<PAGE>
Exhibit 4(vvvvv)
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
Liquid Yield Option(TM) Notes due
(Zero Coupon -- Senior)
_______________________
INDENTURE
Dated as of ,
_______________________
,
Trustee
------------------------------
(TM) Trademark of Merrill Lynch & Co., Inc.
<PAGE>
Table of Contents
Page
----
Article I
DEFINITIONS AND INCORPORATION BY REFERENCE
<TABLE>
<S> <C> <C>
Section 1.01. Definitions.................................................1
Section 1.02. Other Definitions...........................................5
Section 1.03. Incorporation by Reference of Trust Indenture Act...........6
Section 1.04. Rules of Construction.......................................6
ARTICLE II
THE SECURITIES
Section 2.01. Form and Dating.............................................7
Section 2.02. Execution and Authentication................................7
Section 2.03. Registrar, Paying Agent and Conversion Agent................8
Section 2.04. Paying Agent To Hold Money and Securities in Trust..........8
Section 2.05. Securityholder Lists........................................9
Section 2.06. Transfer and Exchange.......................................9
Section 2.07. Replacement Securities.....................................10
Section 2.08. Outstanding Securities; Determinations of Holders' Action..10
Section 2.09. Temporary Securities.......................................11
Section 2.10. Cancellation...............................................12
Section 2.11. Global Securities..........................................12
Section 2.12. CUSIP Numbers..............................................13
ARTICLE III
REDEMPTION AND PURCHASES
Section 3.01. Right to Redeem; Notices to Trustee........................13
Section 3.02. Selection of Securities to Be Redeemed.....................14
Section 3.03. Notice of Redemption.......................................14
Section 3.04. Effect of Notice of Redemption.............................15
Section 3.05. Deposit of Redemption Price................................15
Section 3.06. Securities Redeemed in Part................................15
Section 3.07. Conversion Arrangement on Call for Redemption..............16
Section 3.08. Purchase of Securities at the Option of the Holder.........16
Section 3.09. Purchase of Securities at Option of the Holder
Upon Change in Control ....................................22
Section 3.10. Effect of Purchase Notice or
Change in Control Purchase Notice..........................26
Section 3.11. Deposit of Purchase Price or Change
in Control Purchase Price..................................27
Section 3.12. Securities Purchased in Part...............................27
Section 3.13. Covenant to Comply With Securities Laws
Upon Purchase of Securities................................27
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
Section 3.14. Repayment to the Company...................................27
ARTICLE IV
COVENANTS
Section 4.01. Payment of Securities......................................28
Section 4.02. SEC Reports................................................28
Section 4.03. Compliance Certificate; Notice of Defaults.................29
Section 4.04. Further Instruments and Acts...............................29
Section 4.05. Maintenance of Office or Agency............................29
Section 4.06. Calculation of Original Issue Discount.....................30
ARTICLE V
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge or Transfer Assets..................30
ARTICLE VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................31
Section 6.02. Acceleration...............................................32
Section 6.03. Other Remedies.............................................33
Section 6.04. Waiver of Past Defaults....................................33
Section 6.05. Control by Majority........................................33
Section 6.06. Limitation on Suits........................................34
Section 6.07. Rights of Holders to Receive Payment.......................34
Section 6.08. Collection Suit by Trustee.................................34
Section 6.09. Trustee May File Proofs of Claim...........................34
Section 6.10. Priorities.................................................35
Section 6.11. Undertaking for Costs......................................35
Section 6.12. Notice of Defaults.........................................36
Section 6.13. Waiver of Stay, Extension or Usury Laws....................36
ARTICLE VII
TRUSTEE
Section 7.01. Rights of Trustee..........................................36
Section 7.02. Individual Rights of Trustee...............................37
Section 7.03. Trustee's Disclaimer.......................................37
Section 7.04. Notice of Defaults.........................................37
Section 7.05. Reports by Trustee to Holders..............................37
Section 7.06. Compensation and Indemnity.................................38
Section 7.07. Replacement of Trustee.....................................38
Section 7.08. Successor Trustee by Merger................................39
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
Section 7.09. Eligibility; Disqualification................................39
Section 7.10. Preferential Collection of Claims Against Company............39
ARTICLE VIII
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities.........................40
Section 8.02. Repayment to the Company.....................................40
ARTICLE IX
AMENDMENTS
Section 9.01. Without Consent of Holders...................................40
Section 9.02. With Consent of Holders......................................41
Section 9.03. Compliance with Trust Indenture Act..........................42
Section 9.04. Revocation and Effect of Consents, Waivers and Actions.......42
Section 9.05. Notation on or Exchange of Securities........................43
Section 9.06. Trustee to Sign Supplemental Indentures......................43
Section 9.07. Effect of Supplemental Indentures............................43
ARTICLE X
CONVERSION
Section 10.01. Conversion Privilege.........................................45
Section 10.02. Conversion Procedure.........................................45
Section 10.03. Fractional Shares............................................46
Section 10.04. Taxes on Conversion..........................................46
Section 10.05. Company to Provide Stock.....................................47
Section 10.06. Adjustment for Change in Capital Stock.......................47
Section 10.07. Adjustment for Rights Issue..................................48
Section 10.08. Adjustment for Other Distributions...........................49
Section 10.09. When Adjustment May Be Deferred..............................51
Section 10.10. When No Adjustment Required..................................52
Section 10.11. Notice of Adjustment.........................................52
Section 10.12. Voluntary Increase...........................................52
Section 10.13. Notice of Certain Transactions...............................53
Section 10.14. Reorganization of Company; Special Distributions.............53
iii
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
Section 10.15. Company Determination Final..................................54
Section 10.16. Trustee's Adjustment Disclaimer..............................54
Section 10.17. Simultaneous Adjustments.....................................54
Section 10.18. Successive Adjustments.......................................54
ARTICLE XI
TAX EVENT CONVERSION
Section 11.01. Optional Conversion to Semiannual Coupon Note Upon Tax
Event........................................................54
Section 11.02. Payment of Interest; Interest Rights Preserved...............55
ARTICLE XII
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls.................................56
Section 12.02. Notices......................................................56
Section 12.03. Communication by Holders with Other Holders..................57
Section 12.04. Certificate and Opinion as to Conditions Precedent...........57
Section 12.05. Statements Required in Certificate or Opinion................57
Section 12.06. Separability Clause..........................................58
Section 12.07. Rules By Trustee, Paying Agent, Conversion
Agent and Registrar..........................................58
Section 12.08. Legal Holiday................................................58
Section 12.09. GOVERNING LAW................................................58
Section 12.10. No Recourse Against Others...................................58
Section 12.11. Successors...................................................58
Section 12.12. Multiple Originals...........................................58
Section 12.13. References...................................................58
</TABLE>
SIGNATURES
EXHIBIT A
iv
<PAGE>
CROSS-REFERENCE TABLE*
<TABLE>
<CAPTION>
TIA Indenture
Section Section
----------- ---------
<S> <C>
310(a)(1).........................................................7.09
(a)(2) ..........................................................7.09
(a)(3) ..........................................................N.A.
(a)(4) ..........................................................N.A.
(b) PP.....................................................7.07; 7.09
(c) ......................................................... N.A.
311(a) ......................................................... 7.10
(b) ......................................................... 7.10
(c) ......................................................... N.A.
312(a) ......................................................... 2.05
(b) .........................................................12.03
(c) .........................................................12.03
313(a) ..........................................................7.05
(b) ............................................................7.05
(c) .........................................................12.02
(d) ..........................................................7.05
314(a) ...................................................4.02; 12.02
(b) ..........................................................N.A.
(c)(1) .........................................................12.04
(c)(2) .........................................................12.04
(c)(3) ..........................................................N.A.
(d) ..........................................................N.A.
(e) .........................................................12.05
(f) ..........................................................4.04
315(a) ..........................................................7.01
(b) ......................................................7.04; 12.02
(e) ..........................................................6.11
316(a)(last sentence).............................................2.08
(a)(1)(A) ......................................................6.05
(a)(1)(B) ......................................................6.04
(a)(2) ..........................................................N.A.
(b) ..........................................................6.07
317(a)(1).........................................................6.08
(a)(2) ..........................................................6.09
(b) ..........................................................2.04
318(a)...........................................................12.01
N.A. means Not Applicable._______________
</TABLE>
* Note: This Cross Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.
v
<PAGE>
INDENTURE, dated as of , , between Merrill Lynch & Co., Inc., a
Delaware corporation ("Company"), and , a national banking association,
-------
as trustee (the "Trustee").
-------
Each party agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Company's Liquid Yield
Option(TM) Notes due , (Zero Coupon -- Senior) (the
"Securities"):
----------
Article I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions.
-----------
"Affiliate" of any specified person means any other person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control", when used with respect to any specified person, means the power to
-------
direct or cause the direction of the management and policies of such person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
----------- ----------
meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or transaction
involving a Global Security or beneficial interest therein, the rules and
procedures of the Depositary for such Security, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Bankruptcy Law" means Title 11, United States Code, or any similar Federal
or state law for the relief of debtors.
"Board of Directors" or "Board" means, with respect to any matter, either
the board of directors of the Company or any committee of such board duly
authorized, with respect to such matter, to exercise the powers of such board.
"Business Day" means each week day of the year on which banking
institutions in The City of New York are not authorized or obligated to close.
"Capital Stock" for any corporation means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) capital stock issued by that corporation.
"Cash" or "cash" means such coin or currency of The United States of
America as at any time of payment is legal tender for the payment of public and
private debts.
<PAGE>
"Common Stock" means the Common Stock, par value $1.33 per share, including
the Rights attached thereto of the Company as it exists on the date of this
Indenture or any other shares of capital stock of the Company into which such
common stock shall be reclassified or changed.
"Company" means the party named as the "Company" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor. The
foregoing sentence shall likewise apply to any subsequent such successor or
successors.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by either of its Chairman or Vice Chairman of
the Board, its President or any Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at which
at any time its corporate trust business shall be administered, which office at
the date hereof is located at , Attention: Administration, or
such other address as the Trustee may designate from time to time by notice to
the Holders and the Company.
"Corporation" includes corporations, associations, companies and business
trusts.
"Custodian" means any receiver, trustee, assignee, liquidator, custodian or
similar official under any Bankruptcy Law.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Depositary" means, with respect to the Securities issuable or issued in
whole or in part in global form, the person specified in Section 2.03 as the
Depositary with respect to the Securities, until a successor shall have been
appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depositary" shall mean or include such successor.
"Global Securities" means Securities that are in the form of the Securities
attached hereto as Exhibit A.
"Holder" or "Securityholder" means a person in whose name a Security is
registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time to
time in accordance with the terms hereof, including the provisions of the TIA
that are deemed to be a part hereof.
"Issue Date" of any Security means the date on which the Security was
originally issued or deemed issued as set forth on the face of the Security.
"Issue Price" of any Security means, in connection with the original
issuance of such Security, the initial issue price at which the Security is sold
as set forth on the face of the Security.
"Market Price" means the average of the Sale Prices of the Common Stock for
each Trading Day of the five Trading Day period ending on and including the
third Trading Day immediately prior to, but not including the applicable
Purchase Date, appropriately adjusted to take into account the actual
occurrence, during the seven Trading Days preceding such Purchase Date, of any
event described
2
<PAGE>
in Section 10.06, 10.07 or 10.08; subject, however, to the conditions set forth
in Sections 10.09 and 10.10.
"Officer" means Chairman of the Board, the President, any Vice President,
the Treasurer, the Secretary, any Assistant Treasurer or Assistant Secretary of
the Company.
"Officers' Certificate" means a written certificate containing the
information specified in Sections 11.04 and 11.05, signed in the name of the
Company by Chairman of the Board, the President, a Vice President or the
Treasurer and by an Assistant Treasurer, the Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion containing the information
specified in Sections 12.04 and 12.05, if applicable, rendered by legal counsel
who may be (i) an employee of, or counsel to, the Company or (ii) other counsel
designated by the Company and reasonably acceptable to the Trustee.
"Original Issue Discount" of any Security means the difference between the
Issue Price and the Principal Amount of the Security as set forth on the face of
the Security.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Principal", "Principal Amount" or "principal amount" of a Security means
the principal amount due at the maturity date of the Security as set forth on
the face of the Security.
"Redemption" or "redemption" shall have the meaning set forth in Section
3.01.
"Redemption Date" or "redemption date" shall mean the date specified for
redemption of any of the Securities in accordance with the terms of the
Securities and this Indenture.
"Redemption Price" or "redemption price" shall have the meaning set forth
in paragraph 5 of the Securities.
"Responsible Officer", when used with respect to the Trustee, means any
officer within the corporate trust department (or any successor group) including
without limitation any vice president, any assistant vice president, any
assistant secretary or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above-designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Rights" means the preferred stock purchase rights distributed pursuant to
the Amended and Restated Rights Agreement of the Company dated as of
, , as amended or restated from time to time.
"Sale Price" of a single share of Common Stock on any Trading Day means the
closing per share sale price for the Common Stock (or if no closing sale price
is reported, the average of the bid and ask prices or, if more than one in
either case, the average of the average bid and the average ask prices) on such
Trading Day as reported in composite transactions for the principal United
States securities exchange on which the Common Stock is traded or, if the Common
Stock is not listed on a United States national or regional stock exchange, as
reported by the National Association of Securities Dealers Automated Quotation
System.
"SEC" means the Securities and Exchange Commission.
3
<PAGE>
"Securities" means any of the Company's Liquid Yield Option(TM) Notes due ,
, (Zero Coupon - Senior), as amended or supplemented from time to time in
accordance with the terms hereof, issued under this Indenture.
"Securities Custodian" means the Registrar as custodian with respect to the
Securities in global form, or any successor entity thereto.
"Securityholder" or "Holder" means a person in whose name a Security is
registered on the Registrar's books.
"Stated Maturity", when used with respect to any Security, means the date
specified in such Security as the final fixed date on which the Principal of
such Security is due and payable.
"Subsidiary" means a corporation, a majority of whose Capital Stock with
voting power, under ordinary circumstances, to elect directors is, at the date
of determination, directly or indirectly owned by the Company, by one or more
Subsidiaries of the Company or by the Company and one or more Subsidiaries of
the Company. "Wholly-owned", when used with reference to a Subsidiary, means a
------------
Subsidiary of which all of the outstanding capital stock (except for qualifying
shares) is owned by the Company or by one or more wholly-owned Subsidiaries.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after , , as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or regulations by any legislative
body, court, governmental agency or regulatory authority, in each case which
amendment or change is enacted, promulgated, issued or announced or which
interpretation is issued or announced or which action is taken, on or after
, , there is more than an insubstantial risk that interest (including
Original Issue Discount) payable on the Securities either (i) would not be
deductible on a current accrual basis or (ii) would not be deductible under any
other method, in either case in whole or in part, by the Company (by reason of
deferral, disallowance, or otherwise) for United States federal income tax
purposes.
"TIA" means the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990, and as in effect on the date of this Indenture.
"Time of Determination" means the time and date of the determination of
stockholders entitled to receive rights, warrants, options or a distribution, in
each case, to which Sections 10.07 or 10.08 apply.
"Trading Day" means each day on which the primary securities exchange or
quotation system which is used to determine the Sale Price is open for trading
or quotation.
"Trust Officer" means any officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
4
<PAGE>
"Trustee" means the party named as the "Trustee" in the first paragraph of
this Indenture until a successor replaces it pursuant to the applicable
provisions of this Indenture and, thereafter, shall mean such successor.
Section 1.02. Other Definitions.
-----------------
<TABLE>
<CAPTION>
<S> <C>
Term Defined in
Section
------------------------------------------------------------------------------- --------------
"Agent Members" 2.11
"Associate" 3.09(a)
"Average Sale Price" 10.01
"beneficial owner" 3.09(a)
"Change in Control" 3.09(a)
"Change in Control Purchase Date" 3.09(a)
"Change in Control Purchase Notice" 3.09(c)
"Change in Control Purchase Price" 3.09(a)
"Company Notice" 3.08(e)
"Dividend Equivalent Payment Date" 10.01
"Conversion Agent" 2.03
"Conversion Date" 10.02
"Conversion Payment" 10.01
"Conversion Rate" 10.01
"Defaulted Interest" 11.02
"DTC" 2.03
"Event of Default" 6.01
"Exchange Act" 3.08(d)
"Ex-Dividend Time" 10.01
"Extraordinary Cash Dividend" 10.08
"Interest Payment Date" 11.01
"Legal Holiday" 11.08
"Notice of Default" 6.01
"Option Exercise Date" 11.01
"Over-allotment Option" 2.02
"Paying Agent" 2.03
"Purchase Date" 3.08(a)
"Purchase Notice" 3.08(a)
"Purchase Price" 3.08(a)
"Redemption Purchasers" 3.07
"Registrar" 2.03
"Regular Record Date" 11.01
"Restated Principal Amount" 11.01
"Securities Act" 3.08(d)
</TABLE>
5
<PAGE>
<TABLE>
Term Defined in
Section
---------------------------------------------------------------------------------- ------------
<S> <C>
"Tax Event Date" 12.01
--------------
</TABLE>
Section 1.03. Incorporation by Reference of Trust Indenture Act.
--------------------------------------------------
Whenever this Indenture refers to a provision of the TIA, such provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
----------
"indenture securities" means the Securities.
--------------------
"indenture security holder" means a Securityholder.
-------------------------
"indenture to be qualified" means this Indenture.
-------------------------
"indenture trustee" or "institutional trustee" means the Trustee.
----------------- ---------------------
"obligor" on the indenture securities means the Company.
-------
All other TIA terms used in this Indenture that are defined by the TIA or
defined by TIA reference to another statute or regulation have the meanings
assigned to them by such definitions.
Section 1.04. Rules of Construction. Unless the context otherwise
---------------------
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting principles
as in effect from time to time in The United States of America;
(c) "or" is not exclusive;
(d) "including" means including, without limitation; and
(e) words in the singular include the plural, and words in the
plural include the singular.
Article II
THE SECURITIES
Section 2.01. Form and Dating. The Securities and the Trustee's
---------------
certificate of authentication shall be substantially in the form of Exhibit A,
which is a part of this Indenture.
6
<PAGE>
The Securities may have notations, legends or endorsements required by law,
stock exchange rule or usage (provided that any such notation, legend or
endorsement required by usage is in a form acceptable to the Company and the
Trustee). Each Security shall be dated the date of its authentication.
The Securities shall be issued, initially in the form of a global Security,
which shall be deposited with DTC or the nominee thereof, duly executed by the
Company and authenticated by the Trustee as hereinafter provided.
Each global Security shall represent such of the outstanding Securities as
shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Securities from time to time endorsed thereon
and that the aggregate amount of outstanding Securities represented thereby may
from time to time be reduced or increased, as appropriate, to reflect exchanges
and redemptions. Any endorsement of a global Security to reflect the amount of
any increase or decrease in the amount of outstanding Securities represented
thereby shall be made by the Trustee in accordance with instructions given by
the Holder thereof as required by Section 2.11.
Section 2.02. Execution and Authentication. The Securities shall be
----------------------------
executed by the Company by either of its Chairman or Vice Chairman of the Board,
its President or one of its Vice Presidents, under its corporate seal reproduced
thereon attested by its Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the Issue Date of such Securities.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly
executed by the Trustee by manual signature of an authorized officer, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
The Trustee shall authenticate and deliver Securities for original issue in
an aggregate Principal Amount of up to $ upon a Company Order
without any further action by the Company; provided, however, that in the event
-------- -------
that the Company sells any Securities pursuant to the over-allotment option (the
"Over-allotment Option") granted pursuant to Section 2 of the Purchase
---------------------
Agreement, dated , , between the Company and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, then the Trustee shall
authenticate and deliver Securities for original issue in an aggregate Principal
Amount of up to $ plus up to $ aggregate Principal
Amount of Securities sold pursuant to the Over-allotment Option upon a Company
Order. The aggregate Principal Amount of Securities outstanding at any time may
not exceed the amount set forth in the foregoing sentence, subject to the
proviso set forth therein, except as provided in Section 2.07.
7
<PAGE>
Section 2.03. Registrar, Paying Agent and Conversion Agent. The Company
shall maintain an office or agency where Securities may be presented for
registration of transfer or for exchange ("Registrar"), an office or agency
---------
where Securities may be presented for purchase or payment ("Paying Agent") and
------------
an office or agency where Securities may be presented for conversion
("Conversion Agent"). Registrar shall keep a register of the Securities and of
----------------
their transfer and exchange. The Company may have one or more co-registrars, one
or more additional paying agents and one or more additional conversion agents.
The term Paying Agent includes any additional paying agent. The term Conversion
Agent includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Registrar, Paying Agent, Conversion Agent or co-registrar other than the
Trustee. The agreement shall implement the provisions of this Indenture that
relate to such agent. The Company shall notify the Trustee and the Holders of
the name and address of any such agent and of any change in the office or agency
referred to in Section 4.05. If the Company fails to maintain a Registrar,
Paying Agent or Conversion Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.06. The
Company or any Subsidiary or an Affiliate of either of them may act as Paying
Agent, Registrar, Conversion Agent or co-registrar.
The Company initially appoints the Trustee as Registrar, Conversion Agent
and Paying Agent in connection with the Securities.
The Company initially appoints The Depositary Trust Company ("DTC") to act
as Depositary with respect to the global Securities.
The Company initially appoints the Registrar to act as Securities Custodian
with respect to the global Securities.
Section 2.04. Paying Agent To Hold Money and Securities in Trust. In
--------------------------------------------------
accordance with Section 4.05 and except as otherwise provided herein, prior to
or on each due date of payments in respect of any Security, the Company shall
deposit with the Paying Agent a sum of money or, if permitted by the terms
hereof, securities sufficient to make such payments when so becoming due. The
Company shall require each Paying Agent (other than the Trustee) to agree in
writing that the Paying Agent shall hold in trust for the benefit of
Securityholders or the Trustee all money and securities held by the Paying Agent
for the making of payments in respect of the Securities and shall notify the
Trustee of any default by the Company in making any such payment. At any time
during the continuance of any default by the Company in making any payments in
respect of the Securities, the Paying Agent shall, upon the written request of
the Trustee, forthwith pay to the Trustee all money and securities so held in
trust. If the Company, a Subsidiary or an Affiliate of either of them acts as
Paying Agent, it shall segregate the money and securities held by it as Paying
Agent and hold it as a separate trust fund. The Company at any time may require
a Paying Agent to pay all money and securities held by it to the Trustee and to
account for any money and securities disbursed by it. Upon doing so, the Paying
Agent shall have no further liability for the money and securities.
8
<PAGE>
Section 2.05. Securityholder Lists. The Trustee shall preserve in as
--------------------
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish or cause to be furnished to the Trustee (i)
at least semiannually on , and , a list of the names and addresses
of Securityholders dated within 15 days of the date on which the list is
furnished and (ii) at such other times as the Trustee may request in writing a
list, in such form and as of such date as the Trustee may reasonably require, of
the names and addresses of Securityholders.
Section 2.06. Transfer and Exchange. Upon surrender for registration of
---------------------
transfer of any Security, together with a written instrument of transfer
reasonably satisfactory to the Trustee duly executed by the Securityholder or
such Securityholder's attorney duly authorized in writing, at the office or
agency of the Company designated as Registrar or co-registrar pursuant to
Section 2.03 or at the office or agency referred to in Section 4.05, the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of any
authorized denomination or denominations, of a like aggregate Principal Amount.
The Company shall not charge a service charge for any registration of transfer
or exchange, but the Company may require payment of a sum sufficient to pay all
taxes, assessments or other governmental charges that may be imposed in
connection with the transfer or exchange of the Securities from the
Securityholder requesting such transfer or exchange (other than any exchange of
a temporary Security for a definitive Security not involving any change in
ownership).
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
Principal Amount, upon surrender of the Securities to be exchanged, together
with a written instrument of transfer reasonably satisfactory to the Registrar
duly executed by the Securityholder or such Securityholder's attorney duly
authorized in writing, at such office or agency. Whenever any Securities are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive.
The Company shall not be required to make, and the Registrar need not
register, transfers or exchanges of (a) Securities selected for redemption
(except, in the case of Securities to be redeemed in part, the portion thereof
not to be redeemed), (b) any Securities in respect of which a Purchase Notice or
a Change in Control Purchase Notice has been given and not withdrawn by the
Holder thereof in accordance with the terms of this Indenture (except, in the
case of Securities to be purchased in part, the portion thereof not to be
purchased) or (c) any Securities for a period of 15 days before the mailing of a
notice of redemption.
Notwithstanding any provision to the contrary herein, so long as a global
Security remains outstanding and is held by or on behalf of the Depositary,
transfers of a global Security, in whole or in part, shall be made only in
accordance with Section 2.11 and this Section 2.06. Transfers of a global
Security shall be limited to transfers of such global Security in whole, or in
part, to nominees of the Depositary or to a successor of the Depositary or such
successor's nominee.
9
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Section 2.07. Replacement Securities. If (a) any mutilated Security is
----------------------
surrendered to the Company or the Trustee, or (b) the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and there is delivered to the Company and the Trustee such security or
indemnity as may be required by them to save each of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute, and upon its
---- ----
written request the Trustee shall authenticate and deliver, in exchange for any
such mutilated Security or in lieu of any such destroyed, lost or stolen
Security, a new Security of like tenor and Principal Amount, bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article 3 hereof, the Company in its discretion may, instead
of issuing a new Security, pay or purchase such Security, as the case may be.
Upon the issuance of any new Securities under this Section, 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 (including
the fees and expenses of the Trustee) in connection therewith.
Every new Security issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any
and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 2.08. Outstanding Securities; Determinations of Holders' Action.
---------------------------------------------------------
Securities outstanding at any time are all the Securities authenticated by the
Trustee except for those cancelled by it, those delivered to it for
cancellation, mutilated, destroyed, lost or stolen Securities for which the
Trustee has authenticated and delivered a new Security in lieu therefor pursuant
to Section 2.07, those paid pursuant to Section 2.07, and those described in
this Section 2.08 as not outstanding. A Security does not cease to be
outstanding because the Company or an Affiliate thereof holds the Security;
provided, however, that in determining whether the Holders of the requisite
-------- -------
Principal Amount of Securities have given or concurred in any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor, other than Securities purchased in connection
with the distribution or trading thereof, shall be disregarded and deemed not to
be outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee knows to be so
owned shall be so disregarded. Subject to the foregoing, only Securities
outstanding at the time of such
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determination shall be considered in any such determination (including, without
limitation, determinations pursuant to Articles 6 and 9).
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee receives proof reasonably satisfactory to it that
the replaced Security is held by a bona fide purchaser.
If the Paying Agent holds, in accordance with this Indenture, on a
Redemption Date, or on the Business Day following a Purchase Date, or on the
Business Day following a Change in Control Purchase Date, or at Stated Maturity,
money or, if permitted by the terms hereof, securities sufficient to pay the
Securities payable on that date, then on and after that date such Securities
shall cease to be outstanding and Original Issue Discount and interest, if any
(including, if such Securities have been converted to semiannual coupon notes
following the occurrence of a Tax Event, interest on such notes), on such
Securities shall cease to accrue and all other rights of the Holder shall
terminate (other than the right to receive the applicable Redemption Price,
Purchase Price or Change in Control Purchase Price, as the case may be, upon
delivery of the Security in accordance with the terms of this Indenture);
provided, that if such Securities are to be redeemed, notice of such redemption
--------
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
If a Security is converted in accordance with Article 10, then from and
after the Conversion Date such Security shall cease to be outstanding and
Original Issue Discount and interest, if any (including, if such Securities have
been converted to semiannual coupon notes following the occurrence of a Tax
Event, interest on such notes), shall cease to accrue on such Security.
Section 2.09. Temporary Securities. Pending the preparation of definitive
--------------------
Securities, the Company may execute, and upon Company Order the Trustee shall
authenticate and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the Officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company designated for such purpose pursuant to Section 2.03 or
4.05, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like Principal Amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
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Section 2.10. Cancellation. All Securities surrendered for payment,
------------
redemption or purchase by the Company pursuant to Article 3, conversion pursuant
to Article 10, registration of transfer or exchange shall, if surrendered to any
person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and delivered hereunder
which the Company may have acquired in any manner whatsoever, and all Securities
so delivered shall be promptly cancelled by the Trustee. No Securities shall be
authenticated in lieu of or in exchange for any Securities cancelled as provided
in this Section, except as expressly permitted by this Indenture. All cancelled
Securities held by the Trustee shall be disposed of by the Trustee in accordance
with its standard procedures unless the Company directs by Company Order that
the Trustee deliver cancelled Securities to the Company.
Section 2.11. Global Securities.
-----------------
(a) Transfer and Exchange of Global Securities. A global
------------------------------------------
Security deposited with the Depositary pursuant to Section 2.01 shall be
transferred to the beneficial owners thereof only if such transfer complies
with Section 2.06 and (i) the Depositary notifies the Company that it is
unwilling or unable to continue as depositary for such global Security or
if at any time ceases to be a "clearing agency" registered under the
Exchange Act and a successor depositary is not appointed by the Company
within 60 days after such notice, or (ii) an Event of Default has occurred
and is continuing with respect to the Securities. In either case, the
Company will promptly make available to the Trustee a reasonable supply of
Securities in definitive, fully registered form without interest coupons in
accordance with the provisions of this Article 2.
Any global Security that is transferable to the beneficial owners thereof
pursuant to this Section 2.11 shall be surrendered by the Depositary to the
Trustee located in the Borough of Manhattan, The City of New York, to be so
transferred, in definitive form, in whole or from time to time in part, in
denominations of $1,000 and integral multiples of $1,000, without charge, and
the Trustee shall authenticate and deliver, upon such transfer of each portion
of such global Security, an equal aggregate Principal Amount at Stated Maturity
of Securities of authorized denominations. Any portion of a global Security
transferred pursuant to this Section 2.11 shall be executed, authenticated and
delivered only in the denominations specified in the form of Security attached
as Exhibit A-I hereto and registered in such names as the Depositary shall
direct.
Members of, or participants in, the Depositary ("Agent Members") shall have
no rights under this Indenture with respect to any global Security held on their
behalf by the Depositary or under the global Security, and the Depositary may be
treated by the Company, the Trustee and any agent of the Company or the Trustee
as the absolute owner of such global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall (A) prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or (B) impair, as
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<PAGE>
between the Depositary and its Agent Members, the operation of customary
practices governing the exercise of the rights of a holder of any Security.
Subject to the provisions of this Section 2.11(a), the Holder may grant
proxies and otherwise authorize any Person, including Agent Members and Persons
that may hold interests through Agent Members, to take any action which a Holder
is entitled to take under this Indenture or the Securities.
(b) Transfer and Exchange of Securities. Subject to the provisions of
-----------------------------------
Section 2.11(a), when Securities are presented by a Holder to the Registrar with
a request:
(1) to register the transfer of the Securities; or
(2) to exchange such Securities for an equal principal amount of
Securities of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested;
provided, however, that the Securities presented or surrendered for register of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar duly executed by
such Holder or by such Holder's attorney, duly authorized in writing.
Section 2.12. CUSIP Numbers. The Company in issuing the Securities may
-------------
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
use "CUSIP" numbers in notices of redemption as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
Article III
REDEMPTION AND PURCHASES
Section 3.01. Right to Redeem; Notices to Trustee. The Company, at its
-----------------------------------
option, may redeem the Securities for cash in accordance with the provisions set
forth in paragraphs 5 and 7 of the Securities (a "Redemption"). If the Company
elects to redeem Securities pursuant to paragraph 5 of the Securities, it shall
notify the Trustee in writing of the Redemption Date, the Principal Amount of
Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 3.01 at least 30 days but not more than 60 days before the Redemption
Date (unless a shorter notice shall be satisfactory to the Trustee). If fewer
than all the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee, which
record date shall not be less than ten days after the date of notice to the
Trustee.
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Section 3.02. Selection of Securities to Be Redeemed. If less than all
--------------------------------------
the Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed pro rata or by lot or by any other method the Trustee considers fair
and appropriate (so long as such method is not prohibited by the rules of any
stock exchange on which the Securities are then listed). The Trustee shall make
the selection not more than 60 days before the Redemption Date from outstanding
Securities not previously called for redemption. The Trustee may select for
redemption portions of the Principal Amount of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in Principal Amounts of $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
If any Security selected for partial redemption is thereafter surrendered
for conversion in part before termination of the conversion right with respect
to the portion of the Security so selected and prior to such redemption, the
converted portion of such Security shall be deemed (so far as may be), solely
for purposes of determining the aggregate Principal Amount of Securities to be
redeemed by the Company, to be the portion selected for redemption. Securities
that have been converted during a selection of Securities to be redeemed may be
treated by the Trustee as outstanding for the purpose of such selection. Nothing
in this Section 3.02 shall affect the right of any Holder to convert any
Security pursuant to Article 10 before the termination of the conversion right
with respect thereto.
Section 3.03. Notice of Redemption. At least 30 days but not more than 60
--------------------
days before a Redemption Date, the Company shall mail a notice of redemption by
first-class mail to each Holder of Securities to be redeemed in the manner
provided in Section 12.02.
The notice shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) the Conversion Rate;
(d) the name and address of the Paying Agent and Conversion Agent and
of the office or agency referred to in Section 4.05;
(e) that Securities called for redemption may be converted at any
time before the close of business on the Redemption Date;
(f) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities;
(g) that Securities called for redemption must be surrendered to the
Paying Agent or at the office or agency referred to in Section 4.05 to
collect the Redemption Price;
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<PAGE>
(h) the CUSIP number of the Securities;
(i) the Company has the right to pay the Redemption Price in Common
Stock or cash and the procedure for notifying the Holders of such election;
(j) if fewer than all the outstanding Securities are to be redeemed,
the certificate numbers and Principal Amounts of the particular Securities
to be redeemed; and
(k) that, unless the Company defaults in payment of the Redemption
Price, Original Issue Discount on Securities called for redemption and
interest, if any, will cease to accrue on and after the Redemption Date.
At the Company's written request, the Trustee shall give the notice of
redemption in the Company's name and at the Company's expense.
Section 3.04. Effect of Notice of Redemption. Once notice of redemption
------------------------------
is given, Securities called for redemption become due and payable on the
Redemption Date stated in the notice and at the Redemption Price therefor except
for Securities that are converted in accordance with the terms of the Securities
and this Indenture. Upon the later of the Redemption Date and the date such
Securities are surrendered to the Paying Agent or at the office or agency
referred to in Section 4.05, such Securities called for redemption shall be paid
at the Redemption Price therefor.
Section 3.05. Deposit of Redemption Price. Prior to or on the Redemption
---------------------------
Date, the Company shall deposit with the Paying Agent (or if the Company or a
Subsidiary or an Affiliate of either of them is the Paying Agent, shall
segregate and hold in trust) money sufficient to pay the Redemption Price of all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which prior thereto have been delivered by the
Company to the Trustee for cancellation. The Paying Agent shall as promptly as
practicable return to the Company any money, with interest, if any, thereon
(subject to the provisions of Section 7.01(f)), not required for that purpose
because of conversion of Securities pursuant to Article 10. If such money is
then held by the Company or a Subsidiary or an Affiliate of the Company in trust
and is not required for such purpose it shall be discharged from such trust.
Section 3.06. Securities Redeemed in Part. Upon surrender of a Security
---------------------------
that is redeemed in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder, a new Security in an authorized
denomination equal in Principal Amount to the unredeemed portion of the Security
surrendered.
Section 3.07. Conversion Arrangement on Call for Redemption.
---------------------------------------------
(a) In connection with any redemption of Securities, the Company
may arrange, in lieu of redemption, for the purchase and conversion of any
Securities called for redemption by an agreement with one or more
investment banks or other purchasers pursuant to which such investment
banks or other purchasers (collectively, the "Redemption Purchasers") will
purchase from Holders all or a portion of such Securities
15
<PAGE>
called for redemption by paying to the Trustee in trust for the
Securityholders whose Securities are to be so purchased, on or before the
close of business on the Redemption Date, an amount that, together with any
amounts deposited with the Trustee by the Company for redemption of such
Securities, is not less than the Redemption Price, together with interest,
if any, accrued to the Redemption Date, of such Securities.
(b) Notwithstanding anything to the contrary contained in this
Article 3, the obligation of the Company to pay the Redemption Price of
such Securities, including all accrued interest, if any, shall be deemed to
be satisfied and discharged to the extent such amount is so paid by such
Redemption Purchasers but no such agreement shall relieve the Company of
its obligation to pay such Redemption Price and such accrued interest, if
any, to Securityholders. If such an agreement is entered into, any
Securities not duly surrendered for conversion by the Holders thereof may,
at the option of the Company, be deemed, to the fullest extent permitted by
law, acquired by such Redemption Purchasers from such Holders and
(notwithstanding anything to the contrary contained in Article 11)
surrendered by such Redemption Purchasers for conversion, all as of
immediately prior to the close of business on the Redemption Date, subject
to payment of the Redemption Price as specified herein. The Trustee shall
hold and pay to the Holders whose Securities are selected for redemption
any such amount paid to it for purchase and conversion in the same manner
as it would moneys deposited with it by the Company for the redemption of
Securities.
(c) Without the Trustee's prior written consent, no arrangement
between the Company and such Redemption Purchasers for the purchase and
conversion of any Securities 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 Securities between the Company and such Redemption Purchasers,
including the costs and expenses incurred by the Trustee in the defense of
any claim or liability arising out of or in connection with the exercise or
performance of any of its powers, duties, responsibilities or obligations
under this Indenture other than resulting from the Trustee's gross
negligence or willful misconduct.
Section 3.08. Purchase of Securities at the Option of the Holder.
--------------------------------------------------
(a) General. Securities shall be purchased by the Company
-------
pursuant to paragraph 6 of the Securities as of and (each, a
"Purchase Date"), at the purchase price specified therein (the "Purchase
Price"), at the option of the Holder thereof, upon :
(1) delivery to the Paying Agent or to the office or agency
referred to in Section 4.05 by the Holder of a written notice of purchase
(a "Purchase Notice") at any time from the opening of business on the date
that is 20 Business Days prior to the Purchase Date until the close of
business on the Purchase Date stating:
16
<PAGE>
(A) the certificate number of the Security that the Holder will deliver
to be purchased;
(B) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof;
(C) that such Security shall be purchased on the Purchase Date pursuant
to the terms and conditions specified in this Indenture and in paragraph 6
of the Securities; and
(D) if the Company elects pursuant to Section 3.08(b) to pay the
Purchase Price on the Purchase Date, in whole or in part, in shares of
Common Stock, but such portion of the Purchase Price to be paid in Common
Stock is ultimately to be paid in cash because any condition in Section
3.08(d) is not satisfied, that such Holder elects (i) to withdraw such
Purchase Notice as to some or all of the Securities to which it relates
(stating the Principal Amount and certificate numbers of the Securities as
to which such withdrawal shall relate), or (ii) to receive cash in respect
of the Purchase Price for all Securities subject to such Purchase Notice;
and
(2) delivery of such Security prior to, on, or after, the Purchase
Date (together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent or to the office or agency referred to in
Section 4.05, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor; provided, however, that such Purchase Price
-------- -------
shall be so paid pursuant to this Section 3.08 only if the Security so
delivered conforms in all material respects to the description thereof in
the related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 3.10, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 3.08(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.08, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions hereof
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or the office or agency referred to in Section 4.05 the
Purchase Notice contemplated by this Section 3.08(a) shall have the right to
withdraw at any time prior to the close of business on the Purchase Date such
Purchase Notice by delivery of a written notice of withdrawal to the Paying
Agent or such office or agency in accordance with Section 3.10.
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<PAGE>
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
------------------------------------------------------------
Securities to be purchased pursuant to Section 3.08(a) may be paid for, at the
election of the Company, in cash or Common Stock, or in any combination of cash
and Common Stock, subject to the conditions set forth in this Section 3.08. The
Company shall designate, in the Company Notice delivered pursuant to Section
3.08(e), whether the Company will purchase the Securities for cash or Common
Stock, and, if a combination thereof, the percentages of the Purchase Price of
Securities in respect of which it will pay in cash or Common Stock; provided
--------
that the Company will pay cash in lieu of any fractional interests in Common
Stock. For purposes of determining the existence of potential fractional
interests, all Securities subject to purchase by the Company held by a Holder
shall be considered together (no matter how many separate certificates are to be
presented). Each Holder whose Securities are purchased pursuant to this Section
3.08 shall receive the same percentage of cash or Common Stock in payment of the
Purchase Price for such Securities, except (i) as provided in Section 3.08(d)
with regard to the payment of cash in lieu of fractional shares of Common Stock
and (ii) in the event that the Company is unable to purchase the Securities of a
Holder or Holders for Common Stock because any necessary qualifications or
registrations of the Common Stock under applicable state securities laws cannot
reasonably be obtained, the Company may purchase the Securities of such Holder
or Holders for cash. The Company may not change its election with respect to the
consideration (or components or percentages of components thereof) to be paid
once the Company has given the Company Notice thereof to Securityholders except
pursuant to this Section 3.08(b) or Section 3.08(d).
At least five Business Days before the Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
(1) the manner of payment selected by the Company;
(2) the information required by Section 3.08(e);
(3) that the conditions to such manner of payment set forth in
Section 3.08(d) have or will be complied with; and
(4) whether the Company desires the Trustee to give the notice
required by Section 3.08(e).
(c) Purchase with Cash. On each Purchase Date, at the option of the
------------------
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 3.08(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price of such Securities.
(d) Payment by Common Stock. On each Purchase Date, at the option of the
-----------------------
Company, the Principal Amount of the Securities in respect of which a Purchase
18
<PAGE>
Notice pursuant to Section 3.08(a) has been given, or a specified
percentage thereof, may be purchased by the Company by the issuance of a
number of shares of Common Stock equal to the quotient obtained by dividing
(i) the amount of cash to which the Securityholders would have been
entitled had the Company elected to pay all or such specified percentage,
as the case may be, of the Purchase Price of such Securities in cash by
(ii) the Market Price of a share of Common Stock, subject to the next
succeeding paragraph.
The Company will not issue a fractional share of Common Stock in payment of
the Purchase Price. Instead the Company will pay cash for the current market
value of any such fractional share. The current market value of a fraction of a
share shall be determined by multiplying the Market Price by such fraction and
rounding the product to the nearest whole cent, with one-half cent being rounded
upward. It is understood that if a Holder elects to have more than one Security
purchased, the number of shares of Common Stock shall be based on the aggregate
amount of Securities to be purchased. Upon a payment by Common Stock pursuant to
the terms hereof, that portion of accrued Original Issue Discount attributable
to the period from the Issue Date to the Purchase Date with respect to the
purchased Security shall not be cancelled, extinguished or forfeited but rather
shall be deemed paid in full to the Holder through the delivery of the Common
Stock in exchange for the Security being purchased pursuant to the terms hereof,
and the fair market value of such Common Stock (together with any cash payments
in lieu of fractional shares of Common Stock) shall be treated as issued, to the
extent thereof, first in exchange for the Original Issue Discount accrued
through the Purchase Date, and the balance, if any, of the fair market value of
such shares of Common Stock shall be treated as issued in exchange for the Issue
Price of the Security being purchased pursuant to the provisions hereof.
The Company's right to exercise its election to purchase the Securities
pursuant to this Section through the issuance of shares of Common Stock shall be
conditioned upon:
(1) the Company's not having given notice of an election to pay
entirely in cash and its giving of timely notice of election to purchase
all or a specified percentage of the Securities with Common Stock as
provided herein;
(2) the registration of the shares of Common Stock to be issued in
respect of the payment of the Purchase Price under the Securities Act of
1933, as amended (the "Securities Act") and the Securities Exchange Act of
--------------
1934, as amended (the "Exchange Act"), in each case if required unless
------------
there exists an applicable exemption to registration thereunder;
(3) any necessary qualification or registration under applicable state
securities laws or the availability of an exemption from such qualification
and registration with respect to the shares of Common Stock to be issued in
respect of the payment of the Purchase Price;
(4) the listing of Common Stock on the Purchase Date on the New York
Stock Exchange or other national securities exchange or quotation on the
NASDAQ Stock Market; and
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(5) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Common Stock are in conformity with this Indenture and (B) the shares of
Common Stock to be issued by the Company in payment of the Purchase Price
in respect of Securities have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the
Purchase Price in respect of the Securities, will be validly issued, fully
paid and nonassessable and shall be free of any preemptive rights and any
lien or adverse claim (provided that such Opinion of Counsel may state
that, insofar as it relates to the absence of such preemptive rights, liens
and adverse claims, it is given upon the best knowledge of such counsel),
and, in the case of such Officers' Certificate, that conditions (i), (ii),
(iii) and (iv) above have been satisfied and, in the case of such Opinion
of Counsel, that conditions (ii), (iii) and (iv) above have been satisfied.
Such Officers' Certificate shall also set forth the number of shares of
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Common Stock on each of the seven Business Days prior
to the Purchase Date. The Company may elect to pay in Common Stock only if the
information necessary to calculate the Market Price is reported in The Wall
--------
Street Journal or another daily newspaper of national circulation. If such
--------------
conditions are not satisfied prior to or on the Purchase Date and the Company
elected to purchase the Securities pursuant to this Section 3.08 through the
issuance of shares of Common Stock, the Company shall pay, without further
notice, the Purchase Price in cash.
(e) Notice of Election. The Company shall send a notice of its election
(the "Company Notice") to purchase with cash or Common Stock or any
--------------
combination thereof to each Holder (and to each beneficial owner as required
by applicable law) in the manner provided in Section 11.02. The Company
Notice shall be sent to Holders (and to beneficial owners as required by
applicable law) on a date not less than 20 Business Days prior to the
Purchase Date (such date not less than 20 Business Days prior to the Purchase
Date being herein referred to as the "Company Notice Date"). Such Company
-------------------
Notice shall state the manner of payment elected and shall contain the
following information:
In the event the Company has elected to pay the Purchase Price (or any
specified percentage thereof) with Common Stock, the notice shall:
(1) state that each Holder will receive Common Stock with a Market
Price determined, in accordance with the terms of this Indenture, as of a
specified date prior to the Purchase Date equal to such specified
percentage of the Purchase Price of the Securities held by such Holder
(except for any cash amount to be paid in lieu of fractional shares);
(2) set forth the method of calculating the Market Price; and
(3) state that because the Market Price of Common Stock will be
determined prior to the Purchase Date, Holders will bear the market risk
with
20
<PAGE>
respect to the value of the Common Stock to be received from the date such
Market Price is determined to the Purchase Date.
In any case, each notice shall include a form of Purchase Notice to be
completed by the Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion Agent
and of the office or agency referred to in Section 4.05;
(iii) that Securities as to which a Purchase Notice has been given may
be converted into Common Stock at any time prior to the close of business
on the applicable Purchase Date only if the applicable Purchase Notice has
been withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent or to the
office or agency referred to in Section 4.05 to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not withdrawn will be paid promptly following the
later of the Purchase Date and the time of surrender of such Security as
described in (iv) ;
(vi) the procedures set forth in Section 3.08(a) the Holder must follow
to exercise rights under Section 3.08 and a brief description of those
rights;
(vii) briefly, the conversion rights of the Securities and that Holders
who want to convert Securities must satisfy the requirements set forth in
paragraph 9 of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 3.08(a)(1)(D) or Section 3.10).
At the Company's written request, the Trustee shall give such notice in the
Company's name and at the Company's expense; provided, however, that, in all
-------- -------
cases, the text of such notice shall be prepared by the Company.
Upon determination of the actual number of shares of Common Stock to be
issued for each $1,000 Principal Amount of Securities, the Company promptly will
issue a press release and publish such determination on its Website on the World
Wide Web and furnish the Trustee with an affidavit of publication.
(f) Covenants of the Company. All shares of Common Stock delivered upon
------------------------
purchase of the Securities shall be newly issued shares or treasury shares,
shall be duly authorized, validly issued, fully paid and nonassessable and shall
be free from preemptive rights and free of any lien or adverse claim.
21
<PAGE>
The Company shall use its reasonable efforts to list or cause to have
quoted any shares of Common Stock to be issued to purchase Securities on the
principal national securities exchange or over-the-counter or other domestic
market on which any other shares of the Common Stock are then listed or quoted.
The Company will promptly inform the Trustee in writing of any such listing.
(g) Procedure Upon Purchase. On or before the Purchase Date, the
-----------------------
Company shall deposit cash (in respect of a cash purchase under Section
3.08(c) or for fractional interests, as applicable) or shares of Common
Stock, or any combination thereof, as applicable, at the time and in the
manner as provided in Section 3.11, sufficient to pay the aggregate
Purchase Price of all Securities to be purchased pursuant to this Section
3.08. As soon as practicable after the later of the Purchase Date and the
date such Securities are surrendered to the Paying Agent or at the office
or agency referred to in Section 4.05, the Company shall deliver to each
Holder entitled to receive Common Stock through the Paying Agent a
certificate for the number of full shares of Common Stock issuable in
payment of the Purchase Price and cash in lieu of any fractional interests.
The person in whose name the certificate for Common Stock is registered
shall be treated as a holder of record of such Common Stock on the Business
Day following the related Purchase Date. Subject to Section 3.08(d), no
payment or adjustment will be made for dividends on the Common Stock the
record date for which occurred prior to the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in Common Stock, the
-----
Company shall pay any documentary, stamp or similar issue or transfer tax
due on such issue of shares of Common Stock. However, the Holder shall pay
any such tax that is due because the Holder requests the shares of Common
Stock to be issued in a name other than the Holder's name. The Paying Agent
may refuse to deliver the certificates representing the Common Stock being
issued in a name other than the Holder's name until the Paying Agent
receives a sum sufficient to pay any tax that will be due because the
shares of Common Stock are to be issued in a name other than the Holder's
name. Nothing herein shall preclude the Company from withholding or
directing the withholding of any tax required by law or regulations.
Section 3.09. Purchase of Securities at Option of the Holder Upon Change
----------------------------------------------------------
in Control.
----------
(a) If on or prior to , there shall have occurred a Change in
Control, Securities shall be purchased, at the option of the Holder
thereof, by the Company at the purchase price specified in paragraph 6 of
the Securities (the "Change in Control Purchase Price"), on the date that
--------------------------------
is 35 Business Days after the occurrence of the Change in Control (the
"Change in Control Purchase Date"), subject to satisfaction by or on behalf
--------------------------------
of the Holder of the requirements set forth in Section 3.09(c).
A "Change in Control" shall be deemed to have occurred at such time after
-----------------
the original issuance of the Securities as either of the following events shall
occur:
22
<PAGE>
(1) There shall be consummated any consolidation or merger of the
Company pursuant to which the Common Stock would be converted into cash,
securities or other property, in each case, other than a consolidation or
merger of the Company in which the holders of Common Stock immediately
prior to the consolidation or merger have, directly or indirectly, at least
a majority of the total voting power in the aggregate of all classes of
Capital Stock of the continuing or surviving corporation immediately after
such consolidation or merger; or
(2) There is a report filed by any person, including its Affiliates
and Associates (other than the Company, any Subsidiary of the Company, or
any employee benefit plan of either the Company or any Subsidiary of the
Company), on Schedule 13D or 14D-1 (or any successor schedule, form or
report) pursuant to the Exchange Act, disclosing that such person (for the
purposes of this Section 3.09 only, the term "person" shall include a
"person" within the meaning of Section 13(d)(3) or Section 14(d)(2) of the
Exchange Act or any successor provision to either of the foregoing) has
become the beneficial owner (as the term "beneficial owner" is defined
----------------
under Rule 13d-3 or any successor rule or regulation promulgated under the
Exchange Act) of 50% or more of the total voting power in the aggregate of
all classes of Capital Stock of the Company then outstanding normally
entitled to vote in elections of directors provided, however, that a person
-------- -------
shall not be deemed beneficial owner of, or to own beneficially, (A) any
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such person or any of such person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial ownership (1) arises
solely as a result of a revocable proxy delivered in response to a proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable rules and regulations under the Exchange Act, and (2) is not
also then reportable on Schedule 13D (or any successor schedule, form or
report) under the Exchange Act.
Notwithstanding the foregoing provisions of this Section 3.09, a Change in
Control shall not be deemed to have occurred if at any time the Company, any
Subsidiary, any employee stock ownership plan or any other employee benefit plan
of the Company or any Subsidiary, or any person holding Common Stock for or
pursuant to the terms of any such employee benefit plan files or becomes
obligated to file a report under or in response to Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report) under the Exchange Act
disclosing beneficial ownership by it of shares of Common Stock, whether in
excess of 50% or otherwise.
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
---------
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(b) Within 15 Business Days after the Change in Control, the Company
shall mail a written notice of such Change in Control by first-class mail
to the Trustee and to each Holder (and to beneficial owners if required by
applicable law). The notice
23
<PAGE>
shall include a form of Change in Control Purchase Notice to be completed by the
Securityholder and shall state:
(1) briefly, the events causing a Change in Control, and the date such
Change in Control is deemed to have occurred for purposes of this Section
3.09;
(2) the date by which the Change in Control Purchase Notice pursuant
to this Section 3.09 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent
and the office or agency referred to in Section 4.05;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock (or, in lieu thereof,
cash, if the Company shall so elect) at any time prior to the close of
business on the Change of Control Purchase Date only if the Change in
Control Purchase Notice has been withdrawn in accordance with the terms of
this Indenture;
(8) that Securities must be surrendered to the Paying Agent or the
office or agency referred to in Section 4.05 to collect payment;
(9) that the Change in Control Purchase Price for any Security as to
which a Purchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Change in Control Purchase Date and the
time of surrender of such Security as described in (8);
(10) the procedures the Holder must follow to exercise rights under
this Section 3.09 and a brief description of those rights;
(11) briefly, the conversion rights of the Securities;
(12) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities; and
(13) the procedures for withdrawing a Change in Control Purchase
Notice.
(c) A Holder may exercise its rights specified in Section 3.09(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase
--------------------------
Notice") to the
------
24
<PAGE>
Paying Agent or to the office or agency referred to in Section 4.05 at any
time prior to the close of business on the Change in Control Purchase Date,
stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
(2) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be purchased on the Change in Control
Purchase Date pursuant to the terms and conditions specified in paragraph 6
of the Securities.
Receipt of the Security by the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements), at
the offices of the Paying Agent or to the office or agency referred to in
Section 4.05 shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor; provided, however, that such Change in Control
-------- -------
Purchase Price shall be so paid pursuant to this Section 3.09 only if the
Security so delivered to the Paying Agent or such office or agency shall conform
in all material respects to the description thereof set forth in the related
Change in Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.09, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 3.09 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 4.05.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or to the office or agency referred to in Section 4.05 the
Change in Control Purchase Notice contemplated by this Section 3.09(c) shall
have the right to withdraw such Change in Control Purchase Notice at any time
prior to the close of business on the Change in Control Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent or to such office
or agency in accordance with Section 3.10.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
Section 3.10. Effect of Purchase Notice or Change in Control Purchase
-------------------------------------------------------
Notice. Upon receipt by the Paying Agent of the Purchase Notice or Change in
------
Control Purchase Notice specified in Section 3.08(a) or Section 3.09(c), as
applicable, the Holder of the Security in respect of which such Purchase Notice
or Change in Control Purchase Notice, as the case may be, was given shall
(unless such Purchase Notice or Change in Control Purchase Notice is
25
<PAGE>
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Change in Control Purchase Price, as the
case may be, with respect to such Security. Such Purchase Price or Change in
Control Purchase Price shall be paid to such Holder promptly following the later
of (x) the Business Day following the Purchase Date or the Change in Control
Purchase Date, as the case may be, with respect to such Security (provided the
conditions in Section 3.08(a) or Section 3.09(c), as applicable, have been
satisfied) and (y) the time of delivery of such Security to the Paying Agent or
to the office or agency referred to in Section 4.05 by the Holder thereof in the
manner required by Section 3.08(a) and (g) or Section 3.09(c), as applicable.
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice, as the case may be, has been given by the Holder thereof may not be
converted into shares of Common Stock on or after the date of the delivery of
such Purchase Notice or Change in Control Purchase Notice, as the case may be,
unless such Purchase Notice or Change in Control Purchase Notice, as the case
may be, has first been validly withdrawn as specified in the following two
paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent or to the office or agency referred to in Section
4.05 at any time on or prior to the close of business on the Purchase Date or
the Change in Control Purchase Date, as the case may be, specifying:
(a) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(b) the Principal Amount of the Security with respect to which such
notice of withdrawal is being submitted; and
(c) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
3.08(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 3.08(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Securities pursuant to Section 3.08
(other than through the issuance of Common Stock in payment of the Purchase
Price, including cash in lieu of fractional shares of Common Stock) or Section
3.09 if there has occurred (prior to, on or after, as the case may be, the
giving, by the Holders of such Securities, of the required Purchase Notice or
Change in Control Purchase Notice, as the case may be) and is continuing an
Event of Default (other than a default in the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Securities). The Paying Agent will promptly return to the respective Holders
thereof any Securities (x) with respect to which a Purchase Notice or
26
<PAGE>
Change in Control Purchase Notice, as the case may be, has been withdrawn in
compliance with this Indenture, or (y) held by it during the continuance of an
Event of Default (other than a default in the payment of the Purchase Price or
Change in Control Purchase Price, as the case may be, with respect to such
Securities) in which case, upon such return, the Purchase Notice or Change in
Control Purchase Notice with respect thereto shall be deemed to have been
withdrawn.
Section 3.11. Deposit of Purchase Price or Change in Control Purchase
-------------------------------------------------------
Price. Prior to ____ .m. (local time in The City of New York) on the Business
-----
Day following the Purchase Date or the Change in Control Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying Agent
(or, if the Company or a Subsidiary or an Affiliate of either of them is acting
as Paying Agent, shall segregate and hold in trust as provided in Section 2.04)
an amount of cash in immediately available funds or securities, if expressly
permitted hereunder, sufficient to pay the aggregate Purchase Price or Change in
Control Purchase Price, as the case may be, of all the Securities or portions
thereof which are to be purchased as of the Purchase Date or Change in Control
Purchase Date, as the case may be.
Section 3.12. Securities Purchased in Part. Any Security which is to be
----------------------------
purchased only in part shall be surrendered at the office of the Paying Agent or
the office or agency referred to in Section 4.05 (with, if the Company or the
Trustee so requires, due endorsement, or a written instrument of transfer in
form satisfactory to the Company and the Trustee executed by the Holder or such
Holder's attorney duly authorized in writing) and the Company shall execute and
the Trustee shall authenticate and deliver to the Holder of such Security,
without service charge, a new Security or Securities, of any authorized
denomination as requested by such Holder in aggregate Principal Amount equal to,
and in exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.
Section 3.13. Covenant to Comply With Securities Laws Upon Purchase of
--------------------------------------------------------
Securities. In connection with any offer to purchase or purchase of Securities
----------
under Section 3.08 or 3.09 hereof, the Company shall (i) comply with Rule 13e-4
and Rule 14e-1 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 regulating the offer and delivery of shares of Common Stock upon
purchase of the Securities (including positions of the SEC under applicable no-
action letters) so as to permit the rights and obligations under Sections 3.08
and 3.09 to be exercised in the time and in the manner specified in Sections
3.08 and 3.09.
Section 3.14. Repayment to the Company. The Trustee and the Paying Agent
------------------------
shall return to the Company any cash or shares of Common Stock, together with
interest on such cash, if any, or dividends on such shares of Common Stock, if
any, (subject to the provisions of Section 7.01(f)) held by them for the payment
of a Purchase Price or Change in Control Purchase Price, as the case may be, of
the Securities that remain unclaimed as provided in paragraph 13 of the
Securities; provided, however, that to the extent that the aggregate amount of
-------- -------
cash (including interest) or shares of Common Stock (including dividends
received thereon, if any) deposited by the Company pursuant to Section 3.11
exceeds the aggregate Purchase Price or Change in Control Purchase Price, as the
case may be, of the Securities or portions thereof to be purchased,
27
<PAGE>
then promptly after the Business Day following the Purchase Date or Change in
Control Purchase Date, as the case may be, the Trustee shall return any such
excess to the Company together with interest or dividends, if any, thereon
(subject to the provisions of Section 7.01(f)).
Any cash deposited with the Trustee or with the Paying Agent pursuant to
Section 3.11 hereof, shall be invested by the Trustee or Paying Agent, as
applicable, in short term obligations of, or fully guaranteed by, the United
States of America, or commercial paper rated A-1 or better by Standard and
Poor's Corporation or P-1 or better by Moody's Investors Service, Inc. as
specifically directed in writing by the Company. If the Company fails to so
direct the Trustee in writing, the Trustee may invest any cash deposited with it
in money market funds (including funds of the Trustee and its affiliates for
which they may receive compensation). Interest earned on such investments shall
be repaid to the Company pursuant to this Section 3.14. Except as provided for
in this Section 3.14, the Trustee shall be under no liability for interest on
any money received by it pursuant to this Indenture.
Article IV
COVENANTS
Section 4.01. Payment of Securities. The Company shall promptly make all
---------------------
payments in respect of the Securities on the dates and in the manner provided in
the Securities or pursuant to this Indenture. Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price, Change in
Control Purchase Price and interest, if any, shall be considered paid on the
applicable date due if on such date the Trustee or the Paying Agent holds, in
accordance with this Indenture, cash or securities, if expressly permitted
hereunder, sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay interest on overdue
amounts at the per annum rate of interest set forth in paragraph 1 of the
Securities, compounded semi-annually, which interest on overdue amounts (to the
extent payment of such interest shall be legally enforceable) shall accrue from
the date such overdue amounts were originally due and payable.
Section 4.02. SEC Reports. The Company shall file with the Trustee,
-----------
within 15 days after it files such annual and quarterly reports, information,
documents and other reports with the SEC, copies of its annual and quarterly
reports and of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may by rules and regulations
prescribe) which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act (or any such successor provisions
thereto). The Company also shall comply with the other provisions of TIA Section
314(a), to the extent such provisions are applicable.
Section 4.03. Compliance Certificate; Notice of Defaults.
------------------------------------------
(a) The Company shall deliver to the Trustee within 120 days after the
end of each fiscal year of the Company (beginning with the fiscal year
ending on ) a
28
<PAGE>
certificate of the principal executive officer, the principal financial
officer or the principal accounting officer of the Company stating whether
or not, to the knowledge of the signer, the Company has complied with all
conditions and covenants on its part contained in this Indenture and, if
the signer has obtained knowledge of any default by the Company in the
performance, observance or fulfillment of any such condition or covenant,
specifying each such default and the nature thereof. For the purpose of
this Section 4.03, compliance shall be determined without regard to any
grace period or requirement of notice provided pursuant to the terms of
this Indenture.
(b) The Company shall file with the Trustee written notice of the
occurrence of any Default or Event of Default within five Business Days of
its becoming aware of such Default or Event of Default.
Section 4.04. Further Instruments and Acts. Upon request of the Trustee,
----------------------------
the Company will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purposes of this Indenture.
Section 4.05. Maintenance of Office or Agency. The Company will maintain
-------------------------------
in the Borough of Manhattan, The City of New York, in such location as may be
required by the rules of any securities exchange or quotation system on which
the Securities may from time to time be listed, an office or agency where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer, exchange, purchase, redemption or
conversion and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served. The office of the Trustee in
The City of New York, which office on the date hereof is located at , shall
be such office or agency for all of the aforesaid purposes unless the Company
shall maintain some other office or agency for such purposes and shall give
prompt written notice to the Trustee of the location, and any change of
location, of such other office or agency. If at any time the Company shall fail
to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the address of the Trustee set forth in Section
12.02.
The Company may also from time to time designate one or more other offices
or agencies where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
--------
however, that no such designation or rescission shall in any manner relieve the
-------
Company of its obligation to maintain an office or agency in The City of New
York, for such purposes.
Section 4.06. Calculation of Original Issue Discount. The Company shall
--------------------------------------
file with the Trustee, within 30 days following the end of each calendar year, a
written notice specifying (i) the amount of Original Issue Discount (including
the daily rates and accrual periods) accrued on outstanding Securities as of the
end of such year and (ii) such other specific information relating to such
Original Issue Discount as may then be relevant under the Internal Revenue Code
of 1986, as amended from time to time.
29
<PAGE>
Article V
SUCCESSOR CORPORATION
Section 5.01. When Company May Merge or Transfer Assets. The Company may
-----------------------------------------
consolidate with, or sell, lease or convey all or substantially all of its
properties and assets to, or merge with or into any other corporation, provided
--------
that in any such case:
(a) either the Company shall be the continuing corporation or
the successor corporation shall be a corporation organized and existing
under the laws of the United States or any State thereof and such successor
corporation shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee,
the due and punctual payment of all amounts payable with respect to all the
Securities, according to their terms, and the due and punctual performance
and observance of all of the covenants, conditions and obligations to be
performed by the Company under the Securities and this Indenture; and
(b) immediately after giving effect to such merger or
consolidation or such sale, lease or conveyance, and the assumption
contemplated above, the Company or such successor corporation shall not be
in default in the performance of any such covenant, condition or
obligation.
In the case of any such consolidation, merger, sale, lease or conveyance
and upon any such assumption by the successor corporation, such successor
corporation shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor had been named as the Company herein; and thereafter, except in
the case of a lease of its properties and assets substantially as an entirety,
the Company shall be relieved of any further obligation under this Indenture and
the Securities. Such successor corporation thereupon may cause to be signed, and
may issue either in its own name or in the name of the Company, any or all of
the Securities 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 any Securities which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Securities which such successor corporation thereafter
shall cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof.
In case of any such consolidation, merger, sale, lease or conveyance, such
changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
30
<PAGE>
The Trustee, subject to Section 7.01, may receive an Officers' Certificate
and an Opinion of Counsel as conclusive evidence that any such consolidation,
merger, sale, lease or conveyance, and any such assumption, complies with the
provisions of this Article.
Article VI
DEFAULTS AND REMEDIES
Section 6.01. Events of Default. An "Event of Default" occurs if:
----------------- --------------------
(a) after exercise of its option pursuant to Section 11.01
following a Tax Event, the Company defaults on the payment of interest upon
any Security when such interest becomes due and payable, and such default
continues for a period of 30 days;
(b) the Company defaults in the payment of the Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, Purchase
Price or Change in Control Purchase Price on any Security when the same
becomes due and payable at its Stated Maturity, upon redemption, upon
declaration, when due for purchase by the Company or otherwise, whether or
not such payment shall be prohibited by this Indenture;
(c) the Company fails to comply with any of its agreements in
the Securities or this Indenture (other than those referred to in clauses
(a) and (b) above) and such failure continues for 60 days after receipt by
the Company of a Notice of Default;
(d) the Company, pursuant to or within the meaning of any
Bankruptcy Law:
(1) commences a voluntary case or proceeding;
(2) consents to the entry of an order for relief against it
in an involuntary case or proceeding or the commencement of any case
against it;
(3) consents to the appointment of a Custodian of it or for
any substantial part of its property;
(4) makes a general assignment for the benefit of its
creditors;
(5) files a petition in bankruptcy or answer or consent
seeking reorganization or relief; or
(6) consents to the filing of such petition or the
appointment of or taking possession by a Custodian;
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(e) a court of competent jurisdiction enters an order or decree under any
Bankruptcy Law that:
(1) is for relief against the Company in an involuntary case
or proceeding, or adjudicates the Company insolvent or bankrupt;
(2) appoints a Custodian of the Company or for any
substantial part of its property; or
(3) orders the winding up or liquidation of the Company; and
the order or decree remains unstayed and in effect for 60 days; or
(4) the Company fails to deliver shares of Common Stock (and
cash in lieu of fractional shares) or cash in lieu of shares of Common
Stock in accordance with the terms hereof when such Common Stock (and
cash in lieu of fractional shares) or cash is required to be delivered,
upon conversion of a Security and such failure is not remedied for a
period of 10 days.
A Default under clause (c) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time outstanding notify the Company
and the Trustee, of the Default and the Company does not cure such Default
within the time specified in clause (c) above after receipt of such notice. Any
such notice must specify the Default, demand that it be remedied and state that
such notice is a "Notice of Default."
The Company shall deliver to the Trustee, within 30 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice and the lapse of time or both would become an Event of Default
under clause (c), its status and what action the Company is taking or proposes
to take with respect thereto.
Section 6.02. Acceleration. If an Event of Default (other than an Event
------------
of Default specified in Section 6.01(d) or (e)) occurs and is continuing, unless
the Principal Amount of all the Securities shall have already become due and
payable, either the Trustee by notice to the Company, or the Holders of at least
25% in aggregate Principal Amount of the Securities at the time outstanding by
notice to the Company and the Trustee, may declare the Issue Price and accrued
Original Issue Discount (or if the Securities have been converted to a
semiannual coupon note following a Tax Event, the Restated Principal Amount,
plus accrued and unpaid interest) through the date of declaration on all the
Securities to be immediately due and payable, whereupon such Issue Price and
accrued Original Issue Discount shall be due and payable immediately; provided
that, if an Event of Default specified in Section 6.01(d) or (e) occurs and is
continuing, the Issue Price and accrued Original Issue Discount (or if the
Securities have been converted to a semiannual coupon note following a Tax
Event, the Restated Principal Amount, plus accrued and unpaid interest) on all
the Securities to the date of the occurrence of such Event of Default shall
become and be immediately due and payable without any declaration or other act
on the part of
32
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the Trustee or any Securityholders. The Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding, by notice to the
Trustee (and without notice to any other Securityholder) may rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default have been cured or
waived except nonpayment of the Issue Price and accrued Original Issue Discount
(or accrued and unpaid interest) that have become due solely as a result of
acceleration and if all amounts due to the Trustee under Section 7.06 have been
paid. No such rescission shall affect any subsequent Default or impair any right
consequent thereto.
Section 6.03. Other Remedies. If an Event of Default occurs and is
--------------
continuing, the Trustee may pursue any available remedy to collect the payment
of the Issue Price and accrued Original Issue Discount on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if the Trustee does not possess
any of the Securities or does not produce any of the Securities in the
proceeding. A delay or omission by the Trustee or any Securityholder in
exercising any right or remedy accruing upon an Event of Default shall not
impair the right or remedy or constitute a waiver of, or acquiescence in, the
Event of Default. No remedy is exclusive of any other remedy. All available
remedies are cumulative.
Section 6.04. Waiver of Past Defaults. The Holders of a majority in
-----------------------
aggregate Principal Amount of the Securities at the time outstanding, by notice
to the Trustee (and without notice to any other Securityholder), may waive an
existing Default and its consequences except (a) an Event of Default described
in Section 6.01(b), (b) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected or
(c) a Default under Article 11. When a Default is waived, it is deemed cured and
shall cease to exist, but no such waiver shall extend to any subsequent or other
Default or impair any consequent right.
Section 6.05. Control by Majority. The Holders of a majority in aggregate
-------------------
Principal Amount of the Securities at the time outstanding may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or of exercising any trust or power conferred on the Trustee. However,
the Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines in good faith is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability unless the Trustee shall have been provided with reasonable security
or indemnity against such liability satisfactory to the Trustee.
Section 6.06. Limitation on Suits. A Securityholder may not pursue any
--------------------
remedy with respect to this Indenture or the Securities unless:
(a) the Holder gives to the Trustee written notice stating that an
Event of Default is continuing;
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(b) the Holders of at least 25% in aggregate Principal Amount of
the Securities at the time outstanding make a written request to the
Trustee to pursue the remedy;
(c) such Holder or Holders offer to the Trustee reasonable
security or indemnity against any loss, liability or expense satisfactory
to the Trustee;
(d) the Trustee does not comply with the request within 60 days
after receipt of the notice, the request and the offer of security or
indemnity; and
(e) the Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding do not give the Trustee a direction
inconsistent with the request during such 60-day period.
A Securityholder may not use this Indenture to prejudice the rights of any
other Securityholder or to obtain a preference or priority over any other
Securityholder.
Section 6.07. Rights of Holders to Receive Payment. Notwithstanding any
------------------------------------
other provision of this Indenture, the right of any Holder to receive payment of
the Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if any, in
respect of the Securities held by such Holder, on or after the respective due
dates expressed in the Securities or any Redemption Date, and to convert the
Securities in accordance with Article 10 or to bring suit for the enforcement of
any such payment on or after such respective dates or the right to convert,
shall not be impaired or affected adversely without the consent of each such
Holder.
Section 6.08. Collection Suit by Trustee. If an Event of Default
--------------------------
described in Section 6.01(2) occurs and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount owing with respect to the Securities and the amounts
provided for in Section 7.06.
Section 6.09. Trustee May File Proofs of Claim. In case of the pendency
--------------------------------
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors, the Trustee (irrespective
of whether the Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Change in Control Purchase Price or interest,
if any, in respect of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of any such amount)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of the
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price or interest, if
any, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation,
34
<PAGE>
expenses, disbursements and advances of the Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding; and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any Custodian, receiver, assignee, trustee, liquidator, sequestrator or
similar official in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 7.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities. If the Trustee collects any money pursuant to
----------
this Article 6, it shall pay out the money in the following order:
FIRST: to the Trustee for amounts due under Section 7.06;
SECOND: to Securityholders for amounts due and unpaid on the
Securities for the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price, Change in Control Purchase
Price or interest, if any, as the case may be, ratably, without preference
or priority of any kind, according to such amounts due and payable on the
Securities; and
THIRD: the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders pursuant to this Section 6.10. At least 15 days before such
record date, the Company shall mail to each Securityholder and the Trustee a
notice that states the record date, the payment date and amount to be paid.
Section 6.11. Undertaking for Costs. In any suit for the enforcement of
---------------------
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant (other than the Trustee) in the suit of
an undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section 6.11 does not apply
to a suit initiated by the Trustee, a suit by a Holder pursuant to Section 6.07
or a suit by Holders of more than 10% in aggregate Principal Amount of the
Securities at the time outstanding.
35
<PAGE>
Section 6.12. Notice of Defaults. The Trustee shall, within 90 days after
------------------
the occurrence of any Default, mail to all Holders of Securities, as the names
and addresses of such Holders appear on the books of registry of the Company,
notice of all Defaults of which the Trustee shall be aware, unless such Defaults
shall have been cured or waived before the giving of such notice; provided that,
except in the case of a Default described in Section 6.01(1) or 6.01(2), 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
or Trust Officers of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of Securities.
Section 6.13. Waiver of Stay, Extension or Usury Laws. The Company
----------------------------------------
covenants (to the extent it may lawfully do so) that it shall not at any time
insist upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law, wherever
enacted, now or at any time hereafter in force, that would prohibit or forgive
the Company from paying all or any portion of the Principal Amount, Issue Price,
accrued Original Issue Discount, Redemption Price, Purchase Price or Change in
Control Purchase Price in respect of the Securities, or any interest on any such
amounts, as contemplated herein, or that may affect the covenants or the
performance of this Indenture or the Securities; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.
Article VII
TRUSTEE
Section 7.01. Rights of Trustee.
-----------------
(a) The Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel. The Trustee
shall not be liable for any action it takes or omits to take in good faith
in reliance on such Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be
responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within
its rights or powers.
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<PAGE>
(e) The Trustee may refuse to perform any duty or exercise any
right or power or extend or risk its own funds or otherwise incur any
financial liability unless it receives indemnity satisfactory to it against
any loss, liability or expense.
(f) Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The
Trustee (acting in any capacity hereunder) shall be under no liability for
interest on any money received by it hereunder.
Section 7.02. Individual Rights of Trustee. The Trustee in its individual
----------------------------
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or its Affiliates with the same rights it would
have if it were not Trustee. Any Paying Agent, Registrar, Conversion Agent or
co-registrar may do the same with like rights. However, the Trustee must comply
with Sections 7.09 and 7.10.
Section 7.03. Trustee's Disclaimer. The Trustee makes no representation
--------------------
as to the validity or adequacy of this Indenture or the Securities, it shall not
be accountable for the Company's use of the proceeds from the Securities, it
shall not be responsible for any statement in the registration statement for the
Securities under the Securities Act or in the Indenture or the Securities (other
than its certificate of authentication), or the determination as to which
beneficial owners are entitled to receive any notices hereunder.
Section 7.04. Notice of Defaults. The Trustee shall, within 90 days after
------------------
the occurrence of any Default, mail to all Holders of Securities, as the names
and addresses of such Holders appear on the books of registry of the Company,
notice of all Defaults of which the Trustee shall be aware, unless such Defaults
shall have been cured or waived before the giving of such notice; provided that,
-------- ----
except in the case of a Default described in Section 6.01(1) or 6.01(2), 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
or Trust Officers of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Holders of Securities.
Section 7.05. Reports by Trustee to Holders. Within 60 days after each
-----------------------------
May 15 beginning with the May 15 following the date of this Indenture, the
Trustee shall mail to each Securityholder a brief report dated as of such May 15
that complies with TIA Section 313(a), if required by said Section. The Trustee
also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to Securityholders shall
be provided to the Company and shall be submitted to the SEC and each stock
exchange on which the Securities are listed. The Company agrees promptly to
notify the Trustee whenever the Securities become listed on any stock exchange
and of any delisting thereof.
Section 7.06. Compensation and Indemnity. The Company agrees:
--------------------------
(a) to pay to the Trustee from time to time such reasonable
compensation for all services rendered by it hereunder (which compensation
shall not (to the extent
37
<PAGE>
permitted by law) be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(b) to reimburse the Trustee upon its request and, if required
by the Company, submission of reasonable documentation for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses, advances and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith; and
(c) to indemnify each of the Trustee, its officers, directors,
employees and agents, or any predecessor Trustee for, and to hold it
harmless against, any and all loss, liability, damage, claim or expense,
including taxes (other than taxes based upon, measured or determined by the
income of the Trustee), incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration
of this trust, including the reasonable costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder.
The Trustee shall give the Company notice of any claim or liability for
which the Trustee might be entitled to indemnification under subparagraph (c) of
this Section 7.06, within a reasonable amount of time after a Trust Officer of
the Trustee becomes aware of such claim or liability. To secure the Company's
payment obligations in this Section 7.06, the Trustee shall have a lien prior to
the Securities on all money or property held or collected by the Trustee.
The Company's payment obligations pursuant to this Section 7.06 shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(4) or (5), the expenses
are intended to constitute expenses of administration under the Bankruptcy Law.
The provisions of this Section shall survive the termination of this Indenture.
Section 7.07. Replacement of Trustee. The Trustee may resign by so
----------------------
notifying the Company; provided, however, no such resignation shall be effective
-------- -------
until a successor Trustee has accepted its appointment pursuant to this Section
7.07. The Holders of a majority in aggregate Principal Amount of the Securities
at the time outstanding may remove the Trustee by so notifying the Trustee and
may appoint a successor Trustee (subject to the consent of the Company, such
consent not to be unreasonably withheld). The Company shall remove the Trustee
if:
(a) the Trustee fails to comply with Section 7.09;
(b) the Trustee is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Trustee
or its property; or
(d) the Trustee otherwise becomes incapable of acting.
38
<PAGE>
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint, by resolution of
its Board of Directors, a successor Trustee that meets the requirements of
Section 7.09.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the resignation or removal
of the retiring Trustee shall become effective, and the successor Trustee shall
have all the rights, powers and duties of the Trustee under this Indenture. The
successor Trustee shall mail a notice of its succession to Securityholders. The
retiring Trustee shall promptly transfer all property held by it as Trustee to
the successor Trustee, subject to the lien provided for in Section 7.06.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of a majority in aggregate Principal Amount of the Securities at the
time outstanding may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee fails to comply with Section 7.09, any Securityholder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
Section 7.08. Successor Trustee by Merger. If the Trustee consolidates
---------------------------
with, merges or converts into, or transfers all or substantially all its
corporate trust business or assets to, another corporation, the resulting,
surviving or transferee corporation without any further act shall be the
successor Trustee.
Section 7.09. Eligibility; Disqualification. The Trustee shall at all
-----------------------------
times satisfy the requirements of TIA Sections 310(a)(1) and 310(b). The Trustee
shall have a combined capital and surplus of at least $100,000,000 as set forth
in its most recent published annual report of condition. In determining whether
the Trustee has conflicting interests as defined in TIA Section 310(b)(1), the
provisions contained in the proviso to TIA Section 310(b)(1) shall be deemed
incorporated herein.
Section 7.10. Preferential Collection of Claims Against Company. The
-------------------------------------------------
Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.
Article VIII
DISCHARGE OF INDENTURE
Section 8.01. Discharge of Liability on Securities. When (i) the Company
------------------------------------
delivers to the Trustee all outstanding Securities (other than Securities
replaced pursuant to Section 2.07) for cancellation or (ii) all outstanding
Securities have become due and payable and the Company deposits with the Trustee
cash or, if expressly permitted by the terms hereof, securities sufficient to
pay at the Stated Maturity, the Purchase Date, the Change in Control Purchase or
the
39
<PAGE>
Redemption Date, the Principal Amount, the Purchase Price, the Change in Control
Purchase Price or the Redemption Price, as the case may be, of all outstanding
Securities (other than Securities replaced pursuant to Section 2.07), and if, in
either case, the Company has paid all other sums payable hereunder by the
Company (including, without limitation, sums payable by delivery of shares of
Common Stock pursuant to Section 3.08), then this Indenture shall, subject to
Section 7.06, cease to be of further effect. The Trustee shall join in the
execution of a document prepared by the Company acknowledging satisfaction and
discharge of this Indenture on demand of the Company accompanied by an Officers'
Certificate and Opinion of Counsel and at the cost and expense of the Company.
Section 8.02. Repayment to the Company. The Trustee and the Paying Agent
------------------------
shall return to the Company any money or securities held by them for the payment
of any amount with respect to the Securities that remains unclaimed for two
years; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such return, may, at the expense of the Company, cause to
be published once in The Wall Street Journal or another daily newspaper of
-----------------------
national circulation or mail to each such Holder notice that such money or
securities remains unclaimed and that, after a date specified therein, which
shall not be less than 30 days from the date of such mailing, any unclaimed
money or securities then remaining will be returned to the Company. After return
to the Company, Holders entitled to the money or securities must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person, and the Trustee and the Paying Agent shall have
no further liability with respect to such money or securities for that period
commencing after the return thereof.
Article IX
AMENDMENTS
Section 9.01. Without Consent of Holders. The Company and the Trustee may
--------------------------
amend this Indenture or the Securities without the consent of any
Securityholder:
(a) to cure any ambiguity, omission, defect or inconsistency;
provided, however, that such amendment does not materially adversely affect the
-------- -------
rights of any Securityholder;
(b) to comply with Article 5 or Section 10.14;
(c) to provide for uncertificated Securities in addition to or
in place of certificated Securities so long as such action shall not
adversely affect the interests of the Holders of the Securities in any
material respect;
(d) to make any change that does not materially adversely affect
the rights of any Securityholder;
40
<PAGE>
(e) to add to the covenants or obligations of the Company
hereunder or to surrender any right, power or option herein conferred upon
the Company; or
(f) to make any change to comply with the TIA, or any amendment
thereafter, or any requirement of the SEC in connection with the
qualification of this Indenture under the TIA or any amendment thereof.
Section 9.02. With Consent of Holders. With the written consent of the
-----------------------
Holders of at least a majority in aggregate Principal Amount of the Securities
at the time outstanding, the Company and the Trustee may amend this Indenture or
the Securities. However, without the consent of each Securityholder affected, an
amendment or supplement to this Indenture or the Securities may not:
(a) make any reduction in the Principal Amount of Securities
whose Holders must consent to an amendment;
(b) make any change to the rate of accrual in connection with
Original Issue Discount, reduce the rate of interest referred to in
paragraph 1 of the Securities, reduce the rate of interest referred to in
Section 11.01 upon the occurrence of a Tax Event or extend the time for
payment of accrued Original Issue Discount or interest, if any, on any
Security;
(c) reduce the Principal Amount or the Issue Price of or extend
the Stated Maturity of any Security;
(d) reduce the amount of cash payable in respect of conversion
upon the Company's election to pay cash with respect thereto, the
Redemption Price, Purchase Price or Change in Control Purchase Price of any
Security or extend the date on which the Purchase Price or Change in
Control Purchase Price of any Security is payable;
(e) make any Security payable in money or securities other than
that stated in the Security;
(f) subordinate the securities;
(g) make any change in Section 6.04 or this Section 9.02, except
to increase any percentage referred to therein, or make any change in
Section 6.07;
(h) make any change that adversely affects the right to convert
any Security (including the right to receive cash in lieu of Common Stock
except as set forth in Section 9.01(4));
(i) make any change that adversely affects the right to require
the Company to purchase the Securities in accordance with the terms thereof
and this Indenture
41
<PAGE>
(including the right to receive cash if the Company has elected to pay cash upon
such purchase);
(j) make any change to the provisions of this Indenture relating
to the purchase of Securities at the option of the Holder pursuant to
Section 3.08 or 3.09 which change would result in a violation of applicable
federal or state securities laws (including positions of the SEC under
applicable no-action letters), whether as a result of the exercise or
performance of any rights or obligations under such provisions or
otherwise;
(k) modify the provisions of this Indenture relating to the
ranking of the Securities in a manner adverse to the Holders of the
Securities; or
(l) impair the right to institute suit for the enforcement of
any payment with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under this Section
9.02 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
After an amendment under this Section 9.02 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
Section 9.03. Compliance with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article shall comply with the TIA as then in
effect.
Section 9.04. Revocation and Effect of Consents, Waivers and Actions.
------------------------------------------------------
Until an amendment or waiver becomes effective, a consent to it or any other
action by a Holder of a Security hereunder is a continuing consent by the Holder
and every subsequent Holder of that Security or portion of the Security that
evidences the same obligation as the consenting Holder's Security, even if
notation of the consent, waiver or action is not made on the Security. However,
any such Holder or subsequent Holder may revoke the consent, waiver or action as
to such Holder's Security or portion of the Security if the Trustee receives the
notice of revocation before the date the amendment, waiver or action becomes
effective. After an amendment, waiver or action becomes effective, it shall bind
every Securityholder, except as provided in Section 9.02.
Section 9.05. Notation on or Exchange of Securities. Securities
-------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the Trustee, bear a
notation in form approved by the Trustee as to any matter provided for in such
supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Company, to any
such
42
<PAGE>
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for outstanding
Securities.
Section 9.06. Trustee to Sign Supplemental Indentures. The Trustee shall
---------------------------------------
sign any supplemental indenture authorized pursuant to this Article 9 if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to receive, and (subject
to the provisions of Section 7.01) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that such amendment is
authorized or permitted by this Indenture.
Section 9.07. Effect of Supplemental Indentures. Upon the execution of
---------------------------------
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
43
<PAGE>
Article X
CONVERSION
Section 10.01. Conversion Privilege. A Holder of a Security may convert
--------------------
such Security into shares of Common Stock at any time (subject to the limitation
described in Section 3.03(5)) during the period stated in paragraph 9 of the
Securities. The number of shares of Common Stock issuable upon conversion of a
Security per
44
<PAGE>
$1,000 of Principal Amount thereof shall be that set forth in paragraph 9 in the
Securities (the "Conversion Rate"), subject to adjustment as herein set forth.
---------------
The Holders' right to convert Securities into shares of Common Stock is subject
to the Company's right to elect to instead pay such Holder the amount of cash
set forth in the next succeeding sentence, in lieu of delivering such shares of
Common Stock (the "Conversion Payment"); provided, however, that if such payment
-------- -------
of cash is not permitted pursuant to the provisions of this Indenture or the
provisions of any other agreement or instrument to which the Company is a party
or by which it is bound or otherwise, the Company shall deliver shares of Common
Stock (and cash in lieu of fractional shares of Common Stock) in accordance with
this Article, whether or not the Company has delivered a notice pursuant to
Section 10.02 to the effect that the Securities would be paid in cash. The
amount of cash to be paid pursuant to Section 10.02 for each per $1,000
Principal Amount of a Security upon conversion shall be equal to the Sale Price
of a share of Common Stock on the Trading Day immediately prior to the related
Conversion Date multiplied by the Conversion Rate in effect on such Trading Day.
The Company shall not pay cash in lieu of delivering shares of Common Stock upon
the conversion of any Security pursuant to the terms of this Article (other than
cash in lieu of fractional shares pursuant to Section 10.03) if there has
occurred (prior to, on or after, as the case may be, the Conversion Date or the
date on which the Company delivers its notice of whether such Security shall be
converted into shares of Common Stock or cash pursuant to Section 10.02) and is
continuing an Event of Default (other than a default in such payment on such
Securities), provided, however, that this sentence shall not apply in the event
-------- -------
that an Event of Default occurs after such cash is paid.
"Time of Determination" means the time and date of the earlier of (i) the
---------------------
determination of stockholders entitled to receive rights, warrants, or options
or a distribution, in each case, to which Sections 10.07 and 10.08 apply and
(ii) the time ("Ex-Dividend Time") immediately prior to the commencement of "ex-
----------------
dividend" trading for such rights, options, warrants or distribution on the New
York Stock Exchange or such other national or regional exchange or market on
which the shares of the Common Stock are then listed or quoted.
Section 10.02. Conversion Procedure. To convert a Security a Holder must
--------------------
satisfy the requirements in paragraph 9 of the Securities. The date on which
the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). Within two Business Days following the Conversion Date, the
----------------
Company shall deliver to the Holder, through the Conversion Agent, written
notice of whether such Security shall be converted into shares of Common Stock
or paid in cash. If the Company shall have notified the Holder that such
Security shall be converted into shares of Common Stock, the Company shall
deliver to the Holder no later than the seventh Business Day following the
Conversion Date a certificate for the number of full shares of Common Stock
issuable upon the conversion and cash in lieu of any fractional share determined
pursuant to Section 10.03. Except as provided in Section 10.01, if the Company
shall have notified the Holder that such Security shall be paid in cash, the
Company shall deliver to the Holder surrendering such Security the amount of
cash payable with respect to such Security on the fifth Business Day following
such Conversion Date. Except as provided in Section 10.01, the Company may not
change its election with respect to the consideration to be delivered upon
conversion of a Security once the Company has notified the Holder in accordance
with this paragraph.
The person in whose name the certificate is registered shall be treated as
a stockholder of record on and after the Conversion Date; provided, however,
-------- -------
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the person or persons
entitled to receive the shares of Common Stock upon such conversion as the
record holder or holders of such shares of Common Stock on such date, but such
surrender shall be effective to constitute the person or persons entitled to
receive such shares of Common Stock as the record holder or holders thereof for
all purposes at the close of business on the next succeeding day on which such
stock transfer books are open; provided further, that such conversion shall be
-------- -------
at the Conversion Rate in effect on the date that such Security shall have been
surrendered for conversion, as if the stock transfer books of the Company had
not been closed. Upon conversion of a Security, such person shall no longer be a
Holder of such Security.
Holders may surrender a Security for conversion by means of book entry
delivery in accordance with paragraph 9 of the Securities and the regulations of
the applicable book entry facility.
No payment or adjustment will be made for dividends on any Common Stock
except as provided in this Article. On conversion of a Security, that portion of
accrued Original Issue Discount (or interest, if the Company has exercised its
option provided for in Section 11.01) attributable to the period from the Issue
Date (or, if the Company has exercised the option provided for in Section 11.01,
the later of (x) the date of such exercise and (y) the date on which interest
was last
45
<PAGE>
paid) to the Conversion Date with respect to the converted Security shall not be
cancelled, extinguished or forfeited, but rather shall be deemed to be paid in
full to the Holder thereof through delivery of the Common Stock in exchange for
the Security being converted pursuant to the terms hereof, and the fair market
value of such Common Stock (together with any cash payment in lieu of fractional
shares of Common Stock) shall be treated as issued, to the extent thereof, first
in exchange for the Original Issue Discount accrued through the Conversion Date,
and the balance, if any, of such fair market value of such shares of Common
Stock (and any such cash payment) shall be treated as issued in exchange for the
Issue Price of the Security being converted pursuant to the provisions hereof.
If the Holder converts more than one Security at the same time, the number
of shares of Common Stock issuable upon the conversion shall be computed based
on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is converted in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in
a place where the Conversion Agent is located, the Security may be surrendered
to such Conversion Agent on the next succeeding day that is not a Legal Holiday.
Section 10.03. Fractional Shares. The Company will not issue a fractional
-----------------
share of Common Stock upon conversion of a Security. Instead, the Company will
deliver cash for the current market value of the fractional share. The current
market value of a fractional share shall be determined to the nearest 1/1,000th
of a share by multiplying the Sale Price, on the last Trading Day prior to the
Conversion Date, of a full share by the fractional amount and rounding the
product to the nearest whole cent.
Section 10.04. Taxes on Conversion. If a Holder converts a Security, the
-------------------
Company shall pay any documentary, stamp or similar issue or transfer tax due on
the issue of shares of Common Stock upon such conversion. The Holder, however,
shall pay any such tax that is due because the Holder requests the shares to be
issued in a name other than the Holder's name. The Conversion Agent may refuse
to deliver the certificates representing the Common Stock being issued in a name
other than the Holder's name until the Conversion Agent receives a sum
sufficient to pay any tax that will be due because the shares are to be issued
in a name other than the Holder's name. Nothing herein shall preclude the
Company from withholding or directing the withholding of any tax required by law
or regulations.
Section 10.05. Company to Provide Stock. The Company shall, prior to
------------------------
issuance of any Securities hereunder, and from time to time as may be necessary,
reserve out of its authorized but unissued Common Stock a sufficient number of
shares of Common Stock to permit the conversion of the Securities for shares of
Common Stock.
46
<PAGE>
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares or treasury shares, shall be duly and validly
issued and fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or in the over-the-
counter market or such other market on which the Common Stock is then listed or
quoted.
Section 10.06. Adjustment for Change in Capital Stock. If, after the
--------------------------------------
Issue Date, the Company:
(a) pays a dividend or makes a distribution on its Common Stock in
shares of its Common Stock;
(b) subdivides its outstanding shares of Common Stock into a
greater number of shares;
(c) combines its outstanding shares of Common Stock into a smaller
number of shares;
(d) pays a dividend or makes a distribution on its Common Stock in
shares of its Capital Stock (other than Common Stock or rights, warrants or
options for its Capital Stock); or
(e) issues by reclassification of its Common Stock any shares of
its Capital Stock (other than rights, warrants or options for its Capital
Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of Capital
Stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to such
action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares or other units of two or more classes or series of
Capital Stock of the Company, the Conversion Rate shall thereafter be subject to
adjustment upon the occurrence of an action taken with respect to any such class
or series of Capital Stock as is contemplated by this Article with respect to
the Common Stock, on terms comparable to those applicable to Common Stock in
this Article.
47
<PAGE>
Section 10.07. Adjustment for Rights Issue. If, after the Issue Date, the
---------------------------
Company distributes any rights, warrants or options to all holders of its Common
Stock entitling them, for a period expiring within 60 days after the record date
for such distribution, to purchase shares of Common Stock at a price per share
less than the Sale Price as of the Time of Determination, the Conversion Rate
------------------------
shall be adjusted in accordance with the formula:
O + N
R' = R x ---------
N x P
O + -----
M
-------------------
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
0 = the number of shares of Common Stock outstanding on the record date
for the distribution to which this Section 10.07 is being applied.
N = the number of additional shares of Common Stock offered pursuant to
the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, minus, in the case of (i) a distribution to
-----
which Section 10.06(4) applies or (ii) a distribution to which Section 10.08
applies, for which, in each case, (x) the record date shall occur on or before
the record date for the distribution to which this Section 10.07 applies and (y)
the Ex-Dividend Time shall occur on or after the date of the Time of
Determination for the distribution to which this Section 10.07 applies, the fair
market value (on the record date for the distribution to which this Section
10.07 applies) of:
(a) the Capital Stock of the Company distributed in respect of each
share of Common Stock in such Section 10.06(4) distribution, and
(b) the assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the Company distributed in
respect of each share of Common Stock in such Section 10.08 distribution.
"Average Sale Price" means the average of the Sale Prices of the Common
------------------
Stock for the shorter of:
(1) 30 consecutive Trading Days ending on the last full
Trading Day prior to the Time of Determination with respect to the
rights, options, warrants or distribution in respect of which the
Average Sale Price is being calculated, or
(2) the period (x) commencing on the date next succeeding
the first public announcement of (a) the issuance of rights, options or
warrants or (b) the
48
<PAGE>
distribution, in each case, in respect of which the Average Sale Price is
being calculated and (y) proceeding through the last full Trading Day prior
to the Time of Determination with respect to the rights, warrants or
distribution in respect of which the Average Sale Price is being
calculated, or
(3) the period, if any, (x) commencing on the date next
succeeding the Ex-Dividend Time (as defined below) with respect to the next
preceding (a) issuance of rights, warrants, or options or (b) distribution,
in each case, for which an adjustment is required by the provisions of
Section 10.06(4), 10.07 or 10.08 and (y) proceeding through the last full
Trading Day prior to the Time of Determination with respect to the rights,
warrants, or options or distribution in respect of which the Average Sale
Price is being calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section
10.06(1), (2), (3) or (5) applies occurs during the period applicable for
calculating "Average Sale Price" pursuant to the definition in the preceding
sentence, "Average Sale Price" shall be calculated for such period in a manner
determined in good faith by the Board of Directors to reflect the impact of such
dividend, subdivision, combination or reclassification on the Sale Price of the
Common Stock during such period.
The Board of Directors shall determine fair market values for the purposes
of this Section 10.07.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 10.07 applies.
No adjustment shall be made under this Section 10.07 if the application of
the formula stated above in this Section 10.07 would result in value of R' that
is equal to or less than the value of R.
Section 10.08. Adjustment for Other Distributions. If, after the Issue
----------------------------------
Date, the Company distributes to all holders of its Common Stock any of its
assets or debt securities or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding (x)
distributions of Capital Stock referred to in Section 10.06 and distributions of
rights, warrants or options referred to in Section 10.07 and (y) cash dividends
or other cash distributions that are paid out of consolidated current net
earnings or earned surplus as shown on the books of the Company, unless such
cash dividends or other cash distributions are Extraordinary Cash Dividends (as
defined below)), the Conversion Rate shall be adjusted, subject to the
provisions of the last paragraph of this Section 10.08, in accordance with the
formula:
M
R' = R x -----
M - F
---------------
49
<PAGE>
where:
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to which
-----
Section 10.06(4) applies for which (i) the record date shall occur on
or before the record date for the distribution to which this Section
10.08 applies and (ii) the Ex-Dividend Time shall occur on or after
the date of the Time of Determination for the distribution to which
this Section 10.08 applies, the fair market value (on the record date
for the distribution to which this Section 10.08 applies) of any
Capital Stock of the Company distributed in respect of each share of
Common Stock in such Section 10.06(4) distribution.
F = the fair market value (on the record date for the distribution to
which this Section 10.08 applies) of the assets, securities, rights,
warrants or options to be distributed in respect of each share of
Common Stock in the distribution to which this Section 10.08 is being
applied (including, in the case of cash dividends or other cash
distributions giving rise to an adjustment, all such cash distributed
concurrently).
The Board of Directors shall determine fair market values for the purpose
of this Section 10.08.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 10.08 applies.
For purposes of this Section 10.08, the term "Extraordinary Cash Dividend"
---------------------------
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set forth in items
(1) or (2) below:
(1) If, upon the date prior to the Ex-Dividend Time with respect
to a cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the eighty-five (85) consecutive
day period ending on the date prior to the Ex-Dividend Time with respect to
the cash dividend to which this provision is being applied equals or
exceeds 12.5% of the average of the Sale Prices during the period beginning
on the date after the first such Ex-Dividend Time in such period and ending
on the date prior to the Ex-Dividend Time with respect to the cash dividend
to which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the period
for calculating the average of the Sale Prices shall be the period
commencing 85 days prior to the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied),
such cash dividend together with each other cash dividend with an Ex-
Dividend
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<PAGE>
Time occurring in such 85-day period shall be deemed to be an Extraordinary
Cash Dividend and for purposes of applying the formula set forth above in
this Section 10.08, the value of "F" shall be equal to (w) the aggregate
amount of such cash dividend together with the amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (x) the
aggregate amount of such other cash dividends with Ex-Dividend Times
occurring in such period for which a prior adjustment in the Conversion
Rate was previously made under this Section 10.08.
(2) If upon the date prior to the Ex-Dividend Time with respect to
a cash dividend on the Common Stock, the aggregate amount of such cash
dividend, together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the 365-consecutive-day period
ending on the date prior to the Ex-Dividend Time with respect to the cash
dividend to which this provision is being applied equals or exceeds 25% of
the average of the Sale Prices during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the date
prior to the Ex-Dividend Time with respect to the cash dividend to which
this provision is being applied (except that if no other cash dividend has
had an Ex-Dividend Time occurring in such period, the period for
calculating the average of the Sale Prices shall be the period commencing
365 days prior to the date prior to the Ex-Dividend Time with respect to
the cash dividend to which this provision is being applied), such cash
dividend together with each other cash dividend with an Ex-Dividend Time
occurring in such 365-day period shall be deemed to be an Extraordinary
Cash Dividend and for purposes of applying the formula set forth above in
this Section 10.08, the value of "F" shall be equal to (y) the aggregate
amount of such cash dividend together with amounts of the other cash
dividends with Ex-Dividend Times occurring in such period minus (z) the
-----
aggregate amount of such other cash dividends with Ex-Dividend Times
occurring in such period for which a prior adjustment in the Conversion
Rate was previously made under this Section 10.08.
In the event that, with respect to any distribution to which this Section
10.08 would otherwise apply, the difference "M-F" as defined in the above
formula is less than $1.00 or "F" is greater than "M", then the adjustment
provided by this Section 10.08 shall not be made and in lieu thereof the
provisions of Section 10.14 shall apply to such distribution.
Section 10.09. When Adjustment May Be Deferred. No adjustment in the
-------------------------------
Conversion Rate need be made unless the adjustment would require an increase or
decrease of at least 1% (e.g., if the Conversion Rate is 4, an increase or
---
decrease of .04 (1% of 4)) in the Conversion Rate. Any adjustments that are not
made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article 10 shall be made to the nearest cent or
to the nearest l/l,000th of a share, as the case may be, with one-half of a cent
and 5/10,000ths of a share being rounded upwards.
51
<PAGE>
Section 10.10. When No Adjustment Required. No adjustment need be made
---------------------------
for a transaction referred to in Section 10.06, 10.07, 10.08 or 10.14 if
Securityholders are to participate in the transaction on a basis and with notice
that the Board of Directors determines to be fair and appropriate in light of
the basis and notice on which holders of Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Common Stock pursuant to
a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value of
the Common Stock.
To the extent the Securities become convertible into cash pursuant to the
terms of Sections 10.08 or 10.14, no adjustment need be made thereafter as to
the cash. Interest will not accrue on the cash.
Notwithstanding any provision to the contrary in this Indenture, no
adjustment shall be made in the Conversion Rate to the extent, but only to the
extent, such adjustment results in the following quotient being less than the
par value of the Common Stock: (i) the Issue Price plus accrued Original Issue
Discount as of the date such adjustment would otherwise be effective divided by
(ii) the Conversion Rate as so adjusted.
Section 10.11. Notice of Adjustment. Whenever the Conversion Rate is
--------------------
adjusted, the Company shall file with the Trustee and the Conversion Agent a
notice of such adjustment and a certificate from the Company's independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The Conversion Agent will promptly mail such notice to
Securityholders at the Company's expense. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
Section 10.12. Voluntary Increase. The Company from time to time may
------------------
increase the Conversion Rate by any amount and for any period of time (provided,
that such period shall be not less than 20 Business Days). Whenever the
Conversion Rate is increased, the Company shall mail to Securityholders and file
with the Trustee and the Conversion Agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased Conversion
Rate takes effect. The notice shall state the increased Conversion Rate and the
period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Sections 10.06, 10.07 or
10.08.
Section 10.13. Notice of Certain Transactions. If:
------------------------------
(a) the Company takes any action that would require an adjustment
in the Conversion Rate pursuant to Section 10.06, 10.07 or 10.08 (unless
no adjustment is to occur pursuant to Section 10.10); or
52
<PAGE>
(b) the Company takes any action that would require a supplemental
indenture pursuant to Section 10.14; or
(c) there is a liquidation or dissolution of the Company;
then the Company shall mail to Securityholders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution of the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in it
shall not affect the validity of the transaction.
Section 10.14. Reorganization of Company; Special Distributions. If the
------------------------------------------------
Company is a party to a transaction subject to Section 5.01 (other than a sale
of all or substantially all of the assets of the Company in a transaction in
which the holders of Common Stock immediately prior to such transaction do not
receive securities, cash or other assets of the Company or any other person) or
a merger or binding share exchange which reclassifies or changes its outstanding
Common Stock, the person obligated to deliver securities, cash or other assets
upon conversion of Securities shall enter into a supplemental indenture. If the
issuer of securities deliverable upon conversion of Securities is an Affiliate
of the successor Company, that issuer shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Security
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of non-
electing Holders. The supplemental indenture shall provide for adjustments which
shall be as nearly equivalent as may be practical to the adjustments provided
for in this Article 10. The successor Company shall mail to Securityholders a
notice briefly describing the supplemental indenture.
If this Section applies, neither Section 10.06 nor 10.07 applies.
If the Company makes a distribution to all holders of its Common Stock of
any of its assets, or debt securities or any rights, warrants or options to
purchase securities of the Company that, but for the provisions of the last
paragraph of Section 10.08, would otherwise result in an adjustment in the
Conversion Rate pursuant to the provisions of Section 10.08, then, from and
after the record date for determining the holders of Common Stock entitled to
receive the distribution, a Holder of a Security that converts such Security in
accordance with the provisions of this Indenture shall upon such conversion be
entitled to receive, in addition to the shares of Common Stock into which the
Security is convertible, the kind and amount of securities, cash or other assets
comprising the distribution that such Holder would have received if such Holder
had converted the Security immediately prior to the record date for determining
the holders of Common Stock entitled to receive the distribution.
53
<PAGE>
Section 10.15. Company Determination Final. Any determination that the
---------------------------
Company or the Board of Directors must make pursuant to this Article 10 is
conclusive.
Section 10.16. Trustee's Adjustment Disclaimer. The Trustee has no duty
-------------------------------
to determine when an adjustment under this Article 10 should be made, how it
should be made or what it should be. The Trustee has no duty to determine
whether a supplemental indenture under Section 10.14 need be entered into or
whether any provisions of any supplemental indenture are correct. The Trustee
shall not be accountable for and makes no representation as to the validity or
value of any securities or assets issued upon conversion of Securities. The
Trustee shall not be responsible for the Company's failure to comply with this
Article 11. Each Conversion Agent (other than the Company or an Affiliate of the
Company) shall have the same protection under this Section 10.16 as the Trustee.
Section 10.17. Simultaneous Adjustments. If this Article 10 requires
------------------------
adjustments to the Conversion Rate under more than one of Sections 10.06(4),
10.07 or 10.08, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made by
applying, first, the provisions of Section 10.06, second, the provisions of
Section 10.08 and, third, the provisions of Section 10.07.
Section 10.18. Successive Adjustments. After an adjustment to the
----------------------
Conversion Rate under this Article 10, any subsequent event requiring an
adjustment under this Article 10 shall cause an adjustment to the Conversion
Rate as so adjusted.
Article XI
SPECIAL TAX EVENT CONVERSION
Section 11.01. Optional Conversion to Semiannual Coupon Note Upon Tax
------------------------------------------------------
Event. From and after the date (the "Tax Event Date") of the occurrence of a Tax
----- --------------
Event, at the option of the Company, interest in lieu of future Original Issue
Discount shall accrue at % per annum on a principal amount per Security (the
"Restated Principal Amount") equal to the Issue Price plus Original Issue
Discount accrued to the date immediately prior to the Tax Event Date
or the date on which the Company exercises the option described herein,
whichever is later (such date, the "Option Exercise Date"). Such interest shall
--------------------
accrue from the Option Exercise Date and shall be payable semiannually on and of
each year (each an "Interest Payment Date") to holders of record at the close of
---------------------
business on , or (each a "Regular Record Date") immediately preceding such
-------------------
Interest Payment Date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months and will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from the Option
Exercise Date. Within 15 days of the occurrence of a Tax Event, the Company
shall mail a written notice of such Tax Event by first-class mail to the
Trustee.
Section 11.02. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
(a) Interest on any Security that is payable, and is punctually
paid or duly provided for, on any Interest Payment Date shall be paid to
the person in whose name
54
<PAGE>
that Security is registered at the close of business on the Regular Record
Date for such interest at the office or agency of the Company maintained
for such purpose. Each installment of interest on any Security shall be
paid in same-day funds by transfer to an account maintained by the payee
located inside the United States. In the case of a global Security,
interest payable on any Interest Payment Date will be paid to the
Depositary for the purpose of permitting DTC to credit the interest
received by it in respect of such global Security to the accounts of the
beneficial owners thereof.
(b) Except as otherwise specified with respect to the
Securities, any interest on any Security that is payable, but is not
punctually paid or duly provided for, within 30 days following any Interest
Payment Date (herein called "Defaulted Interest") shall forthwith cease to
------------------
be payable to the registered Holder thereof on the relevant Regular Record
Date by virtue of having been such Holder, and such Defaulted Interest may
be paid by the Company, at its election in each case, as provided in clause
(1) or (2) below:
(1) The Company may elect to make payment of any Default
Interest to the persons in whose names the Securities are registered at the
close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the proposed
payment (which shall not be less than 20 days after such notice is received
by the Trustee), and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit on or prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the persons entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and not
less than 10 days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company of such
Special Record Date and, in the name and at the expense of the Company,
shall cause notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor to be mailed, first-class postage prepaid,
to each Holder of the Securities at his address as it appears on the list
of Securityholders maintained pursuant to Section 2.05 not less than 10
days prior to such Special Record Date. The Trustee may, in its discretion,
in the name and at the expense of the Company, cause a similar notice to be
published at least once in The Wall Street Journal, but such publications
-----------------------
shall not be a condition precedent to the establishment of such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been mailed as aforesaid, such
Defaulted Interest shall be paid to the persons in whose names the
Securities are registered at the close of business on such Special Record
Date and shall no longer be payable pursuant to the following clause (2).
55
<PAGE>
(2) The Company may make payment of any Defaulted Interest on the
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Article XII
MISCELLANEOUS
Section 12.01. Trust Indenture Act Controls. If any provision of this
----------------------------
Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.
Section 12.02. Notices. Any notice or communication shall be in writing
-------
and delivered in person or mailed by first-class mail, postage prepaid,
addressed as follows:
if to the Company:
Merrill Lynch & Co., Inc.
100 Church Street, 12th Floor
New York, New York 10080-6512
Attention: Secretary
with a copy to:
Merrill Lynch & Co., Inc.
World Financial Center
South Tower
225 Liberty Street
New York, New York 10080-0736
Attention: Treasurer
if to the Trustee:
[address]
The Company or the Trustee by notice to the other may designate additional
or different addresses for subsequent notices or communications.
Any notice or communication given to a Securityholder shall be mailed by
first-class mail to the Securityholder at the Securityholder's address as it
appears on the registration books of the Registrar and shall be sufficiently
given if so mailed within the time prescribed.
56
<PAGE>
Failure to mail a notice or communication to a Securityholder or any defect
in it shall not affect its sufficiency with respect to other Securityholders. If
a notice or communication is mailed in the manner provided above, it is duly
given, whether or not received by the addressee.
If the Company mails a notice or communication to the Securityholders, it
shall mail a copy to the Trustee and each Registrar, Paying Agent, Conversion
Agent or co-registrar.
Section 12.03. Communication by Holders with Other Holders.
-------------------------------------------
Securityholders may communicate pursuant to TIA Section 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar, the Paying Agent, the
Conversion Agent and anyone else shall have the protection of TIA Section
312(c).
Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon
--------------------------------------------------
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(b) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
Section 12.05. Statements Required in Certificate or Opinion. Each
---------------------------------------------
Officers' Certificate or Opinion of Counsel with respect to compliance with a
covenant or condition provided for in this Indenture shall include:
(a) a statement that each person making such Officers' Certificate
or Opinion of Counsel 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 Officers' Certificate or Opinion of Counsel are based;
(c) a statement that, in the opinion of each such person, he has
made such examination or investigation as is necessary to enable such
person to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement that, in the opinion of such person, such covenant
or condition has been complied with.
Section 12.06. Separability Clause. In case any provision in this
-------------------
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
57
<PAGE>
Section 12.07. Rules By Trustee, Paying Agent, Conversion Agent and
----------------------------------------------------
Registrar. The Trustee may make reasonable rules for action by or a meeting of
---------
the Securityholders. The Registrar, Conversion Agent and the Paying Agent may
make reasonable rules for their functions.
Section 12.08. Legal Holiday. A "Legal Holiday" is any day other than a
-------------
Business Day. If any specified date (including a date for giving notice) is a
Legal Holiday, the action shall be taken on the next succeeding day that is not
a Legal Holiday, and to the extent applicable no Accreted Discount or interest,
if any, shall accrue for the intervening period.
Section 12.09. GOVERNING LAW. THIS INDENTURE AND THE SECURITIES 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.
Section 12.10. No Recourse Against Others. A director, Officer, employee
--------------------------
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.
Section 12.11. Successors. All agreements of the Company in this
----------
Indenture and the Securities shall bind its successor. All agreements of the
Trustee in this Indenture shall bind its successor.
Section 12.12. Multiple Originals. The parties may sign any number of
------------------
copies of this Indenture. Each signed copy shall be an original, but all of them
together represent the same agreement. One signed copy is enough to prove this
Indenture.
Section 12.13. References. All section references are to sections of this
----------
Indenture unless specified otherwise.
58
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the undersigned, being duly authorized, have executed
this Indenture on behalf of the respective parties hereto as of the date first
above written.
MERRILL LYNCH & CO., INC.
By
Name:___________________________
Title:
Attest:
_________________________________
Name:
Title:
By:_________________________________
Name:
Title:
Attest:
__________________________________
Name:
Title:
59
<PAGE>
EXHIBIT A
[FORM OF FACE OF LYON]
FOR PURPOSES OF SECTIONS 1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED, THE AMOUNT OF ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF
PRINCIPAL AMOUNT OF THIS SECURITY IS $ ,THE ISSUE DATE IS ,AND THE
YIELD TO MATURITY IS % per annum (computed on a semiannual bond equivalent
basis).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO.), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF, OR SUCH
SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE II OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.
MERRILL LYNCH & CO., INC.
Liquid Yield Option(TM) Note due
(Zero Coupon)
No.
Issue Date:
Issue Price: $
Original Issue Discount: $
(for each $1,000 Principal amount)
Merrill Lynch & Co., Inc., a Delaware corporation, promises to pay to
___________________, or registered assigns, the Principal Amount of
___________________________ Dollars ($________) on .
This Security shall not bear interest except as specified on the other side of
this Security. Original Issue Discount will accrue as specified on the other
side of this Security. This Security is convertible
<PAGE>
as specified on the other side of this Security. All capitalized terms used
herein without definition shall have the respective meanings assigned thereto in
the Indenture referred to on the other side of this Security.
Additional provisions of this Security are set forth on the other side of this
Security.
IN WITNESS WHEREOF, Merrill Lynch & Co., Inc. has caused this instrument to be
duly executed under its corporate seal.
MERRILL LYNCH & CO., INC.
By: ________________________
Name:
Title:
ATTEST:
-------------------------------
Name:
Title:
(Seal)
TRUSTEE'S CERTIFICATE OF
AUTHENTICATION
as Trustee, certifies that this Security
is one of the Securities referred to
in the within-mentioned Indenture.
By: __________________________________
Authorized Officer
Date: ________________________
2
<PAGE>
[FORM OF REVERSE SIDE OF LYON]
Liquid Yield Option(TM) Note due
(Zero Coupon)
1. Interest
--------
This Security shall not bear interest except as specified in this paragraph or
in paragraph 9 hereof. If the Principal Amount hereof or any portion of such
Principal Amount is not paid when due (whether upon acceleration pursuant to
Section 6.02 of the Indenture, upon the date set for payment of the Redemption
Price pursuant to paragraph 5 hereof, upon the date set for payment of a
Purchase Price or Change in Control Purchase Price pursuant to paragraph 6
hereof, upon the date set for a Conversion Payment pursuant to paragraph 8
hereof or upon the Stated Maturity of this Security) or if shares of Common
Stock (and cash in lieu of fractional shares) or cash in lieu thereof in respect
of a conversion of this Security in accordance with the terms of Article 10 of
the Indenture is not delivered when due, then in each such case the overdue
amount shall bear interest at the rate of % per annum, compounded semiannually
(to the extent that the payment of such interest shall be legally enforceable),
which interest shall accrue from the date such overdue amount was due to the
date payment of such amount, including interest thereon, has been made or duly
provided for. All such interest shall be payable on demand.
Original Issue Discount (the difference between the Issue Price and the
Principal Amount of the Security), in the period during which a Security remains
outstanding, shall accrue at % per annum, on a semiannual bond equivalent
basis using a 360-day year composed of twelve 30-day months, commencing on the
Issue Date of this Security, and cease to accrue on the earlier of (a) the date
on which the Principal Amount at Stated Maturity hereof or any portion of such
Principal Amount at Stated Maturity becomes due and payable and (b) any
Redemption Date, Conversion Date, Change in Control Purchase Date, Purchase Date
or other date on which such Original Issue Discount (or, if such Securities have
been converted to semiannual coupon notes following the occurrence of a Tax
Event, interest on such notes) shall cease to accrue in accordance with Section
2.08 of the Indenture.
2. Method of Payment
-----------------
Subject to the terms and conditions of the Indenture, Merrill Lynch & Co., Inc.
(the "Company") will make payments in respect of the Securities to the persons
who are registered Holders of Securities at the close of business on the
Business Day preceding the Redemption Date or Stated Maturity, as the case may
be, or at the close of business on a Purchase Date, Change in Control Purchase
Date or Conversion Date, as the case may be. Holders must surrender Securities
to a Paying Agent to collect such payments in respect of the Securities. The
Company will pay cash amounts in money of The United States of America that at
the time of payment is legal tender for payment of public and private debts.
However, the Company may make such cash payments by check payable in such money.
3. Paying Agent, Conversion Agent and Registrar
--------------------------------------------
Initially, ,as trustee (the "Trustee"), will act as Paying Agent,
Conversion Agent and Registrar. The Company may appoint and change any Paying
Agent, Conversion Agent, Registrar or
3
<PAGE>
co-registrar, upon notice to the Trustee and the Holders. The Company or any of
its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion
Agent, Registrar or co-registrar.
4. Indenture
---------
The Company issued the Securities under an Indenture, dated as of (the
"Indenture"), between the Company and the Trustee. The terms of the Securities
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990, and, as in effect on the date of the Indenture (the "TIA"),
except as provided in Section 9.03 of the Indenture. Capitalized terms used
herein or on the face hereof and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the TIA for a statement of
those terms.
The Securities are general unsecured obligations of the Company limited to the
aggregate Principal Amount at Maturity specified in Section 2.02 of the
Indenture (subject to Section 2.07 of the Indenture). The Indenture does not
limit other indebtedness of the Company, secured or unsecured.
5. Redemption at the Option of the Company
---------------------------------------
No sinking fund is provided for the Securities. The Securities are redeemable as
a whole at any time, or from time to time in part, at the option of the Company
at the Redemption Prices set forth below, provided, that the Securities are not
--------
redeemable prior to .
The table below shows the Redemption Prices of a Security per $1,000 Principal
Amount at Stated Maturity on the dates shown below and at Stated Maturity, which
prices reflect accrued Original Issue Discount calculated to each such date. The
Redemption Price of a Security redeemed between such dates would include an
additional amount reflecting the additional Original Issue Discount accrued from
and including the next preceding date in the table to, but excluding, the
Redemption Date.
(1) (2) (3)
Accrued
Original
LYON Issue Redemption
Issue Discount Price
Redemption Date Price at % (1) + (2)
--------------- ----- ----- ----------
If converted to a semiannual coupon note following the occurrence of a Tax
Event, this Security will be redeemable at the Restated Principal Amount plus
interest accrued and unpaid from, and including, the date of such conversion to,
but excluding, the Redemption Date; but in no event will this Security be
redeemable before .
6. Purchase by the Company at the Option of the Holder
---------------------------------------------------
4
<PAGE>
Subject to the terms and conditions of the Indenture, the Company shall become
obligated to purchase, at the option of the Holder, the Securities held by such
Holder on __________, 20__, the Purchase Date, at $_______, the Purchase Price,
per $1,000 Principal Amount at Stated Maturity of such Securities, upon delivery
of a Purchase Notice containing the information set forth in the Indenture, at
any time from the opening of business on the date that is 20 Business Days prior
to the Purchase Date until the close of business on the Purchase Date and upon
delivery of the Securities to the Paying Agent by the Holder as set forth in the
Indenture. Such Purchase Price may be paid, at the option of the Company, in
cash or by the issuance and delivery of shares of Common Stock of the Company,
or in any combination thereof.
If prior to a Purchase Date this Security has been converted to a semiannual
coupon note following the occurrence of a Tax Event, the Purchase Price will be
equal to the Restated Principal Amount plus accrued and unpaid interest from,
and including, the date of conversion to, but excluding, the Purchase Date.
Subject to the terms and conditions of the Indenture, if any Change in Control
occurs on or prior to , the Company shall, at the option of the Holders,
purchase all Securities for which a Change in Control Purchase Notice shall have
been delivered as provided in the Indenture and not withdrawn, on the date that
is 35 Business Days after the occurrence of such Change in Control, for a Change
in Control Purchase Price equal to the Issue Price plus accrued Original Issue
Discount to, but excluding, the Change in Control Purchase Date, which Change in
Control Purchase Price shall be paid in cash.
If prior to a Change in Control Purchase Date this Security has been converted
to a semiannual coupon note following the occurrence of a Tax Event, the Change
in Control Purchase Price shall be equal to the Restated Principal Amount plus
accrued interest from, and including, the date of conversion to, but excluding,
the Change in Control Purchase Date.
Holders have the right to withdraw any Purchase Notice or Change in Control
Purchase Notice, as the case may be, by delivering to the Paying Agent a written
notice of withdrawal in accordance with the provisions of the Indenture prior to
the close of business on the Purchase Date or Change in Control Purchase Date,
as the case may be.
If cash sufficient to pay the Purchase Price or Change in Control Purchase Price
of all Securities or portions thereof to be purchased as of the Purchase Date or
the Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Business Day following the Purchase Date or the Business Day
following the Change in Control Purchase Date, as the case may be, Original
Issue Discount (or interest upon conversion to semiannual coupon notes following
the occurrence of a Tax Event) ceases to accrue on such Securities (or portions
thereof) on and after such date, and the Holders thereof shall have no other
rights as such (other than the right to receive the Purchase Price or Change in
Control Purchase Price, as the case may be, upon surrender of such Security).
7. Notice of Redemption
--------------------
Notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Securities to be redeemed at the
Holder's registered address. If money sufficient to pay the Redemption Price of
all Securities (or portions thereof) to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, on and after
5
<PAGE>
such date Original Issue Discount ceases to accrue on such Securities or
portions thereof. Securities in denominations larger than $1,000 of Principal
Amount may be redeemed in part but only in integral multiples of $1,000 of
Principal Amount.
8. Conversion
----------
Subject to the next two succeeding sentences, a Holder of a Security may convert
it into Common Stock of the Company at any time before the close of business on
provided, however, that if a Security is called for redemption, the Holder
-------- -------
may convert it at any time before the close of business on the Redemption Date.
The number of shares of Common Stock to be delivered upon conversion of a
Security into Common Stock per $1,000 of Principal Amount shall be equal to the
Conversion Rate. A Security in respect of which a Holder has delivered a
Purchase Notice or Change in Control Purchase Notice exercising the option of
such Holder to require the Company to purchase such Security may be converted
only if the notice of exercise is withdrawn in accordance with the terms of the
Indenture.
The initial Conversion Rate is shares of Common Stock per $1,000 Principal
Amount, subject to adjustment in certain events described in the Indenture. The
Company will deliver cash or a check in lieu of any fractional share of Common
Stock.
The Holders' right to convert Securities into shares of Common Stock is subject
to the Company's right to elect to instead pay such Holder the amount of cash
set forth in the next succeeding sentence in lieu of delivering such shares of
Common Stock; provided, however, that if such payment of cash is not permitted
pursuant to the provisions of the Indenture or the provisions of any other
agreement or instrument to which the Company is a party or by which it is bound
or otherwise, the Company shall deliver shares of Common Stock (and cash in lieu
of fractional shares of Common Stock) in accordance with Article 10 of the
Indenture, whether or not the Company has delivered a notice pursuant to Section
10.02 to the effect that the Securities will be paid in cash. The amount of cash
to be paid for each $1,000 Principal Amount of a Security shall be equal to the
Sale Price of a share of Common Stock on the Trading Day immediately prior to
the related Conversion Date multiplied by the Conversion Rate in effect on such
Trading Day.
The Company shall not pay cash in lieu of delivering shares of Common Stock upon
the conversion of any Security pursuant to the terms of Article 10 of the
Indenture (other than cash in lieu of fractional shares) if there has occurred
(prior to, on or after, as the case may be, the Conversion Date or the date on
which the Company delivers its notice of whether each Security shall be
converted into shares of Common Stock or cash) and is continuing an Event of
Default (other than a default in such payment on such Securities), provided,
however, that this sentence shall not apply in the event that an Event of
Default occurs after such cash is paid.
In the event the Company exercises its option pursuant to Section 11.01 of the
Indenture to have interest in lieu of Original Issue Discount accrue on the
Security following a Tax Event, the Holder will be entitled on the conversion to
receive the same number of shares of Common Stock such Holder would have
received if the Company had not exercised such option. If the Company exercises
such option, Securities surrendered for conversion during the period from the
close of business on any Regular Record Date next preceding any Interest Payment
Date to the opening of business of such Interest Payment Date (except Securities
to be redeemed on a date within such period) must be
6
<PAGE>
accompanied by payment of an amount equal to the interest thereon that the
registered Holder is to receive. Except where Securities surrendered for
conversion must be accompanied by payment as described above, no interest on
converted Securities will be payable by the Company on any Interest Payment Date
subsequent to the date of conversion.
To convert a Security a Holder must (i) complete and manually sign the
conversion notice on the back of the Security (or complete and manually sign a
facsimile of such notice) and deliver such notice to the Conversion Agent (or
the office or agency referred to in Section 4.05 of the Indenture) or, if
applicable, complete and deliver to The Depository Trust Company ("DTC" or the
"Depositary", which term includes any successor thereto) the appropriate
instruction form for conversion pursuant to DTC's book-entry conversion program,
(ii) surrender the Security to a Conversion Agent by physical or book-entry
delivery (which is not necessary in the case of conversion pursuant to DTC's
book-entry conversion program), (iii) furnish appropriate endorsements and
transfer documents if required by the Conversion Agent, the Company or the
Trustee and (iv) pay any transfer or similar tax, if required. Book-entry
delivery of a Security to the Conversion Agent may be made by any financial
institution that is a participant in DTC; conversion through DTC's book-entry
conversion program is available for any security that is held in an account
maintained at DTC by any such participant.
A Holder may convert a portion of a Security if the Principal Amount of such
portion is $1,000 or an integral multiple of $1,000. No payment or adjustment
will be made for dividends on the Common Stock except as provided in the
Indenture. On conversion of a Security, that portion of accrued Original Issue
Discount (or interest, if the Company has exercised its option provided for in
paragraph 8 hereof) attributable to the period from the Issue Date (or, if the
Company has exercised the option referred to in paragraph 9 hereof, the later
of (x) the date of such exercise and (y) the date on which interest was last
paid), to the Conversion Date with respect to the converted Security shall not
be cancelled, extinguished or forfeited, but rather shall be deemed paid in full
to the Holder thereof through the delivery of the Common Stock in exchange for
the Security being converted pursuant to the terms hereof.
The Conversion Rate will be adjusted for dividends or distributions on Common
Stock payable in Common Stock or other Capital Stock; subdivisions, combinations
or certain reclassifications of Common Stock; distributions to all holders of
Common Stock of certain rights, warrants or options to purchase Common Stock for
a period expiring within 60 days at less than the Sale Price at the Time of
Determination; and distributions to such holders of assets or debt securities of
the Company or certain rights, warrants or options to purchase securities of the
Company (excluding certain cash dividends or distributions). However, no
adjustment need be made if Securityholders may participate in the transaction or
in certain other cases. The Company from time to time may voluntarily increase
the Conversion Rate.
If the Company is a party to a consolidation, merger or binding share exchange
of the type specified in the Indenture, or certain transfers of all or
substantially all of its assets to another person, or in certain other
circumstances described in the Indenture, the right to convert a Security into
Common Stock may be changed into a right to convert it into securities, cash or
other assets of the Company or another person.
9. Tax Event.
---------
7
<PAGE>
(i) From and after the date (the "Tax Event Date") of the occurrence of a
Tax Event, at the option of the Company, interest in lieu of future
Original Issue Discount shall accrue at % per annum on a principal
amount per Security (the "Restated Principal Amount") equal to the
Issue Price plus Original Issue Discount accrued to the date
immediately prior to the Tax Event Date and shall be payable
semiannually on and of each year (each an "Interest Payment
Date") to holders of record at the close of business on or (each a
"Regular Record Date") immediately preceding such Interest Payment
Date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months and will accrue from the most recent
date to which interest has been paid or, if no interest has been paid,
from the Tax Event Date.
(ii) Interest on any Security that is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the
person in whose name that Security is registered at the close of
business on the Regular Record Date for such interest at the office or
agency of the Company maintained for such purpose. Each installment of
interest on any Security shall be paid in same-day funds by transfer
to an account maintained by the payee located inside the United
States. In the case of a global Security, interest payable on any
Interest Payment Date will be paid to the Depositary, for the purpose
of permitting such party to credit the interest received by it in
respect of such global Security to the accounts of the beneficial
owners thereof.
(iii) Except as otherwise specified with respect to the Securities, any
interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the
registered Holder thereof on the relevant Regular Record Date by virtue
of having been such Holder, and such Defaulted Interest may be paid by
the Company as provided for in Section 11.02(b) of the Indenture.
10. Conversion Arrangement on Call for Redemption
---------------------------------------------
Any Securities called for redemption, unless surrendered for conversion before
the close of business on the Redemption Date, may be deemed to be purchased from
the Holders of such Securities at an amount not less than the Redemption Price,
by one or more investment bankers or other purchasers who may agree with the
Company to purchase such Securities from the Holders and to make payment for
such Securities to the Trustee in trust for such Holders.
11. Denominations; Transfer; Exchange
---------------------------------
The Securities are in fully registered form, without coupons, in denominations
of $1,000 of Principal Amount and integral multiples of $1,000. A Holder may
transfer or exchange Securities in accordance with the Indenture. The Registrar
may require a Holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Registrar need not transfer or exchange any
Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the
8
<PAGE>
portion of the Security not to be purchased) or any Securities for a period of
15 days before a selection of Securities to be redeemed.
12. Persons Deemed Owners
---------------------
The registered Holder of this Security may be treated as the owner of this
Security for all purposes.
13. Unclaimed Money or Securities
-----------------------------
The Trustee and the Paying Agent shall return to the Company any money or
securities held by them for the payment of any amount with respect to the
Securities that remains unclaimed for two years, provided, however, that the
-------- -------
Trustee or such Paying Agent, before being required to make any such return, may
at the expense of the Company cause to be published once in The Wall Street
--- ---- ------
Journal or another newspaper of national circulation or mail to each such Holder
-------
notice that such money or securities remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed money or securities then remaining will be
returned to the Company. After return to the Company, Holders entitled to the
money or securities must look to the Company for payment as general creditors
unless an applicable abandoned property law designates another person, and the
Trustee and the Paying Agent shall have no further liability with respect to
such money or securities for that period commencing after the return thereof.
14. Amendment; Waiver
-----------------
Subject to certain exceptions set forth in the Indenture, (i) the Indenture or
the Securities may be amended with the written consent of the Holders of at
least a majority in aggregate Principal Amount of the Securities at the time
outstanding and (ii) certain defaults or noncompliance with certain provisions
may be waived with the written consent of the Holders of a majority in aggregate
Principal Amount of the Securities at the time outstanding. Subject to certain
exceptions set forth in the Indenture, without the consent of any
Securityholder, the Company and the Trustee may amend the Indenture or the
Securities to cure any ambiguity, defect or inconsistency, or to comply with
Article 5 or Section 10.14 of the Indenture or to make any change that does not
materially adversely affect the rights of any Securityholder.
15. Defaults and Remedies
---------------------
Under the Indenture, Events of Default include (i) after exercise by the Company
of its option pursuant to Section 11.01 of the Indenture following a Tax Event,
default in the payment of interest that continues for a period of 31 days; (ii)
default in payment of the Principal Amount, Issue Price, accrued Original Issue
Discount, Redemption Price, Purchase Price or Change in Control Purchase Price,
as the case may be, in respect of the Securities when the same becomes due and
payable; (iii) failure either to deliver shares of Common Stock or pay cash in
lieu thereof (together with cash in lieu of fractional shares) in accordance
with the terms of the Indenture when such Common Stock (or cash) is required to
be delivered following conversion of a Security and such failure is not remedied
for a period of 10 days; (iv) failure by the Company to comply with other
agreements in the Indenture or the Securities, subject to notice and lapse of
time; or (v) certain events of bankruptcy or insolvency. If an Event of Default
occurs and is continuing, the Trustee, or the Holders of at least 25% in
aggregate Principal Amount of the Securities at the time outstanding, may
declare all the Securities to be due and payable
9
<PAGE>
immediately. Certain events of bankruptcy or insolvency are Events of Default
that will result in the Securities becoming due and payable immediately upon the
occurrence of such Events of Default.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may refuse to enforce the Indenture or
the Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withhold from Securityholders notice of any
continuing Default (except a Default in payment of amounts specified in clause
(i) or (ii) in the immediately preceding paragraph) if it determines that
withholding notice is in their interests.
16. Trustee Dealings with the Company
---------------------------------
Subject to certain limitations imposed by the TIA, the Trustee under the
Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.
17. No Recourse Against Others
--------------------------
A director, officer, employee or stockholder, as such, of the Company shall not
have any liability for any obligations of the Company under the Securities or
the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. By accepting a Security, each Securityholder
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
18. Authentication
--------------
This Security shall not be valid until an authorized officer of the Trustee
manually signs the Certificate of Authentication on the other side of this
Security.
19. Abbreviations
-------------
Customary abbreviations may be used in the name of a Securityholder or an
assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with right of survivorship and not as
tenants in common) and CUST (=custodian), and UNIF TRANS MIN ACT (=Uniform
Transfers to Minors Act).
20. GOVERNING LAW
-------------
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND TO BE
PERFORMED WITHIN THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAWS.
10
<PAGE>
ASSIGNMENT FORM CONVERSION NOTICE
To assign this Security, fill To convert this Security into
Common Stock of the Company,
in the form below: check the box:
I or we assign and transfer -----
this Security to : :
: :
-----
-------------------
(Insert assignee's soc.
sec. or tax ID no.) To convert only part of this
Security, state the Principal
Amount to be converted (which must
______________________________ be $1,000 or an integral
multiple of $1,000): --------------
______________________________
------------------------------ :$--------------------:
------------------------------
(Print or type assignee's
name, address and zip code) If you want the stock
certificate made out in
and irrevocably appoint another person's name, fill
in the form below:
-----------------------------
to transfer this Security on
the books of the Company. The -------------------
agent may substitute another
to act for him. :agent :
-------------------
(Insert person's soc.
sec. or tax ID no.)
---------------------
---------------------
---------------------
------------------------------
(Print or type person's name,
address and zip code)
11
<PAGE>
--------------------------------------------------------------------------------
Date: Your Signature: *
--------------------------------------------------------------------------------
(Sign exactly as your name appears on the other side of this Security)
* Your signature must be guaranteed by a commercial bank or trust company or by
a member or members' organization of the New York Stock Exchange or American
Stock Exchange.
12
