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
January 6, 1998
Date of Report (Date of earliest event reported)
OMNICOM GROUP INC.
(Exact Name of Registrant as Specified in Its Charter)
NEW YORK
(State or Other Jurisdiction of Incorporation)
1-10551 13-1514814
(Commission File Number) (I.R.S. Employer Identification No.)
437 MADISON AVENUE
NEW YORK, NEW YORK 10022
(Address of Principal Executive Offices)
(212) 415-3600
(Registrant's Telephone Number, Including Area Code)
____________________________________________________
(Former Name or Former Address, if Changed Since Last Report
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Item 5. Other Events.
On January 6, 1998, Omnicom Group Inc. (the "Company") sold $230,000,000
aggregate principal amount of 2 1/4% Convertible Subordinated Debentures due
2007 (the "Debentures") within the United States only to "Qualified
Institutional Buyers" (as defined in Rule 144A under the Securities Act of 1933,
as amended (the "Securities Act")) in compliance with Rule 144A. Morgan Stanley
& Co. Incorporated acted as the placement agent in the offering of Debentures
(the "Offering"). The Debentures and the shares of the Company's common stock,
par value $0.50 per share (the "Common Stock"), into which the Debentures may be
converted were not registered under the Securities Act.
The Debentures are convertible into Common Stock of the Company at any time
after 90 days following the latest date of original issuance thereof through
maturity, unless previously redeemed or repaid, at a conversion rate of 20.068
shares per bond (initially representing a conversion price of $49.83), subject
to adjustment in certain events.
Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits.
1 Placement Agreement dated December 4, 1997 between the Company and
Morgan Stanley & Co. Incorporated
4.1 Indenture dated as of January 6, 1998 between the Company and The
Chase Manhattan Bank, as trustee
4.2 Form of Debentures (included in Exhibit 4.1)
4.3 Registration Rights Agreement dated as of January 6, 1998 between the
Company and Morgan Stanley & Co. Incorporated
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SIGNATURES
Pursuant to 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.
OMNICOM GROUP INC.
By: /s/ Barry J. Wagner
------------------------------------
Barry J. Wagner, Secretary
Dated: January 20, 1998
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PLACEMENT AGREEMENT
December 4, 1997
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
OMNICOM GROUP INC., a New York corporation (the "Issuer"), proposes to
issue and sell $200,000,000 aggregate principal amount of its 2 1/4% Convertible
Subordinated Debentures due 2013 (the "Firm Debentures") to be issued pursuant
to an Indenture (the "Indenture") to be dated as of January 6, 1998 between the
Issuer and The Chase Manhattan Bank, as Trustee (the "Trustee"). The Issuer also
proposes to issue and sell to you not more than an additional $30,000,000
principal amount of Debentures (the "Additional Debentures") if and to the
extent that you shall have determined to exercise the right to purchase such
Additional Debentures granted to you in Article II hereof. The Firm Debentures
and the Additional Debentures are hereinafter collectively referred to as the
"Debentures". The Debentures will be convertible on the terms and subject to the
conditions set forth in the Indenture and the Debentures into shares of Common
Stock, par value $0.50 per share (the "Common Stock").
On the basis of the representations and warranties contained herein,
and subject to the terms and conditions hereof, the Issuer agrees to sell, and
you hereby agree to purchase, the Firm Debentures at a purchase price of 98.2%
of the principal amount thereof plus accrued interest, if any, from January 6,
1998 to the date of payment and delivery (the "Purchase Price")on the date of
payment and delivery, as specified in Section 2 hereof (the "Closing Date").
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On the basis of the representations and warranties contained herein,
and subject to the terms and conditions hereof, the Issuer agrees to sell to
you, and you shall have a onetime right to purchase, up to $30,000,000 principal
amount of Additional Debentures at the Purchase Price. Additional Debentures may
be purchased as provided in Section 2 hereof solely for the purpose of covering
over-allotments made in connection with the offering of the Firm Debentures.
The sale of the Debentures to you will be made without registration of
the Debentures under the Securities Act of 1933, as amended (the "Securities
Act"), in reliance upon the exemption therefrom provided by Section 4(2) of the
Securities Act. You have advised the Issuer that you will make an offering of
the Debentures purchased by you hereunder in accordance with Section 5 hereof on
the terms set forth in the Offering Memorandum (as defined below), as soon as
practicable after the date hereof as in your judgment is advisable.
In connection with the sale of the Debentures, the Issuer has prepared
an Offering Memorandum, dated December 4, 1997 (the "Offering Memorandum") for
delivery to prospective purchasers of the Debentures. The Offering Memorandum
includes or incorporates certain information concerning the Issuer, the
Debentures and the Common Stock. The Offering Memorandum will be supplemented
with copies of each document or report filed by the Issuer after the date hereof
and prior to the termination of the distribution of the Debentures with the
Securities and Exchange Commission (the "Commission") pursuant to Sections 13(a)
and (c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Any references herein to the Offering Memorandum shall be
deemed to include all documents incorporated therein by reference and any
further document or report filed by the Issuer with the Commission under the
Exchange Act subsequent to the date hereof and prior to the termination of the
distribution of the Debentures.
1. Representations and Warranties. The Issuer represents and warrants
to you that:
(a) the Issuer has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of New
York, has the corporate power and authority to own its property and to
conduct its business as described in the Offering Memorandum and is
duly qualified to transact business and is in good standing in each
jurisdiction in which
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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 Issuer and its subsidiaries, taken as a whole;
(b) Each of BBDO Worldwide Inc., The DDB Needham Worldwide
Communications Group Inc., TBWA Chiat/Day Inc., Omnicom Finance Inc.,
BBDO Detroit Inc., DDB Needham Worldwide Partners Inc., and DDB Needham
Chicago Inc. 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 property
and to conduct business as described in the Offering Memorandum 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 Issuer and its subsidiaries,
taken as a whole;
(c) the authorized capital stock of the Issuer conforms as to
legal matters to the description thereof contained in the Offering
Memorandum;
(d) the shares of Common Stock outstanding on the date hereof
have been duly authorized and are validly issued, fully paid and
non-assessable;
(e) the shares of Common Stock initially issuable upon
conversion of the Debentures (the "Shares") have been duly authorized
and, when issued and delivered in accordance with the terms of the
Debentures, will be validly issued, fully paid and non-assessable, and
the issuance of such shares is not subject to any preemptive or similar
rights;
(f) the Debentures have been duly authorized and, when
executed and authenticated and delivered to and paid for by you in
accordance with the terms of this Agreement, will (i) be valid and
binding obligations of the Issuer enforceable in accordance with their
terms, except as (A) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (B) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
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applicability and (ii) be entitled to the benefits of the Indenture;
(g) Each of the Registration Rights Agreement dated January 6,
1998 between the Issuer and you (the "Registration Rights Agreement")
and the Indenture has been duly authorized and when executed and
delivered by the Issuer will be a valid and binding agreement of, the
Issuer, except as (i) the enforceability thereof may be limited by
bankruptcy, insolvency or similar laws affecting creditors' rights
generally and (ii) rights of acceleration and the availability of
equitable remedies may be limited by equitable principles of general
applicability;
(h) this Agreement has been duly authorized, executed and
delivered by the Issuer;
(i) the execution and delivery by the Issuer of, and the
performance by the Issuer of its obligations under, this Agreement, the
Indenture, the Registration Rights Agreement and the Debentures will
not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Issuer or any agreement or other
instrument binding upon the Issuer or any of its subsidiaries that is
material to the Issuer and its subsidiaries, taken as a whole, or any
judgment, order or decree of any governmental body, agency or court
having jurisdiction over the Issuer or any subsidiary, and no consent,
approval or authorization or order of, or qualification with, any
governmental body or agency is required for the performance by the
Issuer of its obligations under this Agreement, the Indenture, the
Registration Rights Agreement and the Debentures except such as may be
required (i) by the securities or Blue Sky laws of the various states
in connection with the offer and sale of the Debentures and the Shares,
(ii) under federal and state securities laws with respect to the
Issuer's obligations under the Registration Rights Agreement, or (iii)
by statutes, rules and regulations enacted subsequent to the Closing
Date or the related Option Closing Date (as defined in Section 2 below)
(as the case may be);
(j) there has not occurred any material adverse change or, to
the best of Issuer's knowledge, any development involving a prospective
material adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Issuer and
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its subsidiaries, taken as a whole, from that set forth in the Offering
Memorandum;
(k) there are no legal or governmental proceedings pending of
which the Issuer has notice or knowledge or, to the best of the
Issuer's knowledge, threatened, to which the Issuer or any of its
subsidiaries is a party or to which any of the properties of the Issuer
or any of its subsidiaries is subject that are required to be described
in the Offering Memorandum and are not so described or any statutes,
regulations, contracts or other documents that are required to be
described in the Offering Memorandum or to be filed as an exhibit to
the documents incorporated by reference in the Offering Memorandum that
are not described or filed as required;
(l) each of the Issuer and its subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits
of and from, and has made all declarations and filings with, all
federal, state, local and other governmental authorities, all
self-regulatory organizations and all courts and other tribunals, to
own, lease, license and use its properties and assets and to conduct
its business in the manner described in the Offering Memorandum, except
to the extent that the failure to obtain or file would not have a
material adverse effect on the Issuer and its subsidiaries, taken as a
whole;
(m) each document filed or to be filed under the Exchange Act
and incorporated by reference in the Offering Memorandum complied or
will comply when so filed in all material respects with the Exchange
Act and the rules and regulations of the Commission thereunder;
(n) the Offering Memorandum 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 (n) do not apply to statements
or omissions in the Offering Memorandum based upon information (the
"Furnished Information") concerning that which you furnished to the
Issuer in writing expressly for use therein or based on information
contained in Section 5 hereof;
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(o) the Issuer has not taken and will not take, directly or
indirectly, any action prohibited by Regulation M under the Exchange
Act;
(p) none of the Issuer, its affiliates or any person acting on
its or their behalf has engaged or will engage in any directed selling
efforts (as that term is defined in Regulation S under the Securities
Act) ("Regulation S") with respect to the Debentures, and the Issuer
and its affiliates and any person acting on its or their behalf will
comply with the offering restrictions requirements of Regulation S;
(q) neither the Issuer nor any affiliate (as defined in Rule
501(b) of Regulation D under the Securities Act) of the Issuer has
directly, or through any agent, (i) sold, offered for sale, solicited
offers to buy or otherwise negotiated in respect of, any security (as
defined in the Securities Act) which is or will be integrated with the
sale of the Debentures in a manner that would require the registration
of the Debentures under the Securities Act or (ii) engaged in any form
of general solicitation or general advertising in connection with the
offering of the Debentures;
(r) it is not necessary in connection with the offer, sale and
delivery of the Debentures in the manner contemplated by this Agreement
or in connection with the issuance of the Shares on conversion of the
Debentures to register the Debentures or the Shares under the
Securities Act or to qualify the Indenture under the Trust Indenture
Act of 1939;
(s) the Debentures satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act; and
(t) The Issuer is not and, after giving effect to the offering
and sale of the Debentures and the application of the proceeds thereof
as described in the Offering Memorandum, will not be an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended.
2. Delivery and Payment. Payment for the Firm Debentures shall be made
against delivery of the Firm Debentures at a closing to be held at the office of
Davis Polk & Wardwell, 450 Lexington Avenue, New York, New York, 10017 at 10:00
A.M., local time, on January 6, 1998, or at such other time on the same or such
other date, not later than January 13, 1998, as shall be designated in writing
by
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you. The time and date of such payment are hereinafter referred to as the
"Closing Date." Payment for the Firm Debentures shall be made to the Issuer in
immediately available funds.
Payment for any Additional Debentures shall be made against delivery of
Additional Debentures at the office of Davis Polk & Wardwell, 450 Lexington
Avenue, New York, New York, at 10:00 A.M., local time, on such date (which may
be the same as the Closing Date but shall in no event be earlier than the
Closing Date nor later than ten business days after the giving of the notice
hereinafter referred to) as shall be designated in a written notice from you to
the Issuer of your determination to purchase the Additional Debentures, or on
such other date, in any event not later than January 16, 1998, as shall be
designated in writing by you. The time and date of such payment are hereinafter
referred to as the "Option Closing Date". Payment for the Additional Debentures
shall be made to the Issuer in immediately available funds. The notice of the
determination to exercise the option to purchase the Additional Debentures and
of the Option Closing Date may be given at any time within 30 days after the
date of this Agreement.
Certificates for the Firm Debentures and Additional Debentures shall be
in global form and registered in such names and in such denominations as you
shall request in writing not later than two full business days prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Debentures and Additional Debentures shall be delivered to
you on the Closing Date or the Option Closing Date, as the case may be, with any
transfer taxes payable in connection with the transfer of the Debentures to you
duly paid, against payment of the Purchase Price therefor.
3. Conditions to Closing. Your obligation under this Agreement to
purchase the Debentures is subject to the accuracy of the representations and
warranties on the part of the Issuer herein, to the performance and observance
by the Issuer in all material respects of all covenants and agreements herein
contained on its part to be performed and observed and to the following
conditions:
(a) There shall not have occurred any downgrading, nor shall
any notice have been given of (A) any intended or potential downgrading
or (B) any review for a possible change that does not indicate the
direction of the possible change, in the rating
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accorded any of the Issuer'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.
(b) 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 Issuer
and its subsidiaries, taken as a whole, from that set forth in the
Offering Memorandum that, in your judgment, is material and adverse and
that makes it, in your judgment, impracticable to market the Debentures
on the terms and in the manner contemplated in the Offering Memorandum.
(c) You shall have received on the Closing Date a certificate
of the Issuer, dated the Closing Date and signed by an executive
officer of the Issuer, to the effect set forth in clause (a) above and
to the effect that the representations and warranties of the Issuer
contained in this Agreement are true and correct as of the Closing Date
and that the Issuer has performed all of its obligations to be
performed hereunder or satisfied on or prior to the Closing Date, it
being understood that the officer signing and delivering such
certificate may rely upon the best of his knowledge as to proceedings
threatened.
(d) You shall have received on the Closing Date an opinion of
Davis & Gilbert, counsel for the Issuer, dated the Closing Date, to the
effect set forth in Exhibit A.
(e) You shall have received on the Closing Date an opinion of
Davis Polk & Wardwell, your counsel, dated the Closing Date, to the
effect set forth in Exhibit B.
(f) You shall have received on the Closing Date a letter from
Davis & Gilbert, tax counsel to the Issuer, confirming the discussion
set forth in the Offering Memorandum under the caption "Certain Federal
Income Tax Considerations" is accurate in all material respects.
(g) You shall have received on the date of this Agreement a
letter dated such date and also on the Closing Date a letter dated the
Closing Date, in each case in form and substance satisfactory to you,
from
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Arthur Andersen 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 Offering Memorandum; provided that
the letter delivered on the Closing Date uses a cut-off date not
earlier than the date hereof.
Your obligation to purchase the Additional Debentures hereunder is
subject to the delivery to you on the Option Closing Date of such documents as
you may reasonably request with respect to the good standing of the Issuer, the
due authorization and issuance of the Additional Debentures and other matters
related to the issuance of the Additional Debentures.
4. Covenants of the Issuer. In further consideration of your agreements
contained in this Agreement, the Issuer covenants as follows:
(a) The Issuer will furnish to you in New York City, without
charge, prior to 5:00 p.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned
in paragraph (c) below, as many copies of the Offering Memorandum and
any supplements and amendments thereto as you may reasonably request.
(b) Before amending or supplementing the Offering Memorandum,
the Issuer will furnish you a copy of each such proposed amendment or
supplement and not use any such proposed amendment or supplement to
which you reasonably object.
(c) If, during such period after the first date of the
offering of the Debentures and prior to the completion of the sale
thereof, any event shall occur as a result of which it is necessary in
your judgment to amend or supplement the Offering Memorandum in order
to make the statements therein, in the light of the circumstances when
such Offering Memorandum is delivered to a purchaser, not misleading,
or if it is necessary to amend or supplement the Offering Memorandum to
comply with applicable law, the Issuer will forthwith prepare and
furnish to you, at its own expense, either amendments or supplements to
the Offering Memorandum so that the statements in the Offering
Memorandum as so amended or supplemented will
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not, in the light of the circumstances when the Offering Memorandum is
delivered to a purchaser, be misleading or so that the Offering
Memorandum, as so amended or supplemented, will comply with applicable
law.
(d) The Issuer will endeavor to qualify the Debentures and the
Shares for offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and maintain such
qualifications for as long as you shall reasonably request.
(e) The Issuer will, whether or not any sale of the Debentures
is consummated, pay all expenses incident to the performance of its
obligations under this Agreement, including: (i) the preparation of the
Offering Memorandum and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Debentures and Shares,
(iii) the fees and disbursements of the Issuer's counsel, its
accountants and of the Trustee and its counsel, (iv) the qualification
of the Debentures and the Shares under securities or Blue Sky laws in
accordance with the provisions of Section 4(d), including filing fees
and the fees and disbursements of your counsel in connection therewith
and in connection with the preparation of any Blue Sky or legal
investment memoranda, (v) any fees charged by rating agencies for the
rating of the Debentures, (vi) the printing and delivery to you in
quantities as hereinabove stated of copies of the Offering Memorandum
and any amendments or supplements thereto, (vii) the fees and expenses,
if any, incurred in connection with the admission of the Debentures and
Shares for trading in any appropriate market system and (viii) any
stamp or value added taxes payable in connection with the sale of the
Debentures to you.
(f) Without your prior written consent, the Issuer will not,
directly or indirectly, offer, sell, contract to sell or otherwise
dispose of any shares of its Preferred Stock or Common Stock or any
securities convertible into or exercisable or exchangeable for its
Preferred Stock or Common Stock or any rights to acquire Preferred
Stock or Common Stock for a period of 90 days after the date of this
Agreement, other than (i) the Debentures to be sold hereunder, (ii) any
shares of such Common Stock sold upon the conversion of the Debentures
or any other debentures outstanding on
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the date hereof, (iii) any shares of such Common Stock sold upon the
exercise of an option granted under the Issuer's existing stock option
or issued under the Issuer's restricted stock purchase plans, (iv) any
shares of Common Stock issued in connection with earn-out payments,(v)
shares of Common Stock issued but not freely tradeable prior to the end
of the 90 day period, and (vi) up to 1,200,000 shares of Common Stock
to be issued in connection with acquisitions.
(g) Not to solicit any offer to buy or offer or sell the
Debentures by means of any form of general solicitation or general
advertising (as those terms are used in Regulation D under the
Securities Act) or in any manner involving a public offering within the
meaning of Section 4(2) of the Securities Act.
(h) Neither the Issuer nor any person acting on behalf of the
Issuer will engage in any directed selling efforts with respect to the
Debentures within the meaning of Regulation S, and the Issuer and each
such person acting on behalf of the Issuer (other than you) has
complied and will comply with the offering restrictions requirement of
Regulation S.
(i) During the two year period following the Closing Date (or,
if later, the Option Closing Date) and during the two year period
following the sale of any Debenture by an affiliate of the Issuer, the
Issuer shall, if it is not then subject to Section 13 or 15(d) of the
Exchange Act make available, upon request, to any seller of the
Debentures or Shares the information concerning the Issuer specified in
Rule 144A(d)(4) under the Securities Act (so long as such requirement
is necessary in order to permit holders of the Debentures or Shares to
effect resales under Rule 144A).
(j) The Issuer will not resell any of the Debentures.
(k) The Issuer shall use its best efforts to permit the
Debentures to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of Securities
Dealers, Inc. relating to trading in the PORTAL Market.
5. Offering of Securities; Restrictions on Transfer. (a) You represent
and warrant that you are a qualified institutional buyer within the meaning of
Rule
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144A under the Securities Act. You agree with the Issuer that (i) you will not
solicit offers for, or offer to sell, the Debentures by any form of general
solicitation or general advertising (as those terms are used in Regulation D
under the Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act and (ii) you will solicit
offers for the Debentures only from, and will offer the Debentures only to, (A)
persons you reasonably believe to be qualified institutional buyers or (B)
persons to whom you reasonably believe offers and sales of the Debentures may be
made without registration of the Debentures under the Securities Act in reliance
upon Regulation S thereunder. You also agree that you will offer the Debentures
only to, and will solicit offers for the Debentures only from, persons that in
purchasing such Debentures will be deemed to have represented and agreed as
provided in the Offering Memorandum in the second paragraph under the caption
"Transfer Restrictions" (to the extent such representations are applicable to
the purchaser concerned).
(b) The Debentures have not been registered under the Securities Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Securities Act or pursuant to another exemption from the registration
requirements of the Securities Act. You represent that you have offered the
Debentures and will offer and sell the Debentures (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date (or Option Closing Date, if
later), only in accordance with Rule 903 of Regulation S or as otherwise
permitted pursuant to paragraph (a) above. Accordingly, neither you, your
affiliates nor any persons acting on your or their behalf have engaged or will
engage in any directed selling efforts with respect to the Debentures, and you
and they have complied and will comply with the offering restrictions
requirement of Regulation S.
(c) You represent and, during the period of six months from the date of
the Offering Memorandum, agree that (1) you have not offered or sold and will
not offer or sell any Debentures to persons in the United Kingdom except to
persons whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995
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("Regulations"); (2) you have complied and will comply with all applicable
provisions of the Financial Services Act 1986 and the Regulations with respect
to anything done by you in relation to the Debentures in, from or otherwise
involving the United Kingdom; and (3) you have only issued or passed on and will
only issue or pass on to any person in the United Kingdom any document received
by you in connection with the issue of the Debentures if that person is of a
kind described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(d) You understand that the Debentures have not been and will
not be registered under the Securities and Exchange Law of Japan, and represent
that you have not offered or sold, and agree that you will not offer or sell,
any Debentures, directly or indirectly in Japan or to or from any resident of
Japan except (i) pursuant to an exemption from the registration requirements of
the Securities and Exchange Law of Japan and (ii) in compliance with any other
applicable requirements of Japanese law.
(e) You agree that, at or prior to confirmation of sale of
Debentures (other than a sale pursuant to subclauses (A) or (C) of clause "ii"
of paragraph (a) above), you will have sent to each distributor, dealer or
person receiving a selling concession, fee or other remuneration that purchases
Debentures from you during the restricted period a confirmation or notice to
substantially the following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered and sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and the final closing date, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act. Terms used above have the meaning given to them by
Regulation S."
Terms used in this Section 5 have the meanings given to them by Regulation S.
6. Indemnification and Contribution. (a) The Issuer agrees to indemnify
and hold harmless you and each
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person, if any, who controls you 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 or liabilities (including, without limitation, any legal
or other expenses reasonably incurred by you or any such controlling person 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
either the Offering Memorandum (as amended or supplemented if the Issuer shall
have furnished any amendments or supplements thereto) used during the period set
forth in Section 4(c) above, or caused by any omission or alleged omission to
state therein a material fact necessary to make the statements therein, in 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 alleged omission based upon
the Furnished Information or information contained in Section 5 hereof.
(b) You agree to indemnify and hold harmless the Issuer, its directors,
its officers and each person, if any, who controls the Issuer 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 Issuer to you, but only with
reference to the Furnished Information.
(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 either paragraph (a) or (b) above, 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
14
<PAGE>
inappropriate due to actual or potential differing interests between them. It is
understood that the indemnifying party shall not, 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 you in the case of parties indemnified pursuant to paragraph (a)
above and by the Issuer in the case of parties indemnified pursuant to paragraph
(b) above. 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 third sentence 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; provided nothing herein shall limit the right of a person against
which indemnity is sought to contest in good faith such person's obligation to
so indemnify. 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) If the indemnification provided for in paragraph (a) or
(b) of this Section 6 is unavailable to an indemnified party or insufficient in
respect of any losses, claims, damages or liabilities referred to therein in
connection with the offering of the Debentures, 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
15
<PAGE>
reflect the relative benefits received by the Issuer and you from the offering
of the Debentures or (ii) if the allocation provided by clause (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 (i) above but also the relative
fault of the Issuer on the one hand and you on the other hand in connection with
the matters that resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by the Issuer on the one hand and you on the other hand in connection
with the offering of the Debentures shall be deemed to be in the same respective
proportions as the net proceeds from the offering of the Debentures (before
deducting expenses) received by the Issuer and the total discounts and
commissions received by you in respect thereof, in each case as set forth in the
Offering Memorandum, bear to the aggregate offering price of the Debentures. The
relative fault of the Issuer on the one hand and of you on the other hand shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or by you, the information
contained in Section 5 hereof and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
(e) The Issuer and you agree that it would not be just or equitable if
contribution pursuant to this Section 6 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 paragraph (d) above. The amount paid or payable by
an indemnified party as a result of the losses, claims, damages and liabilities
referred to in paragraph (d) above 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 investigation or defending any such
action or claim. Notwithstanding the provisions of this Section 6, you shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Debentures resold by you in the initial placement of such
Debentures were offered to investors exceeds the amount of any damages that you
have 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 for Debentures from any person who
16
<PAGE>
was not guilty of such fraudulent misrepresentation. The remedies provided for
in this Section 6 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 agreements contained in this Section 6
and the representations and warranties of the Issuer contained in this Agreement
shall remain operative and in full force and effect regardless of (i) any
investigation made by you or on your behalf or any person controlling you or by
or on behalf of the Issuer, its officers or directors or any other person
controlling the Issuer and (ii) acceptance of and payment for any of the
Debentures. The indemnity and contribution agreements contained in this Section
6 shall also remain operative in full force and effect regardless of any
termination of this Agreement.
7. Termination. This Agreement shall be subject to termination in your
absolute discretion by notice given to the Issuer, 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., the Chicago Board of Options
Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade, (ii)
trading of any securities of the Issuer 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 (a)(i) through (iv), such
event singly or together with any other such event makes it, in your judgment,
impracticable to market the Debentures on the terms and in the manner
contemplated in the Offering Memorandum.
If this Agreement shall be terminated by you because of any failure or
refusal on the part of the Issuer to comply with the terms or to fulfill any of
the conditions of this Agreement, or if for any reason (other than owing to a
default by you of your obligations hereunder or to your exercise of your right
to terminate this Agreement pursuant to the preceding paragraph) the Issuer
shall be unable to
17
<PAGE>
perform its obligations under this Agreement, the Issuer will reimburse you for
all out-of-pocket expenses (including the fees and disbursements of your
counsel) reasonably incurred by you in connection with the proposed offering of
the Debentures.
8. Miscellaneous. 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.
This Agreement shall be governed by and construed in accordance with
the internal laws of the State of New York.
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to you shall be directed to you at the
address shown above; notices to the Issuer shall be directed to it at 437
Madison Avenue, New York, New York 10022; Attention: Chief Financial Officer,
telephone no. (212) 415-3631, telecopy no. (212) 415-3536.
This Agreement shall inure to the benefit of and be binding upon you
and the Issuer and your and its respective successors. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any
person, firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Section 6 and their heirs and legal representatives, any legal or equitable
right, remedy or claim under or in respect of this Agreement.
The headings of the sections of this Agreement have been inserted for
convenience of reference only and shall not be deemed a part this Agreement.
18
<PAGE>
Please confirm your agreement by having an authorized officer sign a
copy of this Placement Agreement in the space set forth below.
Very truly yours,
OMNICOM GROUP INC.
By: /s/ Dennis E. Hewitt
---------------------------------
Title: Treasurer
Accepted:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Kevin Cox
-----------------------------
Title: Principal
<PAGE>
EXHIBIT A
[OPINION OF DAVIS & GILBERT]
January 6, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Re: Omnicom Group Inc.
Ladies and Gentlemen:
We have acted as counsel for Omnicom Group Inc. (the "Company") in
connection with your purchase of $200,000,000 aggregate principal amount of 2
1/4% Convertible Subordinated Debentures Due 2013 (the "Debentures") pursuant to
the Placement Agreement dated December 4, 1997 (the "Agreement") between the
Company and you. Except as otherwise indicated, the terms used in this letter
have the meanings ascribed to them in the Agreement.
In rendering the opinions expressed below, we have examined originals
or copies, certified or otherwise identified to our satisfaction, of such
documents, corporate records, certificates and letters of public officials, such
other instruments and such legal matters as we have deemed necessary as the
basis for the opinions hereinafter expressed, including but not limited to (i)
the Company's Restated Certificate of Incorporation and Bylaws, each as amended,
and minutes of the corporate proceedings of the Company relating thereto, (ii)
the Agreement, (iii) the Indenture dated January 6, 1998 (the "Indenture")
between the Company and The Chase Manhattan Bank, as Trustee, pursuant to which
the Debentures are being issued, (iv) the Registration Rights Agreement dated
January 6, 1998 between the Company and you (the "Registration Rights
Agreement"; together with the Agreement, the Indenture and the Debentures,
collectively the "Agreements"), (v) the Offering
<PAGE>
Morgan Stanley & Co. 2 January 6, 1998
Incorporated
Memorandum and (vi) the forms of the Debentures and Shares.
For the purposes hereof, we have assumed, with your permission and
without independent verification of any kind; (a) that the signatures of persons
(other than the Company) signing all documents in connection with which this
opinion is rendered are genuine and authorized; (b) the legal capacity of all
natural persons; (c) that all documents submitted to us as originals or
duplicate originals are authentic; and (d) that all documents submitted to us as
copies, whether certified or not, conform to authentic original documents. As to
questions of fact relevant to this opinion, we have assumed the accuracy of the
representations and warranties of the Company in the applicable Agreements and
have relied upon certificates and oral or written statements and other
information of public officials, officers and representatives of the Company.
In rendering the opinions expressed below, we have assumed, with your
permission and without any independent investigation or verification of any
kind, that: (i) each party to the Agreements other than the Company
(individually, the "Other Party" and collectively, the "Other Parties") has been
duly incorporated and is validly existing and in good standing under the laws of
its jurisdiction of incorporation and of each other jurisdiction in which the
conduct of its business or the ownership of its property makes such
qualification necessary; (ii) each of the Other Parties has full power and
authority to execute, deliver and perform the Agreements to which it is a party;
(iii) the execution, delivery and performance of the Agreements by each of the
Other Parties has been duly authorized by all requisite corporate action on the
part of each Other Party; (iv) the Agreements have been duly executed and
delivered by each of the Other Parties; and (v) the execution, delivery and
performance of the Agreements by each of the Other Parties does not and will not
violate the charter, by-laws or other organizational documents of any of the
Other Parties. We have further assumed, with your permission and without any
independent investigation or verification of any kind, that the Agreements
constitute the valid and binding obligations of each party thereto other than
the Company.
<PAGE>
Morgan Stanley & Co. 3 January 6, 1998
Incorporated
The opinion expressed in paragraph numbered 7 below, is limited solely
to those facts and laws in existence on the date hereof, and in giving such
opinion, we have relied upon a certificate of an officer of the Company which
specifically identifies, and states that we have received copies of, each
indenture, mortgage, deed of trust, credit agreement, loan agreement and any
other similar material agreement, contract or instrument to which the Company,
or any of the companies set forth in paragraph 2 below, as the case may be, is a
party or by which it or any of its property or assets is bound or to which it
may be subject. In giving the opinion set forth in paragraph numbered 8 below,
we have relied upon a certificate of an officer of the Company describing
actions, suits and proceedings currently pending or threatened against the
Company, that if adversely determined, are reasonably likely to materially and
adversely affect the operations, business, property, assets, condition
(financial or otherwise) or (to the best knowledge of the Company) prospects of
the Company. Copies of the certificates referred to in this paragraph are
attached at the end of this opinion. Furthermore, in giving the opinions
expressed in paragraph numbered 7 below, we express no opinion as to state
securities or blue sky laws.
Based on the foregoing, and such examination of law as we have deemed
necessary, we are of the opinion that:
1. The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of New
York and is duly qualified to transact business as a foreign
corporation 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 a whole.
2. Each of BBDO Worldwide Inc., The DDB Needham Worldwide
Communications Group Inc., TBWA Chiat/Day Inc., Omnicom Finance Inc.,
BBDO Detroit Inc., DDB Needham Worldwide Partners Inc., and DDB Needham
Chicago Inc. has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation and is duly qualified to transact business and is in good
<PAGE>
Morgan Stanley & Co. 4 January 6, 1998
Incorporated
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 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.
3. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company.
4. The Debentures have been duly authorized and, when executed
and authenticated in accordance with the provisions of the Indenture
and delivered to and paid for by you in accordance with the terms of
the Agreement, will be valid and binding obligations of the Company and
will be entitled to the benefits of the Indenture.
5. The shares of Common Stock initially issuable on conversion
of the Debentures have been duly authorized and reserved for issuance
upon such conversion and, when issued upon conversion in accordance
with the terms of the Indenture, will have been validly issued, fully
paid and non-assessable, and the issuance of such shares is not subject
to any preemptive or similar rights.
6. The Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, except as rights to indemnity and contribution thereunder may
be limited under applicable law.
7. The execution and delivery by the Company of, and the
performance by the Company of its obligations under, the Agreement, the
Debentures, the Indenture and the Registration Rights Agreement, will
not contravene any provisions of applicable law or the certificate of
incorporation or the bylaws of the Company or to our knowledge after
inquiry, any material agreement or other instrument binding upon the
Company, and no consent, approval or authorization of any governmental
body or agency is required for the performance by the Company of its
obligations under the Agreement, the
<PAGE>
Morgan Stanley & Co. 5 January 6, 1998
Incorporated
Debentures, the Indenture and the Registration Rights Agreement.
8. After due inquiry of responsible officers of the Company,
we do not know of any legal or governmental proceeding pending or
threatened to which the Company or any of its subsidiaries is a party
that, if determined adversely to the Company or its subsidiaries, would
have a material adverse effect on the Company and its subsidiaries
taken as a whole, or in any manner questions the validity of the
Agreement, the Indenture, the Debentures or the Registration Rights
Agreement.
9. Based upon the representations, warranties and agreements
of the Company in Sections 1(p) and (q) of the Agreement and of the
Initial Purchaser (as defined in the Offering Memorandum) in Section 5
of the Agreement and on the representations, warranties and agreements
contained in the Section "Transfer Restrictions" of the Offering
Memorandum, it is not necessary in connection with the offer, sale and
delivery of the Debentures to the Initial Purchaser under the Agreement
or in connection with the initial resale of such Debentures by the
Initial Purchaser in accordance with Section 5 of the Agreement to
register the Debentures or the Shares (other than as required by the
Registration Rights Agreement) under the Securities Act of 1933, as
amended, or to qualify the Indenture under the Trust Indenture Act of
1939, as amended, it being understood that no opinion is expressed as
to any subsequent resale of any Debenture or Share.
10. The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
11. The statements in the Offering Memorandum under the
captions "Description of Debentures," "Description of Capital Stock,"
"Plan of Distribution" and "Transfer Restrictions," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein.
<PAGE>
Morgan Stanley & Co. 6 January 6, 1998
Incorporated
12. Each document incorporated by reference in the Offering
Memorandum (except for financial statements and schedules and other
statistical and financial data included therein as to which we express
no opinion), complied as to form when filed with the Commission in all
material respects with the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission thereunder.
Our opinions are subject to the qualifications that:
A. The enforceability of the Agreements is subject to the effect of any
applicable bankruptcy, insolvency, moratorium, reorganization, marshaling or
other similar law or rule of law affecting creditor's rights generally
(including such as may deny giving effect to waivers of debtors' or guarantors'
rights), and to the discretionary nature of equitable remedies.
B. The enforcement of any rights under any of the Agreements are in all
cases subject to each party's implied duty of good faith and to general
principles of equity (regardless of whether enforcement is considered in a
proceeding at law or in equity). Consequently, no opinion is given herein as to
(i) the availability of the right to accelerate any obligation and certain
remedies provided for in the Agreements in the event of a nonmaterial default or
(ii) the enforceability of any provision of the Agreements relating to
cumulation of remedies or waiving the remedy of specific performance.
C. We express no opinion as to the enforceability of any contractual
provision in the Agreements relating to indemnification, or waiver of jury
trial, process or other procedural right, to the extent enforcement thereof is
contrary to federal or state securities laws and the public policy underlying
such laws.
D. We express no opinion as to the enforceability of any right or
obligation to the extent that the same has been varied by course of dealing or
performance.
We have represented the Company in the preparation of the Offering
Memorandum (but not the documents included
<PAGE>
Morgan Stanley & Co. 7 January 6, 1998
Incorporated
therein by reference) and in connection therewith participated in conferences
with your representatives, your counsel, and representatives of the Company, at
which the contents of the Offering Memorandum (including documents included
therein by reference) were reviewed and discussed. We have not independently
verified the accuracy, completeness or fairness of the statements made or
included in the Offering Memorandum (or the documents incorporated therein by
reference) except with respect to matters referred to in paragraph 11 above.
On the basis of the information which was developed in the course of
our participation referred to above, considered in the light of our
understanding of the applicable United States law and the experience we have
gained through our practice thereunder, we have no reason to believe that the
Offering Memorandum (except for financial statements, and other financial and
statistical information included or incorporated by reference therein, as to
which we do not express any opinion), as of its date contained or on the date
hereof contains any untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
The opinions set forth in this letter relate only to the federal laws
of the United States of America, the laws of the State of New York and the
General Corporation Law of the State of Delaware.
This letter is furnished by us as counsel to the Company to you under
the Agreement and is solely for your benefit and, other than the Trustee under
the Indenture who may rely upon this opinion as if it were addressed to it, may
not be relied upon by any other person, firm or entity whatsoever for any
purpose.
Very truly yours,
<PAGE>
EXHIBIT B
[OPINION OF DAVIS POLK & WARDWELL]
January 6, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Ladies and Gentlemen:
We have acted as counsel for you in connection with your purchase
pursuant to the Placement Agreement dated December 4, 1997 (the "Agreement"),
with Omnicom Group Inc. (the "Company") of $200,000,000 aggregate principal
amount of 2 1/4% Convertible Subordinated Debentures Due 2013 (the "Debentures")
issued pursuant to the Indenture dated as of January 6, 1998 (the "Indenture")
between the Company and The Chase Manhattan Bank, as Trustee. Except as
otherwise indicated, the terms used in this letter have the meanings ascribed to
them in the Agreement.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments as we have deemed necessary for the
purposes of rendering this opinion.
We have participated in the preparation of the Company's Offering
Memorandum dated December 4, 1997 (other than the documents incorporated therein
by reference (the "Incorporated Documents")) relating to the Debentures.
Although we did not participate in the preparation of the Incorporated
Documents, we have reviewed such documents. The Offering Memorandum dated
December 4, 1997 (including the Incorporated Documents) is hereinafter called
the "Offering Memorandum."
On the basis of the foregoing, we are of the opinion that:
<PAGE>
Morgan Stanley & Co. 2 January 6, 1998
Incorporated
1. Each of the Indenture and the Registration Rights Agreement
has been duly authorized, executed and &delivered by the Company and is
a valid and binding agreement of the Company.
2. The Debentures have been duly authorized, and, when
executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by you in accordance with the
terms of the Agreement, will be valid and binding obligations of the
Company and will be entitled to the benefits of the Indenture.
3. The shares of Common Stock initially issuable upon
conversion of the Debentures have been duly authorized and reserved for
issuance upon such conversion and, when issued upon conversion and
delivered in accordance with the terms of the Indenture, will be
validly issued, fully paid and non-assessable, and the issuance of the
Shares is not subject to any preemptive or similar rights.
4. The Agreement has been duly authorized, executed and
delivered by the Company and is a valid and binding agreement of the
Company, except as rights to indemnity and contribution thereunder may
be limited under applicable law.
5. Based upon the representations, warranties and agreements
of the Company in Sections 1(p) and (q) of the Agreement and of the
Initial Purchaser (as defined in the Offering Memorandum) in Section 5
of the Agreement and on the representations and agreements contained in
the section "Transfer Restrictions" of the Offering Memorandum, it is
not necessary in connection with the offer, sale and delivery of the
Debentures to the Initial Purchaser under the Agreement or in
connection with the initial resale of such Debentures by the Initial
Purchaser in accordance with Section 5 of the Agreement to register the
Debentures or the Shares under the Securities Act of 1933, as amended,
or to qualify the Indenture under the Trust Indenture Act of 1939, as
amended, it being understood that no opinion is expressed as to any
subsequent resale of any Debenture or Share.
We have considered the matters required to be included in the Offering
Memorandum and the information contained therein. We are of the opinion that the
<PAGE>
Morgan Stanley & Co. 3 January 6, 1998
Incorporated
statements in the Offering Memorandum under "Description of Debentures",
"Description of Capital Stock", "Plan of Distribution" and "Transfer
Restrictions", insofar as such statements constitute a summary of the legal
matters and documents referred to therein, fairly present the information called
for with respect to such legal matters and documents.
We have not ourselves checked the accuracy or completeness of, or
otherwise verified, the information furnished with respect to other matters in
the Offering Memorandum. We have generally reviewed and discussed with certain
officers and employees of the Company, counsel for the Company, independent
public accountants for the Company and your representatives the information
furnished, whether or not subject to our check and verification. On the basis of
such consideration, review and discussions, but without independent check or
verification, except as stated, we believe that (except for financial statements
and other financial and statistical information, as to which we are not called
upon to express a belief) the Offering Memorandum as of its date did not and on
the date hereof does not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.
We have examined the opinion dated today of Davis & Gilbert, counsel
for the Company, delivered to you pursuant to Section 3(d) of the Agreement and
it is substantially responsive to the requirements of the Agreement and
satisfactory as to scope. We have examined a letter from Davis & Gilbert, tax
counsel to the Company, delivered to you pursuant to Section 3(f) of the
Agreement and it is substantially responsive to the requirements therefor. We
have also examined the letters dated December 4, 1997 and today, addressed to
you of Arthur Andersen LLP, independent public accountants, and delivered to you
pursuant to Section 3(g) of the Agreement relating to the financial statements
and certain financial information contained in the Offering Memorandum. We
participated in discussions with representatives of Arthur Andersen LLP and your
representatives relating to the forms of such letters and we believe that they
are substantially in the respective forms agreed to.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the
<PAGE>
Morgan Stanley & Co. 4 January 6, 1998
Incorporated
State of New York and the federal laws of the United States of America.
This opinion is rendered solely to you pursuant to the Agreement. This
opinion may not be relied upon by or furnished to any other person without our
prior written consent.
Very truly yours,
================================================================================
OMNICOM GROUP INC.
TO
THE CHASE MANHATTAN BANK
Trustee
------------
INDENTURE
Dated as of January 6, 1998
------------
2 1/4% Convertible Subordinated Debentures due 2013
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.1 Definitions................................................. 2
Affiliate........................................ 2
Applicable Price................................. 2
Board of Directors............................... 2
Business Day..................................... 2
Closing Price.................................... 3
Commission....................................... 3
Common Stock..................................... 3
Company.......................................... 3
Company Notice................................... 3
Conversion Price................................. 3
Custodian........................................ 3
Debenture or Debentures.......................... 3
Debentureholder or holder........................ 3
default.......................................... 4
Defaulted Interest............................... 4
Depositary....................................... 4
Event of Default................................. 4
Fundamental Change............................... 4
Fundamental Change Repayment Date................ 4
Fundamental Change Repayment Notice.............. 4
Fundamental Change Repayment Price............... 4
Holder Repayment Date............................ 4
Holder Repayment Notice.......................... 5
Holder Repayment Price........................... 5
Indenture........................................ 5
Initial Purchaser................................ 5
Officers' Certificate............................ 5
Opinion of Counsel............................... 5
outstanding...................................... 5
Person........................................... 6
PORTAL Market.................................... 6
i
<PAGE>
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Predecessor Debenture............................ 6
QIB.............................................. 6
Reference Market Price........................... 6
Register......................................... 6
Registration Rights Agreement.................... 7
Regulation S..................................... 7
Responsible Officer.............................. 7
Restricted Securities............................ 7
Rule 144A........................................ 7
Securities Act................................... 7
Senior Indebtedness.............................. 7
Subsidiary....................................... 8
Trading Day...................................... 8
Trust Indenture Act.............................. 8
Trustee.......................................... 8
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation Amount and Issue of Debentures.................. 9
Section 2.2 Form of Debentures.......................................... 9
Section 2.3 Date and Denomination of Debentures; Payments of Interest... 10
Section 2.4 Execution of Debentures..................................... 11
Section 2.5 Exchange and Registration of Transfer of Debentures:
Restrictions on Transfer; Depositary........................ 12
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures............. 20
Section 2.7 Temporary Debentures........................................ 21
Section 2.8 Cancellation of Debentures Paid, Etc........................ 21
ARTICLE III
REDEMPTION AND REPAYMENT OF DEBENTURES
Section 3.1 Redemption Prices........................................... 22
Section 3.2 Notice of Redemption; Selection of Debentures............... 22
Section 3.3 Payment of Debentures Called for Redemption................. 24
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Section 3.4 Conversion Arrangement on Call for Redemption............... 25
Section 3.5 Repayment at Option of Holders.............................. 26
Section 3.6 Repayment at Option of Holders Upon a Fundamental Change.... 28
Section 3.7 Effect of Holder Repayment Notice or Fundamental Change
Repayment Notice and Withdrawal of Such Notices............. 31
Section 3.8 Covenant to Comply with Securities Laws upon Purchase of
` Debentures.................................................. 32
Section 3.9 No Sinking Fund............................................. 33
ARTICLE IV
SUBORDINATION OF DEBENTURES
Section 4.1 Agreement of Subordination.................................. 33
Section 4.2 Payments to Debentureholders................................ 33
Section 4.3 Subrogation of Debentures................................... 35
Section 4.4 Authorization by Debentureholders........................... 36
Section 4.5 Notice to Trustee........................................... 36
Section 4.6 Trustee's Relation to Senior Indebtedness................... 37
Section 4.7 No Impairment of Subordination.............................. 37
Section 4.8 Certain Conversions Deemed Payment.......................... 37
Section 4.9 Senior Indebtedness Entitled to Rely........................ 38
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest.................. 38
Section 5.2 Offices for Notices and Payments............................ 38
Section 5.3 Appointments to Fill Vacancies in Trustee's Office.......... 39
Section 5.4 Provisions as to Paying Agent............................... 39
Section 5.5 Corporate Existence......................................... 40
Section 5.6 Rule 144A Information Requirement........................... 40
Section 5.7 Stay, Extension and Usury Laws.............................. 41
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
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THE COMPANY AND THE TRUSTEE
Section 6.1 Debentureholders' Lists..................................... 41
Section 6.2 Preservation and Disclosure of Lists........................ 41
Section 6.3 Reports by Trustee.......................................... 42
Section 6.4 Reports by Company.......................................... 42
ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
IN THE EVENT OF DEFAULT
Section 7.1 Events of Default........................................... 43
Section 7.2 Payment of Debentures on Default; Suit Therefor............. 45
Section 7.3 Application of Monies Collected by Trustee.................. 47
Section 7.4 Proceedings by Debentureholder.............................. 47
Section 7.5 Proceedings by Trustee...................................... 48
Section 7.6 Remedies Cumulative and Continuing.......................... 48
Section 7.7 Direction of Proceedings and Waiver of Defaults by
Majority of Debentureholders................................ 49
Section 7.8 Notice of Defaults.......................................... 49
Section 7.9 Undertaking to Pay Costs.................................... 50
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee...................... 50
Section 8.2 Reliance on Documents, Opinions, Etc........................ 52
Section 8.3 No Responsibility for Recitals, Etc......................... 53
Section 8.4 Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures.......................................... 53
Section 8.5 Monies to Be Held in Trust.................................. 53
Section 8.6 Compensation and Expenses of Trustee........................ 53
Section 8.7 Officers' Certificate and Opinion of Counsel as Evidence... 54
Section 8.8 Conflicting Interests of Trustee............................ 54
Section 8.9 Eligibility of Trustee...................................... 54
Section 8.10 Resignation or Removal of Trustee........................... 55
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Section 8.11 Acceptance by Successor Trustee............................. 56
Section 8.12 Succession by Merger, Etc................................... 57
Section 8.13 Limitation on Rights of Trustee as Creditor................. 57
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
Section 9.1 Action by Debentureholders.................................. 57
Section 9.2 Proof of Execution by Debentureholders...................... 58
Section 9.3 Who Are Deemed Absolute Owners.............................. 58
Section 9.4 Company-Owned Debentures Disregarded........................ 58
Section 9.5 Revocation of Consents; Future Holders Bound................ 59
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
Section 10.1 Purposes of Meetings........................................ 59
Section 10.2 Call of Meetings by Trustee................................. 60
Section 10.3 Call of Meetings by Company or Debentureholders............. 60
Section 10.4 Qualifications for Voting................................... 60
Section 10.5 Regulations................................................. 61
Section 10.6 Voting...................................................... 61
Section 10.7 No Delay of Rights by Meeting............................... 62
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of Debentureholders. 62
Section 11.2 Supplemental Indentures with Consent of Debentureholders.... 63
Section 11.3 Effect of Supplemental Indenture............................ 64
Section 11.4 Notation on Debentures...................................... 65
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee........................................... 65
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ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate Etc. on Certain Terms............... 65
Section 12.2 Successor Corporation to Be Substituted..................... 66
Section 12.3 Opinion of Counsel to Be Given Trustee...................... 66
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture...................................... 67
Section 13.2 Deposited Monies to Be Held in Trust by Trustee............. 67
Section 13.3 Paying Agent to Repay Monies Held........................... 68
Section 13.4 Return of Unclaimed Monies.................................. 68
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Debentures Solely Corporate Obligations....... 68
ARTICLE XV
CONVERSION OF DEBENTURES
Section 15.1 Right to Convert............................................ 69
Section 15.2 Exercise of Conversion Privilege; Issuance of Common Stock
on Conversion; No Adjustment for Interest or Dividends...... 69
Section 15.3 Payments in Lieu of Fractional Shares....................... 71
Section 15.4 Conversion Price............................................ 72
Section 15.5 Adjustment of Conversion Price.............................. 72
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale... 79
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Section 15.7 Taxes on Shares Issued...................................... 80
Section 15.8 Reservation of Shares; Shares to Be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Stock..... 80
Section 15.9 Responsibility of Trustee................................... 81
Section 15.10 Notice to Holders Prior to Certain Actions.................. 81
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors.................. 82
Section 16.2 Official Acts by Successor Corporation...................... 82
Section 16.3 Addresses for Notices, Etc.................................. 83
Section 16.4 Governing Law............................................... 83
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee..................................... 83
Section 16.6 Statements Required in Certificate or Opinion............... 83
Section 16.7 Legal Holidays.............................................. 84
Section 16.8 No Security Interest Created................................ 84
Section 16.9 Benefits of Indenture....................................... 84
Section 16.10 Table of Contents, Headings, Etc............................ 84
Section 16.11 Authenticating Agent........................................ 84
Section 16.12 Execution in Counterparts................................... 85
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INDENTURE dated as of January 6, 1998, between Omnicom Group Inc., a
New York corporation (hereinafter sometimes called the "Company", as more fully
set forth in Section 1.1), and The Chase Manhattan Bank, duly organized and
existing under the laws of the State of New York, as trustee hereunder
(hereinafter sometimes called the "Trustee", as more fully set forth in Section
1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 2 1/4% Convertible Subordinated Debentures due 2013
(hereinafter sometimes called the "Debentures"), in an aggregate principal
amount not to exceed $230,000,000 and, to provide the terms and conditions upon
which the Debentures are to be authenticated, issued and delivered, the Company
has duly authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of option to elect repayment on
January 6, 2004, a form of option to elect repayment upon a Fundamental Change,
a form of conversion notice and a certificate of transfer to be borne by the
Debentures are to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, 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 Debentures have in
all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures 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 Debentures (except as otherwise provided below), as follows:
<PAGE>
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.
Applicable Price: The term "Applicable Price" means (i) in the event of
a Fundamental Change in which the holders of the Common Stock receive cash, the
amount of cash received by the holder of one share of Common Stock and (ii) in
the event of any other Fundamental Change, the arithmetic average of the Closing
Price for the Common Stock during the ten Trading Days immediately prior to the
record date for the determination of the holders of Common Stock entitled to
receive cash, securities, property or other assets in connection with such
Fundamental Change, or, if there is no such record date, the date upon which the
holders of the Common Stock shall have the right to receive cash, securities,
property or other assets in connection with the Fundamental Change.
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" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which banking institutions
in The City of New York are authorized or obligated by law or executive order to
close or be closed.
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Closing Price: The term "Closing Price" shall have the meaning
specified in Section 15.5(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 15.6, however, shares issuable on
conversion of Debentures 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 to 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 Omnicom Group Inc., a New York
corporation, and subject to the provisions of Article XII, shall include its
successors and assigns.
Company Notice: The term "Company Notice" shall have the meaning
specified in Section 3.6(b) .
Conversion Price: The term "Conversion Price" shall have the meaning
specified in Section 15.4.
Custodian: The term "Custodian" shall mean The Chase Manhattan Bank, as
custodian with respect to the Debentures in global form, or any successor entity
thereto.
Debenture or Debentures: The terms "Debenture" or "Debentures" shall
mean any Debenture or Debentures, as the case may be, authenticated and
delivered under this Indenture, including the 144A Global Debenture and the
Regulation S Global Debenture.
Debentureholder or holder: The terms "Debentureholder" or "holder" as
applied to any Debenture, or other similar terms (but excluding the term
"beneficial holder"), shall mean any Person in whose name at the time a
particular Debenture is registered on the Debenture registrar's books.
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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" has the meaning
ascribed to it in Section 2.3.
Depositary: The term "Depositary" means, with respect to the Debentures
issuable or issued in whole or in part in global form, the Person specified in
Section 2.5(d) as the Depositary with respect to the Debentures, 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.
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.
Fundamental Change: The term "Fundamental Change" means the occurrence
of any transaction or event in connection with which all or substantially all
the Common Stock shall be exchanged for, converted into, acquired for or
constitute 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 national
securities exchange in the United States or approved for quotation in the Nasdaq
National Market or any similar system of automated dissemination of quotations
of securities prices in the United States.
Fundamental Change Repayment Date: The term "Fundamental Change
Repayment Date" has the meaning ascribed to it in Section 3.6(a).
Fundamental Change Repayment Notice: The term "Fundamental Change
Repayment Notice" has the meaning ascribed to it in Section 3.6(c).
Fundamental Change Repayment Price: The term "Fundamental Change
Repayment Price" has the meaning ascribed to it in Section 3.6(b).
Holder Repayment Date: The term "Holder Repayment Date" shall mean
January 6, 2004.
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Holder Repayment Notice: The term "Holder Repayment Notice" has the
meaning ascribed to it in Section 3.5(a).
Holder Repayment Price: The term "Holder Repayment Price" has the
meaning ascribed to it in Section 3.5(a)
Indenture: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Initial Purchaser: The term "Initial Purchaser" means Morgan Stanley &
Co. Incorporated.
Officers' Certificate: The term "Officers' Certificate", when used with
respect to the Company, shall mean a certificate signed by the President, the
Chief Executive Officer or the Chief Financial Officer and by the Treasurer or
the Secretary of the Company that meets the requirement of Sections 16.5 and
16.6.
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, or other counsel acceptable to the Trustee which opinion meets the
requirements of Sections 16.5 and 16.6.
outstanding: The term "outstanding," (except as otherwise provided in
Section 8.10) when used with reference to Debentures, shall, subject to the
provisions of Section 9.4, mean, as of any particular time, all Debentures
authenticated and delivered by the Trustee under this Indenture, except
(a) Debentures theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the payment or
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 set aside and
segregated in trust by the Company (if the Company shall act as its own
paying agent), provided that if such Debentures are to be redeemed
prior to the maturity thereof, notice of such redemption shall have
been given as in Article III provided, or provision satisfactory to the
Trustee shall have been made for giving such notice;
(c) Debentures paid or Debentures in lieu of or in
substitution for which other Debentures shall have been authenticated
and delivered pursuant to the terms of
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Section 2.6 unless proof satisfactory to the Trustee is presented that
any such Debentures are held by bona fide holders in due course; and
(d) Debentures converted into Common Stock pursuant to Article
XV and Debentures deemed not outstanding pursuant to Article III.
Person: The term "Person" shall mean a corporation, an association, a
partnership, 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.
PORTAL Market: The term "PORTAL Market" shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market operated by the
National Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Debenture: The term "Predecessor Debenture" of any
particular Debenture shall mean every previous Debenture evidencing all or a
portion of the same debt as that evidenced by such particular Debenture; and,
for the purposes of this definition, any Debenture authenticated and delivered
under Section 2.6 in lieu of a lost, destroyed or stolen Debenture shall be
deemed to evidence the same debt as the lost, destroyed or stolen Debenture that
it replaces.
Principal Office of the Trustee: The term "principal office of the
Trustee", or other similar term, shall mean the principal office of the Trustee
at which at any particular time its corporate trust business shall be
administered, which office is, at the date as of which this Indenture is dated,
located at 450 West 33rd Street, 15th Floor, New York, New York 10001-2697.
QIB: The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.
Reference Market Price: The term "Reference Market Price" shall
initially mean $25.165 and, in the event of any adjustment to the Conversion
Price pursuant to Sections 15.5(a), (b), (c), (d), (e), (f) or (g), the
Reference Market Price shall also be adjusted so that the ratio of the Reference
Market Price to the Conversion Price after giving effect to any such adjustment
shall always be the same as the ratio of $25.165 to the initial Conversion Price
specified in the form of Debenture attached hereto (without regard to any
adjustment thereto).
Register: The term "Register" shall have the meaning specified in
Section 2.5(2).
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Registration Rights Agreement: The term "Registration Rights Agreement"
means that certain Registration Rights Agreement, dated as of January 6, 1998,
between the Company and the Initial Purchaser.
Regulation S: The term "Regulation S" shall mean Regulation S
promulgated under the Securities Act.
Responsible Officer: The term "Responsible Officer," when used with
respect to the Trustee, shall mean any officer assigned by the Trustee to
administer this Indenture and also shall mean, with respect to a particular
trust matter any other officers to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
Restricted Securities: The term "Restricted Securities" has the meaning
specified in Section 2.5(d).
Rule 144A: The term "Rule 144A" shall mean Rule 144A promulgated under
the Securities Act.
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 on, and any other payment due pursuant
to any of the following, whether outstanding at the date hereof or hereafter
incurred or created:
(a) all indebtedness of the Company for money borrowed
(including any indebtedness secured by a conditional sales contract,
mortgage or other lien which is (i) given to secure all or part of the
purchase price of property subject thereto, whether given to the vendor
of such property or to another or (ii) existing on property at the time
of acquisition thereof);
(b) all indebtedness of the Company evidenced by notes,
debentures, bonds or other securities sold by the Company for money;
(c) all lease obligations of the Company which are capitalized
on the books of the Company in accordance with generally accepted
accounting principles;
(d) all indebtedness of others of the kinds described in
either of the preceding clause (a) or (b) and all lease obligations of
others of the kind described in the preceding clause (c) assumed by or
guaranteed in any manner by the Company or in effect guaranteed by the
Company through an agreement to purchase, contingent or otherwise; and
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(e) all renewals, extensions or refundings of indebtedness of
the kinds described in any of the preceding clauses (a), (b) and (d)
and all renewals or extensions of lease obligations of the kinds
described in either of the preceding clauses (c) and (d);
unless, in the case of any particular indebtedness, lease, renewal, extension or
refunding, the instrument or lease creating or evidencing the same or the
assumption or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension or refunding is not superior in right of payment to,
or is pari passu with, the Debentures.
Subsidiary: The term "Subsidiary" means, with respect to any Person,
(i) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such Person or one or more of the other subsidiaries of that
Person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or managing general partner of which is such Person or a subsidiary of
such Person or (b) the only general partners of which are such Person or 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 15.5(h)(5).
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 15.6;
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 Chase Manhattan Bank 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.
The definitions of certain other terms are as specified in Sections 2.5
and 3.5 and Article XV.
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ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF DEBENTURES
Section 2.1 Designation Amount and Issue of Debentures. The Debentures
shall be designated as "2 1/4% Convertible Subordinated Debentures due 2013."
Debentures not to exceed the aggregate principal amount of $230,000,000 (except
pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) 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 Debentures to or upon the Trustee's receipt of the
written order of the Company, signed by its President, Chief Executive Officer
or Chief Financial Officer, and the other documents required pursuant to
Sections 16.5 and 16.6 hereof, without any further action of the Company
hereunder.
Section 2.2 Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A.
Any of the Debentures may have such letters, numbers or other marks of
identification 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 Debentures may be
listed, or to conform to usage.
Any Debenture in global form shall represent such of the outstanding
Debentures as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Debentures from time to time
endorsed thereon and that the aggregate amount of outstanding Debentures
represented thereby may from time to time be increased or reduced to reflect
transfers or exchanges permitted hereby. Any endorsement of a Debenture in
global form to reflect the amount of any increase or decrease in the amount of
outstanding Debentures 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 Debentures in accordance with this Indenture.
Payment of principal of and interest and premium, if any, on any Debenture in
global form shall be made to the holder of such Debenture.
The terms and provisions contained in the form of Debenture attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the
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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.
Section 2.3 Date and Denomination of Debentures; Payments of Interest.
The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Every
Debenture 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
Debenture attached as Exhibit A hereto. Interest on the Debentures shall be
computed on the basis of a 360-day year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered 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 notwithstanding the cancellation of such Debenture upon
any transfer or exchange subsequent to the record date and prior to such
interest payment date. As provided in Section 15.2, and subject to the exception
contained therein, interest shall not be payable to such Person in the case of
any Debenture or Debentures, or portion thereof, which have been called for
redemption and which are converted on a date subsequent to such record date and
prior to such interest payment date. Interest may, as the Company shall specify
to the paying agent in writing be paid either (i) by check mailed to the address
of the Person entitled thereto as it appears on the Register or (ii) by wire
transfer of immediately available funds 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 the December 22 or June 21 preceding said
January 6 or July 6, respectively.
Any interest on any Debenture which is payable, but is not punctually
paid or duly provided for, on any said January 6 or July 6 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Debentureholder
on the relevant record date by virtue of his having been such Debentureholder;
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 Debentures (or their
respective Predecessor Debentures) are registered at the close of
business on a special record date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Debenture and the date of the proposed
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
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
proposed to be paid in respect of such Defaulted Interest or shall make
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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 Persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which
shall be not more than 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 the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first-class postage
prepaid to each Debentureholder at his address as it appears on the
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 Defaulted
Interest shall be paid to the Persons in whose names the Debentures (or
their respective Predecessor Debentures) were registered at the close
of business on such special record date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest in
any other lawful manner not inconsistent with the requirements of any
securities exchange or automated quotation system on which the
Debentures may be listed or designated for issuance, and upon such
notice as may be required by such exchange or automated quotation
system, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
Section 2.4 Execution of Debentures. The Debentures shall be signed in
the name and on behalf of the Company by the facsimile signature of its
President, Chief Executive Officer or Chief Financial Officer and attested by
the facsimile signature of its Treasurer or Secretary (which may be printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such
Debentures as shall bear thereon a certificate of authentication substantially
in the form set forth on the form of Debenture 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 Debenture executed by the
Company shall be conclusive evidence that the Debenture 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
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may
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be authenticated and delivered or disposed of as though the person who signed
such Debentures had not ceased to be such officer of the Company; and any
Debenture may be signed on behalf of the Company by such persons as, at the
actual date of the execution of such Debenture, 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 Debentures:
Restrictions on Transfer; Depositary.
(a) The Company shall keep at its principal office, or shall cause to
be kept, at one of the offices or agencies maintained pursuant to Section 5.2, a
register (the "Register") in which, subject to such reasonable regulations as it
may prescribe, Debentures shall be registered and the transfer of Debentures
shall be registered as in this Article II provided. Such Register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time. At all reasonable times such Register shall be open
for inspection by the Trustee. Upon due presentment for registration of transfer
of any Debenture at any office or agency maintained by the Company pursuant to
Section 5.2, the Company shall execute and register and the Trustee shall
authenticate and deliver in the name of the transferee or transferees a new
Debenture or Debentures for an equal aggregate principal amount. The Trustee is
hereby appointed "Debenture registrar" for the purpose of registering Debentures
and transfers of Debentures as herein provided. The Company may appoint one or
more co-registrars in accordance with Section 5.2.
Upon due presentment for registration of transfer of any Debenture to
the Trustee 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 Debentures of any authorized denominations and of a like aggregate
principal amount and bearing such restrictive legends as may be required by this
Indenture, without charge except for any tax or other governmental charge
imposed in connection imposed herewith.
Debentures may be exchanged for a like aggregate principal amount of
Debentures of other authorized denominations. Debentures to be exchanged shall
be surrendered at any office or agency to be maintained by the Company pursuant
to Section 5.2 and the Company shall execute and register and the Trustee shall
authenticate and deliver in exchange therefor the Debenture or Debentures which
the Debentureholder making the exchange shall be entitled to receive, bearing
registration numbers not contemporaneously outstanding.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
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All Debentures presented or surrendered for registration of transfer or
for exchange, redemption or conversion shall (if so required by the Company or
the Debenture registrar) be duly endorsed, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company, and
the Debentures shall be duly executed by the Debentureholder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Debentures, 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 Debentures.
Neither the Company nor the Trustee shall be required to exchange or
register a transfer of (i) any Debentures for a period of fifteen (15) days next
preceding any selection of Debentures to be redeemed or (ii) any Debentures or
portions thereof called for redemption pursuant to Article III or (iii) any
Debentures or portion thereof surrendered for conversion pursuant to Article XV
or (iv) any Debentures or portions thereof surrendered for repayment pursuant to
Article III.
(b) So long as the Debentures are eligible for book-entry settlement
with the Depositary, or unless otherwise required by law, all Debentures that
are so eligible may be represented by one or more Debentures in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in any such Debenture in global form shall be effected through the
Depositary in accordance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary therefor.
Debentures that upon initial issuance are beneficially owned by QIBs
will be represented by a global Debenture (the "144A Global Debenture"), and
Debentures that upon initial issuance are beneficially owned by Non-U.S. Persons
will be represented by another global Debenture (the "Regulation S Global
Debenture"). Transfers of interests in the Debentures between the 144A Global
Debenture and the Regulation S Global Debenture will be made in accordance with
the standing instructions and procedures of the Depositary and its participants.
The Trustee shall make appropriate endorsements to reflect increases or
decreases in the principal amounts of such global Debentures as set forth on the
face of the Debenture ("Principal Amount") to reflect any such transfers.
Except as provided below, beneficial owners of a Debenture in global
form shall not be entitled to have certificates registered in their names, will
not receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered holders of such Debentures in global
form.
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(c) So long as the Debentures are Restricted Securities and are
eligible for book-entry settlement, or unless otherwise required by law, as set
forth in an Officers' Certificate delivered to the Trustee, upon receipt by the
Trustee of any definitive Debenture or Debentures for registration of transfer,
together with (i) the form of assignment duly completed with an indication that
such transfer is being made pursuant to Rule 144A, the Trustee shall make an
endorsement on the 144A Global Debenture to reflect an increase in the aggregate
Principal Amount represented by such 144A Global Debenture equal to the
principal amount of the definitive Debenture or Debentures being so transferred,
and the Trustee shall cancel such definitive Debenture or Debentures, in
accordance with the standing instructions and procedures of the Depositary, or
(ii) the form of assignment duly completed with an indication that such transfer
is being made pursuant to Regulation S, the Trustee shall made an endorsement on
the Regulation S Global Debenture to reflect an increase in the aggregate
Principal Amount represented by such Regulation S Global Debenture equal to the
principal amount of the definitive Debenture or Debentures being so transferred,
and the Trustee shall cancel such definitive Debenture or Debentures in
accordance with the standing instructions and procedures of the Depositary.
Notwithstanding the foregoing, (i) no definitive Debenture, or portion thereof,
as to which the Trustee was notified in writing by the Company that the Company
or any Affiliate of the Company held any beneficial interest therein, shall be
included in such 144A Global Debenture or Regulations S Global Debenture and
(ii) the Trustee shall issue Debentures in definitive form upon registration of
transfer of any beneficial interest in a Debenture in global form to the Company
or any Affiliate of the Company, provided the Trustee has been notified in
writing by the Company or the transferor that such beneficial interest is being
transferred to the Company or any Affiliate of the Company.
Any Debenture in global form may be endorsed with or have incorporated
in the text thereof such legends or recitals or changes not inconsistent with
the provisions of this Indenture as may be required by the Custodian, the
Depositary or by the National Association of Securities Dealers, Inc. in order
for the Debentures to be tradeable on the PORTAL Market or as may be required
for the Debentures to be tradeable on any other market developed for trading of
securities pursuant to Rule 144A or Regulation S or required to comply with any
applicable law or any regulation thereunder or with the rules and regulations of
any securities exchange or automated quotation system upon which the Debentures
may be listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular
Debentures are subject.
(d) Every Debenture that bears or is required under this Section 2.5(d)
to bear the legend set forth in this Section 2.5(d) (together with any Common
Stock issued upon conversion of the Debentures and required to bear the legend
set forth in Section 2.5(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.5 (d)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the
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holder of each such Restricted Debenture, by such Debentureholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d) and 2.5(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until written notification by the Company to the Trustee of the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), any certificate
evidencing such Debenture (and all securities issued in exchange therefor or
substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.5(e), if applicable)
shall bear a legend in substantially the following form, unless the Debenture
registrar is notified by the Company in writing that such Debenture has been
sold pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer), or unless otherwise agreed by the Company (with written notice
thereof by the Company to the Trustee and the Debenture registrar):
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL
NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT
(A) TO OMNICOM GROUP INC. OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER
THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
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ACT (AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH
TRANSFER); (3) AGREES THAT PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO
THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE,
AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE DEBENTURE EVIDENCED HEREBY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY
PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE
HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS
CERTIFICATE TO THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A
SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED TRANSFEREE
IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST,
PRIOR TO SUCH TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK,
AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS
LEGEND WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE
DEBENTURE EVIDENCED HEREBY PURSUANT TO CLAUSE 2(E) ABOVE OR
UPON ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to the conditions for removal of the foregoing legend set
forth therein have been satisfied may,
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upon surrender of such Debenture for exchange to the Debenture registrar in
accordance with the provisions of this Section 2.5, be exchanged for a new
Debenture or Debentures, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this Section 2.5(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.5(b) and in this
Section 2.5(d)), a Debenture 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 Debentures in global form. Initially, the 144A
Global Debenture and the Regulation S Global Debenture shall be issued to the
Depositary, registered in the name of Cede & Co., as the nominee of the
Depositary, and deposited with the Custodian for Cede & Co.
If at any time the Depositary for a Debenture in global form notifies
the Company that it is unwilling or unable to continue as Depositary for such
Debenture, the Company may appoint a successor Depositary with respect to such
Debenture. If a successor Depositary is not appointed by the Company within
ninety (90) days after the Company receives such notice, the Company will
execute, and the Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Debentures, will authenticate and deliver,
Debentures in certificated form, in aggregate principal amount equal to the
principal amount of such Debenture in global form, in exchange for such
Debenture in global form.
If a Debenture in certificated form is issued in exchange for any
portion of a Debenture 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 Debenture, 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 Debenture in global form is payable in accordance with the
provisions of this Indenture.
Debentures in certificated form issued in exchange for all or a part of
a Debenture 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 Debentures in certificated form to the Persons in whose names such
Debentures in certificated form are so registered.
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At such time as all interests in a Debenture in global form have been
redeemed, converted, canceled, exchanged for Debentures in certificated form, or
transferred to a transferee who receives Debentures in certificated form
thereof, such Debenture 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 Debenture is exchanged for Debentures
in certificated form, redeemed, converted, repaid or canceled, or transferred to
a transferee who receives Debentures in certificated form therefor or any
Debenture in certificated form is exchanged or transferred for part of a
Debenture in global form, the principal amount of such Debenture 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 Debenture in global
form, by the Trustee or the Custodian, at the direction of the Trustee, to
reflect such reduction or increase.
(e) Until written notification by the Company to the Trustee of the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision), any stock certificate
representing Common Stock issued upon conversion of such Debenture shall bear a
legend in substantially the following form, unless such Common Stock has been
sold pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such
transfer) or such Common Stock has been issued upon conversion of Debentures
that have been transferred pursuant to a registration statement that has been
declared effective under the Securities Act, or unless otherwise agreed by the
Company (with written notice thereof by the Company to the Trustee and the
Debenture registrar):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO OMNICOM GROUP INC.
OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A), (C) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904
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UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND
WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER);
(2) PRIOR TO SUCH TRANSFER (OTHER THAN A TRANSFER PURSUANT TO
CLAUSE 1(E) ABOVE), IT WILL FURNISH TO CHASEMELLON SHAREHOLDER
SERVICES, L.L.C., AS TRANSFER AGENT (OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR
IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH PERSON
TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS TRANSFERRED
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(E) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE COMMON
STOCK EVIDENCED HEREBY PURSUANT TO CLAUSE 1(E) ABOVE OR UPON
ANY TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY AFTER THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS
GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.5(e).
(f) Any Debenture or Common Stock issued upon the conversion or
exchange of a Debenture that, prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), is purchased or owned by the Company or any Affiliate
thereof may not be resold by the Company or such Affiliate unless registered
under the Securities Act or resold pursuant to an exemption from the
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registration requirements of the Securities Act in a transaction which results
in such Debentures or Common Stock, as the case may be, no longer being
"restricted securities" (as defined under Rule 144).
Section 2.6 Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be apparently destroyed, lost or stolen,
the Company in its discretion may execute, and upon its request the Trustee or
an authenticating agent appointed by the Trustee shall authenticate and deliver,
a new Debenture, bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Debenture, or in lieu of and in substitution
for the Debenture so apparently destroyed, lost or stolen. In every case the
applicant for a substituted Debenture 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 hold 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
Debenture and of the ownership thereof.
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 Debenture and deliver such Debenture. Upon the
issuance of any substituted Debenture, 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
Debenture which has matured or is about to mature or has been called for
redemption 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 Debenture, 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 Debenture), 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 Debenture
and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the apparently destroyed, lost or stolen Debenture 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 Debentures duly issued hereunder. To the extent permitted
by law, all
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Debentures 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 Debentures 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 Debentures. Pending the preparation of Debentures
in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the request of the
Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture 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 Debentures in
certificated form. Without unreasonable delay the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form (other than in the case of Debentures in global form) and thereupon any or
all temporary Debentures (other than any such Debenture 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 deliver in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures 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 Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.
Section 2.8 Cancellation of Debentures Paid, Etc. All Debentures
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 Debenture 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 Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall destroy canceled Debentures (unless the Company directs it to do
otherwise) and, after such destruction, shall deliver a certificate of such
destruction to the Company. If the Company shall acquire any of the Debentures,
such acquisition shall not operate as a redemption or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
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ARTICLE III
REDEMPTION AND REPAYMENT OF DEBENTURES
Section 3.1 Redemption Prices. The Debentures will not be redeemable at
the option of the Company prior to December 31, 2001. At any time on or after
December 31, 2001 and prior to maturity, the Debentures may (unless theretofore
repaid or converted) be redeemed at the option of the Company as a whole, or
from time to time in part, upon notice as set forth in Section 3.2, and at the
following redemption prices (expressed as percentages of the principal amount),
together in each case with accrued interest to, but excluding, the date fixed
for redemption, if redeemed during the 3-month period beginning:
Date Percentage Date Percentage
- ---- ---------- ---- ----------
January 6, 2002......... 112.841% January 6, 2003......... 116.275%
April 6, 2002........... 113.687% April 6, 2003........... 117.164%
July 6, 2002............ 114.537% July 6, 2003............ 118.057%
October 6, 2002......... 115.404% October 6, 2003......... 118.968%
and at 118.968% if redeemed on January 6, 2004 and at 100% if redeemed
thereafter; provided that any semiannual payment of interest becoming due on the
date fixed for redemption shall be paid to the holders of record on the relevant
record date of the Debentures being redeemed. If the date fixed for redemption
is on or after December 31, 2001 but before January 6, 2002, the redemption
price shall be at 112.841% of the principal amount with accrued interest to
January 6, 2002.
Section 3.2 Notice of Redemption; Selection of Debentures. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Debentures pursuant to Section 3.1 for redemption then it, or at
its request, 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 at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Debentures
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Register. 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
Debenture designated for redemption as a whole or in part shall not affect the
validity of the proceedings for the redemption of any other Debenture.
Each such notice of redemption shall specify the principal amount of
each Debenture to be redeemed, the date fixed for redemption which shall be a
Business Day, the redemption price at which Debentures are to be redeemed, the
place or places of payment, that payment will be made upon presentation and
surrender of such Debentures, that interest accrued to,
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but excluding, the date fixed for redemption (unless the date fixed for
redemption is on or after December 31, 2001 but before January 6, 2002 in which
case with accrued interest to January 6, 2002) will be paid as specified in said
notice, and that on and after said date (or on or after January 6, 2002, if the
date fixed for redemption is on or after December 31, 2001, but before January
6, 2002) interest thereon or on the portions 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 Debentures or portions thereof into
Common Stock will expire. If fewer than all the Debentures are to be redeemed,
the notice of redemption shall identify the Debentures to be redeemed. In case
any Debenture 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
Debenture, a new Debenture or Debentures in principal amount equal to the
unredeemed portion thereof will be issued.
On or before the date fixed for redemption 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 sufficient to redeem on the date fixed for
redemption all the Debentures (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 (or to, but excluding, January 6, 2002,
if the date fixed for redemption is on or after December 31, 2001, but before
January 6, 2002); provided that if such payment is made on the date fixed for
redemption it must be received by the Trustee or paying agent, as the case may
be, by 11:00 a.m. New York City time, on such date. If any Debenture called for
redemption is converted pursuant hereto, any money deposited with the Trustee or
any paying agent or so segregated and held in trust for the redemption of such
Debenture shall be paid to the Company upon its request, or, if then held by the
Company shall be discharged from such trust. If fewer than all the Debentures
are to be redeemed, the Company will give the Trustee written notice not less
than 60 days prior to the date fixed for redemption as to the aggregate
principal amount of Debentures to be redeemed.
If less than all of the outstanding Debentures are to be redeemed, the
Trustee shall select the Debentures to be redeemed in principal amounts of
$1,000 or multiples thereof by lot, pro rata or by another method the Trustee
considers fair and appropriate. If a portion of a holder's Debentures is
selected for partial redemption and such holder converts a portion of such
Debentures, such converted portion shall be deemed to be of the portion selected
for redemption. Debentures must be presented for redemption. If the Company
shall acquire any of the Debentures, such acquisition shall not operate as or be
deemed for any purpose to be a redemption or satisfaction of the indebtedness
represented by such Debentures unless and until the same are delivered to the
Trustee for cancellation. The Debentures (or portions thereof) so selected shall
be deemed duly selected for redemption for all purposes hereof,
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notwithstanding that any such Debenture is converted as a whole or in part
before the mailing of the notice of redemption.
Upon any redemption of less than all Debentures, the Company and the
Trustee may treat as outstanding any Debentures surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may treat as outstanding any Debenture authenticated and
delivered during such period in exchange for the unconverted portion of any
Debenture converted in part during such period.
Section 3.3 Payment of Debentures Called for Redemption. If notice of
redemption has been given as above provided, the Debentures or portions of
Debentures with respect to which such notice has been given shall, unless
theretofore 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 (or to, but excluding,
January 6, 2002 if the date fixed for redemption is on or after December 31,
2001, but before January 6, 2002), and on and after said date (unless the
Company shall default in the payment of such Debentures at the redemption price,
together with interest accrued to said date) interest on the Debentures or
portion of Debentures so called for redemption shall cease to accrue and such
Debentures shall cease after the close of business on the Business Day
immediately preceding the date fixed for redemption to be convertible into
Common Stock and, except as provided in Sections 8.5 and 13.4, to be entitled to
any benefit or security under this Indenture, and the holders thereof shall have
no right in respect of such Debentures except the right to receive the
redemption price thereof and unpaid interest to, but excluding, the date fixed
for redemption (or to January 6, 2002 if the date fixed for redemption is on or
after December 31, 2001, but before January 6, 2002). On presentation and
surrender of such Debentures at a place of payment in said notice specified, the
said Debentures 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 (or to, but excluding,
January 6, 2002 if the date fixed for redemption is on or after December 31,
2001, but before January 6, 2002); provided that, if the applicable date fixed
for redemption is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Debentures
registered as such on the relevant record date instead of the holders
surrendering such Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the holder
thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Debenture so presented.
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Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of optional redemption during the continuance of a
default in payment of interest or premium on the Debentures or of any Event of
Default. If any Debenture called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and premium, if any, shall,
until paid or duly provided for, bear interest from the date fixed for
redemption at the rate borne by the Debenture and such Debenture shall remain
convertible into Common Stock until the principal and premium, if any, shall
have been paid or duly provided for.
Section 3.4 Conversion Arrangement on Call for Redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment bankers or other purchasers to purchase such Debentures by paying to
the Trustee in trust for the Debentureholders, on or before the date fixed for
redemption (if such payment is made on the date fixed for redemption it must be
received by the Trustee or paying agent, as the case may be, by 11:00 a.m. New
York City time, on such date), an amount not less than the applicable redemption
price, together with interest accrued to, but excluding, the date fixed for
redemption (or to, but excluding, January 6, 2002 if the date fixed for
redemption is on or after December 31, 2001, but before January 6, 2002), of
such Debentures. Notwithstanding anything to the contrary contained in this
Article III, the obligation of the Company to pay the redemption price of such
Debentures, together with interest accrued to, but excluding, the date fixed for
redemption (or to, but excluding, January 6, 2002 if the date fixed for
redemption is on or after December 31, 2001, but before January 6, 2002), 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 Debentures
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 Debentures 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 Debentures. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Debentures shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Debentures between the Company and such purchasers to which the Trustee has not
consented in writing, including the costs and expenses incurred by the Trustee
in the defense
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of any claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations under
this Indenture.
Section 3.5 Repayment at Option of Holders.
(a) Notwithstanding the Company's right of redemption, the holder of a
Debenture may elect to have that Debenture or portions thereof (in the principal
amount of $1,000 or any multiple thereof) repaid by the Company on the Holder
Repayment Date. Any such repayment shall be at a repayment price of 118.968% of
the principal amount thereof (the "Holder Repayment Price") with interest
accrued to, but excluding, the Holder Repayment Date on the repaid Debentures.
For a Debenture to be so repaid at the option of the holder, the Company must
receive at an office of one of the Company's paying agents such Debenture with
the form entitled "Option to Elect Repayment on January 6, 2004" on the reverse
thereof duly completed (a "Holder Repayment Notice"), together with such
Debenture duly endorsed, at any time from the opening of business on the date
that is 20 Business Days prior to the Holder Repayment Date until the close of
business on the Business Day immediately preceding such Holder Repayment Date.
In order to exercise the repayment option with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary, furnish appropriate endorsements and documentation
if required by the Company or the Trustee or paying agent and such notice shall
not have been withdrawn.
Notwithstanding anything herein to the contrary, any holder delivering
to the paying agent the Holder Repayment Notice contemplated by this Section
3.5(a) shall have the right at any time prior to the close of business on the
Business Day immediately preceding the Holder Repayment Date to withdraw, in
whole or in part, such Holder Repayment Notice by delivery of a written notice
of withdrawal to the paying agent in accordance with Section 3.7. In order to
exercise the withdrawal option with respect to any interest in a Debenture in
global form, the beneficial holder must comply with the applicable procedures of
the Depositary.
All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding.
Upon presentation of any Debenture to be repaid in part only, pursuant
to this Section 3.5, the Company shall execute and, upon the Company's written
direction to the Trustee, the Trustee shall authenticate and deliver to the
holder thereof, at the expense of the Company, a new Debenture or Debentures, of
authorized denominations, in principal amount equal to the unrepaid portion of
the Debentures so presented.
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On or before the Holder Repayment Date, the Company shall 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 sufficient to pay the aggregate Holder Repayment
Price including any interest accrued to, but excluding, the Holder Repayment
Date of all the Debentures or portions thereof which are to be repaid as of such
Holder Repayment Date; provided that if such payment is made on the Holder
Repayment Date it must be received by the Trustee or paying agent, as the case
may be, by 11:00 a.m. New York City time, on such date.
Payment of the Holder Repayment Price, together with any accrued
interest, for a Debenture for which a Holder Repayment Notice has been delivered
and not withdrawn is conditioned upon book-entry transfer or delivery of such
Debenture (together with necessary endorsements) to the Company's paying agent
at its office at 55 Water Street, Room 234, North Building, New York, New York,
10041, or any other office of the paying agent maintained for such purpose, at
any time (whether prior to, on or after the Holder Repayment Date) after
delivery of such Holder Repayment Notice. Payment of the Holder Repayment Price
of such Debenture will be made promptly following the later of the Holder
Repayment Date or the time of book-entry transfer of such Debenture or the time
of delivery of the Debentures by mailing checks or by sending a wire transfer
for immediately available funds to an account maintained in the United States
for the amount payable to the holders of such Debentures entitled thereto as
they shall appear on the Register; 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 paying agent shall promptly notify the Company of the receipt by it
of any Holder Repayment Notice or written notice of withdrawal thereof.
(b) The Company shall use its best efforts to have a notice regarding
repayment at the option of the holders on the Holder Repayment Date published at
least once in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter
Financial Report in The City of New York at least 30 days prior to the Holder
Repayment Date. Each published notice shall specify the Holder Repayment Date,
the price at which the Company shall be obligated to repay Debentures, that the
holder must exercise the repayment right prior to the close of business on the
Business Day immediately preceding the Holder Repayment Date, that the holder
shall have the right to withdraw, in whole or in part, any Debentures
surrendered prior to the close of business on the Business Day immediately
preceding the Holder Repayment Date, a description of the procedure which a
Debentureholder must follow to exercise such repayment right and to withdraw any
surrendered Debentures, the place or places where the holder is to surrender
such holder's Debentures, and the amount of interest accrued on each Debenture
to the Holder Repayment Date. The Company shall promptly deliver a copy of each
published notice to the Trustee.
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No failure of the Company to give the foregoing notice and no defect
therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures pursuant to this
Section 3.5.
Section 3.6 Repayment at Option of Holders Upon a Fundamental Change.
(a) If a Fundamental Change occurs at any time while Debentures are
outstanding, each holder of Debentures shall have the right, at such holder's
option, to require the Company to repay such holder with respect to all (and not
less than all for Debentures in certificated form) such holder's Debentures on
the date (the "Fundamental Change Repayment Date") that is the 45th day (or if
such 45th day is not a Business Day, the next succeeding Business Day) after the
date of the Company Notice of such Fundamental Change. Such repayment shall be
made at the following prices (expressed as percentages of the principal amount)
in the event of a Fundamental Change occurring during the 3-month period
beginning:
Date Percentage Date Percentage
- ---- ---------- ---- ----------
January 6, 1998.......... 100.679% January 6, 2000........... 106.460%
April 6, 1998............ 101.375% April 6, 2000............. 107.227%
July 6, 1998............. 102.071% July 6, 2000.............. 107.997%
October 6, 1998.......... 102.784% October 6, 2000........... 108.783%
January 6, 1999.......... 103.498% January 6, 2001........... 109.571%
April 6, 1999............ 104.229% April 6, 2001............. 110.377%
July 6, 1999............. 104.961% July 6, 2001.............. 111.186%
October 6, 1999.......... 105.709%
at a repayment price of 112.012% of the principal amount if a Fundamental Change
occurs on or after October 6, 2001 but before December 31, 2001, and thereafter
at the redemption price set forth under Section 3.1 which would be applicable to
a redemption at the option of the Company; provided in each case that if the
Applicable Price is less than the Reference Market Price, the Company shall
repay such Debentures at a price equal to the foregoing repayment price
multiplied by the fraction obtained by dividing the Applicable Price by the
Reference Market Price. In each case, the Company shall also pay accrued
interest, if any, on such Debentures to, but excluding, the Fundamental Change
Repayment Date; provided, that if such Fundamental Change Repayment Date is
January 6 or July 6, then the interest payable on such date shall be paid to the
holder of record of the Debenture on the next preceding record date.
(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 Business Days prior to the date the Trustee is requested
to give notice as described below), the Trustee in the name of and at the
expense of the Company, shall mail or cause to be
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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
repayment 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. The Company shall also use its best efforts to have a
notice published at least once in each of Bloomberg Business News, Dow Jones
News (DJN) and Reuter Financial Report in The City of New York on or before the
tenth day after the occurrence of a Fundamental Change. The Company shall
promptly deliver a copy of each of the published notices and Company Notice to
the Trustee.
Each published notice and Company Notice shall specify the
circumstances constituting the Fundamental Change, the Fundamental Change
Repayment Date, the price at which the Company shall be obligated to repay
Debentures (the "Fundamental Change Repayment Price"), that the holder must
exercise the repayment right before the close of business on the Business Day
immediately preceding the Fundamental Change Repayment Date, that the holder
shall have the right to withdraw any Debentures surrendered prior to the close
of business on the Business Day immediately preceding the Fundamental Change
Repayment Date, a description of the procedure which a Debentureholder must
follow to exercise such repayment right and to withdraw any surrendered
Debentures, the place or places where the holder is to surrender such holder's
Debentures, and the amount of interest accrued on each Debenture to, but
excluding, the Fundamental Change Repayment Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures pursuant to this
Section 3.6.
(c) For a Debenture to be repaid at the option of the holder resulting
from a Fundamental Change, the Company must receive at an office of one of the
Company's paying agents such Debenture with a form entitled "Option to Elect
Repayment Upon A Fundamental Change" on the reverse thereof duly completed (the
"Fundamental Change Repayment Notice"), together with such Debenture duly
endorsed, at any time from the opening of business on the date that is on or
before the 43rd day after the Company Notice (or if such 43rd day is not a
Business Day, the immediately preceding Business Day) and such Fundamental
Change Repayment Notice shall not have been withdrawn. In order to exercise the
repayment option with respect to any interest in a Debenture in global form, the
beneficial holder must comply with the applicable procedures of the Depositary,
furnish appropriate endorsements and documentation if required by the Company or
the Trustee or paying agent and such notice shall not have been withdrawn.
Notwithstanding anything herein to the contrary, any holder delivering
to the paying agent the Fundamental Change Repayment Notice contemplated by this
Section 3.6(c) shall have the right at any time prior to the close of business
on the Business Day immediately
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preceding the Fundamental Change Repayment Date to withdraw such Fundamental
Change Repayment Notice (as to Debentures in certificated form, withdrawal must
be made in full) by delivery of a written notice of withdrawal to the paying
agent in accordance with Section 3.7. In order to exercise the withdrawal option
with respect to any interest in a Debenture in global form, the beneficial
holder must comply with the applicable procedures of the Depositary.
All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Debenture for repayment shall be determined by
the Company, whose determination shall be final and binding absent manifest
error.
(d) On or before the Fundamental Change Repayment 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
trust as provided in Section 5.4) an amount of money sufficient to repay on the
Fundamental Change Repayment Date all the Debentures which are to be repaid on
such date at the appropriate Fundamental Change Repayment Price, together with
accrued interest to, but excluding, the Fundamental Change Repayment Date;
provided that if such payment is made on the Fundamental Change Repayment Date
it must be received by the Trustee or paying agent, as the case may be, by 11:00
a.m. New York City time, on such date. Payment of the Fundamental Change
Repayment Price, together with any accrued interest, for a Debenture for which a
Fundamental Change Repayment Notice has been delivered and not withdrawn is
conditioned upon book-entry transfer or delivery of such Debenture (together
with necessary endorsements) to the Company's paying agent at its office at 55
Water Street, Room 234, North Building, New York, New York, 10041, or any other
office of the Company's paying agent maintained for such purpose, at any time
(whether prior to, on or after the Fundamental Change Repayment Date) after
delivery of such Fundamental Change Repayment Notice. Payment of the Fundamental
Change Repayment Price, together with any accrued interest, for such Debenture
will be made promptly following the later of the Fundamental Change Repayment
Date or the time of book-entry transfer or delivery of such Debenture by mailing
checks or by sending a wire transfer for immediately available funds to an
account maintained in the United States for the amount payable to the holders of
such Debentures entitled thereto as they shall appear on the Register; 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. If
the Company's paying agent holds, in accordance with the terms of this
Indenture, money sufficient to pay the Fundamental Change Repayment Price,
together with any accrued interest, of such Debenture on the Fundamental Change
Repayment Date, then on and after such date, such Debenture will cease to be
outstanding, and interest on such Debenture shall cease to accrue, and all other
rights of the holder shall terminate (other than the right to receive the
repayment price upon the time of book-entry transfer or delivery of the
Debentures).
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(e) In the case of a consolidation, merger, conveyance, transfer or
lease to which Section 15.6 applies, in which the Common Stock of the Company is
changed or exchanged as a result into the right to receive securities, cash or
other property 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 securities, cash and other property (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 Debentures to cause the
Company to repay the Debentures following a Fundamental Change, including
without limitation the applicable provisions of this Section 3.6 and the
definitions of the Applicable Price, Common Stock, Fundamental Change and
Reference Market Price, 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).
Section 3.7 Effect of Holder Repayment Notice or Fundamental Change
Repayment Notice and Withdrawal of Such Notices. Upon receipt by the Company of
the Holder Repayment Notice or Fundamental Change Repayment Notice specified in
Section 3.5 or Section 3.6, as applicable, the holder of the Debenture in
respect of which such Holder Repayment Notice or Fundamental Change Repayment
Notice, as the case may be, was given shall (unless such Holder Repayment Notice
or Fundamental Change Repayment Notice is withdrawn as specified in the
following paragraph) thereafter be entitled to receive solely the Holder
Repayment Price or Fundamental Change Repayment Price, as the case may be, with
respect to such Debenture. Such Holder Repayment Price or Fundamental Change
Repayment Price shall be paid to such holder promptly following the later of (x)
the Holder Repayment Date or the Fundamental Change Repayment Date, as the case
may be, with respect to such Debenture (provided the conditions in Section 3.5
or Section 3.6, as applicable, have been satisfied) or (y) the time of
book-entry transfer or (z) time of delivery of such Debenture to the paying
agent by the holder thereof in the manner required by Section 3.5 or Section
3.6, as applicable. Debentures in respect of which a Holder Repayment Notice or
Fundamental Change Repayment Notice, as the case may be, has been given by the
holder thereof may not be converted on or after the date of the delivery of such
Holder Repayment Notice (or Fundamental Change Repayment Notice, as the case may
be), unless such Holder Repayment Notice (or Fundamental Change Repayment
Notice, as the case may be) has first been validly withdrawn as specified in the
following paragraph.
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A Holder Repayment Notice or Fundamental Change Repayment Notice, as
the case may be, may be withdrawn by means of a written notice of withdrawal
delivered to the office of the paying agent at any time prior to the close of
business on the Business Day immediately preceding the Holder Repayment Date or
the Fundamental Change Repayment Date, as the case may be, to which it relates
specifying:
(1) the certificate number of the Debenture in respect of
which such notice of withdrawal is being submitted,
(2) the principal amount of the Debenture with respect to
which such notice of withdrawal is being submitted, and
(3) the principal amount, if any, of such Debenture which
remains subject to the original Holder Repayment Notice and which has
been or will be delivered for purchase by the Company.
A Fundamental Change Notice must be withdrawn in whole and not in part for
Debentures held in certificated form.
There shall be no repayment of any Debentures pursuant to Section 3.5
or Section 3.6 if there has occurred (prior to, on or after, as the case may be,
the giving, by the holders of such Debentures, of the required Holder Repayment
Notice or Fundamental Change Repayment Notice, as the case may be), and is
continuing an Event of Default (other than a default in the payment of the
Holder Repayment Price or Fundamental Change Repayment Price, as the case may
be, with respect to such Debentures).
Section 3.8 Covenant to Comply with Securities Laws upon Purchase of
Debentures. In connection with any offer to purchase or redemption of Debentures
under Section 3.4, 3.5 or 3.6 hereof, the Company shall (i) comply with Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act, if applicable, (ii) file the related Schedule 13E-4 (or
any successor schedule, form or report) under the Exchange Act, if applicable,
and (iii) otherwise comply with all Federal and state securities laws so as to
permit the rights and obligations under Sections 3.5 and 3.6 to be exercised in
the time and in the manner specified in Sections 3.5 and 3.6.
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Section 3.9 No Sinking Fund. The Debentures shall not be entitled to
the benefit of any sinking fund.
ARTICLE IV
SUBORDINATION OF DEBENTURES
Section 4.1 Agreement of Subordination. The Company covenants and
agrees, and each holder of Debentures issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article IV; and each Person holding any Debenture,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on all
Debentures issued hereunder shall, to the extent and in the manner hereinafter
set forth, be subordinated and subject in right of payment to the prior payment
in full 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 Debentureholders. In the event and during the
continuation of any default in the payment of principal, premium, interest or
any other payment due on any Senior Indebtedness continuing beyond the period of
grace, if any, specified in the instrument or lease evidencing such Senior
Indebtedness, then, unless and until such default shall have been cured or
waived or shall have ceased to exist, no payment shall be made by the Company
with respect to the principal of, or premium, if any, or interest on the
Debentures, except payments made pursuant to Article XIII hereof from monies
deposited with the Trustee pursuant thereto prior to the happening of such
default.
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, or payment thereof provided for
in money in accordance with its terms, before any payment is made on account of
the principal (and premium, if any) or interest on the Debentures (except
payments made pursuant to Article XIII hereof from monies deposited with the
Trustee pursuant thereto prior to the happening of such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in
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cash, property or securities, to which the holders of the Debentures 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 Debentures 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, as calculated by the Company) 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 money or money's worth,
after giving effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is made to
the holders of the Debentures or to the Trustee. By reason of such
subordination, in the event of the Company's dissolution, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the holders of the Debentures before all Senior Indebtedness is paid
in full, or provision is made for such payment in money in accordance with its
terms, 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 all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in money
in accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
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 Debentures 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 such reorganization or readjustment,
and (ii) the rights of the holders of the Senior Indebtedness (other than
leases) and of leases which are assumed are not, without the consent of such
holders, altered by such reorganization or readjustment. The consolidation of
the Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XII hereof
shall
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not be deemed a dissolution, winding-up, liquidation or reorganization for the
purposes of this Section 4.2 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article XII hereof. Nothing in this Section 4.2 shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 8.6.
Section 4.3 Subrogation of Debentures. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated 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 (and premium, if
any) and interest on the Debentures 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
Debentures or the Trustee would be entitled except for the provisions of this
Article IV, and no payment over pursuant to the provisions of this Article IV,
to or for the benefit of the holders of Senior Indebtedness by holders of the
Debentures or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the holders of the Debentures, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness. It is understood that the provisions of this Article IV are and
are intended solely for the purpose of defining the relative rights of the
holders of the Debentures, 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 Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness, and the holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures 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 Debentures 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 Debenture 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 Debentures shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Debentures, for the purpose of ascertaining the Persons
entitled to participate
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in such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article IV.
Section 4.4 Authorization by Debentureholders. Each holder of a
Debenture by his acceptance thereof authorizes and directs the Trustee in his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article IV and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section 4.5 Notice to Trustee. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
which would prohibit the making of any payment of monies to or by the Trustee in
respect of the Debentures 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 which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures 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 Principal Office of the Trustee from the Company
or a holder or holders of Senior Indebtedness or from any trustee therefor; 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 fewer than three 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 (or premium, if any) or interest on any Debenture) 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 receive such
monies and to apply the same to the purpose for which they were received, and
shall not be affected by any notice to the contrary which may be received by it
on or after such prior date.
Notwithstanding anything to the contrary herein set forth, nothing
shall prevent any payment by the Company or the Trustee to the Debentureholders
of monies (A) in connection with a redemption of Debentures if (i) notice of
such redemption has been given pursuant to Article III or Section 13.1 hereof
prior to the receipt by the Trustee of written notice as aforesaid, and (ii)
such notice of redemption is given not earlier than 60 days before the date
fixed for redemption; and (B) in connection with a repayment of a Debenture
pursuant to Article III if, prior to the receipt by the Trustee of a written
notice as aforesaid, the Company has given notice of a Fundamental Change.
The Trustee, subject to the provisions of Section 8.1, shall be
entitled to rely on the delivery to it of a written notice by 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
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given by a holder of Senior Indebtedness or a trustee on behalf of any such
holder or holders. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article IV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee 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, and if such evidence is not furnished the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 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 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 if it shall pay over or deliver to holders of Debentures,
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 Deemed Payment. For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Debentures in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Debentures or on account of the purchase or other
acquisition of Debentures, and (2) the payment, issuance or delivery of cash
(except in satisfaction of fractional shares pursuant to Section 15.2), property
or securities (other than junior securities) upon conversion of a Debenture
shall be
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deemed to constitute payment on account of the principal of such Debenture. 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 which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article. Nothing contained in this
Article IV or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Debentureholders, the right, which is absolute and
unconditional, of the holder of any Debenture to convert such Debenture in
accordance with Article XV.
Section 4.9 Senior Indebtedness Entitled to Rely. The holders of 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.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Debentures at
the places, at the respective times and in the manner provided herein and in the
Debentures. Each installment of interest on the Debentures due on any
semi-annual interest payment date may be paid either (i) by check mailed to the
address of the Person entitled thereto as it appears on the Register or (ii) by
wire transfer for immediately available funds 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.
Section 5.2 Offices for Notices and Payments. So long as any of the
Debentures remain outstanding, the Company will maintain in New York, New York,
an office or agency where the Debentures may be presented for payment, and an
office or agency where the Debentures may be presented for registration of
transfer and for exchange and conversion as provided for in this Indenture and
an office or agency where notices and demands to or upon the Company in respect
of the Debentures or of this Indenture may be served. The Company will give to
the Trustee written notice of the location of each such office or agency and of
any change in the location thereof. If the Company shall fail to maintain any
such office or agency or shall fail to give such notice of the location or of
any change in the
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location thereof, presentations and demands may be made and notices may be
served at the Principal Office of the Trustee.
The Company may also from time to time designate co-registrars and one
or more other offices or agencies where the Debentures 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,
Debenture registrar, Custodian and conversion agent, and the Principal Office of
the Trustee as the office of the Company for each of the aforesaid purposes.
So long as the Trustee is the Debenture 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 only mail such notices to the
Company and the holders of Debentures it can identify from its records.
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 8.9, 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,
it 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 and premium, if any,
or interest on the Debentures (whether such sums have been
paid to it by the Company or by any other obligor on the
Debentures) in trust for the benefit of the holders of the
Debentures;
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the
Debentures) to make any payment of the principal of and
premium, if any, or interest on the Debentures when the same
shall be due and payable; and
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(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, premium, if any, or interest on the Debentures, deposit with the
paying agent a sum sufficient to pay such principal, premium, if any,
or interest, and (unless such paying agent is the Trustee) the Company
will promptly notify the Trustee of any failure to take such action.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on the
Debentures, set aside, segregate and hold in trust for the benefit of the
holders of the Debentures a sum sufficient to pay such principal, premium, if
any, or interest so becoming due and will notify the Trustee of any failure to
take such action and of any failure by the Company (or by any other obligor
under the Debentures) to make any payment of the principal of, premium, if any,
or interest on the Debentures 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 money.
(d) Anything in 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.
Section 5.5 Corporate 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 corporate existence.
Section 5.6 Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Debentures or any Common Stock issued upon conversion
thereof which continue to be Restricted Securities in connection with any sale
thereof and any prospective purchaser of Debentures or such Common Stock from
such holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Debentures or such
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Common Stock and it will take such further action as any holder or beneficial
holder of such Debentures or such Common Stock may reasonably request, all to
the extent required from time to time to enable such holder or beneficial holder
to sell its Debentures or Common Stock without registration under the Securities
Act within the limitation of the exemption provided by Rule 144A, as such Rule
may be amended from time to time. Upon the request of any holder or any
beneficial holder of the Debentures or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
Section 5.7 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 on the Debentures 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 has been enacted.
ARTICLE VI
DEBENTUREHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually, not
more than fifteen (15) days after each June 15 and December 15 in each year
beginning with June 15, 1998, 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, a list in such form as the Trustee may reasonably require of the names
and addresses of the holders of Debentures as of a date not more than fifteen
days prior to the time such information is furnished, except that no such list
need be furnished so long as the Trustee is acting as Debenture 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
Debentures contained in the most recent list furnished to it as provided in
Section 6.1 or maintained by the Trustee in its capacity as Debenture registrar
in respect of the Debentures, if so acting. The Trustee may
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destroy any list furnished to it as provided in Section 6.1 upon receipt of a
new list so furnished.
(b) The rights of Debentureholders to communicate with other holders of
Debentures with respect to their rights under this Indenture or under the
Debentures, and the corresponding rights and duties of the Trustee, shall be as
provided by the Trust Indenture Act.
(c) If the Trustee shall be required by law to disclose any information
contained in any list of Debentureholders maintained by it, then each and every
holder of the Debentures by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any paying
agent nor the Debenture registrar shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 6.3 Reports by Trustee.
(a) Within 60 days after May 15 of each year commencing with the year
1998, the Trustee shall transmit to holders of Debentures 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 Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
Company. The Company will notify the Trustee in writing within a reasonable time
when the Debentures are listed on any stock exchange or automated quotation
system.
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 Debentures, 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; 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 15 days after the
same is so required to be filed with the Commission.
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ARTICLE VII
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS
IN THE 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 upon
any of the Debentures 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 and premium, if
any, on any of the Debentures as and when the same shall become due and
payable either at maturity or in connection with any redemption or
repayment 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 Debentures 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 forty-five (45) 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 to the Company and the
Trustee by the holders of at least twenty-five (25) percent in
aggregate principal amount of the Debentures at the time outstanding
determined in accordance with Section 9.4; or
(d) the Company shall have commenced a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with
respect to itself or its 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 substantial part of its property, or shall have
consented 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 shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its debts as
they become due; or
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(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief
with respect to it or its 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 substantial part of its property, 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, unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than 25 percent in aggregate principal amount of the
Debentures then outstanding hereunder determined in accordance with Section 9.4,
by notice in writing to the Company (and to the Trustee if given by
Debentureholders), may declare the principal of all the Debentures and the
interest accrued thereon 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 Debentures contained to the contrary
notwithstanding. This provision, however, is subject to the condition that if,
at any time after the principal of the Debentures 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 the Debentures and the principal of and
premium, if any, on any and all Debentures which shall have become due otherwise
than by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal and premium, if any, at the rate borne by the Debentures, 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 premium, if any, and accrued interest on
Debentures 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 Debentures 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 Trustee shall not be charged with knowledge and shall not be deemed
to have notice of any default or Event of Default, except an Event of Default
under Section 7.1(a) or (b) in cases where the Trustee is acting as paying
agent, unless written notice thereof stating that such notice is a "Notice of
Default" shall have been given to a Responsible Officer by the Company or a
Debentureholder or any agent of a Debentureholder; and, in the absence of such
written notice, the Trustee may conclusively assume that there is no default or
Event of Default.
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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 Debentures, 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 Debentures, and the Trustee
shall continue as though no such proceeding had been taken.
Section 7.2 Payment of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Debentures 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 or premium, if any, on any of the Debentures as and when the same
shall have become due and payable, whether at maturity of the Debentures, or in
connection with any repayment of a Debenture pursuant to Article III or in
connection with any redemption, by declaration or otherwise -- then, upon demand
of the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Debentures, the whole amount that then shall have become due and
payable on all such Debentures for principal and premium, if any, or interest,
or both, as the case may be, with interest upon the overdue principal and
premium, if any, and (to the extent that payment of such interest is enforceable
under applicable law) upon the overdue installments of interest at the rate
borne by the Debentures; and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including a
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
any expenses or liabilities incurred by the Trustee hereunder other than through
its negligence or bad faith. Until such demand by the Trustee, the Company may
pay the principal of and premium, if any, and interest on the Debentures to the
registered holders, whether or not the Debentures 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
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures 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 Debentures 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
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Company or such other obligor, or in the case of any other similar judicial
proceedings relative to the Company or such other obligor upon the Debentures,
or to the creditors or property of the Company or such other obligor, the
Trustee, irrespective of whether the principal of the Debentures 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, premium, if any, and interest owing and unpaid in
respect of the Debentures, 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 Debentureholders
allowed in such judicial proceedings relative to the Company or any other
obligor on the Debentures, 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 Debentureholders 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 Debentureholders, to pay to the Trustee any amount due
it for 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 Debentures may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or adopt on behalf of any Debentureholder any plan of
reorganization or arrangement, affecting the Debentures or the rights of any
Debentureholder, or to authorize the Trustee to vote in respect of the claim of
any Debentureholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof for 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
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the holders of the Debentures.
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
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Trustee shall be held to represent all the holders of the Debentures, and it
shall not be necessary to make any holders of the Debentures 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 Debentures, 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
principal of the outstanding Debentures shall not have become due and
be unpaid, to the payment of interest on the Debentures 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 Debentures, 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 Debentures shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Debentures for principal and
premium, if any, and interest, with interest on the overdue principal
and premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the
rate borne by the Debentures; and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Debentures, then to the payment of such principal and premium, if
any, and interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal and
premium, if any, or of any installment of interest over any other
installment of interest, or of any Debenture over any other Debenture,
ratably to the aggregate of such principal and premium, if any, and
accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the
payment of the remainder, if any, to the Company or any other Person
lawfully entitled thereto.
Section 7.4 Proceedings by Debentureholder. No holder of any Debenture
shall have any right by virtue of or by availing 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 a majority
in aggregate principal
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amount of the Debentures 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 reasonable
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 Debenture with every other taker and
holder and the Trustee, that no one or more holders of Debentures 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
Debentures, 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 Debentures (except as otherwise provided herein). For the protection
and enforcement of this Section 7.4, each and every Debentureholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provisions of this Indenture and any
provision of any Debenture, the right of any holder of any Debenture to receive
payment of the principal of and premium, if any, and interest on such Debenture,
on or after the respective due dates expressed in such Debenture, 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 Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of Default
hereunder 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 the Trustee shall deem most effectual 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 Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not
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exclusive of any thereof or of any other powers and remedies available to the
Trustee or the holders of the Debentures, 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 Debentures 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 an 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 Debentureholders may be exercised from time to time, and as often as
shall be deemed expedient, by the Trustee or by the Debentureholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by Majority
of Debentureholders. The holders of a majority in aggregate principal amount of
the Debentures 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 (subject to the
provisions of Section 8.1) the Trustee shall have the right to decline to follow
any such direction if the Trustee shall be advised by counsel that the action or
proceeding so directed may not lawfully be taken or if the Trustee in good faith
by its board of directors or executive committee, or a trust committee of
directors and/or Responsible Officers shall determine that the action or
proceedings so directed could involve the Trustee in personal liability. Prior
to any declaration accelerating the maturity of the Debentures, the holders of a
majority in aggregate principal amount of the Debentures at the time outstanding
may on behalf of the holders of all of the Debentures waive any past default or
Event of Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the Debentures,
(ii) a failure by the Company to convert any Debentures into Common Stock, (iii)
a default in the payment of redemption or repayment price pursuant to Article
III or (iv) a default in respect of a covenant or provision hereof which under
Article XI cannot be modified or amended without the consent of the holders of
all Debentures then outstanding. Upon any such waiver the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder, respectively; 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 Debentures 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 the occurrence of a default, mail to all Debentureholders, as the
names and addresses of such holders appear upon the Register, notice of all
defaults known to the Trustee, unless such
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defaults shall have been cured or waived before the giving of such notice (the
term "defaults" for the purpose of this Section 7.8 being hereby defined to be
the events specified in clauses (a), (b), (c), (d) and (e) of Section 7.1, not
including periods of grace, if any, or the giving of any notice, or both
provided for therein); and provided that, except in the case of default in the
payment of the principal of or premium, if any, or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as the board of directors, the executive committee, or a trust committee of
directors and/or Responsible Officers of the Trustee in good faith determine
that the withholding of such notice is in the interests of the Debentureholders.
Section 7.9 Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture 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, 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 shall not
apply to any suit instituted by the Trustee, to any suit instituted by any
Debentureholder, or group of Debentureholders, holding in the aggregate more
than ten percent in principal amount of the Debentures at the time outstanding
determined in accordance with Section 9.4, or to any suit instituted by any
Debentureholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Debenture on or after the due date expressed
in such Debenture or to any suit for the enforcement of the right to convert any
Debenture 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 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.
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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 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 requirements of this Indenture;
(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 it shall be proved that 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
direction of the holders of not less than a majority in principal
amount of the Debentures 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; and
(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.
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
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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 rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, coupon or other paper
or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(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 the Treasurer of the Company;
(c) the Trustee may consult with counsel 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 Debentureholders pursuant to the
provisions of this Indenture, unless such Debentureholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby;
(e) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion or rights or powers conferred upon it by this
Indenture;
(f) prior to the occurrence of an Event of Default hereunder
and after the curing or waiving of all Events of Default, 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, consent, order, approval, bond, debenture,
coupon or other paper or document unless requested in writing to do so
by the holders of not less than a majority in principal amount of the
Debentures then outstanding; provided, however, that if the payment
within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee
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may require reasonable indemnity against such expense or liability as a
condition to so proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if paid by the Trustee or
any predecessor Trustee, shall be repaid by the Company upon demand;
and
(g) 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.
Section 8.3 No Responsibility for Recitals, Etc. The recitals contained
herein and in the Debentures (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
Debentures. The Trustee shall not be accountable for the use or application by
the Company of any Debentures or the proceeds of any Debentures 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 Debentures. The Trustee, any paying agent, any conversion agent or Debenture
registrar, in its individual or any other capacity, may become the owner or
pledgee of Debentures with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Debenture 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.
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, reasonable 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), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances 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 bad faith. The Company also covenants to indemnify
the Trustee for, and
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to hold it harmless against, any loss, liability or expense (including
attorneys' fees and expenses) incurred without negligence or bad faith on the
part of the Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of enforcing the
Indenture against the Company (including this Section 8.6) and defending itself
against or investigating any claim (whether asserted by the Company, any holder
or other Person). 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 Debentures 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
Debentures. The obligation of the Company under this Section 8.6 and the liens
created hereunder shall survive the resignation or removal of the Trustee, the
satisfaction and discharge of this Indenture and the termination of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 7.1(d) or (e) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
bankruptcy law.
Section 8.7 Officers' Certificate and Opinion of Counsel as Evidence.
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 additional
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate or an Opinion of
Counsel or both delivered to the Trustee, such certificate or opinion, in the
absence of negligence or bad faith on the part of the Trustee, shall be full
warrant to the Trustee for any action taken or omitted by it under the
provisions of this Indenture upon the faith thereof.
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. 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, 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
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in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.
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 by mailing notice thereof to the holders of
Debentures at their addresses as they shall appear on the Register. 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 within sixty (60)
days after the mailing of such notice of resignation to the Debentureholders,
the resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Debentureholder who has been a bona
fide holder of a Debenture or Debentures for at least six 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 cease to be eligible in accordance with
the provisions of Section 8.8 and shall fail to resign after written
request therefor by the Company or by any such Debentureholder, or
(2) 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 Debentureholder who has been a bona fide holder
of a Debenture or Debentures for at least six 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. Such
court may
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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
Debentures 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 Debentureholder, 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 amounts then due it 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 or funds held or collected by such
trustee as such trustee to secure any amounts then due it pursuant to the
provisions of Section 8.6.
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) shall mail or cause to be
mailed notice of the succession of such trustee hereunder to the holders of
Debentures at their addresses as they shall appear on the 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.
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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 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 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 Debentures 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 Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or an authenticating agent
appointed by such successor trustee may authenticate such Debentures either in
the name of any predecessor trustee hereunder or in the name of the successor
trustee; and in all such cases such certificates shall have the full force which
it is anywhere in the Debentures or in this Indenture provided that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Debentures in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
Section 8.13 Limitation on Rights of Trustee as Creditor. If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Debentures), 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).
ARTICLE IX
CONCERNING THE DEBENTUREHOLDERS
Section 9.1 Action by Debentureholders. Whenever in this Indenture it
is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures 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 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
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of
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Debentureholders 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 Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, 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 Debentureholders. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Debentureholder or his 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 Debentures shall be proved by the registry of such
Debentures or by a certificate of the Debenture registrar.
The record of any Debentureholders' 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 Debenture registrar may deem the
Person in whose name such Debenture shall be registered upon the Register to be,
and may treat him as, the absolute owner of such Debenture (whether or not such
Debenture shall be overdue and notwithstanding any notation of ownership or
other writing thereon made by anyone other than the Company or any Debenture
registrar) for the purpose of receiving payment of or on account of the
principal of and premium, if any, and interest on such Debenture, for conversion
of such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any other authenticating agent nor any paying agent nor any
conversion agent nor any Debenture 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 Debenture.
Section 9.4 Company-Owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures 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 Debentures which a Responsible Officer knows are so owned
shall be so disregarded. Debentures 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
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satisfaction of the Trustee the pledgee's right to vote such Debentures and that
the pledgee is not the Company, any other obligor on the Debentures 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 Debentures, 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
Debentures not listed therein are outstanding for the purpose of any such
determinations.
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 Debentures specified in this Indenture in connection
with such action, any holder of a Debenture which is shown by the evidence to be
included in the Debentures the holders of which have consented to such action
may, by filing written notice with the Trustee at its Principal Office and upon
proof of holding as provided in Section 9.2, revoke such action so far as
concerns such Debenture. Except as aforesaid, any such action taken by the
holder of any Debenture shall be conclusive and binding upon such holder and
upon all future holders and owners of such Debenture and of any Debentures
issued in exchange or substitution therefor, irrespective of whether any
notation in regard thereto is made upon such Debenture or any Debenture issued
in exchange or substitution therefor.
ARTICLE X
DEBENTUREHOLDERS' MEETINGS
Section 10.1 Purposes of Meetings. A meeting of Debentureholders 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, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders 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;
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(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 Debentures 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 Debentureholders 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 Debentureholders, 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 Debentures at their addresses as they shall appear on
the 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 Debentureholders shall be valid without notice if the
holders of all Debentures then outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
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 Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent in aggregate principal amount of the
Debentures then outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, 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 Debentureholders 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 Debentureholders a Person shall (a) be a holder of one or more
Debentures or (b) be a Person appointed by an instrument in writing as proxy by
a holder of one or more Debentures. The only Persons who shall be entitled to be
present or to speak at any meeting of Debentureholders 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.
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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 Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors 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 Debentureholders as provided in Section 10.3, in which case the
Company or the Debentureholders 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 Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 9.4, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Debenture
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 Debentures held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
10.2 or 10.3 may be adjourned from time to time by a majority of those present,
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 Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the principal amount of the Debentures 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 Debentureholders 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 Debentures 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.
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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 in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders 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
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent of
Debentureholders. 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 Debentures pursuant to the requirements of Section 15.6
and the repayment obligations of the Company pursuant to the
requirements of Section 3.6(e);
(b) subject to Article IV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Debentures, any
property or assets;
(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation 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
Debentures, 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;
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(e) to provide for the issuance under this Indenture of
Debentures in coupon form (including Debentures registrable as to
principal only) and to provide for exchangeability of such Debentures
with the Debentures 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 which 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 which shall
not adversely affect the interests of the holders of the Debentures in
any material respect;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures; 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.
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 which 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 such
supplemental indenture which 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 Debentures at the time outstanding, notwithstanding any of
the provisions of Section 11.2.
Section 11.2 Supplemental Indentures with Consent of Debentureholders.
With the consent (evidenced as provided in Article IX) of the holders of not
less than 662/3% in aggregate principal amount of the Debentures 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 of any supplemental indenture or of modifying in any manner
the rights of the holders of the Debentures; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debenture, or
reduce the rate or extend the time of payment of interest thereon, or reduce the
principal amount thereof or premium, if any, thereon, or reduce any amount
payable on redemption or on repayment thereof, or impair or affect the right of
any Debentureholder to institute suit for the payment thereof, or
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make the principal thereof or interest or premium, if any, thereon payable in
any coin or currency other than that provided in the Debentures, or modify the
provisions of this Indenture with respect to the subordination of the Debentures
in a manner adverse to the Debentureholders, or change the obligation of the
Company to make repayment of any Debenture pursuant to Section 3.5 or 3.6 in a
manner adverse to the holder of Debentures, or impair the right to convert the
Debentures into Common Stock subject to the terms set forth herein, including
Section 15.6, without the consent of the holder of each Debenture so affected,
or (ii) reduce the aforesaid percentage of Debentures, the holders of which are
required to consent to any such supplemental indenture, without the consent of
the holders of all Debentures then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Treasurer
authorizing the execution of any such supplemental indenture, and upon the
filing with the Trustee of evidence of the consent of Debentureholders 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 Debentureholders 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 Debentures
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments and all the terms 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.
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Section 11.4 Notation on Debentures. Debentures 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 Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may
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 Debentures then outstanding, upon surrender of
such Debentures then outstanding.
Section 11.5 Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee. The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of Counsel 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 Debentures shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (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 corporation
(whether or not affiliated with the Company) authorized to acquire and operate
the same and which shall be organized under the laws of a State of the United
States or the District of Columbia; however, and the Company hereby covenants
and agrees, that upon any such consolidation, merger, sale, conveyance or lease,
the due and punctual payment of the principal of and premium, if any, and
interest on all of the Debentures, 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 corporation (if other than the Company) formed
by such consolidation, or into which the Company shall have been merged, or by
the corporation which shall have acquired or leased such property, and such
supplemental indenture shall provide for the applicable conversion rights set
forth in Section 15.6.
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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 corporation, 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 premium, if any, and interest on all of the
Debentures and the due and punctual performance of all of the covenants and
conditions of this Indenture to be performed by the Company, such successor
corporation shall succeed to and be substituted for the Company, with the same
effect as if it had been named herein as the party of the first part. Such
successor corporation thereupon may cause to be signed, and may issue either in
its own name or in the name of Omnicom Group Inc. any or all of the Debentures
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor corporation
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 Debentures which previously
shall have been signed and delivered by the officers of the Company to the
Trustee for authentication, and any Debentures which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for that
purpose. All the Debentures so issued shall in all respects have the same legal
rank and benefit under this Indenture as the Debentures theretofore or
thereafter issued in accordance with the terms of this Indenture as though all
of such Debentures 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
which 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
Debentures 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
Debentures 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.
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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 Debentures theretofore authenticated (other
than any Debentures which shall have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures 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 all of the Debentures (other than any Debentures
which shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or date fixed for redemption, as the case
may be, and if in either case 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 Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and premium,
if any, and interest on, the Debentures and the other rights, duties and
obligations of Debentureholders, 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 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
Debentures.
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,
shall be held in trust and applied by it 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 Debentures 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 and premium, if
any.
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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
Debentures (other than the Trustee) shall, upon demand 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, premium, if any, or interest on Debentures and not applied but
remaining unclaimed by the holders of Debentures for two years after the date
upon which the principal of, premium, if any, or interest on such Debentures, 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
Debentures shall thereafter look only to the Company for any payment which such
holder may be entitled to collect.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Debentures Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Debenture, or for any claim based thereon or 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 Debenture,
or because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, 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
Debentures.
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ARTICLE XV
CONVERSION OF DEBENTURES
Section 15.1 Right to Convert. Subject to and upon compliance with the
provisions of this Article, the holder of any Debenture shall have the right, at
his option, at any time after ninety (90) days following the latest date of
original issuance and prior to the close of business on January 6, 2013 (except
that, with respect to any Debenture or portion of a Debenture which shall be
called for redemption 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 redemption of such Debenture or portion of a Debenture unless
the Company shall default in payment due upon redemption thereof) to convert the
principal amount of any such Debenture, or any portion of such principal amount
which is $1,000 or a multiple thereof, into that number of fully paid and
non-assessable shares of Common Stock (as such shares shall then be constituted)
at the date of conversion obtained, by dividing the principal amount of the
Debenture or portion thereof surrendered for conversion by the Conversion Price
in effect at such time, by surrender of the Debenture so to be converted in
whole or in part in the manner provided, together with any required funds, in
Section 15.2. A Debenture in respect of which a holder is exercising the option
to require repayment on the January 6, 2004 or upon a Fundamental Change may be
converted only if such holder withdraws its election to exercise the option to
require repayment in accordance with Sections 3.5, 3.6 and 3.7 hereof. A holder
of Debentures is not entitled to any rights of a holder of Common Stock until
such holder has converted his Debentures to Common Stock, and only to the extent
such Debentures 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 Debenture in certificated form, the
holder of any such Debenture to be converted in whole or in part shall surrender
such Debenture, 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 Debentures (or such other notice which is
acceptable to the Company) to the Company at such office or agency that the
holder elects to convert such Debenture or the portion thereof specified in said
notice. Such notice shall also state the name or names (with address) 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 Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or its duly authorized attorney.
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In order to exercise the conversion privilege with respect to any
interest in a Debenture in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depositary's
book-entry conversion program, deliver by book-entry delivery an interest in
such Debenture 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 the surrender of such Debenture and
the receipt of such notice and funds, if any, as aforesaid, the Company shall
issue and shall deliver at such office or agency to such holder, or on his
written order, a certificate or certificates for the number of full shares of
Common Stock issuable upon the conversion of such Debenture or portion thereof
in accordance with the provisions of this Article and a check in payment 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 Debenture of a denomination
greater than $1,000 shall be surrendered for partial conversion, and subject to
Section 2.3, the Company shall execute and the Trustee shall authenticate and
deliver to or upon the written order of the holder of the Debenture so
surrendered, without charge to him, a new Debenture or Debentures in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
above in this Section 15.2 have been satisfied as to such Debenture (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 Debenture shall have been surrendered.
The Company's delivery of the fixed number of shares of Common Stock
into which the Debentures are convertible will be deemed to satisfy the
Company's obligation to pay the principal amount of the Debentures and all
accrued interest and original issue discount that has not previously been (or is
not simultaneously being) paid. The Common Stock is treated as issued first in
payment of accrued interest and original issue discount and then in payment of
principal. Thus, accrued interest and original issue discount are treated as
paid rather than canceled.
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Any Debenture 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 Debenture or portion thereof being
converted shall have been called for redemption on a date fixed for redemption
which 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 (i) there
shall exist at the time of conversion a default in the payment of interest on
the Debentures or (ii) the date fixed for redemption is on or after December 31,
2001 but on or before January 6, 2002, the holders who convert on or after
December 26, 2001 will receive, in addition to Common Stock otherwise payable
upon such conversion, accrued interest to, but excluding, January 6, 2002 on the
principal amount of Debentures so converted. An amount equal to such payment
shall be paid by the Company on such interest payment date to the holder of such
Debenture at the close of business on such record date; provided, however, that
if the Company shall default in the payment of interest on such interest payment
date, such amount shall be paid to the Person who made such required payment.
Except as provided above in this Section 15.2, no payment or other adjustment
shall be made for interest accrued on any Debenture converted or for dividends
on any shares issued upon the conversion of such Debenture as provided in this
Article.
Upon the conversion of an interest in a Debenture 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 Debenture 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 Debentures effected through any
conversion agent other than the Trustee.
Section 15.3 Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Debentures. If more than one Debenture shall be surrendered
for conversion at one time by the same holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Debentures (or specified portions thereof to
the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment therefor at the current market value thereof,
and such payment thereof shall be made by check. For these purposes, the current
market value of a share of Common Stock shall be the Closing Price on the first
Business Day immediately preceding the day on which the Debentures (or specified
portions thereof) are deemed to have been converted.
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Section 15.4 Conversion Price. The conversion price shall be as
specified in the form of Debenture (herein called the "Conversion Price")
attached as Exhibit A hereto, subject to adjustment as provided in this Article
XV.
Section 15.5 Adjustment of Conversion Price. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall (i) pay a dividend, or make a
distribution, in shares of its Common Stock, on its Common Stock, (ii)
subdivide its outstanding Common Stock into a greater number of shares,
or (iii) combine its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall
be adjusted so that the holder of any Debenture thereafter surrendered
for conversion shall be entitled to receive the number of shares of
Common Stock of the Company which he would have owned or have been
entitled to receive after the happening of any of the events described
above had such Debenture been converted immediately prior to the
happening of such event. An adjustment made pursuant to this subsection
(a) shall become effective immediately after the record date in the
case of a dividend and shall become effective immediately after the
effective date in the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all
holders of its Common Stock entitling them (for a period expiring
within 45 days after the record date mentioned below) to subscribe for
or purchase Common Stock at a price per share less than the Current
Market Price (as defined below) at the record date for the
determination of stockholders entitled to receive such rights or
warrants, the Conversion Price in effect immediately prior thereto
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the
date of issuance of such rights or warrants by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants plus the number of
shares which the aggregate offering price of the total number of shares
so offered would purchase at such Current Market Price, and of which
the denominator shall be the number of shares of Common Stock
outstanding on the date of issuance of such rights or warrants plus the
number of additional shares of Common Stock offered for subscription or
purchase. Such adjustment shall be made successively whenever any such
rights or warrants are issued, and shall become effective immediately
after such record date. 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. To the extent that no
shares of Common Stock
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are so delivered after the expiration of such rights or warrants, the
Conversion Price shall be readjusted to the Conversion Price which
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.
(c) In case the Company shall distribute to all holders of its
Common Stock any shares of any class of capital stock of the Company
(other than Common Stock) or evidences of its indebtedness or assets
(excluding cash dividends or other distributions to the extent paid
from retained earnings of the Company) or rights or warrants to
subscribe for or purchase any of its securities (excluding those
referred to in subsection (b) above), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the
Conversion Price determined by multiplying the Conversion Price in
effect immediately prior to the date of such distribution by a fraction
of which the numerator shall be the Current Market Price of the Common
Stock on the record date mentioned below less the fair market value on
such record date (as determined by the Board of Directors of the
Company, whose determination shall be conclusive, and described in a
certificate filed with the Trustee) of the portion of the capital stock
or assets or evidences of indebtedness so distributed or of such rights
or warrants applicable to one share of Common Stock, and the
denominator shall be the Current Market Price of the Common Stock on
such record date. For purposes of this subsection (c) the period for
determining the Current Market Price shall end immediately prior to the
date that is the earlier of the ex-distribution date and the record
date referred to below in this subsection. Such adjustment shall become
effective immediately after the record date for the determination of
shareholders entitled to receive such distribution; provided, however,
that in the event the numerator shall be less than one, in lieu of the
foregoing adjustment, adequate provision shall be made so that each
holder of Debentures shall have the right to receive upon conversion
the amount of such distribution such holder would have received had
such holder converted each Debenture immediately prior to the record
date. In the event that no such dividend or distribution is so paid or
made, the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect if such dividend or distribution
had not occurred.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any
quarterly cash dividend on the Common Stock to the extent the aggregate
cash dividend per share of Common Stock in any fiscal quarter does not
exceed the greater of (A) the amount per share of Common Stock of the
next preceding quarterly cash dividend on the Common Stock to the
extent such preceding quarterly dividend did not require any adjustment
of the Conversion Price pursuant to this subsection (d) (as adjusted to
reflect subdivisions or combinations of the Common Stock), and (B)
3.75% of the average of the Closing Price (determined in Section
15.5(h)) during the ten Trading Days (as defined in
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Section 15.5(h)) next preceding the date of declaration of such
dividend and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary), then, in such case, unless the Company
elects to reserve such cash for distribution to the holders of the
Debentures upon the conversion of the Debentures so that any such
holder converting Debentures will receive upon such conversion, in
addition to the shares of Common Stock to which such holder is
entitled, the amount of cash which such holder would have received if
such holder had, immediately prior to the record date for such
distribution of cash, converted its Debentures into Common Stock, 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 of which the numerator 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 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 Debentureholder shall have the right to receive upon
conversion the amount of cash such holder would have received had such
holder converted each Debenture 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 which would
then be in effect if such dividend or distribution had not been
declared. If any adjustment is required to be made as set forth in this
subsection (d) 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 subsection (d) 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.
(e) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall involve the
payment by the Company or such subsidiary of consideration per share of
Common Stock having a fair market value (as determined by the Board of
Directors, or to the extent permitted by applicable law, a duly
authorized committee thereof, 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, at the last time
(the "Expiration Time") tenders or exchanges may be made pursuant to
such tender or exchange offer (as it shall have been amended) that
exceeds the Current Market Price of the Common Stock on the
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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 (which shall not be greater than one) of
which the numerator 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 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
which would then be in effect if such tender or exchange offer had not
been made.
(f) In case of a tender or exchange offer made by a Person
other than the Company or any Subsidiary for an amount which increases
the offeror's ownership of Common Stock to more than 25% of the Common
Stock outstanding and shall involve the payment by such Person of
consideration per share of Common Stock having a fair market value (as
determined by the Board of Directors, or to the extent permitted by
applicable law, a duly authorized committee thereof, whose
determination shall be conclusive, and described in a resolution of the
Board of Directors) at the applicable 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 Expiration Time,
and in which, as of the 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
Expiration Time by a fraction (which shall not be greater than one) of
which the numerator 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 shall be the sum of (x) the fair market value (determined
as aforesaid) of the aggregate consideration payable
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to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender or exchange offer) of all 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 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 subsection (f) shall not be
made if, as of the 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.
(g) In case the Company shall issue Common Stock or securities
convertible into, or exchangeable for, Common Stock at a price per
share (or having a conversion or exchange price per share) that is less
than the then Current Market Price of the Common Stock (but excluding,
among other things, issuances: (a) pursuant to any bona fide plan for
the benefit of employees, directors, consultants or other individuals
in connection with employee incentive plans of the Company now or
hereafter in effect; (b) to acquire all or any portion of a business in
an arm's-length transaction between the Company and an unaffiliated
third party including, if applicable, issuances upon exercise of
options or warrants assumed in connection with such an acquisition; (c)
in a bona fide public offering pursuant to a firm commitment
underwriting (or a similar type of offering made pursuant to Rule 144A
and/or Regulation S under the Securities Act) or sales at the market
pursuant to a continuous offering stock program; (d) pursuant to the
exercise of warrants, rights (including, without limitation, earnout
rights) or options, or upon the conversion of convertible securities,
which are issued and outstanding on the date hereof, or which may be
issued in the future at fair value and with an exercise price or
conversion price at least equal to the Current Market Price of the
Common Stock at the time of issuance of such warrant, right, option or
convertible security; and (e) pursuant to a dividend reinvestment plan
or other plan hereafter adopted for the reinvestment of dividends or
interest provided that such Common Stock is issued at a price at least
equal to 95% of the market price of the Common Stock at the time of
such issuance), the Conversion Price shall be adjusted so that the
holder of each Debenture shall be entitled to receive, upon the
conversion thereof, the number of shares of Common Stock determined by
multiplying (i) the Conversion Price on the day immediately prior to
such date of issuance by (ii) a fraction, the numerator of which shall
be the sum of (1) the number of shares of Common Stock outstanding on
such date and (2) the
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number of shares of Common Stock which the aggregate consideration
receivable by the Company for the total number of shares of Common
Stock so issued (or into which the convertible securities may convert)
would purchase at such Conversion Price on such date, and the
denominator of which shall be the sum of (A) the number of shares of
Common Stock outstanding on such date and (B) the number of additional
shares of Common Stock issued (or into which the convertible securities
may convert). An adjustment made pursuant to this subsection (g) shall
be made on the next Business Day following the date on which any such
issuance is made and shall be effective retroactively immediately after
the close of business on such date. For purposes of this subsection
(g), the aggregate consideration receivable by the Company in
connection with the issuance of shares of Common Stock or of securities
convertible into shares of Common Stock shall be deemed to be equal to
the sum of the aggregate offering price (before deduction of
underwriting discounts or commissions and expenses payable to third
parties) of all such securities plus the minimum aggregate amount, if
any, payable upon conversion of any such convertible securities into
shares of Common Stock.
(h) For purposes of this Section 15.5, the following terms
shall have the meaning indicated:
(1) "Closing Price" means the last reported
sale price for each day shall be (i) the last reported sale
price of Common Stock on the National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
System, or any similar system of automated dissemination of
quotations of securities prices then in common use, if so
quoted, or (ii) if not quoted as described in clause (i), the
mean between the high bid and low asked quotations for Common
Stock as reported by the National Quotation Bureau
Incorporated if at least two securities dealers have inserted
both bid and asked quotations for such class of stock on at
least 5 of the 10 preceding days, or (iii) if the Common Stock
is listed or admitted for trading on any national securities
exchange, the last sale price, or the closing bid price if no
sale occurred, of such class of stock on the principal
securities exchange on which such class of stock is listed. If
the Common Stock is quoted on a national securities or central
market system, in lieu of a market or quotation system
described above, the last reported sale price shall be
determined in the manner set forth in clause (ii) of the
preceding sentence if bid and asked quotations are reported
but actual transactions are not, and in the manner set forth
in clause (iii) of the preceding sentence if actual
transactions are reported. If none of the conditions set forth
above is met, the last reported sale price of Common Stock on
any day or the average of such last reported sale prices for
any period shall be the fair market value of such
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class of stock as determined by a member firm of the New York
Stock Exchange, Inc. selected by the Company.
(2) "Current Market Price" shall mean the
arithmetic average of the daily Closing Prices per share of
Common Stock for the ten consecutive Trading Days immediately
prior to the date in question for the purpose of any
computation under subsections (b), (c), (d), (e), (f) and (g)
above.
(3) "fair market value" shall mean the amount
which a willing buyer would pay a willing seller in an
arm's-length transaction.
(4) "Trading Day" with respect to Common Stock
means (i) if the Common Stock is quoted on the National Market
of the National Association of Securities Dealers, Inc.,
Automated Quotation System or any similar system of automated
dissemination of quotations of securities prices, days on
which trades may be made on such system or (ii) if the Common
Stock is listed or admitted for trading on any national
securities exchange, days on which such national securities
exchange is open for business.
(i) 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 Debentures at his
address appearing on the Register 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 shall be required
unless such adjustment would require an increase or decrease of at
least 1% in such price; provided, however, that any adjustments which
by reason of this subsection (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 of a
share, as the case may be.
Anything in this Section 15.5 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Conversion
Price, in addition to those
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required by this Section 15.5, as it in its discretion shall determine
to be advisable in order that any stock dividends, subdivision of
shares, distribution of rights to purchase stock or securities, or a
distribution of securities convertible into or exchangeable for stock
hereafter made by the Company to its stockholders shall not be taxable.
(k) Whenever the Conversion Price is adjusted, as herein
provided, the Company shall 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.
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 Debenture at his last address
appearing on the Register provided for in Section 2.5 of this
Indenture, within 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 15.5 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 Debenture 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 lieu of any fraction pursuant to Section
15.3, such payment thereof shall be made by check.
Section 15.6 Effect of Reclassification, Consolidation, Merger or Sale.
If any of the following events occur, namely (i) any reclassification or change
of outstanding shares of Common Stock (other than a change in par value, or from
par value to no par value, or from no par value to par value, or as a result of
a subdivision or combination), (ii) any consolidation, merger or combination of
the Company with another corporation as a result of which holders of Common
Stock shall be entitled to receive stock, securities or other property or assets
(including cash) with respect to or in exchange for such Common Stock, or (iii)
any sale or conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be entitled to receive stock, securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, then the Company or the successor or purchasing corporation, as
the case may be, shall execute with the Trustee a supplemental indenture (which
shall comply with the Trust Indenture Act as in force at the date of execution
of such supplemental indenture) providing that each Debenture shall be
convertible
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into the kind and amount of shares of stock and other securities or property or
assets (including cash) receivable upon such reclassification, change,
consolidation, merger, combination, sale or conveyance by a holder of a number
of shares of Common Stock issuable upon conversion of such Debentures
immediately prior to such reclassification, change, consolidation, merger,
combination, sale or conveyance. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article XV.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at his address appearing on
the Register provided for in Section 2.5 of this Indenture.
The above provisions of this Section 15.6 shall similarly apply to
successive reclassifications, consolidations, mergers, combinations, and sales.
If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.
Section 15.7 Taxes on Shares Issued. The issue of stock certificates on
conversions of Debentures shall be made without charge to the converting
Debentureholder for any U.S. 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 Debenture converted, and the Company shall not be
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 15.8 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,
sufficient shares of Common Stock to provide for the conversion of the
Debentures from time to time as such Debentures 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 Debentures, 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 Debentures 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.
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The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Debentures 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 New York Stock Exchange or any other national securities
exchange the Company will, if permitted by the rules of such exchange, list and
keep listed so long as the Common Stock shall be so listed on such exchange, all
Common Stock issuable upon conversion of the Debentures.
Section 15.9 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 Debentures 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 Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Subject to the provisions of Section 8.1,
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 Debenture 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 Debentureholders upon the
conversion of their Debentures 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.
Section 15.10 Notice to Holders Prior to Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of retained
earnings); or
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(b) the Company shall authorize the granting to the holders 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 shareholders of the Company is required, or of the sale
or transfer of all or substantially all of the assets of the Company;
or
(d) of the voluntary or involuntary dissolution, liquidation
or winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Register, provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen (15) 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 in this Indenture contained by
the Company 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
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force and effect by the like board, committee or officer of any corporation 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 Debentures on the Company may be 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 Omnicom Group Inc., 437 Madison Avenue, New York, New York
10022 Attention: Secretary. 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 made in writing at the Principal Office of the
Trustee, which office is, at the date as of which this Indenture is dated,
located at The Chase Manhattan Bank, 450 West 33rd Street, New York, NY 10001,
Attention:
Global Trust Services.
Section 16.4 Governing Law. This Indenture and each Debenture shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws 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.
Section 16.6 Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
Trust Indenture Act ss.314(a)(4)) shall comply with the provisions of Trust
Indenture Act ss.314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him to express an
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informed opinion as to whether or not such covenant or condition has
been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person such condition or covenant has been satisfied.
Section 16.7 Legal Holidays. In any case where the date of maturity of
interest on or principal of the Debentures or the date fixed for redemption or
repayment of any Debenture will be a legal holiday or a day on which banking
institutions in New York, New York are authorized by law or executive order to
close ("Legal Holidays"), then payment of such interest on or principal of the
Debentures need not be made on such date but may be made on the next succeeding
day not a Legal Holiday with the same force and effect as if made on the date of
maturity or the date fixed for redemption or repayment and no interest shall
accrue for the period from and after such date.
Section 16.8 No Security Interest Created. Nothing in this Indenture or
in the Debentures, 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 where property of
the Company or its subsidiaries is located.
Section 16.9 Benefits of Indenture. Nothing in this Indenture or in the
Debentures, expressed or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
registrar and their successors hereunder, the holders of Debentures 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.
Section 16.11 Authenticating Agent. The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
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
Debentures. For all purposes of this Indenture, the authentication and delivery
of Debentures by the authenticating agent shall be deemed to be authentication
and delivery of such Debentures "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
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the Debentures 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 16.12, 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 Debentures as the names and
addresses of such holders appear on the Register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
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 Chase Manhattan Bank hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of January 6, 1998.
OMNICOM GROUP INC.
By /s/ Dennis E. Hewitt
------------------------------
Title: Treasurer
[CORPORATE SEAL]
Attest:
By /s/ Barry J. Wagner
----------------------------------
THE CHASE MANHATTAN BANK
_________________________,
TRUSTEE
By /s/ Andrew M. Deck
------------------------------
Title: Vice President
[CORPORATE SEAL]
Attest:
By /s/ Glenn McKeever
- ---------------------------------------
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EXHIBIT A
THIS DEBENTURE WAS ISSUED WITH ORIGINAL ISSUE DISCOUNT FOR FEDERAL INCOME TAX
PURPOSES. THE TOTAL AMOUNT OF ORIGINAL ISSUE DISCOUNT IS 18.968% OF THE
DEBENTURE'S PRINCIPAL AMOUNT, THE ISSUE DATE IS JANUARY 6, 1998, AND THE YIELD
FROM THE ISSUE DATE TO JANUARY 6, 2004 IS 5%, COMPOUNDED SEMIANNUALLY (TREATED
AS THE YIELD TO MATURITY FOR TAX PURPOSES).
[For global Debenture only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY," WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DEPOSITARY AND ANY
PAYMENT HEREON IS MADE TO CEDE & CO. (OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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.]
[For Restricted Securities only:
THE DEBENTURE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS,
AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE DEBENTURE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE DEBENTURE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH DEBENTURE EXCEPT (A) TO OMNICOM GROUP INC. OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
<PAGE>
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) AGREES THAT PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(E) ABOVE), IT WILL FURNISH TO THE
CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE DEBENTURE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PRIOR
TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE DEBENTURE
EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE CHASE MANHATTAN BANK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF
THE PROPOSED TRANSFEREE IS A PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE CHASE MANHATTAN BANK, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE EARLIER OF THE TRANSFER OF THE DEBENTURE EVIDENCED HEREBY PURSUANT TO
CLAUSE 2(E) ABOVE OR UPON ANY TRANSFER OF THE DEBENTURES EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.]
2
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OMNICOM GROUP INC.
2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013
No. CUSIP
Omnicom Group Inc., a corporation duly organized and validly existing
under the laws of the State of New York (herein called the "Company"), which
term includes any successor corporation under the Indenture referred to on the
reverse hereof, for value received hereby promises to pay to
____________________ or registered assigns, the principal sum of ____________
($________ ) DOLLARS on January 6, 2013, at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or,
at the option of the holder of this Debenture, at the Principal Office, in such
coin or currency of the United States of America as at the time of payment shall
be legal tender for the payment of public and private debts, and to pay
interest, semi-annually on January 6 and July 6 of each year, commencing July 6,
1998, on said principal sum at said office or agency, in like coin or currency,
at the rate per annum 2 1/4%, from January 6 or July 6, as the case may be, next
preceding the date of this Debenture to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this Debenture, or unless
no interest has been paid or duly provided for on the Debentures, in which case
from January 6, 1998, until payment of said principal sum has been made or duly
provided for. Notwithstanding the foregoing, if the date hereof is after any
December 22 or June 21, as the case may be, and before the following January 6
or July 6, this Debenture shall bear interest from such January 6 or July 6;
provided, however, that if the Company shall default in the payment of interest
due on such January 6 or July 6, then this Debenture shall bear interest from
the next preceding January 6 or July 6 to which interest has been paid or duly
provided for or, if no interest has been paid or duly provided for on such
Debenture, from January 6, 1998. The interest payable on the Debenture pursuant
to the Indenture on any January 6 or July 6 will be paid to the person entitled
thereto as it appears on the Register at the close of business on the record
date, which shall be the December 22 or June 21 (whether or not a Business Day)
next preceding such January 6 or July 6, as provided in the Indenture; provided
that any such interest not punctually paid or duly provided for shall be payable
as provided in the Indenture. Interest may, at the option of the Company, be
paid either (i) by check mailed to the registered address of such person or (ii)
by transfer to an account maintained by such person located in the United
States.
Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
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Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions subordinating
the payment of principal of and premium, if any, and interest on the Debentures
to the prior payment in full of all Senior Indebtedness and provisions giving
the holder of this Debenture the right to convert this Debenture into Common
Stock of the Company on the terms and subject to the limitations referred to on
the reverse hereof and as more fully specified in the Indenture. Such further
provisions shall for all purposes have the same effect as though fully set forth
at this place.
This Debenture 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 and governed by the laws of said State.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed under its corporate seal.
Dated: OMNICOM GROUP INC.
By:________________________________
Attest:____________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
THE CHASE MANHATTAN BANK, as Trustee
By:__________________________________________________
Authorized Officer
By:___________________________________________________
As Authenticating Agent (if different from Trustee)
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[FORM OF REVERSE OF DEBENTURE]
OMNICOM GROUP INC.
2 1/4% CONVERTIBLE SUBORDINATED DEBENTURE DUE 2013
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 2 1/4% Convertible Subordinated Debentures due 2013
(herein called the "Debentures"), limited to the aggregate principal amount of
$230,000,000 all issued or to be issued under and pursuant to an indenture dated
as of January 6, 1998 (herein called the "Indenture"), between the Company and
The Chase Manhattan Bank, as trustee (herein called the "Trustee"), to which the
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures. Capitalized terms used in this Debenture and not defined herein have
the meaning ascribed thereto in the Indenture.
The Chase Manhattan Bank, the Trustee under the Indenture, has been
appointed by the Company as paying agent, conversion agent, Debenture registrar
and Custodian with regard to the Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of and accrued interest on all Debentures may be declared, and upon
said declaration shall become, due and payable, in the manner, with the effect
and subject to the conditions provided in the Indenture.
With the consent of the holders of not less than 66 2/3% in aggregate
principal amount of the Debentures at the time outstanding, the Company, when
authorized by resolutions of the Board of Directors, and the Trustee from time
to time and at any time may enter into an indenture or indentures supplemental
to the Indenture for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Debentures; provided, however, that no such supplemental indenture shall (i)
extend the fixed maturity of any Debenture, or reduce the rate or extend the
time of payment of interest thereon, or reduce the principal amount thereof or
premium, if any, thereon, or reduce any amount payable on redemption or on
repayment thereof, or impair or affect the right of any Debentureholder to
institute suit for the payment thereof, or make the principal thereof or
interest or premium, if any, thereon payable in any coin or currency other than
that provided in the Debenture, or modify the provisions of the Indenture with
respect to the subordination of the Debentures in a manner adverse to the
Debentureholders, or change the obligation of the Company to make repayment of
any Debenture on a Fundamental Change Repayment
<PAGE>
Date or the Holder Repayment Date in a manner adverse to the holder of the
Debentures, or impair the right to convert the Debentures into Common Stock
subject to the terms set forth in the Indenture, including Section 15.6 thereof,
without the consent of the holder of each Debenture so affected or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Debentures then outstanding. If any Event of Default shall have occurred
and be continuing, the Trustee or the holders of not less than 25 percent in
aggregate principal amount of the Debentures then outstanding, by notice in
writing to the Company (and to the Trustee if given by Debentureholders), may
declare the principal of all the Debentures and the interest accrued thereon to
be due and payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in the Indenture or in
this Debenture contained to the contrary notwithstanding. It is also provided in
the Indenture that, prior to any declaration accelerating the maturity of the
Debentures, the holders of a majority in aggregate principal amount of the
Debentures at the time outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except a default in the payment of interest or any premium on
or the principal of any of the Debentures, a default in the payment of a
redemption or repayment price pursuant to Article III thereof, a failure by the
Company to convert any Debentures into Common Stock or a default in respect of a
covenant or provision in the Indenture which under Article XI thereof cannot be
modified or amended without the consent of holders of all Debentures
outstanding. The holders of a majority in principal amount of the Debentures
then outstanding shall have the right to direct the time, method of conducting
any proceedings for any remedy available to the Trustee subject to certain
limitations specified in the Indenture. Any such consent or waiver by the holder
of this Debenture (unless revoked as provided in the Indenture) shall be
conclusive and binding upon such holder and upon all future holders and owners
of this Debenture and any Debentures which may be issued in exchange or
substitute hereof, irrespective of whether or not any notation thereof is made
upon this Debenture or such other Debentures.
The indebtedness evidenced by the Debentures is subordinate to the
prior payment in full of all Senior Indebtedness. During the continuance beyond
any applicable grace period of any default in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness, no payment of
principal of, or premium if any, or interest on the Debentures shall be made by
the Company. In addition, upon any distribution of assets of the Company upon
any dissolution, winding up, liquidation or reorganization, the payment of the
principal of, or premium, if any, and interest on the Debentures is to be
subordinated to the extent provided in the Indenture in right of payment to the
prior payment in full of all Senior Indebtedness. By reason of such
subordination, in the event of the Company's dissolution, holders of Senior
Indebtedness may receive more, ratably, and holders of the Debentures may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture. Each holder of this Debenture, by accepting the same, agrees to and
shall be bound by such
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provisions and authorizes the Trustee on its behalf to take such action as may
be necessary or appropriate to effectuate the subordination so provided and
appoints the Trustee its attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Debenture
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of and any premium and
interest on this Debenture at the place, at the respective times, at the rate
and in the coin or currency herein prescribed.
The Debentures are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000.
The Debentures will not be redeemable at the option of the Company
prior to December 31, 2001. The Debentures are not entitled to any sinking fund.
At any time on or after December 31, 2001 and prior to maturity, the Debentures
may (unless theretofore repaid or converted) be redeemed at the option of the
Company as a whole, or from time to time in part, upon notice, as described
below, at the following redemption prices (expressed as percentages of the
principal amount), together in each case with accrued interest to, but
excluding, the date fixed for redemption, if redeemed during the 3-month period
beginning:
Date Percentage Date Percentage
---- ---------- ---- ----------
January 6, 2002............. 112.841% January 6, 2003............ 116.275%
April 6, 2002............... 113.687% April 6, 2003.............. 117.164%
July 6, 2002................ 114.537% July 6, 2003............... 118.057%
October 6, 2002............. 115.404% October 6, 2003............ 118.968%
and at 118.968% if redeemed on January 6, 2004 and at 100% if redeemed
thereafter; provided that any semiannual payment of interest becoming due on the
date fixed for redemption shall be paid to the holders of record on the relevant
record date of the Debentures being redeemed. If the date fixed for redemption
is on or after December 31, 2001 but before January 6, 2002, the redemption
price shall be at 112.841% of the principal amount with accrued interest to
January 6, 2002.
In case the Company shall desire to exercise the right to redeem all
or, as the case may be, any part of the Debentures for redemption then it, or at
its request, 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 at least 30 and not more
than 60 days prior to the date fixed for redemption to the holders of Debentures
so to be redeemed as a whole or in part at their last addresses as the same
appear on the Register. 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
Debenture designated for
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<PAGE>
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debenture.
If notice of redemption has been given as above provided, the
Debentures or portions of Debentures with respect to which such notice has been
given shall, unless theretofore 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
(or to, but excluding, January 6, 2002 if the date fixed for redemption is on or
after December 31, 2001, but before January 6, 2002), and on and after said date
(unless the Company shall default in the payment of such Debentures at the
redemption price, together with interest accrued to said date) interest on the
Debentures or portion of Debentures so called for redemption shall cease to
accrue and such Debentures shall cease after the close of business on the
Business Day immediately preceding the date fixed for redemption to be
convertible into Common Stock and, except as provided in Sections 8.5 and 13.4
of the Indenture, to be entitled to any benefit or security under the Indenture,
and the holders thereof shall have no right in respect of such Debentures except
the right to receive the redemption price thereof and unpaid interest to, but
excluding, the date fixed for redemption (or to January 6, 2002 if the date
fixed for redemption is on or after December 31, 2001, but before January 6,
2002). On presentation and surrender of such Debentures at a place of payment in
said notice specified, the said Debentures 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 (or to, but excluding, January 6, 2002 if the date fixed for
redemption is on or after December 31, 2001, but before January 6, 2002);
provided that, if the applicable date fixed for redemption is an interest
payment date, the semi-annual payment of interest becoming due on such date
shall be payable to the holders of such Debentures registered as such on the
relevant record date instead of the holders surrendering such Debentures for
redemption on such date.
Notwithstanding the Company's right of redemption, the holder of a
Debenture may elect to have that Debenture or portions thereof (in the principal
amount of $1,000 or any multiple thereof) repaid by the Company on January 6,
2004 (the "Holder Repayment Date"). Any such repayment shall be at a repayment
price of 118.968% of the principal amount thereof (the "Holder Repayment Price")
with interest accrued to, but excluding, the Holder Repayment Date on the repaid
Debentures. For a Debenture to be so repaid at the option of the holder, the
Company must receive at the office of one of the Company's paying agents such
Debenture with a form entitled "Option to Elect Repayment on January 6, 2004" on
the reverse thereof duly completed (the "Holder Repayment Notice"), together
with such Debenture duly endorsed, at any time from the opening of business on
the date that is 20 Business Days prior to the Holder Repayment Date until the
close of business on the Business Day immediately preceding such Holder
Repayment Date and such Holder Repayment Notice must not have been withdrawn. In
order to exercise the repayment option
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<PAGE>
with respect to any interest in a Debenture in global form, the beneficial
holder must comply with the applicable procedures of the Depositary, furnish
appropriate endorsements and documentation if required by the Company or the
Trustee or paying agent and such notice shall not have been withdrawn.
Any holder delivering to the paying agent a Holder Repayment Notice
shall have the right at any time prior to the close of business on the Business
Day immediately preceding the Holder Repayment Date to withdraw, in whole or in
part, such Holder Repayment Notice by delivery of a written notice of withdrawal
to the paying agent. In order to exercise the withdrawal option with respect to
any interest in a Debenture in global form, the beneficial holder must comply
with the applicable procedures of the Depositary. All questions as to the
validity, eligibility (including time of receipt) and acceptance of any
Debenture for repayment shall be determined by the Company, whose determination
shall be final and binding.
Payment of the Holder Repayment Price, together with any accrued
interest, for a Debenture for which a Holder Repayment Notice has been delivered
and not withdrawn is conditioned upon book-entry transfer or delivery of such
Debenture (together with necessary endorsements) to the Company's paying agent
at its office at 55 Water Street, Room 234, North Building, New York, New York,
10041, or any other office of the paying agent maintained for such purpose, at
any time (whether prior to, on or after the Holder Repayment Date) after
delivery of such Holder Repayment Notice. Payment of the Holder Repayment Price,
together with any accrued interest, for such Debenture will be made promptly
following the later of the Holder Repayment Date or the time of book-entry
transfer or delivery of such Debenture by mailing checks or by sending a wire
transfer for immediately available funds to an account maintained in the United
States for the amount payable to the holders of such Debentures entitled thereto
as they shall appear on the Register. If the paying agent holds, in accordance
with the terms of the Indenture, money sufficient to pay the repayment price of
such Debenture on the Holder Repayment Date, then on and after such date, such
Debenture will cease to be outstanding, and interest on such Debenture shall
cease to accrue, and all other rights of the holder shall terminate (other than
the right to receive the repayment price upon the time of book-entry transfer or
delivery of the Debentures).
The Company shall use its best efforts to have a notice regarding
repayment at the option of the holders on the Holder Repayment Date published at
least once in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter
Financial Report in The City of New York at least 30 days prior to the Holder
Repayment Date. No failure of the Company to give the foregoing notice and no
defect therein shall limit the Debentureholders' repayment rights or affect the
validity of the proceedings for the repayment of the Debentures.
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<PAGE>
If a Fundamental Change occurs at any time while Debentures are
outstanding, each holder of Debentures shall have the right, at such holder's
option, to require the Company to repay such holder with respect to all (and not
less than all for Debentures in certificated form) such holder's Debentures on
the date (the "Fundamental Change Repayment Date") that is the 45th day (or, if
such 45th day is not a Business Day, the next succeeding Business Day) after the
Company Notice (as defined below) of such Fundamental Change. Such repayment
shall be made at the following prices (expressed as percentages of the principal
amount) in the event of a Fundamental Change occurring during the 3-month period
beginning:
Date Percentage Date Percentage
- ---- ---------- ---- ----------
January 6, 1998........... 100.679% January 6, 2000............ 106.460%
April 6, 1998............. 101.375% April 6, 2000.............. 107.227%
July 6, 1998.............. 102.071% July 6, 2000............... 107.997%
October 6, 1998........... 102.784% October 6, 2000............ 108.783%
January 6, 1999........... 103.498% January 6, 2001............ 109.571%
April 6, 1999............. 104.961% April 6, 2001.............. 110.377%
July 6, 1999.............. 104.229% July 6, 2001............... 111.186%
October 6, 1999........... 105.709%
and at a repayment price of 112.012% of the principal amount if a Fundamental
Change occurs on or after October 6, 2001 but before December 31, 2001, and
thereafter at the redemption price which would be applicable to a redemption at
the option of the Company; provided in each case that if the Applicable Price is
less than the Reference Market Price, the Company shall repay such Debentures at
a price equal to the foregoing repayment price multiplied by the fraction
obtained by dividing the Applicable Price by the Reference Market Price. In each
case, the Company shall pay accrued interest, if any, on such Debentures to, but
excluding, the Fundamental Change Repayment Date; provided that if such
Fundamental Change Repayment Date is January 6 or July 6, then the interest
payable on such date shall be paid to the holder of record of the Debenture on
the next preceding record date. On or before the tenth day after the occurrence
of a Fundamental Change, the Company, or, at its written request, 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
repayment right at the option of the holders arising as a result thereof. The
Company shall also use its best efforts to have a notice published at least once
in each of Bloomberg Business News, Dow Jones News (DJN) and Reuter Financial
Report in The City of New York on or before the tenth day after the occurrence
of a Fundamental Change. The Company shall promptly deliver a copy of each of
the published notices and Company Notice to the Trustee. No failure of the
Company to give the foregoing notices and no defect therein shall limit the
Debentureholders' repayment rights or affect the validity of the proceedings for
the repayment of the Debentures.
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For a Debenture to be repaid at the option of the holder resulting from
a Fundamental Change, the Company must receive at the office of one of the
Company's paying agents such Debenture with a form entitled "Option to Elect
Repayment Upon a Fundamental Change" on the reverse thereof duly completed (the
"Fundamental Change Repayment Notice") together with such Debenture, duly
endorsed at any time from the opening of business on the date that is on or
before the 43rd day after the Company Notice (or if such 43rd day is not a
Business Day, the immediately preceding Business Day) and such Fundamental
Change Repayment Notice shall not have been withdrawn. In order to exercise the
repayment option with respect to any interest in a Debenture in global form, the
beneficial holder must comply with the applicable procedures of the Depositary,
furnish appropriate endorsements and documentation if required by the Company or
the Trustee or paying agent and such notice shall not have been withdrawn.
Any holder delivering to the paying agent a Fundamental Change
Repayment Notice shall have the right at any time prior to the close of business
on the Business Day immediately preceding the Fundamental Change Repayment Date
to withdraw such Fundamental Change Repayment Notice (as to Debentures in
certificated form, withdrawal must be made in fully) by delivery of a written
notice of withdrawal to the paying agent. In order to exercise the withdrawal
option with respect to any interest in a Debenture in global form, the
beneficial holder must comply with the applicable procedures of the Depositary.
All questions as to the validity, eligibility (including time of receipt) and
acceptance of any Debenture for repayment shall be determined by the Company,
whose determination shall be final and binding.
Payment of the Fundamental Change Repayment Price, together with any
accrued interest, for a Debenture for which a Fundamental Change Repayment
Notice has been delivered and not withdrawn is conditioned upon book-entry
transfer or delivery of such Debenture (together with necessary endorsements) to
the Company's paying agent at its office at 55 Water Street, Room 234, North
Building, New York, New York, 10041, or any other office of the Company's paying
agent maintained for such purpose, at any time (whether prior to, on or after
the Fundamental Change Repayment Date) after delivery of such Fundamental Change
Repayment Notice. Payment of the Fundamental Change Repayment Price, together
with any accrued interest, for such Debenture will be made promptly following
the later of the Fundamental Change Repayment Date or the time of book-entry
transfer or delivery of such Debenture by mailing checks or by sending a wire
transfer for immediately available funds to an account maintained in the United
States for the amount payable to the holders of such Debentures entitled thereto
as they shall appear on the Register. If the Company's paying agent holds, in
accordance with the terms of the Indenture, money sufficient to pay the
Fundamental Change Repayment Price, together with any accrued interest of such
Debenture on the Fundamental Change Repayment Date, then on and after such date,
such Debenture will cease to be outstanding, and interest on such Debenture
shall cease to accrue, and all other rights of the holder shall terminate (other
than
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the right to receive the repayment price upon the time of book-entry transfer or
delivery of the Debentures).
Subject to and upon compliance with the provisions of the Indenture,
the holder hereof shall have the right, at its option, at any time after 90 days
following the latest date of original issuance of the Debentures and prior to
the close of business on January 6, 2013, or, as to all or any portion hereof
called for redemption, prior to the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the Company shall
default in payment due upon redemption thereof), to convert the principal hereof
or any portion of such principal which is $1,000 or an integral multiple hereof,
into that number of shares of Common Stock (as said shares shall then be
constituted) at the date of conversion, obtained by dividing the principal
amount of this Debenture or portion hereof surrendered for by $49.83 (the
"Conversion Price") or such Conversion Price as adjusted from time to time as
provided in the Indenture, by surrender of the Debenture so to be converted in
whole or in part in the manner provided, together with any required funds, if
any, under the Indenture. A Debenture in respect of which a holder is exercising
the option to require repayment on January 6, 2004 or upon a Fundamental Change
may be converted only if such holder withdraws its election to exercise the
option to require repayment in accordance with the terms of the Indenture. A
holder of Debentures is not entitled to any rights of a holder of Common Stock
until such holder has converted its Debentures to Common Stock, and only to the
extent such Debentures are deemed to have converted to Common Stock under
Article XV of the Indenture.
In order to exercise the conversion privilege with respect to any
Debenture in certificated form, the holder of any such Debenture to be converted
in whole or in part shall surrender such Debenture, duly endorsed, at an office
or agency maintained by the Company accompanied by any funds required under the
Indenture and shall give written notice of conversion in the form provided on
the Debentures (or such other notice which is acceptable to the Company) to the
Company at such office or agency that the holder elects to convert such
Debenture or the portion thereof specified in said notice. Such notice shall
also state the name or names (with address) 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 of the Indenture. Each such Debenture
surrendered for conversion shall, unless the shares issuable on conversion are
to be issued in the same name as the registration of such Debenture, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory
to the Company duly executed by, the holder or its duly authorized attorney. In
order to exercise the conversion privilege with respect to any interest in a
Debenture in global form, the beneficial holder must comply with the applicable
procedures of the Depositary, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
funds or taxes, if any, required under the Indenture. The Company's delivery of
the fixed number of shares of Common Stock into which the Debentures are
convertible will be
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deemed to satisfy the Company's obligation to pay the principal amount of the
Debentures and all accrued interest and original issue discount that has not
previously been (or is not simultaneously being) paid. The Common Stock is
treated as issued first in payment of accrued interest and original issue
discount and then in payment of principal. Thus, accrued interest and original
issue discount are treated as paid rather than canceled. As promptly as
practicable after the surrender of such Debenture and the receipt of such notice
and funds, if any, as aforesaid, the Company shall issue and shall deliver at
such office or agency to such holder, or on its written order, a certificate or
certificates for the number of full shares of Common Stock issuable upon the
conversion of such Debenture or portion thereof in accordance with the
provisions of Article XV of the Indenture and a check in payment of any
fractional interest in respect of a share of Common Stock arising upon such
conversion, as provided in Section 15.3 of the Indenture. In case any Debenture
of a denomination greater than $1,000 shall be surrendered for partial
conversion, and subject to Section 2.3 of the Indenture, the Company shall
execute and the Trustee shall authenticate and deliver to or upon the written
order of the holder of the Debenture so surrendered, without charge to him, a
new Debenture or Debentures in authorized denominations in an aggregate
principal amount equal to the unconverted portion of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date on which the requirements set forth
in Section 15.2 of the Indenture have been satisfied as to such Debenture (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 Debenture shall have been surrendered. Any Debenture
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 Debenture or portion thereof being converted shall have been
called for redemption on a date fixed for redemption which 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 (i) there shall exist at the time
of conversion a default in the payment of interest on the Debentures or (ii) the
date fixed for redemption is on or after December 31, 2001 but on or before
January 6, 2002, the holders who convert on or after December 26, 2001 will
receive, in addition to Common Stock otherwise payable upon such conversion,
accrued interest to, but excluding, January 6, 2002 on the principal amount of
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Debentures so converted. An amount equal to such payment shall be paid by the
Company on such interest payment date to the holder of such Debenture at the
close of business on such record date; provided, however, that if the Company
shall default in the payment of interest on such interest payment date, such
amount shall be paid to the Person who made such required payment. Except as
described in the Indenture and herein, no payment or adjustment will be made on
conversion of any Debenture for interest accrued thereon or for dividends on any
Common Stock issued upon such conversion of such Debentures.
No fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Debentures. If any fractional share of
stock would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment therefor at the current market value thereof,
and such payment shall be made by check. For these purposes, the current market
value of a share of Common Stock shall be the Closing Price on the first
Business Day immediately preceding the day on which the Debentures (or specified
portions thereof) are deemed to have been converted.
Any Debentures called for redemption, unless surrendered for conversion
on or before the close of business on the Business Day immediately preceding the
date fixed for redemption, may, upon an agreement between the Company and one or
more investment bankers or other purchasers, be deemed to be purchased from the
holder of such Debentures at an amount equal to the applicable redemption price,
together with accrued interest to, but excluding, the date fixed for redemption,
by such investment bankers or other purchasers who may agree with the Company to
purchase such Debentures from the holders thereof and convert them into Common
Stock of the Company and to make payment for such Debentures as aforesaid to the
Trustee in trust for such holders, all in accordance with the terms of the
Indenture.
Upon due presentment for registration of transfer of any Debenture to
the Trustee and satisfaction of the requirements for such transfer set forth in
Section 2.5 of the Indenture, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Debentures of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture registrar may deem the Person in whose
name this Debenture shall be registered upon the Register to be, and treat him
as the absolute owner of this Debenture (whether or not this Debenture shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Debenture registrar), for the
purpose of receiving payment hereof, or on account hereof, and premium, if any,
and interest hereon, for the conversion hereof and for all other
10
<PAGE>
purposes, and neither the Company nor the Trustee nor any other authenticating
agent nor any paying agent nor any other conversion agent nor any Debenture
registrar shall be affected by any notice to the contrary. All payments made to
or upon the order of such registered holder shall be valid, and, to the extent
of the sum or sums paid, effectual to satisfy and discharge liability for monies
payable on this Debenture.
No recourse for the payment of the principal of or any premium or
interest on this Debenture, or for any claim based hereon or otherwise in
respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Company in the Indenture or any indenture supplemental thereto
or in any Debenture, or because of the creation of any indebtedness represented
thereby, shall be had against any incorporator, stockholder, employee, agent,
officer or 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, all
such liability being, by the acceptance hereof and as part of the consideration
for the issue hereof, expressly waived and released.
11
<PAGE>
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT-- ______ Custodian of ______
TEN ENT - as tenants by the (Cust) (Minor)
entireties Under Uniform Gifts to Minors Act
JT TEN - as joint tenants with
right of survivorship ___________________________________________
and not as tenants in (State)
common
Additional abbreviations may also be used
though not in the above list.
12
<PAGE>
CONVERSION NOTICE
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Omnicom Group Inc. in accordance with the terms of the Indenture
referred to in this Debenture, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Debentures representing any unconverted principal
amount hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this
Debenture not converted are to be issued in the name of a person other than the
undersigned, the undersigned will complete the appropriate section below and pay
all transfer taxes payable with respect thereto. Any amount required to be paid
to the undersigned on account of interest accompanies this Debenture.
Dated:____________________
___________________________________________
___________________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if shares of
Common Stock are to be issued, or Debentures
to be delivered, other than to and in the
name of the registered holder.
___________________________________________
Signature Guarantee
<PAGE>
Fill in for registration of shares of Common Stock if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
__________________________________
(Name)
__________________________________
(Street Address)
__________________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $___________
_________________________________
Social Security or Other Taxpayer
Identification Number
2
<PAGE>
OPTION TO ELECT REPAYMENT
ON JANUARY 6, 2004
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
requests and instructs Omnicom Group Inc. (the "Company") to repay the within
Debenture or portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Debenture at the repayment price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated: ______________________ _____________________________________
_____________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be repaid (if less
than all):
$_________________________________
__________________________________
Social Security or Other Taxpayer
Identification Number
<PAGE>
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
To: OMNICOM GROUP INC.
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Omnicom Group Inc. (the "Company") as to
the occurrence of a Fundamental Change with respect to the Company and requests
and instructs the Company to repay the entire principal amount of this Debenture
below designated, in accordance with the terms of the Indenture referred to in
this Debenture at the repayment price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated: ______________________ _________________________________________
_________________________________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Debenture in every particular without
alteration or enlargement or any change
whatever.
Principal amount to be repaid (not less than
all for Debentures in certificated form):
$____________________________________
_____________________________________
Social Security or Other Taxpayer
Identification Number
<PAGE>
ASSIGNMENT
For value received ________________________ hereby sell(s), assign(s) and
transfer(s) unto _____________________ (Please insert social security or other
Taxpayer Identification Number of assignee) the within Debenture, and hereby
irrevocably constitutes and appoints ________________ attorney to transfer the
said Debenture on the books of Omnicom Group Inc. with full power of
substitution in the premises.
[For Restricted Securities only:
In connection with any transfer of the Debenture within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act of 1933, as amended (or any successor
provision), the undersigned confirms that such Debenture is being transferred:
|_| To Omnicom Group Inc. or a subsidiary thereof; or
|_| Pursuant to and in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Regulation S under the
Securities Act of 1933, as amended; or
|_| Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that such
Debenture is not being transferred to an "affiliate" of Omnicom Group Inc. as
defined in Rule 144 under the Securities Act of 1933, as amended (an
"Affiliate").
<PAGE>
|_| The transferee is an Affiliate of Omnicom Group Inc.]
Dated:____________________
_____________________________________
_____________________________________
Signature(s)
Signature(s) must be guaranteed by a
commercial bank or trust company or a member
firm of a major stock exchange if shares of
Common Stock are to be issued, or Debentures
to be delivered, other than to and in the
name of the registered holder.
_____________________________________
Signature Guarantee
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of January 6, 1998, by and among Omnicom Group Inc., a New York
corporation (the "Company") and Morgan Stanley & Co. Incorporated (the "Initial
Purchaser") pursuant to the Placement Agreement, dated as of December 4, 1997
(the "Placement Agreement"), between the Company and the Initial Purchaser. In
order to induce the Initial Purchaser to enter into the Placement Agreement the
Company has agreed to provide the registration rights set forth in this
Agreement. The execution of this Agreement is a condition to the closing under
the Placement Agreement.
The Company agrees with the Initial Purchaser, (i) for its benefit as
Initial Purchaser and (ii) for the benefit of the holders from time to time of
the Debentures (including the Initial Purchaser) and the holders from time to
time of the Common Stock issued upon conversion of the Debentures (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definitions. Capitalized terms used herein without definition shall have
their respective meanings set forth in the Placement Agreement. As used in this
Agreement, the following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified person, (i)
any other person directly or indirectly controlling or controlled by, or under
direct or indirect common control with, such specified person or (ii) any
officer or director of such other person. For purposes of this definition, the
term "control" (including the terms "controlling," "controlled by" and "under
common control with") of a person means the possession, direct or indirect, of
the power (whether or not exercised) to direct or cause the direction of the
management and policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
Common Stock: The shares of common stock, $.50 par value per share, of
the Company and any other shares of common stock as may constitute "Common
Stock" for purposes of the Indenture, in each case, as issuable or issued upon
conversion of the Debentures.
Damages Accrual Period: See Section 2(e) hereof.
<PAGE>
Damages Payment Date: Each of the semi-annual interest payment dates
provided in the Indenture.
Debentures: The 2-1/4% Convertible Subordinated Debentures due 2013 of
the Company being issued and sold pursuant to the Placement Agreement and the
Indenture.
Deferral Period: See Section 2(d) hereof.
Effectiveness Period: The period commencing with the date hereof and
ending on the date that all Registrable Securities have ceased to be Registrable
Securities.
Event: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of January 6, 1998, between the
Company and The Chase Manhattan Bank, pursuant to which the Debentures are being
issued, as amended or supplemented from time to time in accordance with the
terms hereof.
Initial Purchaser: Morgan Stanley & Co. Incorporated.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Notice and Questionnaire. A written notice delivered to the Company
containing substantially the information called for by the Notice and
Questionnaire attached as Annex A to the Offering Memorandum of the Company
dated December 4, 1997 relating to the Debentures.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this Agreement.
2
<PAGE>
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
Record Holder: (i) with respect to any Damages Payment Date relating to
any Debenture as to which any such Liquidated Damages have accrued, the
registered holder of such Debenture on the record date with respect to the
interest payment date under the Indenture on which such Damages Payment Date
shall occur and (ii) with respect to any Damages Payment Date relating to any
Common Stock as to which any such Liquidated Damages have accrued, the
registered holder of such Common Stock 15 days prior to the next succeeding
Damages Payment Date.
Registrable Securities: (A) The Common Stock into which the Debentures
are convertible or converted, whether or not such Debentures have been
converted, and at all times subsequent thereto, and any Common Stock issued with
respect thereto upon any stock dividend, split or similar event until, in the
case of any such Common Stock, (i) it is effectively registered under the
Securities Act and disposed of in accordance with the Registration Statement
covering it, (ii) it is saleable by the holder thereof pursuant to Rule 144(k)
or (iii) it is sold to the public pursuant to Rule 144, and, as a result of the
event or circumstance described in any of the foregoing clauses (i) through
(iii), the legends with respect to transfer restrictions required under the
Indenture (other than any such legends required solely as the consequence of the
fact that such Common Stock (or the Debentures, upon the conversion of which,
such Common Stock was issued or is issuable) is owned by, or was previously
owned by, the Company or an Affiliate of the Company) are removed or removable
in accordance with the terms of the Indenture; (B) the Debentures, until, in the
case of any such Debenture, (i) it is converted into shares of Common Stock in
accordance with the terms of the Indenture, (ii) it is effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (iii) it is saleable by the holder thereof pursuant to
Rule 144(k) or (iv) it is sold to the public pursuant to Rule 144, and, as a
result of the event or circumstance described in any of the foregoing clauses
(ii) through (iv), the legends with respect to transfer restrictions required
under the Indenture (other than any such legends required solely as the
consequence of the fact that such Debenture is owned by, or was previously owned
by, the Company or an Affiliate of the Company) are removed or removable in
accordance with the terms of the Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the Company which
covers any of the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement,
3
<PAGE>
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
Selling Period: See Section 2(d)(i) hereof.
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Davis Polk & Wardwell or such successor counsel as
shall be specified by the Holders of a majority of the Registrable Securities,
the fees and expenses of which will be paid by the Company pursuant to Section 5
hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
2. Shelf Registration.
(a) The Company shall prepare and file with the SEC, as soon as
practicable but in any event on or prior to the date ninety (90) days following
the latest date of original issuance of the Debentures (the "Filing Date"), a
Registration Statement for an offering to be made on a continuous basis pursuant
to Rule 415 of the Securities Act (a "Shelf Registration") registering the
resale from time to time by Holders thereof of all of the Registrable Securities
(the "Initial Shelf Registration"). The Initial Shelf Registration shall be on
Form S-3 or another appropriate form permitting registration of such Registrable
Securities for resale by the Holders in the manner or manners designated by
them. The manner of sale may include, without limitation, a sale to a dealer
acting as principal for resale to the public. The Company shall use its
reasonable efforts to cause the Initial Shelf Registration to be declared
effective under the Securities Act as soon as practicable and to keep the
Initial Shelf Registration continuously effective under the Securities Act until
the earlier of the expiration of the Effectiveness Period or the date a
Subsequent Shelf
4
<PAGE>
Registration, as defined below, covering all of the Registrable Securities has
been declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use its reasonable efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof, and in any
event shall within thirty (30) days of such cessation of effectiveness amend the
Shelf Registration in a manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use its reasonable efforts to cause the Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the
registration form used by the Company for such Shelf Registration, if required
by the Securities Act, or if reasonably requested by the Initial Purchaser or by
the Trustee on behalf of a majority of the Holders of the Registrable Securities
covered by such Registration Statement.
(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell its Registrable Securities pursuant to a Shelf Registration and
related Prospectus, it will do so only in accordance with this Section 2(d).
Each Holder of Registrable Securities wishing to sell Registrable Securities
agrees to deliver a Notice and Questionnaire to the Company at least three
Business Days prior to any intended distribution of Registrable Securities under
the Shelf Registration. In the event the Holder fails to provide the Notice and
Questionnaire, the Company will promptly request such Holder to provide such
Notice and Questionnaire. As soon as practicable after the date such Notice and
Questionnaire is provided, and in any event within two Business Days after such
date, the Company shall either:
(i) (A) If necessary, prepare and file with the Commission a
post- effective amendment to the Shelf Registration or a supplement to the
related Prospectus or a supplement or amendment to any document incorporated
therein by reference or file any other required document so that such
Registration Statement will not contain an 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, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will not contain an 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, in light of the circumstances under which they were made,
not misleading; (B) provide each Notice Holder (as defined below) copies of any
documents filed pursuant to Section 2(d)(i)(A); and (C) inform each Notice
5
<PAGE>
Holder that the Company has complied with its obligations in Section 2(d)(i)(A)
(or that, if the Company has filed a post-effective amendment to the Shelf
Registration which has not yet been declared effective, the Company will notify
the Notice Holder to that effect, will use its reasonable efforts to secure the
effectiveness of such post-effective amendment and will immediately notify the
Notice Holder when the amendment has become effective); each Holder who has
delivered a Notice and Questionnaire in accordance with Section 2(d) hereof (a
"Notice Holder") will sell all or any of such Registrable Securities pursuant to
the Shelf Registration and related Prospectus only during the 45-day period
commencing with the date on which the Company gives notice, pursuant to Section
2(d)(i)(C), that the Registration Statement and Prospectus may be used for such
purpose (such 45-day period is referred to as a "Selling Period"). The Notice
Holders will not sell any Registrable Securities pursuant to such Registration
Statement or Prospectus after such Selling Period without giving a new notice of
intention to sell pursuant to Section 2(d) hereof and receiving a further notice
from the Company pursuant to Section 2(d)(i)(C) hereof.
(ii) in the event (A) of the happening of any event of the
kind described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), or 3(c)(vi)
hereof or (B) that, in the judgment of the Company, it is advisable to suspend
use of the Prospectus for a discrete period of time due to pending material
corporate developments or similar material events that have not yet been
publicly disclosed and as to which the Company believes public disclosure will
be prejudicial to the Company, the Company shall deliver a certificate in
writing, signed by an authorized executive officer of the Company, to the Notice
Holders and the Special Counsel to the effect of the foregoing and, upon receipt
of such certificate, each such Notice Holder's Selling Period will not commence
until such Notice Holder's receipt of copies of the supplemented or amended
Prospectus provided for in Section 2(d)(i)(A) hereof, or until it is advised in
writing by the Company that the Prospectus may be used and has received copies
of any additional or supplemental filings that are incorporated or deemed
incorporated by reference in such Prospectus. The Company will use its
reasonable efforts to ensure that the use of the Prospectus may be resumed, and
the Selling Period will commence, as soon as practicable and, in the case of a
pending development or event referred to in Section 2(d)(ii)(B) hereof, as soon
as the earlier of (x) public disclosure of such pending material corporate
development or similar material event or (y) in the judgment of the Company,
public disclosure of such material corporate development or similar material
event would not be prejudicial to the Company. Notwithstanding the foregoing,
the Company shall not under any circumstances be entitled to exercise its right
under this Section 2(d)(ii) to defer the commencement of a Selling Period except
as follows: the Company may defer the commencement of a Selling Period in
accordance with this Section 2(d)(ii) for a period not to exceed 30 days in any
three-month period, or not to exceed an aggregate of 60 days in any 12-month
period, and the period in which a Selling Period is suspended shall not exceed
fifteen (15) days unless the Company shall deliver to such Notice Holders a
second notice to the effect set forth above, which shall have the effect of
extending the period during which such Selling Period is deferred by up to an
additional fifteen (15) days, or such shorter period of time as is specified in
such second notice. In no event shall the Company be
6
<PAGE>
permitted to extend the period during which such Selling Period is deferred (a
"Deferral Period") beyond such thirty (30) day period from and after the date a
Notice Holder provides a Notice and Questionnaire to the Company in accordance
with this Section 2(d).
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration has not
been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of
Deferral Periods exceeds the number permitted pursuant to Section 2(d)(ii)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (iv) are individually referred to herein as an "Event," and the
Filing Date in the case of clause (i), the date on which the effectiveness of
the Shelf Registration has been suspended or proceedings with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the periods permitted by Section 2(d)(ii) hereof in the
case of clause (iii), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods under Section 2(d)(ii) hereof
to be exceeded in the case of clause (iv), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the date of the termination of
such Event, which shall be the following dates with respect to the respective
types of Events: the date the Initial Registration Statement is filed in the
case of an Event of the type described in clause (i), the date that all stop
orders suspending effectiveness of the Shelf Registration have been removed and
the proceedings initiated with respect to the Shelf Registration under Section
8(d) or 8(e) of the Securities Act have terminated, as the case may be, in the
case of Events of the types described in clause (ii), termination of the
Deferral Period which caused the aggregate number of days in any one Deferral
Period to exceed the number permitted by Section 2(d)(ii) to be exceeded in the
case of Events of the type described in clause (iii), and termination of the
Deferral Period the commencement of which caused the number of Deferral Periods
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iv).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a
Debenture that is a Notice Holder, accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of
Debentures held by such Notice Holder and (ii) to each holder of Common Stock
that is a Notice Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
then-applicable
7
<PAGE>
Conversion Price (as defined in the Indenture), times (y) the number of shares
of Common Stock held by such holder; and (B) if the Damages Accrual Period
continues for a period in excess of thirty (30) days from the Event Date, from
and after the end of such thirty (30) days until such time as there are no
Events which have occurred and are continuing, (i) to each holder of a Debenture
(whether or not a Notice Holder), accruing at a rate equal to one-half of one
percent per annum (50 basis points) on the aggregate principal amount of
Debentures held by such holder and (ii) to each holder of Common Stock (whether
or not a Notice Holder), accruing at a rate equal to one-half of one percent per
annum (50 basis points) calculated on an amount equal to the product of (x) the
then applicable Conversion Price (as defined in the Indenture), times (y) the
number of shares of Common Stock held by such holder. Notwithstanding the
foregoing, no Liquidated Damages shall accrue under clause (A) of the preceding
sentence during any period for which Liquidated Damages accrue under clause (B)
of the preceding sentence or as to any Registrable Securities from and after the
expiration of the Effectiveness Period. The rate of accrual of the Liquidated
Damages with respect to any period shall not exceed the rate provided for in
this paragraph notwithstanding the occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Debentures or
Common Stock by depositing with the Trustee under the Indenture, in trust, for
the benefit of the holders of Debentures or Common Stock or Notice Holders, as
the case may be, entitled thereto, at least one Business Day prior to the
applicable Damages Payment Date, sums sufficient to pay the Liquidated Damages
accrued or accruing since the last preceding Damages Payment Date through such
Damages Payment Date. The Liquidated Damages shall be paid by the Company to the
Record Holders on each Damages Payment Date by wire transfer of immediately
available funds to the accounts specified by them or by mailing checks to their
registered addresses as they appear in the Debenture register (as defined in the
Indenture), in the case of the Debentures, and in the register of the Company
for the Common Stock, in the case of the Common Stock, if no such accounts have
been specified on or before the Damage Payment Date; provided, however, that any
Liquidated Damages accrued with respect to any Debenture or portion thereof
called for redemption on a redemption date, repurchased on January 3, 2003 at
the option of the holder, or repurchased in connection with a Fundamental Change
(as defined in the Indenture) on a redemption date, repurchase date, or
converted into Common Stock on a conversion date prior to the Damages Payment
Date, shall, in any such event, be paid instead to the holder who submitted such
Debenture or portion thereof for redemption, repurchase or conversion on the
applicable redemption date, repurchase date or conversion date, as the case may
be, on such date (or promptly following the conversion date, in the case of
conversion of a Debenture). The Trustee shall be entitled, on behalf of the
holders of Debentures, holders of Common Stock and Notice Holders, to seek any
available remedy for the enforcement of this Agreement, including for the
payment of such Liquidated Damages. Notwithstanding the foregoing, the parties
agree that the sole damages payable for a violation of the terms of this
Agreement with respect to which Liquidated Damages are expressly provided shall
be such Liquidated Damages. Nothing shall preclude a Notice Holder or Holder of
Registrable Securities from
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pursuing or obtaining specific performance or other equitable relief with
respect to this Agreement, in addition to the payment of Liquidated Damages.
All of the Company's obligations set forth in this Section 2(e) which
are outstanding with respect to any Registrable Securities at the time such
security ceases to be a Registrable Security shall survive until such time as
all such obligations with respect to such security have been satisfied in full
(notwithstanding termination of the Agreement pursuant to Section 8(o)).
The parties hereto agree that the Liquidated Damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities (other than the Initial Purchaser)
by reason of the failure of the Shelf Registration to be filed or declared
effective or unavailable (absolutely or as a practical matter) for effecting
resales of Registrable Securities, as the case may be, in accordance with the
provisions hereof.
3. Registration Procedures. In connection with the Company's registration
obligations under Section 2 hereof, the Company shall effect such registrations
to permit the sale of the Registrable Securities in accordance with the intended
method or methods of disposition thereof, and pursuant thereto the Company shall
as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
its reasonable efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that before filing
any such Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the Company shall
furnish to the Initial Purchaser and the Special Counsel copies of all such
documents proposed to be filed, which documents will be subject to the review of
the Initial Purchaser and the Special Counsel, and the Company shall not file
any such Registration Statement or amendment thereto or any Prospectus or any
supplement thereto (other than such documents which, upon filing, would be
incorporated or deemed to be incorporated by reference therein and that the
Company is required by applicable securities laws or stock exchange requirements
to file) to which the Holders of a majority of the Registrable Securities
covered by such Registration Statement, the Initial Purchaser or the Special
Counsel shall reasonably object in writing within two full Business Days.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2; cause the
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related Prospectus to be supplemented by any required Prospectus supplement, and
as so supplemented to be filed pursuant to Rule 424 (or any similar provisions
then in force) under the Securities Act; and comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement and Prospectus during the applicable period in accordance
with the intended methods of disposition by the sellers thereof set forth in
such Registration Statement as so amended or such Prospectus as so supplemented.
(c) Notify the Notice Holders, the Initial Purchaser, and the Special
Counsel promptly, and (if requested by any such person) confirm such notice in
writing, (i) when a Prospectus, any Prospectus supplement, a Registration
Statement or a post-effective amendment to a Registration Statement has been
filed with the SEC, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective, (ii) of any
request by the SEC or any other federal or state governmental authority for
amendments or supplements to a Registration Statement or related Prospectus or
for additional information, (iii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation or threatening of
any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the existence of any fact or happening of any event which makes
any statement of a material fact in such Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue or which would require the making of any changes in the
Registration Statement or Prospectus in order that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use its reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction, at the earliest possible
moment.
(e) If reasonably requested by the Initial Purchaser or the Holders of
a majority of the Registrable Securities being sold, (i) promptly incorporate in
a Prospectus supplement or post-effective amendment to a Registration Statement
such information as the Initial Purchaser, the Special Counsel, or such Holders,
in connection with any offering of Registrable Securities, agree should be
included therein as required by applicable law, and
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(ii) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as practicable after the Company has received
notification of the matters to be incorporated in such Prospectus supplement or
post-effective amendment; provided, that the Company shall not be required to
take any actions under this Section 3(e) that are not, in the reasonable opinion
of counsel for the Company, in compliance with applicable law.
(f) Furnish to each selling Holder, the Special Counsel and the Initial
Purchaser, without charge, at least one conformed copy of the Registration
Statement or Statements and any amendment thereto, including financial
statements but excluding schedules, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits (unless requested in writing
by such selling Holder, counsel or the Initial Purchaser).
(g) Deliver to each selling Holder, the Special Counsel and the Initial
Purchaser, in connection with any offering of Registrable Securities, without
charge, as many copies of the Prospectus or Prospectuses relating to such
Registrable Securities (including each preliminary prospectus) and any amendment
or supplement thereto as such persons may reasonably request; and the Company
hereby consents to the use of such Prospectus or each amendment or supplement
thereto by each of the selling Holders of Registrable Securities and the
underwriters, if any, in connection with any offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or supplement
thereto.
(h) Prior to any offering of Registrable Securities, to register or
qualify or cooperate with the selling Holders, and the Special Counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, reasonably requests in writing; keep each such
registration or qualification (or exemption therefrom) effective during the
period such Registration Statement is required to be kept effective and do any
and all other acts or things necessary or advisable to enable the disposition in
such jurisdictions of the Registrable Securities covered by the applicable
Registration Statement; provided, that the Company will not be required to (i)
qualify generally to do business in any jurisdiction where it is not then so
qualified or (ii) take any action that would subject it to general service of
process in suits or to taxation in any such jurisdiction where it is not then so
subject.
(i) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of such selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the selling Holder or Holders thereof, to consummate the
disposition of such Registrable Securities.
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(j) During any Selling Period (other than during a Deferral Period),
immediately upon the existence of any fact or the occurrence of any event as a
result of which a Registration Statement shall contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading, or a Prospectus
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, promptly prepare and file (subject to the proviso in Section 3(a)) a
post-effective amendment to each Registration Statement or a supplement to the
related Prospectus or any document incorporated therein by reference or file any
other required document (such as a Current Report on Form 8-K) that would be
incorporated by reference into the Registration Statement so that the
Registration Statement shall not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that the Prospectus will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading, as
thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder, and, in the case of a post-effective amendment to a Registration
Statement, use its reasonable efforts to cause it to become effective as soon as
practicable.
(k) If requested in connection with a disposition of Registrable
Securities pursuant to a Registration Statement, make available for inspection
by a representative of the Holders of Registrable Securities being sold, and the
Special Counsel , financial and other records, pertinent corporate documents and
properties of the Company and its subsidiaries, and cause the executive
officers, directors and employees of the Company and its subsidiaries to supply
all information reasonably requested by any such representative, or the Special
Counsel in connection with such disposition; subject to reasonable assurances by
each such person that such information will only be used in connection with
matters relating to such Registration Statement; provided, however, that such
persons shall first agree in writing with the Company that any information that
is reasonably and in good faith designated by the Company in writing as
confidential at the time of delivery of such information shall be kept
confidential by such persons, unless (i) disclosure of such information is
required by court or administrative order or is necessary to respond to
inquiries of regulatory authorities, (ii) disclosure of such information is
required by law (including any disclosure requirements pursuant to Federal
securities laws in connection with the filing of any Registration Statement or
the use of any prospectus referred to in this Agreement), (iii) such information
becomes generally available to the public other than as a result of a disclosure
or failure to safeguard by any such person or (iv) such information becomes
available to any such person from a source other than the Company and such
source is not bound by a confidentiality agreement.
(l) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited)
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satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) (i) commencing at the end
of any fiscal quarter in which Registrable Securities are sold to underwriters
in a firm commitment or best efforts underwritten offering and (ii) if not sold
to underwriters in such an offering, commencing on the first day of the first
fiscal quarter of the Company commencing after the effective date of a
Registration Statement, which statements shall cover said 12-month periods.
(m) Cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any restrictive legends; and
enable such Registrable Securities to be in such denominations and registered in
such names as such Holders may request.
(n) Provide the Trustee under the Indenture and the transfer agent for
the Common Stock with printed certificates for the Registrable Securities which
are in a form eligible for deposit with The Depository Trust Company.
(o) Cause the Common Stock covered by the Registration Statement to be
listed on each securities exchange or quoted on each automated quotation system
on which any of the Company's "Common Stock," as that term is defined in the
Indenture, is then listed or quoted) no later than the date the Registration
Statement is declared effective and, in connection therewith, to the extent
applicable, to make such filings under the Exchange Act (e.g., the filing of a
Registration Statement on Form 8-A) and to have such filings declared effective
thereunder.
(p) Cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc.
(q) Upon (i) the filing of the Initial Shelf Registration and (ii) the
effectiveness of the Initial Shelf Registration, the Company agrees to announce
the same, in each case by release to Reuters Economic Services and Bloomberg
Business News.
Nothing herein shall obligate the Company to provide accountants' "cold comfort"
letters, opinions of counsel, or to enter into underwriting agreements, as would
be customary in an underwritten offering (or incur any expenses in connection
therewith) unless otherwise specifically agreed to by the Company at such time.
4. Holder's Obligations. Each Holder agrees, by acquisition of the
Debentures and Registrable Securities, that no Holder of Registrable Securities
shall be entitled to sell any of such Registrable Securities pursuant to a
Registration Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with the Notice and Questionnaire required
pursuant to Section 2(d) hereof and such other information
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regarding such Holder and the distribution of such Registrable Securities as may
be required to be included in the Registration Statement or the Prospectus or as
the Company may from time to time reasonably request. The Company may exclude
from such registration the Registrable Securities of any Holder who does not
furnish such information provided above for so long as such information is not
so furnished. Each Holder of Registrable Securities as to which any Registration
Statement is being effected agrees promptly to furnish to the Company all
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not misleading. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to
such Holder or its plan of distribution and that such Prospectus does not as of
the time of such sale omit to state any material fact relating to such Holder or
its plan of distribution necessary to make the statements in such Prospectus, in
light of the circumstances under which they were made, not misleading.
5. Registration Expenses. All fees and expenses incident to the Company's
performance of or compliance with this Agreement shall be borne by the Company
whether or not any of the Registration Statements become effective. Such fees
and expenses shall include, without limitation, (i) all registration and filing
fees (including, without limitation, fees and expenses (x) with respect to
filings required to be made with the SEC or the National Association of
Securities Dealers, Inc. and (y) relating to compliance with federal securities
or Blue Sky laws (including, without limitation, fees and disbursements of
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Holders of a majority of
the Registrable Securities being sold may designate)), (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository Trust
Company and of printing prospectuses if the printing of prospectuses is
requested by the Special Counsel or the Holders of a majority of the Registrable
Securities included in any Registration Statement), (iii) the reasonable fees
and disbursements of the Trustee and its counsel and of the registrar and
transfer agent for the Common Stock, (iv) messenger, telephone and delivery
expenses relating to the performance of the Company's obligations hereunder, (v)
reasonable fees and disbursements of counsel for the Company and the Special
Counsel in connection with the Shelf Registration (provided that the Company
shall not be liable for the fees and expenses of more than one separate firm, in
addition to counsel for the Company, for all parties participating in any
transaction hereunder) and (vi) Securities Act liability insurance, to the
extent obtained by the Company in its sole discretion. In addition, the Company
shall pay its internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties and
auditors' fees), the expense of any annual audit, the fees and expenses incurred
in connection with the listing of the securities to be registered on any
securities exchange on which similar securities issued by the Company are then
listed and the fees and
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expenses of any person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of Registrable
Securities shall pay all selling expenses and all registration expenses to the
extent that the Company is prohibited by applicable Blue Sky laws from paying
for or on behalf of such seller of Registrable Securities.
6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless the Initial Purchaser, each Holder and each person, if any, who
controls the Initial Purchaser or any Holder (within the meaning of either
Section 15 of the Securities Act or Section 20(a) of the Exchange Act) from and
against all losses, liabilities, damages and expenses (including, without
limitation, any legal or other expenses reasonably incurred in connection with
defending or investigating any such action or claim) (collectively, "Losses"),
arising out of or based upon any untrue statement or alleged untrue statement of
a material fact contained in any Registration Statement or Prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or based upon any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as such Losses arise out of or are based upon the
information relating to the Initial Purchaser or any Holder furnished to the
Company in writing by the Initial Purchaser or such Holder expressly for use
therein; provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A)(i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claims from which such Losses arise and
(ii) the Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B)(x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such Losses arise. The Company shall also indemnify each person
purchasing Registrable Securities from a Holder who is an "underwriter" as
defined in the Securities Act and each person who controls such person (within
the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) to the same extent and with the same limitations as provided above with
respect to the indemnification of the Initial Purchaser or the Holders of
Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. Each Holder
agrees, and such agreement shall be evidenced by the Holder delivering a Notice
and
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Questionnaire, severally and not jointly to indemnify and hold harmless the
Initial Purchaser, the other selling Holders, the Company, its directors, its
officers who sign a Registration Statement, and each person, if any, who
controls the Company, the Initial Purchaser and any other selling Holder (within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act), from and against all losses arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission or alleged omission of a material fact required to be
stated therein or necessary to make the statements therein not misleading, to
the extent, but only to the extent, that such untrue statement or omission is
contained in any information relating to such Holder so furnished in writing by
such Holder to the Company expressly for use in such Registration Statement or
Prospectus. In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities giving rise
to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, 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 (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Initial
Purchaser and all persons, if any, who control the Initial Purchaser within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act, (b) the fees and expenses of more than one separate firm (in addition to
any local counsel) for all Holders and all persons, if any, who control any
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, and (c) the fees and expenses of more than one separate
firm (in addition to any local counsel) for the Company, its directors, its
officers who sign a Registration Statement and each person, if any, who controls
the Company within the meaning of either such Section, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Company,
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and such directors, officers and control persons of the Company, such firm shall
be designated in writing by the Company. In such case involving the Initial
Purchaser and persons who control the Initial Purchaser, such firm shall be
designated in writing by Morgan Stanley & Co. Incorporated. In such case
involving the Holders and such persons who control Holders, such firm shall be
designated in writing by the Holders of the majority of Registrable Securities
sold pursuant to the Registration Statement. 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 45 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 or claims that are the subject matter
of such proceeding.
(d) Contribution. If the indemnification provided for in this Section 6
is unavailable to an indemnified party under Section 6(a) or 6(b) hereof in
respect of any Losses or is insufficient to hold such indemnified party
harmless, then each applicable indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses, (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (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 (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement (before deducting expenses) of the
Debentures pursuant to the Placement Agreement. Benefits received by the Initial
Purchaser shall be deemed to be equal to the total purchase discounts and
commissions received by it pursuant to the Placement Agreement and benefits
received by any other Holders shall be deemed to be equal to the value of
receiving Debentures registered under the Securities Act. Benefits received by
any underwriter shall be deemed to be equal to the total underwriting discounts
and commissions, as set forth on the cover page of the Prospectus forming a part
of the Registration Statement
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which resulted in such Losses. The relative fault of the Holders on the one hand
and the Company 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 Holders or by the Company and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Holders' respective obligations to contribute
pursuant to this paragraph are several in proportion to the respective number of
Registrable Securities they have sold pursuant to a Registration Statement, and
not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph 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 this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages which such indemnifying party 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 indemnity, contribution and expense reimbursement obligations of
the Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Placement Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.
The indemnity and contribution provisions contained in this Section 6
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
the Initial Purchaser, any Holder or any person controlling any Holder, or the
Company, its officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
7. Information Requirements.
(a) The Company shall file the reports required to be filed by it under
the Securities Act and the Exchange Act, and if at any time the Company is not
required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly
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available other information so long as necessary to permit sales pursuant to
Rule 144 and Rule 144A under the Securities Act. The Company further covenants
that it will cooperate with any Holder of Registrable Securities and take such
further reasonable action as any Holder of Registrable Securities may reasonably
request (including, without limitation making such reasonable representations as
any such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act. Upon the request of any Holder
of Registrable Securities, the Company shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements.
Notwithstanding the foregoing, nothing in this Section 7 shall be deemed to
require the Company to register any of its securities under any section of the
Exchange Act.
(b) The Company shall file the reports required to be filed by it under
the Exchange Act and shall comply with all other requirements set forth in the
instructions to Form S-3 in order to allow the Company to be eligible to file
registration statements on Form S-3.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement; provided that the sole damages payable for a violation of
the terms of this Agreement for which Liquidated Damages are expressly provided
pursuant to Section 2(e) hereof shall be such Liquidated Damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of the date
hereof and shall not, on or after the date of this Agreement, enter into any
agreement with respect to its securities which conflicts with the rights granted
to the Holders of Registrable Securities in this Agreement. The Company
represents and warrants that the rights granted to the Holders of Registrable
Securities hereunder do not in any way conflict with the rights granted to the
holders of the Company's securities under any other agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Common Stock constituting Registrable
Securities (with Holders of Debentures
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deemed to be the Holders, for purposes of this Section, of the number of
outstanding shares of Common Stock into which such Debentures are convertible).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders of Registrable Securities may be given by Holders of at
least a majority of the Registrable Securities being sold by such Holders;
provided, that the provisions of this sentence may not be amended, modified, or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier or (iii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(x) if to a Holder of Registrable Securities, at the
most current address given by such Holder to the Company in a Notice
and Questionnaire.
(y) if to the Company, to:
Omnicom Group Inc.
437 Madison Avenue, 9th Floor
New York, NY 10022
Telephone: (212) 415-3600
Telecopy No.: (212) 415-3536
with a copy to:
Davis & Gilbert
1740 Broadway
New York, New York 10019
Attention: Mike Ditzian
Telephone: (212) 468-4800
Telecopy No.: (212) 468-4888
and
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(z) if to the Special Counsel to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attention: Francis J. Morison
Telecopy No: (212) 450-4800
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) Owner of Registrable Securities. The Company will maintain, or will
cause its registrar and transfer agent to maintain, a register with respect to
the Registrable Securities in which all transfers of Registrable Securities of
which the Company has received a Notice and Questionnaire will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the Company as the owner thereof for all
purposes, including without limitation, the giving of notices under this
Agreement.
(f) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder, (i)
Holders of Debentures shall be deemed to be Holders, for such purposes, of the
number of outstanding shares of Common Stock into which such Debentures are
convertible and (ii) Registrable Securities held by the Company or its
affiliates (as such term is defined in Rule 405 under the Securities Act) (other
than the Initial Purchaser or subsequent Holders of Registrable Securities if
such subsequent Holders are deemed to be such affiliates solely by reason of
their holdings of such Registrable Securities) shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
(g) Successors and Assigns. Any person who purchases any Registrable
Securities from an Initial Purchaser shall be deemed, for purposes of this
Agreement, to be an assignee of such Initial Purchaser. This Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties and shall inure to the benefit of and be binding upon each Holder
of any Registrable Securities.
(h) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
(i) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
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(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
(k) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants
and restrictions without including any of such which may be hereafter declared
invalid, illegal, void or unenforceable.
(l) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Placement Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the prevailing party, as determined by the court, shall be
entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) Further Assurances. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for Liquidated Damages under Section
2(e) hereof to the extent such damages accrue
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prior to the end of the Effectiveness Period, each of which shall remain in
effect in accordance with their terms.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
OMNICOM GROUP INC.
By:/s/ Dennis E. Hewitt
------------------------
Title: Treasurer
Accepted as of the date first above written:
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Kevin Cox
-------------------------------
Title: Principal
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