the Trustee for cancellation all Notes theretofore authenticated (other than
any Notes that have been destroyed, lost or stolen and in lieu of or in
substitution for which other Notes shall have been authenticated and delivered)
and not theretofore canceled, or (b) all the Notes not theretofore canceled or
delivered to the Trustee for cancellation shall have become due and payable, or
are by their terms to become due and payable within one year or are to be called
for redemption within one year under arrangements satisfactory to the Trustee
for the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds sufficient to pay at maturity or upon redemption of
39
<PAGE> 40
all of the Notes (other than any Notes that shall have been mutilated,
destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) not theretofore canceled or
delivered to the Trustee for cancellation, including principal and interest due
or to become due to such date of maturity or redemption date, as the case may
be, accompanied by a verification report, as to the sufficiency of the deposited
amount, from an independent certified accountant or other financial professional
satisfactory to the Trustee, and if the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect (except as to (i) remaining rights of registration
of transfer, substitution and exchange and conversion of Notes, (ii) rights
hereunder of Noteholders to receive payments of principal of and interest on,
the Notes and the other rights, duties and obligations of Noteholders, as
beneficiaries hereof with respect to the amounts, if any, so deposited with the
Trustee and (iii) the rights, obligations and immunities of the Trustee
hereunder), and the Trustee, on written demand of the Company accompanied by an
Officers' Certificate and an Opinion of Counsel as required by Section 16.5 and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
SECTION 13.2 DEPOSITED MONIES TO BE HELD IN TRUST BY TRUSTEE. Subject to
Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1,
provided such deposit was not in violation of Article IV, shall be held in trust
for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article IV, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest.
SECTION 13.3 PAYING AGENT TO REPAY MONIES HELD. Upon the satisfaction and
discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
SECTION 13.4 RETURN OF UNCLAIMED MONIES. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of
the principal of or interest on Notes and not applied but remaining unclaimed by
the holders of Notes for two years after the date upon which the principal of,
or interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Notes shall thereafter look only to the Company for any
payment that such holder may be entitled to collect unless an applicable
abandoned property law designates another Person.
SECTION 13.5 REINSTATEMENT. If the Trustee or the paying agent is unable
to apply any money in accordance with Section 13.2 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
provided, however, that if the Company makes any payment of interest on or
principal of any Note or the Make-Whole Payment following the reinstatement of
its obligations, the Company shall be subrogated to the rights of the holders of
such Notes to receive such payment from the money held by the Trustee or paying
agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 14.1 INDENTURE AND NOTES SOLELY CORPORATE OBLIGATIONS. No
recourse for the payment of the principal of, or interest or Make-Whole Payment,
if any, on, any Note, or for any claim based thereon or
40
<PAGE> 41
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against any incorporator, stockholder,
employee, agent, officer, director or subsidiary, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
SECTION 15.1 RIGHT TO CONVERT. Subject to and upon compliance with the
provisions of this Indenture, including, without limitation, Article IV, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, subject to withdrawal of
conversion rights, such right shall terminate, except as provided in Section
15.2, or Section 3.4, at the close of business on the Business Day next
preceding the date fixed for withdrawal of the conversion rights or redemption
of such Note or portion of a Note unless the Company shall default in payment
due upon redemption or withdrawal thereof) to convert the principal amount of
any such Note, or any portion of such principal amount which is E1,000 or
an integral multiple thereof, into a number of fully paid and non-assessable
shares of Common Stock (as such shares shall then be constituted) obtained by
dividing the principal amount of the Note or portion thereof surrendered for
conversion by the Conversion Price in effect at such time, by surrender of the
Note so to be converted in whole or in part, together with any required funds,
in the manner provided in Section 15.2. A Note in respect of which a holder is
exercising its option to require redemption upon a Fundamental Change pursuant
to Section 3.5 may be converted only if such holder withdraws its election to
exercise in accordance with Section 3.5. A holder of Notes is not entitled to
any rights of a holder of Common Stock until such holder has converted its Notes
to Common Stock, and only to the extent such Notes are deemed to have been
converted to Common Stock under this Article XV.
SECTION 15.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF COMMON STOCK
ON CONVERSION; NO ADJUSTMENT FOR INTEREST OR DIVIDENDS. In order to exercise the
conversion privilege with respect to any Note in certificated form, the holder
of any such Note to be converted in whole or in part shall surrender such Note,
duly endorsed, at an office or agency maintained by the Company pursuant to
Section 5.2, accompanied by the funds, if any, required by the penultimate
paragraph of this Section 15.2, and shall give written notice of conversion in
the form provided on the Notes (or such other notice which is acceptable to the
Company) to the office or agency that the holder elects to convert such Note or
the portion thereof specified in said notice. Such notice shall also state the
name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued, and shall be accompanied by transfer taxes, if
required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any interest
in a Note in global form, the holder must complete the appropriate instruction
form for conversion pursuant to the Depository's book-entry conversion program,
deliver by book-entry delivery an interest in such Note in global form, furnish
appropriate endorsements and transfer documents if required by the Company or
the Trustee or conversion agent, and pay the funds, if any, required by this
Section 15.2 and any transfer taxes if required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
41
<PAGE> 42
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such holder at the office or agency maintained by the Company for such purpose
pursuant to Section 5.2, a certificate or certificates for the number of full
shares of Common Stock issuable upon the conversion of such Note or portion
thereof in accordance with the provisions of this Article and a check or cash in
respect of any fractional interest in respect of a share of Common Stock arising
upon such conversion, as provided in Section 15.3. In case any Note of a
denomination greater than E1000 shall be surrendered for partial
conversion, and subject to Section 2.3, the Company shall execute and the
Trustee shall authenticate and deliver to the holder of the Note so surrendered,
without charge to it, a new Note or Notes in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered
Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.2 have been satisfied as to such Note (or portion thereof), and
the Person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided,
however, that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the period
from the close of business on the record date for any interest payment date to
the close of business on the Business Day next preceding the following interest
payment date shall (unless such Note or portion thereof being converted shall
have been called for redemption on a redemption date that occurs during the
period from the close of business on such record date to the close of business
on the Business Day next preceding the following interest payment date) be
accompanied by payment, in New York Clearing House funds or other funds
acceptable to the Company, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being converted; provided,
however, that no such payment need be made if there shall exist at the time of
conversion a default in the payment of interest on the Notes. Except as provided
above in this Section 15.2, no payment or other adjustment shall be made for
interest accrued on any Note converted or for dividends on any shares issued
upon the conversion of such Note as provided in this Article.
Upon the conversion of an interest in a Note in global form, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Note in global form as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any conversion agent other
than the Trustee.
SECTION 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
conversion at one time by the same holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted thereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
SECTION 15.4 CONVERSION PRICE. The conversion price shall be as specified
in the form of Note (herein called the "Conversion Price") attached as Exhibit A
hereto, subject to reset and adjustment as provided in this Article XV.
SECTION 15.5 RESET OF CONVERSION PRICE. (A) The Conversion Price shall be
reset on each of February 16, 2001 and February 16, 2002, to the lesser of:
42
<PAGE> 43
(i) the Conversion Price in effect as of such date; and
(ii) the average of the Share Equivalent Prices of the Common
Stock for the 20 consecutive trading days preceding such
date;
provided, however, that the Conversion Price shall not be reset, in any
circumstance, to lower than E84.883.
(b) Whenever the Conversion Price is reset as herein provided, the
Company shall (1) undertake to publish a notice of each reset in Luxembourg
within 10 days after the occurrence of such reset and (2) promptly file with the
Trustee and any conversion agent other than the Trustee an Officers' Certificate
setting forth the Conversion Price after such reset and setting forth a brief
statement of the facts requiring such reset. Unless and until a Responsible
Officer of the Trustee shall have received such Officer's Certificate, the
Trustee shall not be deemed to have knowledge of any reset of the Conversion
Price and may assume without inquiry that the last Conversion Price of which it
has knowledge is still in effect. Promptly after delivery of such certificate,
the Trustee shall prepare a notice of such reset of the Conversion Price setting
forth the reset Conversion Price and the date on which the reset becomes
effective and shall mail such notice of the reset of the Conversion Price to the
holder of each Note at his last address appearing on the Note register provided
for in Section 2.5, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such reset.
(c) In any case in which this Section 15.5 provides that reset shall
become effective immediately after a record date for an event, the Company may
defer until the occurrence of such event (i) issuing to the holder of any Note
converted after such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion by reason of the
reset required by such event over and above the Common Stock issuable upon such
conversion before giving effect to such reset and (ii) paying to such holder any
amount in cash in lieu of any fractional share of Common Stock pursuant to
Section 15.3.
For purposes of Section 15.5, the following terms shall have the
following meanings:
"Share Equivalent Price" means, on any day, the Closing Price of the
Common Stock (in U.S. dollars on such day) multiplied by the Calculation
Exchange Rate on such date. For purposes hereof, the Share Equivalent Price
shall be rounded to the nearest cent.
"Calculation Exchange Rate" shall mean, as of 12:00 (noon) on any
Trading Day, the buying rate in New York City on such day for cable transfers in
euro equivalent to the applicable U.S. $ price of the Common Stock, as certified
for customs purposes by the Federal Reserve Bank of New York.
SECTION 15.6 ADJUSTMENT OF CONVERSION PRICE. The Conversion Price as then
in effect shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction the numerator of which shall be the number of
shares of the Common Stock outstanding at the close of business on the date
fixed for such determination and the denominator of which shall be the sum of
such number of shares and the total number of shares constituting such dividend
or other distribution, such reduction to become effective immediately after the
opening of business on the day following the date fixed for such determination.
The Company will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Company. If any dividend or
distribution of the type described in this Section 15.6(a) is declared but not
so paid or made, the Conversion Price shall again be adjusted to the Conversion
Price that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all holders
of its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for
43
<PAGE> 44
determination of stockholders entitled to receive such rights or warrants) to
subscribe for or purchase shares of Common Stock at a price per share less than
the Current Market Price (as defined below) on the date fixed for determination
of stockholders entitled to receive such rights or warrants, the Conversion
Price shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to receive such rights or warrants by
a fraction the numerator of which shall be the number of shares of Common Stock
outstanding at the close of business on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the number of
shares that the aggregate offering price of the total number of shares so
offered would purchase at such Current Market Price, and the denominator of
which shall be the number of shares of Common Stock outstanding on the date
fixed for determination of stockholders entitled to receive such rights and
warrants plus the total number of additional shares of Common Stock offered for
subscription or purchase. Such adjustment shall be successively made whenever
any such rights and warrants are issued, and shall become effective immediately
after the opening of business on the day following the date fixed for
determination of stockholders entitled to receive such rights or warrants. To
the extent that shares of Common Stock are not delivered after the expiration of
such rights or warrants, the Conversion Price shall be readjusted to the
Conversion Price that would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of only
the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price that would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase shares of Common Stock at less
than such Current Market Price, and in determining the aggregate offering price
of such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants, the value of
such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, 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.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.6(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.6(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.6(a) (any of the foregoing hereinafter in this Section 15.6(d) called
the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Noteholders upon the conversion
of the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock immediately
prior to the Record Date (as defined in Section 15.6(h) for such distribution of
the Securities)), the Conversion Price shall be reduced so that the same shall
be equal to the price determined by multiplying the Conversion Price in effect
on the Record Date with respect to such distribution by a fraction, the
numerator of which shall be the Current Market Price per share of the Common
Stock on such Record Date less the fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) on the Record Date of the portion of the
Securities so distributed applicable to one share of Common Stock and the
denominator of which shall be the Current Market Price per share of the Common
Stock, such reduction to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that in the
event the then fair market value (as so determined) of the portion of the
Securities so distributed applicable to one share of Common Stock is equal to or
greater than the Current Market Price of the Common Stock on the Record Date, in
lieu of the foregoing adjustment, adequate provision shall be made so that each
Noteholder shall have the right to receive upon conversion the amount of
44
<PAGE> 45
Securities such holder would have received had such holder converted each Note
on the Record Date. In the event that such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the Conversion
Price that would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 15.6(d) by reference to the actual or
when issued trading market for any securities, it must in doing so consider the
prices in such market over the same period used in computing the Current Market
Price of the Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.6 (and no adjustment to the Conversion Price under
this Section 15.6 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.6(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.6 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
For purposes of this Section 15.6(d) and Sections 15.6(a) and (b), any
dividend or distribution to which this Section 15.6(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 15.6(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.6(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution" and "the date fixed for such
determination" within the meaning of Sections 15.6(a) and (b), and (B) any
shares of Common Stock included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for such
determination" within the meaning of Section 15.6(a).
(e) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock cash (excluding (x) any quarterly cash
dividend on the Common Stock to the extent the aggregate cash dividend per share
of Common Stock in any fiscal quarter does not exceed the greater of (A) the
amount per share of Common Stock of the next preceding quarterly cash dividend
on the Common Stock to the extent that such preceding quarterly dividend did not
require any adjustment of the Conversion Price pursuant to this Section 15.6(e)
(as adjusted to reflect subdivisions, or combinations of the Common Stock), and
(B) 3.75% of the arithmetic average of the Closing Price (determined as set
forth in Section 15.6(h)) during the ten Trading Days (as defined in Section
15.6(h)) immediately prior to the date of declaration of such dividend, and (y)
any dividend
45
<PAGE> 46
or distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on such record date by a fraction the numerator of which
shall be the Current Market Price of the Common Stock on the record date less
the amount of cash so distributed (and not excluded as provided above)
applicable to one share of Common Stock and the denominator of which shall be
such Current Market Price of the Common Stock, such reduction to be effective
immediately prior to the opening of business on the day following the record
date; provided, however, that in the event the portion of the cash so
distributed applicable to one share of Common Stock is equal to or greater than
the Current Market Price of the Common Stock on the record date, in lieu of the
foregoing adjustment, adequate provision shall be made so that each Noteholder
shall have the right to receive upon conversion the amount of cash such holder
would have received had such holder converted each Note on the record date. In
the event that such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such dividend or distribution had not been declared. If any
adjustment is required to be made as set forth in this Section 15.6(e) as a
result of a distribution that is a quarterly dividend, such adjustment shall be
based upon the amount by which such distribution exceeds the amount of the
quarterly cash dividend permitted to be excluded pursuant hereto. If an
adjustment is required to be made as set forth in this Section 15.6(e) above as
a result of a distribution that is not a quarterly dividend, such adjustment
shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors)
that as of the last time (the "Expiration Time") tenders or exchanges may be
made pursuant to such tender or exchange offer (as it may be amended) exceeds
the Current Market Price of the Common Stock on the Trading Day next succeeding
the Expiration Time, the Conversion Price shall be reduced so that the same
shall equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction the numerator of which
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator of which shall be the sum of (x) the fair
market value (determined as aforesaid) of the aggregate consideration payable to
stockholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price that would then be in effect if such tender or exchange offer
had not been made.
(g) In case of a tender or exchange offer made by a Person other than
the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Stock to more than twenty-five percent (25%) of the Common
Stock outstanding and shall involve the payment by such Person of consideration
per share of Common Stock having a fair market value (as determined by the Board
of Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Offer Expiration
Time") tenders or exchanges may be made pursuant to such tender or exchange
offer (as it shall have been amended) that exceeds the Current Market Price of
the Common Stock on the Trading Day next succeeding the Offer Expiration Time,
and in which, as of the Offer Expiration Time the Board of Directors is not
recommending rejection of the offer, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to the Offer Expiration Time by a fraction the
numerator of which shall be the number of shares of Common Stock outstanding
(including any tendered or exchanged shares) on the Offer Expiration Time
multiplied by the Current Market Price of the Common Stock on
46
<PAGE> 47
the Trading Day next succeeding the Offer Expiration Time and the denominator of
which shall be the sum of (x) the fair market value (determined as aforesaid) of
the aggregate consideration payable to stockholders based on the acceptance (up
to any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Accepted Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) on the Offer Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Offer Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the day following the Offer Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 15.6(g) shall not be made if, as of the
Offer Expiration Time, the offering documents with respect to such offer
disclose a plan or intention to cause the Company to engage in any transaction
described in Article XII.
(h) For purposes of this Section 15.6, the following terms shall have
the following meanings:
(1) "Closing Price" with respect to any securities on any day
shall mean the closing sale price, regular way, on such day or, in case no such
sale takes place on such day, the average of the reported closing bid and asked
prices, regular way, in each case as quoted on the Nasdaq National Market or, if
such security is not quoted or listed or admitted to trading on such Nasdaq
National Market, on the principal national security exchange or quotation system
on which such security is quoted or listed or admitted to trading or, if not
quoted or listed or admitted to trading on any national securities exchange or
quotation system, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished by any
New York Stock Exchange member firm selected from time to time by the Board of
Directors for that purpose, or a price determined in good faith by the Board of
Directors or, to the extent permitted by applicable law, a duly authorized
committee thereof, whose determination shall be conclusive.
(2) "Current Market Price" shall mean the average of the daily
Closing Prices per share of Common Stock for the ten consecutive Trading Days
immediately prior to the date in question; provided, however, that (1) if the
"ex" date (as hereinafter defined) for any event (other than the issuance or
distribution or Fundamental Change requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 15.6(a), (b), (c), (d),
(e), (f) or (g) occurs during such ten consecutive Trading Days, the Closing
Price for each Trading Day prior to the "ex" date for such other event shall be
adjusted by multiplying such Closing Price by the same fraction by which the
Conversion Price is so required to be adjusted as a result of such other event,
(2) if the "ex" date for any event (other than the issuance, distribution or
Fundamental Change requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 15.6(a), (b), (c), (d), (e), (f) or (g)
occurs on or after the "ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing Price for each Trading
Day on and after the "ex" date for such other event shall be adjusted by
multiplying such Closing Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of such other event,
and (3) if the "ex" date for the issuance, distribution or Fundamental Change
requiring such computation is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or (2) of this proviso,
the Closing Price for each Trading Day on or after such "ex" date shall be
adjusted by adding thereto the amount of any cash and the fair market value (as
determined by the Board of Directors or, to the extent permitted by applicable
law, a duly authorized committee thereof in a manner consistent with any
determination of such value for purposes of Section 15.6(d), (f) or (g), whose
determination shall be conclusive and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the case may be) of the
evidences of indebtedness, shares of capital stock or assets being distributed
applicable to one share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under Section 15.6(f) or
(g), the Current Market Price of the Common Stock on any date shall be deemed to
be the average of the daily Closing Prices per share of Common Stock for such
day and
47
<PAGE> 48
the next two succeeding Trading Days; provided, however, that if the
"ex" date for any event (other than the tender or exchange offer requiring such
computation) that requires an adjustment to the Conversion Price pursuant to
Section 15.6(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
Expiration Time or Offer Expiration Time, as the case may be, for the tender or
exchange offer requiring such computation and prior to the day in question, the
Closing Price for each Trading Day on and after the "ex" date for such other
event shall be adjusted by multiplying such Closing Price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as a
result of such other event. For purpose of this paragraph, the term "ex" date,
(1) when used with respect to any issuance or distribution, means the first date
on which the Common Stock trades, regular way, on the relevant exchange or in
the relevant market from which the Closing Price was obtained without the right
to receive such issuance or distribution, (2) when used with respect to any
subdivision or combination of shares of Common Stock, means the first date on
which the Common Stock trades, regular way, on such exchange or in such market
after the time at which such subdivision or combination becomes effective, and
(3) when used with respect to any tender or exchange offer means the first date
on which the Common Stock trades, regular way, on such exchange or in such
market after the Offer Expiration Time of such offer.
(3) "fair market value" shall mean the amount which a willing
buyer would pay a willing seller in an arm's-length transaction.
(4) "Record Date" shall mean, with respect to any dividend,
distribution or other transaction or event in which the holders of Common Stock
have the right to receive any cash, securities or other property or in which the
Common Stock (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, the date fixed for
determination of stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by statute,
contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable security is
quoted on the Nasdaq National Market, a day on which trades may be made thereon
or (y) if the applicable security is listed or admitted for trading on the New
York Stock Exchange or another national security exchange, a day on which the
New York Stock Exchange or another national security exchange is open for
business or (z) if the applicable security is not so listed, admitted for
trading or quoted, 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.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.6(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price pursuant to this Section
15.6 shall be required unless such adjustment would require an increase or
decrease of at least one percent (1%) in such price; provided, however, that any
adjustments that by reason of this Section 15.6(j) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Article XV shall be made by the Company and shall be
made to the nearest cent or to the nearest one-hundredth (1/100) of a share, as
the case may be. No adjustment need be made for rights to purchase Common Stock
pursuant to a Company plan for reinvestment of dividends or interest. To the
extent the Notes become convertible into cash, assets, property or securities
(other than capital stock of the Company), no adjustment need be made thereafter
as to the cash, assets, property or such securities. Interest will not accrue on
the cash.
48
<PAGE> 49
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall (1) publish a notice of such adjustment within 10 days of the
occurrence of the events set forth in Section 15.6(a) to (g) above and (2)
promptly file with the Trustee and any conversion agent other than the Trustee
an Officers' Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume without
inquiry that the last Conversion Price of which it has knowledge is still in
effect. Promptly after delivery of such certificate, the Company shall prepare a
notice of such adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which each adjustment becomes effective and
shall mail such notice of such adjustment of the Conversion Price to the holder
of each Note at his last address appearing on the Note register provided for in
Section 2.5 of this Indenture, within twenty (20) days after execution thereof.
Failure to deliver such notice shall not affect the legality or validity of any
such adjustment.
(l) In any case in which this Section 15.6 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 (i) issuing to the
holder of any Note converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 15.3.
(m) For purposes of this Section 15.6, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of shares of Common Stock. The Company will not pay
any dividend or make any distribution on shares of Common Stock held in the
treasury of the Company.
SECTION 15.7 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE.
If any of the following events occur, namely (i) any reclassification or change
of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.6(c) applies), (ii) any consolidation, merger or
combination of the Company with another Person as a result of which holders of
Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the Company or the successor or purchasing Person, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that such Note shall be convertible
into the kind and amount of shares of stock, other securities or other property
or assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Notes (assuming, for
such purposes, a sufficient number of authorized shares of Common Stock
available to convert all such Notes) immediately prior to such reclassification,
change, consolidation, merger, combination, sale or conveyance assuming such
holder of Common Stock did not exercise his rights of election, if any, as to
the kind or amount of securities, cash or other property receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
(provided that, if the kind or amount of stock, other securities or other
property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each share of Common Stock in respect of which such rights of election shall
not have been exercised ("non-electing share")), then for the purposes of this
Section 15.7 the kind and amount of securities, cash or other property
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance for each non-electing share shall be deemed to
be the kind and amount so receivable per share by a plurality of the
non-electing shares. Such supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.5, within twenty (20) days
49
<PAGE> 50
after execution thereof. Failure to deliver such notice shall not affect the
legality or validity of such supplemental indenture.
The Company shall publish notice of any of the events set forth in Section
15.7(i) to (iii) above in Luxembourg as soon as practicable after the occurrence
of such event.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
SECTION 15.8 WITHDRAWAL OF CONVERSION RIGHTS. (a) Upon giving the notice
described in Section 15.8(b) the Company may, at any time prior to February 20,
2003, withdraw the Noteholders' right to convert the Notes pursuant to this
Article XV if, at any time and each time, the Share Equivalent Price shall have
exceeded E167.915 for 20 Trading Days in any consecutive 30 Trading Day period.
(b) In case the Company shall desire to withdraw the Noteholders'
conversion rights, it shall fix a date for withdrawal ("Withdrawal Date") and it
or, at its written request received by the Trustee not fewer than forty-five
(45) days prior (or such shorter period of time as may be acceptable to the
Trustee) to the Withdrawal Date, the Trustee, in the name of and at the expense
of the Company, shall mail or cause to be mailed a notice of such withdrawal not
fewer than thirty (30) nor more than sixty (60) days prior to the Withdrawal
Date to the holders of Notes at their last addresses as the same appear on the
Note register; provided, however, that if the Company shall give such notice, it
shall also give written notice of the withdrawal of conversion rights to the
Trustee. The notice of withdrawal shall be given no later than five Business
Days after the last Trading Day of the 30 Trading Day period described in
Section 15.8(a) above ("Notice Date"). The notice of withdrawal shall set forth
a brief statement of the facts giving rise to the withdrawal of conversion
rights, the Withdrawal Date and the amount of the Make-Whole Payment. The
Company may not give notice of withdrawal if a default in payment of interest on
the Notes has occurred and is continuing. Such mailing shall be by first class
mail. The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any defect in the
notice to the holder of any Note shall not affect the validity of the
proceedings for withdrawal of conversion rights of any other Note.
(c) If the Company withdraws the Noteholders' right to covert the Notes
pursuant to Section 15.8(b) above, the Company shall make an additional payment
in cash (the "Make-Whole Payment") with respect to the Notes to the Noteholders
in an amount equal to E206.25 per E1,000 Note, less the amount of any interest
actually paid on such Note prior to the Notice Date. The Company shall make the
Make-Whole Payment on all Notes, including any Notes converted into Common Stock
pursuant to the terms hereof after the Notice Date and prior to the Withdrawal
Date.
(d) On or prior to the Withdrawal Date specified in the notice of
withdrawal given as provided in this Section 15.8, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money in immediately available funds sufficient to pay
the Make-Whole Payment (other than with respect to Notes theretofore surrendered
for conversion into Common Stock prior to the Notice Date); provided that if
such payment is made on the Withdrawal Date it must be received by the Trustee
or paying agent, as the case may be, by 10:00 a.m. New York City time on such
date. If any Note is converted pursuant hereto prior to the Notice Date, any
money deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Note shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust. Whenever any Notes are to be converted prior to the Notice Date, the
Company will give the Trustee written notice in the form of an Officers'
Certificate not fewer than forty-five (45) days (or such shorter period of time
as may be acceptable to the Trustee) prior to the Withdrawal Date as to the
Make-Whole Payment.
SECTION 15.9 TAXES ON SHARES ISSUED. The issue of stock certificates on
conversions of Notes shall be made without charge to the converting Noteholder
for any tax in respect of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any transfer involved
in the issue and delivery of stock in any name other than that of the holder of
any Note converted, and the Company shall not be
50
<PAGE> 51
required to issue or deliver any such stock certificate unless and until the
Person or Persons requesting the issue thereof shall have paid to the Company
the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 15.10 RESERVATION OF SHARES; SHARES TO BE FULLY PAID; COMPLIANCE
WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON STOCK. The Company shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
conversion of the Notes from time to time as such Notes are presented for
conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be issued
upon conversion of Notes will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company covenants that, if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that, if at any time the Common Stock shall
be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Note;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.
SECTION 15.11 RESPONSIBILITY OF TRUSTEE. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article. Without limiting the generality of the foregoing, neither the
Trustee nor any conversion agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
entered into pursuant to Section 15.6 relating either to the kind or amount of
shares of stock or securities or property (including cash) receivable by
Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.6 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.1, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
51
<PAGE> 52
SECTION 15.12 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.6; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Significant Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company or any Significant Subsidiary;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.5, as promptly as possible but in any event at least ten (10) days
prior to the applicable date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be taken, the date
as of which the holders of Common Stock of record to be entitled to such
dividend, distribution or rights are to be determined, or (y) the date on which
such reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of record shall be
entitled to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up. Failure to give such notice, or any
defect therein, shall not affect the legality or validity of such dividend,
distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
SECTION 16.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
SECTION 16.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
SECTION 16.3 ADDRESSES FOR NOTICES, ETC. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Amazon.com, Inc., 1516 Second Avenue, Seattle, Washington 98101,
Attention: Chief Financial Officer. Any notice, direction, request or demand
hereunder to or upon the Trustee shall be deemed to have been sufficiently given
or made, for all purposes, if given or served by being deposited, postage
prepaid, by registered or certified mail in a post office letter box addressed
to the Corporate Trust Office, which office is, at the date as of which this
Indenture is dated, located at 101 Barclay Street, 21st Floor West, New York,
52
<PAGE> 53
New York 10286, Attention: Corporate Trust Administration (Amazon.com, Inc., 6
8758% Convertible Subordinated Notes due 2010).
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to him
by first class mail, postage prepaid, at his address as it appears on the Note
register and shall be sufficiently given to him if so mailed within the time
prescribed.
Failure to mail a notice or communication to a Noteholder or any defect in
it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
SECTION 16.4 GOVERNING LAW. This Indenture and each Note shall be deemed
to be a contract made under the laws of the State of New York, and for all
purposes shall be construed in accordance with the laws of the State of New
York.
SECTION 16.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT;
CERTIFICATES TO TRUSTEE. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (4) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 16.6 LEGAL HOLIDAYS. In any case in which the date of maturity of
interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
SECTION 16.7 TRUST INDENTURE ACT. This Indenture is hereby made subject
to, and shall be governed by, the provisions of the Trust Indenture Act required
to be part of and to govern indentures qualified under the Trust Indenture Act;
provided, however, that, unless otherwise required by law, notwithstanding the
foregoing, this Indenture and the Notes issued hereunder shall not be subject to
the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314 of the
Trust Indenture Act as now in effect or as hereafter amended or modified;
provided further that this Section 16.7 shall not require this Indenture or the
Trustee to be qualified under the Trust Indenture Act prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act,
nor shall it constitute any admission or acknowledgment by any party to the
Indenture that any such qualification is required prior to the time such
qualification is in fact required under the terms of the Trust Indenture Act. If
any provision hereof limits, qualifies or conflicts with another provision
hereof which is required to be included in an indenture qualified under the
Trust Indenture Act, such required provision shall control.
SECTION 16.8 NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or
hereafter enacted and in effect, in any jurisdiction in which property of the
Company or its subsidiaries is located.
53
<PAGE> 54
SECTION 16.9 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 16.10 TABLE OF CONTENTS, HEADINGS, ETC. The table of contents and
the titles and headings of the articles and sections of this Indenture have been
inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof. All Articles and Sections referenced herein are to Articles and
Sections, respectively, of this Indenture unless specified otherwise.
SECTION 16.11 AUTHENTICATING AGENT. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination to such authenticating agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11 shall
be applicable to any authenticating agent.
SECTION 16.12 EXECUTION IN COUNTERPARTS. This Indenture may be executed in
any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
The Bank of New York hereby accepts the trusts in this Indenture declared
and provided, upon the terms and conditions herein above set forth.
54
<PAGE> 55
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
AMAZON.COM, INC.
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK,
as Trustee
By:
-------------------------------
Name:
Title:
55
<PAGE> 56
S&S DRAFT
2/14/00
AMAZON.COM, INC.
TO
THE BANK OF NEW YORK
TRUSTEE
INDENTURE
DATED AS OF FEBRUARY 16, 2000
6.875% CONVERTIBLE SUBORDINATED NOTES DUE 2010
<PAGE> 57
AMAZON.COM, INC.
Reconciliation and Tie Between the Trust Indenture Act of 1939 and
Indenture, dated as of February 3, 1999, between Amazon.com, Inc. and The Bank
of New York, as Trustee.
<TABLE>
<CAPTION>
TRUST INDENTURE ACT SECTION INDENTURE SECTION
<S> <C>
Section 310(a)(1)......................................................................................8.9
(a)(2).................................................................................................8.9
(a)(3)......................................................................................Not Applicable
(a)(4)......................................................................................Not Applicable
(a)(5).................................................................................................8.9
(b)................................................................8.8; 8.9; 8.10; 8.11 Section 311(a)8.13
(b)...................................................................................................8.13
(b)(2)................................................................................................8.13
Section 312(a).................................................................................6.1; 6.2(a)
(b).................................................................................................6.2(b)
(c).................................................................................................6.2(c)
Section 313(a)......................................................................................6.3(a)
(b).................................................................................................6.3(a)
(c).................................................................................................6.3(a)
(d).................................................................................................6.3(b)
Section 314(a).........................................................................................6.4
(b).........................................................................................Not Applicable
(c)(1)................................................................................................16.5
(c)(2)................................................................................................16.5
(c)(3)......................................................................................Not Applicable
(d).........................................................................................Not Applicable
(e)...................................................................................................16.5
Section 315(a).........................................................................................8.1
(b)....................................................................................................7.8
(c)....................................................................................................8.1
(d)....................................................................................................8.1
(d)(1)..............................................................................................8.1(a)
(d)(2)..............................................................................................8.1(b)
(d)(3)..............................................................................................8.1(c)
(e)....................................................................................................7.9
Section 316(a).........................................................................................7.7
(a)(1)(A)..............................................................................................7.7
(a)(1)(B)..............................................................................................7.7
(a)(2)......................................................................................Not Applicable
(b)....................................................................................................7.4
Section 317(a)(1)......................................................................................7.5
(a)(2).................................................................................................7.5
(b)....................................................................................................5.4
Section 318(a)........................................................................................16.7
</TABLE>
- ---------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
<PAGE> 58
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE I DEFINITIONS........................................................................................1
Section 1.1 Definitions.....................................................................................1
Affiliate....................................................................................................1
Board of Directors...........................................................................................2
Business Day.................................................................................................2
Closing Price................................................................................................2
Commission...................................................................................................2
Common Stock.................................................................................................2
Company......................................................................................................2
Conversion Price.............................................................................................2
Corporate Trust Office.......................................................................................2
Custodian....................................................................................................2
Current Market Price.........................................................................................2
Default......................................................................................................2
Defaulted Interest...........................................................................................2
Depositary...................................................................................................2
Designated Senior Indebtedness...............................................................................2
Event of Default.............................................................................................3
Exchange Act.................................................................................................3
fair market value............................................................................................3
Fundamental Change...........................................................................................3
Global Note..................................................................................................3
Indebtedness.................................................................................................3
Indenture....................................................................................................4
Note or Notes................................................................................................4
Note register................................................................................................4
Noteholder or holder.........................................................................................4
Notice Date..................................................................................................4
Officers' Certificate........................................................................................4
Opinion of Counsel...........................................................................................4
Optional Redemption..........................................................................................4
outstanding..................................................................................................4
Payment Blockage Notice......................................................................................4
Person.......................................................................................................4
Predecessor Note.............................................................................................4
Record Date..................................................................................................5
Representative...............................................................................................5
Responsible Officer..........................................................................................5
Securities Act...............................................................................................5
Senior Indebtedness..........................................................................................5
Significant Subsidiary.......................................................................................5
Subsidiary...................................................................................................5
Trading Day..................................................................................................5
Trigger Event................................................................................................5
Trust Indenture Act..........................................................................................5
Trustee......................................................................................................6
Underwriters.................................................................................................6
Withdrawal Date..............................................................................................6
ARTICLE II ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF NOTES..................................6
</TABLE>
<PAGE> 59
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 2.1 Designation Amount and Issue of Notes...........................................................6
Section 2.2 Form of Notes...................................................................................6
Section 2.3 Date and Denomination of Notes; Payments of Interest............................................6
Section 2.4 Execution of Notes..............................................................................8
Section 2.5 Exchange and Registration of Transfer of Notes; Depositary......................................8
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes.....................................................10
Section 2.7 Temporary Notes................................................................................11
Section 2.8 Cancellation of Notes Paid, Etc................................................................11
Section 2.9 CUSIP Numbers..................................................................................11
ARTICLE III REDEMPTION OF NOTES..................................................................................12
Section 3.1 Optional Redemption by the Company.............................................................12
Section 3.2 Notice of Redemptions; Selection of Notes......................................................12
Section 3.3 Payment of Notes Called for Redemption.........................................................13
Section 3.4 Conversion Arrangement on Call for Redemption..................................................13
Section 3.5 Redemption at Option of Holders................................................................14
ARTICLE IV SUBORDINATION OF NOTES............................................................................15
Section 4.1 Agreement of Subordination.....................................................................15
Section 4.2 Payments to Noteholders........................................................................15
Section 4.3 Subrogation of Notes...........................................................................17
Section 4.4 Authorization to Effect Subordination..........................................................18
Section 4.5 Notice to Trustee..............................................................................18
Section 4.6 Trustee's Relation to Senior Indebtedness......................................................19
Section 4.7 No Impairment of Subordination.................................................................19
Section 4.8 Certain Conversions Not Deemed Payment.........................................................19
Section 4.9 Article Applicable to Paying Agents............................................................19
Section 4.10 Senior Indebtedness Entitled to Rely...........................................................19
Section 4.11 Reliance on Judicial Order or Certificate of Liquidating Agent.................................19
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY...............................................................20
Section 5.1 Payment of Principal, Premium and Interest.....................................................20
Section 5.2 Maintenance of Office or Agency................................................................20
Section 5.3 Appointments to Fill Vacancies in Trustee's Office.............................................20
Section 5.4 Provisions as to Paying Agent..................................................................20
Section 5.5 Existence......................................................................................21
Section 5.6 Maintenance of Properties......................................................................21
Section 5.7 Payment of Taxes and Other Claims..............................................................21
Section 5.8 Stay, Extension and Usury Laws.................................................................22
Section 5.9 Compliance Certificate.........................................................................22
ARTICLE VI NOTEHOLDERS'LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE......................................22
Section 6.1 Noteholders'Lists..............................................................................22
Section 6.2 Preservation and Disclosure of Lists...........................................................22
Section 6.3 Reports by Trustee.............................................................................23
Section 6.4 Reports by Company.............................................................................23
ARTICLE VII REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF DEFAULT....................................23
Section 7.1 Events of Default..............................................................................23
Section 7.2 Payments of Notes on Default; Suit Therefor....................................................25
Section 7.3 Application of Monies Collected by Trustee.....................................................26
Section 7.4 Proceedings by Noteholder......................................................................26
Section 7.5 Proceedings by Trustee.........................................................................27
Section 7.6 Remedies Cumulative and Continuing.............................................................27
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority of Noteholders.....................27
Section 7.8 Notice of Defaults.............................................................................28
Section 7.9 Undertaking to Pay Costs.......................................................................28
ARTICLE VIII CONCERNING THE TRUSTEE............................................................................28
</TABLE>
ii
<PAGE> 60
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 8.1 Duties and Responsibilities of Trustee.........................................................28
Section 8.2 Reliance on Documents, Opinions, Etc...........................................................29
Section 8.3 No Responsibility for Recitals, Etc............................................................30
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar May Own Notes...........................30
Section 8.5 Monies to Be Held in Trust.....................................................................30
Section 8.6 Compensation and Expenses of Trustee...........................................................30
Section 8.7 Officers'Certificate as Evidence...............................................................31
Section 8.8 Conflicting Interests of Trustee...............................................................31
Section 8.9 Eligibility of Trustee.........................................................................31
Section 8.10 Resignation or Removal of Trustee..............................................................31
Section 8.11 Acceptance by Successor Trustee................................................................32
Section 8.12 Succession by Merger, Etc......................................................................32
Section 8.13 Preferential Collection of Claims..............................................................33
Section 8.14 Trustee's Application for Instructions from the Company........................................33
ARTICLE IX CONCERNING THE NOTEHOLDERS........................................................................33
Section 9.1 Action by Noteholders..........................................................................33
Section 9.2 Proof of Execution by Noteholders..............................................................33
Section 9.3 Who Are Deemed Absolute Owners.................................................................33
Section 9.4 Company-Owned Notes Disregarded................................................................34
Section 9.5 Revocation of Consents; Future Holders Bound...................................................34
ARTICLE X NOTEHOLDERS'MEETINGS................................................................................34
Section 10.1 Purpose of Meetings............................................................................34
Section 10.2 Call of Meetings by Trustee....................................................................34
Section 10.3 Call of Meetings by Company or Noteholders.....................................................35
Section 10.4 Qualifications for Voting......................................................................35
Section 10.5 Regulations....................................................................................35
Section 10.6 Voting.........................................................................................35
Section 10.7 No Delay of Rights by Meeting..................................................................36
ARTICLE XI SUPPLEMENTAL INDENTURES...........................................................................36
Section 11.1 Supplemental Indentures Without Consent of Noteholders.........................................36
Section 11.2 Supplemental Indenture with Consent of Noteholders.............................................37
Section 11.3 Effect of Supplemental Indenture...............................................................37
Section 11.4 Notation on Notes..............................................................................38
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be Furnished to Trustee....................38
ARTICLE XII CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE.................................................38
Section 12.1 Company May Consolidate, Etc., on Certain Terms................................................38
Section 12.2 Successor Corporation to Be Substituted........................................................38
Section 12.3 Opinion of Counsel to Be Given Trustee.........................................................39
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE...........................................................39
Section 13.1 Discharge of Indenture.........................................................................39
Section 13.2 Deposited Monies to Be Held in Trust by Trustee................................................39
Section 13.3 Paying Agent to Repay Monies Held..............................................................39
Section 13.4 Return of Unclaimed Monies.....................................................................40
Section 13.5 Reinstatement..................................................................................40
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS...................................40
Section 14.1 Indenture and Notes Solely Corporate Obligations...............................................40
ARTICLE XV CONVERSION OF NOTES.............................................................................40
</TABLE>
iii
<PAGE> 61
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Section 15.1 Right to Convert...............................................................................40
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock on Conversion;
No Adjustment for Interest or Dividends........................................................41
Section 15.3 Cash Payments in Lieu of Fractional Shares.....................................................42
Section 15.4 Conversion Price...............................................................................42
Section 15.5 Reset of Conversion Price......................................................................42
Section 15.6 Adjustment of Conversion Price.................................................................43
Section 15.7 Effect of Reclassification, Consolidation, Merger or Sale......................................48
Section 15.8 Withdrawal of Conversion Rights................................................................49
Section 15.9 Taxes on Shares Issued.........................................................................50
Section 15.10 Reservation of Shares; Shares to Be Fully Paid; Compliance with Governmental
Requirements; Listing of Common Stock..........................................................50
Section 15.11 Responsibility of Trustee......................................................................50
Section 15.12 Notice to Holders Prior to Certain Actions.....................................................51
ARTICLE XVI MISCELLANEOUS PROVISIONS..........................................................................51
Section 16.1 Provisions Binding on Company's Successors.....................................................51
Section 16.2 Official Acts by Successor Corporation.........................................................52
Section 16.3 Addresses for Notices, Etc.....................................................................52
Section 16.4 Governing Law..................................................................................52
Section 16.5 Evidence of Compliance with Conditions Precedent; Certificates to Trustee......................52
Section 16.6 Legal Holidays.................................................................................52
Section 16.7 Trust Indenture Act............................................................................52
Section 16.8 No Security Interest Created...................................................................53
Section 16.9 Benefits of Indenture..........................................................................53
Section 16.10 Table of Contents, Headings, Etc...............................................................53
Section 16.11 Authenticating Agent...........................................................................53
Section 16.12 Execution in Counterparts......................................................................54
</TABLE>
iv
