SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 17, 1997
AMERICA ONLINE, INC.
(Exact Name of Registrant as Specified in Charter)
Delaware 0-19836 54-1322110
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
22000 AOL Way, Dulles, Virginia 20166
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (703) 448-8700
<PAGE>
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(a) Not Applicable.
(b) Not Applicable.
(c) Exhibits.
4.1 Indenture, dated as of November 17, 1997 between America Online,
Inc., as issuer, and State Street Bank and Trust Company, as
trustee.
4.2 Registration Rights Agreement, dated as of November 17, 1997
between America Online, Inc. and Goldman, Sachs & Co., BT Alex.
Brown Incorporated, Lehman Brothers Inc. and Cowen & Company.
4.3 Purchase Agreement dated November 12, 1997 between America
Online, Inc. and Goldman, Sachs & Co., BT Alex. Brown
Incorporated, Lehman Brothers Inc. and Cowen & Company.
Item 9. Sale of Equity Securities Pursuant to Regulation S.
On November 17, 1997 (the "Date of Sale"), America Online, Inc. (the
"Company") completed the sale of a new issue of $350,000,000 aggregate principal
amount of 4% Convertible Subordinated Notes due November 15, 2002 (the "Notes").
The Notes were sold by the Company to Goldman, Sachs & Co., BT Alex. Brown
Incorporated, Lehman Brothers Inc. and Cowen & Company, as initial purchasers
(collectively, the "Initial Purchasers"), in an unregistered private placement
conducted pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act"). The discount to the Initial Purchasers was 2.50% of the
$350,000,000 principal amount of the Notes purchased (or an aggregate of
$8,750,000). The Company has granted the Initial Purchasers an option for 30
days after the Date of Sale to purchase up to an additional $50,000,000
aggregate principal amount of Notes solely to cover over-allotments, if any.
The Company has been advised that the Initial Purchasers resold
$317,850,000 aggregate principal amount of the Notes in the United States to
"qualified institutional buyers" in reliance on Rule 144A under the Securities
Act. The Company has been advised that the Initial Purchasers resold the
remaining $32,150,000 aggregate principal amount of the Notes through their
respective international affiliates, as selling agents, outside the United
States to non-U.S. persons in reliance on Regulation S under the Securities Act.
The Notes are convertible, in whole or in part, into shares of Common Stock
of the Company at any time on or after the 90th day following the last issuance
of Notes upon the Initial Purchasers' exercise of their over-allotment option
or, if such option is not exercised, the date on which such option expires and
prior to the close of business on the maturity date, unless previously redeemed
or repurchased, at a conversion price of $104.3875 per share (equivalent to a
conversion rate of 9.5797 shares per $1,000 principal amount of Notes), subject
to adjustment in certain events. Interest on the Notes is payable semiannually
on May 15 and November 15 of each year, commencing on May 15, 1998. The Notes
may be redeemed at the option of the Company on or after November 15, 2000, in
whole or in part, at the redemption prices set forth in the Notes. The Notes
are not entitled to any sinking fund, and the Notes are general unsecured
obligations subordinated in right of payment to all existing and future Senior
Debt (as defined in the Indenture in respect of the Notes) of the Company and
effectively subordinated in right of payment to all indebtedness and other
liabilities of the Company's subsidiaries. In the event of a Change in Control
(as defined in the Indenture), each holder of Notes may require the Company to
repurchase its Notes, in whole or in part, for cash or, at the Company's option,
Common Stock of the Company (valued at 95% of the average closing prices for the
five trading days immediately preceding and including the third trading day
prior to the repurchase date) at a repurchase price of 100% of the principal
amount of Notes to be repurchased, plus accrued interest to the repurchase date.
<PAGE>
Pursuant to a Registration Rights Agreement with the Initial Purchasers
dated November 17, 1997 (the "Registration Rights Agreement"), the Company has
agreed to file a shelf registration statement in respect of the Notes and the
Common Stock issuable upon conversion thereof within 90 days of the Date of Sale
and to use its best efforts to cause such shelf registration statement to be
declared effective by the Securities and Exchange Commission within 180 days of
the Date of Sale. Upon any failure by the Company to comply with such deadlines
and certain other obligations under the Registration Rights Agreement,
additional interest will be payable on the Notes.
The foregoing is a summary of the Notes, the Indenture and the Registration
Rights Agreement, and does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the
Indenture, the Registration Rights Agreement and the Purchase Agreement, copies
of which are filed as Exhibits to this Report on Form 8-K, and the Notes, the
form of which are included in the Indenture.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
AMERICA ONLINE, INC.
Date: December 2, 1997 By: /S/MILES R. GILBURNE
Miles R. Gilburne
Senior Vice President, Business Development
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
4.1 Indenture, dated as of November 17, 1997 between America Online, Inc.,
as issuer, and State Street Bank and Trust Company, as trustee.
4.2 Registration Rights Agreement, dated as of November 17, 1997 between
America Online, Inc. and Goldman, Sachs & Co., BT Alex. Brown
Incorporated, Lehman Brothers Inc. and Cowen & Company.
4.3 Purchase Agreement dated November 12, 1997 between America Online,
Inc. and Goldman, Sachs & Co., BT Alex. Brown Incorporated, Lehman
Brothers Inc. and Cowen & Company.
$350,000,000
4% CONVERTIBLE SUBORDINATED NOTES
DUE NOVEMBER 15, 2002
Between
AMERICA ONLINE, INC.
as Issuer
and
STATE STREET BANK AND TRUST COMPANY
as Trustee
Dated as of November 17, 1997
TABLE OF CONTENTS
Page
ARTICLE I Definitions and Other Provisionsof General Application
SECTION 1.01. Definitions. 1
SECTION 1.02 Compliance Certificates and Opinions; Form of Documents
Delivered to Trustee. 10
SECTION 1.03. Acts of Holders of Securities. 11
SECTION 1.04. Notices, etc. 12
SECTION 1.05. Notice to Holders of Securities; Waiver. 13
SECTION 1.06. Effect of Headings and Table of Contents 13
SECTION 1.07. Successors and Assigns 13
SECTION 1.08. Separability Clause 13
SECTION 1.09. Benefits of Indenture. 13
SECTION 1.10. Governing Law 14
SECTION 1.11. Legal Holidays 14
SECTION 1.12. Conflict with Trust Indenture Act 14
ARTICLE II Security Forms
SECTION 2.01. Forms Generally. 15
SECTION 2.02. Form of Face of Security. 16
SECTION 2.03. Form of Reverse of Security 21
SECTION 2.04. Form of Trustee's Certificate of Authentication 27
ARTICLE III The Securities
SECTION 3.01. Title and Terms. 27
SECTION 3.02. Denominations. 28
SECTION 3.03. Execution, Authentication, Delivery and Dating. 29
SECTION 3.04. Temporary Securities 29
SECTION 3.05. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer 30
SECTION 3.06. Mutilated, Destroyed, Lost or Stolen Securities 34
SECTION 3.07. Payment of Interest, Interest Rights Preserved 36
SECTION 3.08. Persons Deemed Owners 37
SECTION 3.09. Cancelation 37
SECTION 3.10. Computation of Interest 37
SECTION 3.11. CUSIP Numbers 37
ARTICLE IV Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture 38
SECTION 4.02. Application of Trust Money 39
ARTICLE V REMEDIES
SECTION 5.01. Events of Default 39
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment 41
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee 42
SECTION 5.04. Trustee May File Proofs of Claim 43
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities 44
SECTION 5.06. Application of Money Collected 44
SECTION 5.07. Limitation on Suits 44
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest and to Convert 45
SECTION 5.09. Restoration of Rights and Remedies 45
SECTION 5.10. Rights and Remedies Cumulative 45
SECTION 5.11. Delay or Omission Not Waiver 45
SECTION 5.12. Control by Holders of Securities 45
SECTION 5.13. Waiver of Past Defaults 46
SECTION 5.14. Undertaking for Costs 46
SECTION 5.15. Waiver of Stay or Extension Laws 47
ARTICLE VI The Trustee
SECTION 6.01. Certain Duties and Responsibilities. 47
SECTION 6.02. Notice of Defaults. 48
SECTION 6.03. Certain Rights of Trustee. 48
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities 49
SECTION 6.05. May Hold Securities, Act as Trustee Under Other
Indentures. 49
SECTION 6.06. Money Held in Trust. 49
SECTION 6.07. Compensation and Reimbursement. 49
SECTION 6.08. Corporate Trustee Required; Eligibility. 50
SECTION 6.09. Resignation and Removal; Appointment of Successor. 51
SECTION 6.10. Acceptance of Appointment by Successor. 52
SECTION 6.11. Merger, Conversion, Consolidation or Succession to
Business 52
SECTION 6.12. Authenticating Agent 52
ARTICLE VII Holder's Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders 54
SECTION 7.02. Preservation of Information; Communications to Holders 54
SECTION 7.03. Reports by the Company 55
ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms 56
SECTION 8.02. Successor Substituted 56
ARTICLE IX Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders of
Securities 57
SECTION 9.02. Supplemental Indentures with Consent of Holders of
Securities 58
SECTION 9.03. Execution of Supplemental Indentures 58
SECTION 9.04. Effect of Supplemental Indentures 59
SECTION 9.05. Reference in Securities to Supplemental Indentures 59
ARTICLE X Covenants
SECTION 10.01. Payment of Principal and Interest. 59
SECTION 10.02. Maintenance of Offices or Agencies. 59
SECTION 10.03. Money for Security Payments To Be Held in Trust 60
SECTION 10.04. Corporate Existence 61
SECTION 10.05. Maintenance of Properties 61
SECTION 10.06. Compliance with Laws 61
SECTION 10.07. Payment of Taxes and Other Claims 61
SECTION 10.08. Delivery of Certain Information 62
SECTION 10.09. Statement by Officers as to Default 62
SECTION 10.10. Resale of Certain Securities 63
SECTION 10.11. Waiver of Certain Covenants 63
SECTION 10.12. Registration Rights 63
SECTION 10.13. Book-Entry System 63
ARTICLE XI Redemption of Securities
SECTION 11.01. Right of Redemption. 63
SECTION 11.02. Applicability of Article 63
SECTION 11.03. Election To Redeem; Notice to Trustee 64
SECTION 11.04. Notice of Redemption 64
SECTION 11.05. Deposit of Redemption Price 64
SECTION 11.06. Securities Payable on Redemption Date 65
ARTICLE XII Conversion of Securities
SECTION 12.01. Conversion Privilege and Conversion Rate 65
SECTION 12.02. Exercise of Conversion Privilege 66
SECTION 12.03. Fractions of Common Stock 67
SECTION 12.04. Adjustment of Conversion Rate 67
SECTION 12.05. Notice of Adjustments of Conversion Rate 72
SECTION 12.06. Notice of Certain Corporate Action 73
SECTION 12.07. Company To Reserve Common Stock 74
SECTION 12.08. Taxes on Conversions 74
SECTION 12.09. Covenant as to Common Stock 74
SECTION 12.10. Cancelation of Converted Securities 74
SECTION 12.11 Provision in Case of Consolidation, Merger or
Conveyance of Assets 74
SECTION 12.12. Responsibility of Trustee for Conversion Provisions 75
SECTION 12.13. Repayment of Certain Funds Upon Conversion 76
ARTICLE XIII Subordination
SECTION 13.01. Securities Subordinate to Senior Debt 76
SECTION 13.02. Payment Over of Proceeds Upon Dissolution, Etc 76
SECTION 13.03. No Payment When Senior Debt in Default 77
SECTION 13.04. Payment Permitted If No Default 78
SECTION 13.05. Subrogation to Rights of Holders of Senior Debt 78
SECTION 13.06. Provisions Solely To Define Relative Rights 78
SECTION 13.07. Trustee To Effectuate Subordination 79
SECTION 13.08. No Waiver of Subordination Provisions 79
SECTION 13.09. Notice to Trustee 79
SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent 80
SECTION 13.11. Trustee Not Fiduciary for Holders of Senior Debt 80
SECTION 13.12. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights 80
SECTION 13.13. Article Applicable to Paying Agents 80
SECTION 13.14. Subsidiaries 81
SECTION 13.15. Rescission 81
SECTION 13.16. Payment 81
ARTICLE XIV Repurchase of Securities at the Option of theHolder upon
a Change in Control
SECTION 14.01. Right to Require Repurchase 81
SECTION 14.02. Notices; Method of Exercising Repurchase Right, Etc 82
SECTION 14.03. Certain Definitions 84
INDENTURE dated as of November 17, 1997, between
AMERICA ONLINE, INC., a Delaware corporation (herein called the
"Company"), and STATE STREET BANK AND TRUST COMPANY, a
Massachusetts banking corporation, as Trustee hereunder (herein
called the "Trustee").
W I T N E S S E T H :
WHEREAS the Company has duly authorized the creation of an issue of
its 4% Convertible Subordinated Notes due November 15, 2002 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture; and
WHEREAS all things necessary to make the Securities, when executed by
the Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company in accordance with their and its terms, have been
done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE I
Definitions and Other Provisions
of General Application
SECTION 1.01. Definitions.1.01. Definitions. For all purposes of
this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(c) any reference to an "Article" or a "Section", or to an "Annex",
refers to an Article or Section of, or an Annex attached to, this
Indenture, as the case may be;
(d) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles in the United States prevailing at the time of any relevant
computation hereunder; and
(e) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; provided, however, that where such
words are used in any form of Security, form of notice or form of
certificate, such words shall refer only to the particular form of
Security, form of notice or form of certificate, as the case may be, in
which such words are contained.
"Act", when used with respect to any Holder of a Security, has the
meaning specified in Section 1.03.
"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 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.
"Agent Members" has the meaning specified in Section 3.05.
"Applicable Procedures" has the meaning specified in Section 3.05.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.13 to act on behalf of the Trustee to authenticate
Securities.
"Authorized Newspaper" means a newspaper, in an official language of
the country of publication or in the English language, customarily published on
each Business Day, whether or not published on Saturdays, Sundays or holidays,
and of general circulation in the place in connection with which the term is
used or in the financial community of such place. Where successive publications
are required to be made in Authorized Newspapers, the successive publications
may be made in the same or in different newspapers in the same city meeting the
foregoing requirements and in each case on any Business Day.
"Board of Directors", when used with reference to the Company, means
the board of directors of the Company, or any committee of the board of
directors of the Company, empowered to act for the Company, as the case may be,
with respect to this Indenture.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company, as the case may be, to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
shall have been delivered to the Trustee.
"Business Day" means, with respect to any particular place of payment,
place of conversion or any other place, as the case may be, each Monday,
Tuesday, Wednesday, Thursday and Friday, other than any such day on which
banking institutions in The City of New York, New York, or in the city in which
the Corporate Trust Office is located, or in such particular place are
authorized or obligated by law or executive order to close. If any day on which
any delivery, request, surrender, payment or other action is required or
permitted hereunder to be taken by or on behalf of a Holder is not a Business
Day in any place where such action is required or permitted hereunder to be
taken, then such actions may be taken at such or any other permitted place on
the next succeeding Business Day at such place with the same force and effect as
if taken at the same time on such day that is not a Business Day at such place.
"CEDEL" means Cedel Bank Societe Anonyme.
"Change in Control" has the meaning specified in Section 14.03.
"Closing Price Per Share" means, with respect to the Common Shares of
the Company, for any day, the reported last sales price regular way per share on
such day or, in case no such reported sale takes place on such day, the average
of the reported closing bid and asked prices regular way, in either case (a) on
the principal (as determined by the Company's Board of Directors) national
securities exchange on which the Common Shares are listed or admitted to trading
or (b) if not listed or admitted to trading on any national securities exchange,
on the Nasdaq National Market or (c) if the Common Shares are not listed or
admitted to trading on any national securities exchange or quoted on such
National Market, the average of the closing bid and asked prices in the over-
the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose.
"Code" means the United States Internal Revenue Code of 1986, as
amended.
"Commission" means the U.S. Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and performing the duties now assigned to it under applicable
law, then the body performing such duties at such time.
"Common Stock", as applied to the capital stock of any corporation
other than the Company shall mean the capital stock of any class which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of such
corporation and which is not subject to redemption by such corporation; and as
applied to the Company shall mean the Common Stock of the Company, par value
$.01. However, subject to the provisions of Section 12.12, shares issuable on
conversion of Securities shall include only shares of the class designated as
Common Stock of the Company at the date of execution of this instrument or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable shall
be substantially in the proportion which the total number of shares of such
class resulting from all such reclassifications bears to the total number of
shares of all such classes resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
President, or any Vice President, and by any one of its Treasurer, any Assistant
Treasurer, its Secretary or any Assistant Secretary, and delivered to the
Trustee.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article XII.
"Conversion Price" and "Conversion Rate" have the meanings specified
in Section 12.01 hereof, as adjusted in accordance with Section 12.04.
"Conversion Securities" means the securities delivered on conversion
of Securities (or any securities successor thereto), together with any
securities successor thereto to those so delivered on conversions.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at Two
International Place, Boston, MA 02110, Attention: Corporate Trust Department.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depository" means, with respect to the Securities issued in whole or
in part in the form of one or more Global Securities, the clearing agency
registered under the Exchange Act, specified for that purpose as contemplated by
Section 2.01 or any successor clearing agency registered under the Exchange Act
as contemplated by Section 2.01.
"Dollar", "$" or "U.S. $" means a dollar or other equivalent unit in
such coin or currency of the United States as at the time shall be legal tender
for the payment of public and private debts.
"DTC" means The Depository Trust Company.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, including any successor or amendatory statutes.
"Euroclear" means the Euroclear System.
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the U.S. Securities Exchange Act of 1934
(including any successor act thereto), as it may be amended from time to time,
and (unless the context otherwise requires) includes the rules and regulations
of the Commission promulgated thereunder.
"Global Security" means any of the Restricted Global Security and the
Regulation S Global Security.
"Holder" means, with respect to any Security, a Person in whose name
such Security is registered in the Security Register.
"Indebtedness" means (i) all items of indebtedness or liability
(except capital and surplus) which in accordance with generally accepted
accounting principles would be included in determining total liabilities as
shown on the liability side of a balance sheet as at the date as of which
indebtedness is to be determined, (ii) indebtedness secured by any Mortgage
existing on property owned subject to such Mortgage, whether or not the
indebtedness secured thereby shall have been assumed, and (iii) guarantees,
endorsements (other than for purposes of collection) and other contingent
obligations in respect of, or to purchase or otherwise acquire, indebtedness of
others, unless the amount thereof is included in indebtedness under the
preceding clause (i) or (ii); provided, however, that any obligations or
guarantees of obligations in respect of lease rentals, whether or not such
obligations or guarantees of obligations would be included as liabilities on a
consolidated balance sheet of the Company and its Subsidiaries, shall not be
included in indebtedness.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
including, for all purposes of this instrument and any such supplemental
indenture, the Annexes attached to this instrument.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Institutional Accredited Investor" means an institutional accredited
investor within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act.
"Liquidated Damages" has the meaning specified in Section 2.03.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article XV or otherwise.
"Mortgage" means and includes any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non-Conversion Period" has the meaning specified in Section 2.03.
"Non-Electing Share" has the meaning specified in Section 12.11.
"Officer", when used with reference to the Company, means the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, the Treasurer, the Controller, an Assistant Treasurer, an Assistant
Controller, the Secretary, an Assistant Secretary or any Vice President of the
Company.
"Officers' Certificate", when used with reference to the Company,
means a written certificate signed by any one of the Chairman of the Board, the
President or any Vice President of the Company and by any one of the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee provided, however, that, for purposes of
Section 10.09, an "Officers' Certificate" means a written certificate signed by
the principal executive, financial or accounting officer of the Company and any
one of the other Officers referred to above and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of independent counsel
selected by the Company, which counsel shall be reasonably acceptable to the
Trustee.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancelation;
(b) Securities for the payment or redemption of which money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as its own Paying Agent)
for the Holders of such Securities; provided that if such Securities are to
be redeemed, notice of such redemption has been duly given pursuant to this
Indenture or irrevocable instructions have been given to the Trustee to
give such notice; and
(c) Securities which have been paid pursuant to Section 3.06 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company; and
(d) Securities theretofore authenticated and delivered under this
Indenture at the time this Indenture ceases to be of further effect upon
the Company's satisfaction and discharge hereof pursuant to Section 4.01.
provided, however, that in determining whether the Holders of the requisite
aggregate principal amount of Outstanding Securities are present at a meeting of
Holders of Securities for quorum purposes or have given 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 shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in conclusively relying upon any such determination as to the presence of a
quorum or upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Securities so owned
which have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Trustee the pledgee's right so to
act with respect to such Securities and that the pledgee is not the Company or
any other obligor upon the Securities or any Affiliate of the Company or such
other obligor. In case of a dispute as to such right, any decision by the
Trustee upon the advice of counsel shall be full protection to the Trustee.
Upon request of the Trustee, the Company shall furnish to the Trustee promptly
an Officers' Certificate listing and identifying all Securities, if any, known
by the Company to be owned or held by or for the account of any of the above-
described persons; and, subject to Section 6.01, the Trustee shall be entitled
to accept such Officers' Certificate as conclusive evidence of the facts therein
set forth and of the fact that all Securities not listed therein are Outstanding
for the purposes of any such determination.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, company, partnership,
joint venture, association, joint-stock company, trust, estate, unincorporated
organization or other legal entity or government or any agency or political
subdivision thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.06 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Qualified Institutional Buyer" has the meaning specified in Rule
144A.
"Record Date" means any Regular Record Date or Special Record Date.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Default" has the meaning specified in Section 2.03.
"Registration Rights Agreement" has the meaning specified in
Section 10.12.
"Regular Record Date" for interest payable in respect of any Security
on any Interest Payment Date means the May 1st or November 1st (whether or not a
Business Day) next preceding the relevant Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (including
any successor regulation thereto), as it may be amended from time to time.
"Regulation S Global Security" has the meaning specified in Section
2.01.
"Repurchase Date" has the meaning specified in Section 14.01.
"Repurchase Price" has the meaning specified in Section 14.01.
"Responsible Officer", when used with respect to the Trustee, means
any officer of the Trustee assigned by the Trustee and working in its Corporate
Trust Department.
"Restricted Global Security" has the meaning specified in
Section 2.01.
"Restricted Period" has the meaning specified in Section 2.01.
"Restricted Securities" has the meaning specified in Section 2.1.
"Rule 144" means Rule 144 under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any
successor rule thereto), as the same may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 10.08.
"Securities" has the meaning ascribed to it in the first paragraph of
this Indenture.
"Securities Act" means the Securities Act of 1933 (including any
successor act thereto), as it may be amended from time to time, and (unless the
context otherwise requires) includes the rules and regulations of the Commission
promulgated thereunder.
"Securities Payment" has the meaning specified in Section 13.02.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
"Senior Debt" means the principal of (and premium, if any) and
interest (including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts (including collection expenses, attorney's fees and late charges)
owing with respect to, the following, whether direct or indirect, absolute or
contingent, secured or unsecured, due or to become due, outstanding at the date
of execution of the Indenture or thereafter incurred, created or assumed:
(a) indebtedness of the Company for money borrowed or evidenced by
bonds, debentures, notes or similar instruments;
(b) reimbursement obligations of the Company with respect to letters
of credit, bankers' acceptances and similar facilities issued for the
account of the Company;
(c) every obligation of the Company issued or assumed as the deferred
purchase price of property or services purchased by the Company, excluding
any trade payables and other accrued current liabilities incurred in the
ordinary course of business;
(d) obligations of the Company as lessee under leases required to be
capitalized on the balance sheet of the lessee under United States
generally accepted accounting principles;
(e) obligations of the Company under interest rate and currency swaps,
caps, floors, collars or similar arrangements intended to protect the
Company against fluctuations in interest or currency exchange rates;
(f) indebtedness of others of the kinds described in the preceding
clauses (a) through (e) that the Company has assumed, guaranteed or
otherwise assured the payment thereof, directly or indirectly; and/or
(g) deferrals, renewals, extensions and refundings of, or amendments,
modifications or supplements to, any indebtedness or obligation described
in the preceding clauses (a) through (f) whether or not there is any notice
to or consent of the Holders of Securities;
provided, however, that the following shall not constitute Senior Debt:
(i) any particular indebtedness or obligation that is owed by
the Company to any of its direct and indirect Subsidiaries, and
(ii) any particular indebtedness or obligation, or any deferral,
renewal, extension or refunding of such indebtedness or obligation, if
it is expressly stated in the governing terms or in the assumption
thereof that the indebtedness or obligation involved is not senior in
right of payment to the Securities or that such indebtedness or
obligation is pari passu with or junior to the Securities.
"Shelf Registration Statement" has the meaning specified in
Section 2.03.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock
which ordinarily has voting power for the election of directors, whether at all
times or only so long as no senior class of stock has such voting power by
reason of any contingency.
"Trading Days" means (a) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which such national
securities exchange is open for business or (b) if the Common Stock is not
listed or admitted for trading on any national securities exchange, days on
which trades may be made on the Nasdaq National Market or any similar system of
automated dissemination of quotations of securities prices on which the Common
Stock is quoted or (c) if the Common Stock is not listed or admitted to trading
on any national securities exchange or quoted on such National Market or similar
system, days on which the Common Stock is traded regular way in the over-the-
counter market and for which a closing bid and a closing asked price for the
Common Stock are available.
"Trustee" means the Person named as the "Trustee" in the preamble of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee. If at any time there is more than one such Person,
"Trustee" as used with respect to the Securities shall mean the Trustee with
respect to such Securities.
"Trust Indenture Act" means the United States Trust Indenture Act of
1939 (including any successor act thereto), as it may be amended from time to
time, and (unless the context otherwise requires) includes the rules and
regulations of the Commission thereunder.
"U.S. Depository" means DTC until a successor U.S. Depository shall
have become such pursuant to the applicable provisions of this Indenture, and
thereafter "U.S. Depository" shall mean such successor U.S. Depository.
"Unrestricted Securities" has the meaning specified in Section 2.01.
"U.S. Government Obligations" means securities which are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank or trust company as custodian with
respect to any such obligation evidenced by such depository receipt or a
specific payment of interest on or principal of any such obligation held by such
custodian for the account of the holder of a depository receipt; provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository receipt from
any amount received by the custodian in respect of the obligation set forth in
(i) or (ii) above or the specific payment of interest on or principal of such
obligation evidenced by such depository receipt.
"U.S. Person" means a citizen or resident of the United States, a
domestic partnership, a domestic corporation or any estate or trust the income
of which is subject to U.S. Federal income taxation regardless of its source.
"Vice President", when used with respect to the Company, means any
Vice President, whether or not designated by a number or a word or words added
before or after the title "Vice President".
"Western Europe" means Austria, Belgium, Denmark, France, Germany,
Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden,
Switzerland and the United Kingdom.
SECTION 1.02 Compliance Certificates and Opinions; Form of Documents
Delivered to Trustee. (a) Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel stating that
in the opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each Person signing such certificate or opinion
has read such covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(iv) a statement as to whether, in the opinion of each such Person, such
condition or covenant has been complied with.
(b) In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such Officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an Officer or Officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, or upon a certificate of a public official, unless such counsel knows,
or in the exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.03. Acts of Holders of Securities. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided or permitted by this Indenture to be given or taken by Holders of
Securities may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by agent or
proxy duly appointed in writing. Except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments or record
or both are delivered to the Trustee and, where it is hereby expressly required,
to the Company. Such instrument or instruments and record (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders of Securities signing such instrument or instruments and so
voting at such meeting. Subject to Section 6.01, the execution of any
instrument by a Holder or his agent, or proxy, may be proved in accordance with
such reasonable rules and regulations as may be prescribed by the Trustee or in
such manner as shall be satisfactory to the Trustee. Proof of execution of any
such instrument or of a writing appointing any such agent or proxy, or of the
holding by any Person of a Security, shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proven by the Security
Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Security shall bind every future Holder
of the same Security and the Holder of every Security issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Trustee or the
Company in reliance thereon, whether or not notation of such action is made upon
such Security.
(e) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Company
shall have no obligation to do so. If the Company does not so fix a record date
in any such case, the Trustee may fix such a record date by giving written
notice to the Company. If such a record date is fixed, upon request, demand,
authorization, direction, notice, consent, waiver or other Act may be given
before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for the purposes of
determining whether Holders of the requisite proportion of Outstanding
Securities have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other Act, and for that
purpose the Outstanding Securities shall be computed as of such record date;
provided that no such authorization, agreement or consent by the Holders on such
record date shall be deemed to be effective unless it shall become effective
pursuant to the provisions of this Indenture not later than six months after the
record date.
SECTION 1.04. Notices, etc. Any request, demand, authorization,
direction, notice, consent, election, waiver or other Act of Holders of
Securities or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with either of the following:
(a) the Trustee by any Holder of Securities or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to or with the Trustee and received at its Corporate Trust
Office, Attention: Corporate Trust Department, or
(b) the Company by the Trustee or by any Holder of Securities shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing, mailed, first-class postage prepaid, addressed to
the Company at 22000 AOL Way, Dulles, Virginia 20166-9323, Attention:
Chief Financial Officer or at any other address previously furnished in
writing to the Trustee by the Company.
SECTION 1.05. Notice to Holders of Securities; Waiver. Except as
otherwise provided herein, where this Indenture provides for notice to Holders
of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder affected by such event, at his registered address as recorded in the
Security Register. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Holder entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.06. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
SECTION 1.07. Successors and Assigns. All covenants and agreements
in this Indenture by the Company shall bind its respective successors and
assigns, whether so expressed or not.
SECTION 1.08. Separability Clause. In case any provision in this
Indenture or the Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.09. Benefits of Indenture. Nothing in this Indenture or
in the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors and assigns hereunder, the holders of Senior
Debt of the Company (solely with respect to Article XIII) and the Holders of
Securities and, solely with respect to this Article I and Sections 10.08, 12.08
and 12.09, the Holders of Conversion Securities, any benefit or legal or
equitable right, remedy or claim under this Indenture.
This Article I and Sections 10.08, 12.08 and 12.09 shall not be
amended or modified, and neither compliance by the Company with, nor any default
by it under, such Article or any such Sections, shall be waived, in any manner
that adversely affects the interest of any Holder of a Conversion Security at
the time outstanding without the consent of the Holders of a majority of the
outstanding Conversion Securities so affected.
SECTION 1.10. Governing Law. THIS INDENTURE AND THE SECURITIES SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, THE UNITED STATES OF AMERICA, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
SECTION 1.11. Legal Holidays. In any case where any Interest Payment
Date, Redemption Date, Repurchase Date or Stated Maturity of any Security or the
last day on which a Holder of a Security has a right to convert his Security
shall not be a Business Day, then (notwithstanding any other provision of this
Indenture or of the Securities) payment of interest or principal or delivery for
conversion of such Security need not be made on or by such day, but may be made
on or by the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date, Redemption Date, Repurchase Date, or at the
Stated Maturity or by such last day for conversion, as the case may be;
provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Stated Maturity or last day for conversion, as the case may be. It is not the
intention of this paragraph to cause the terms of this Indenture to be subject
to the Trust Indenture Act unless and except to the extent it is required under
such Act to be qualified under the Trust Indenture Act.
SECTION 1.12. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with a provision of the Trust Indenture
Act that is required under such Act to be a part of and govern this Indenture
(or would be required to be a part of and govern this Indenture if this
Indenture were required to be qualified under the Trust Indenture Act), the
latter provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act that may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
ARTICLE II
Security FormsII
SECTION 2.01. Forms Generally The Securities shall be in
substantially the forms set forth in this Article, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or Depository
thereof, the Internal Revenue Code of 1986, as amended (the "Code"), and
regulations thereunder, or as may, consistently herewith, be determined by the
Officers executing such Securities, as evidenced by their execution thereof.
The Company shall approve the form of the Securities and any notation, legend or
endorsement on the Securities.
In certain cases described elsewhere herein, the legends set forth in
the first four paragraphs of Section 2.02 may be omitted from Securities issued
hereunder.
After a transfer of any Securities during the period of the
effectiveness of a Shelf Registration Statement with respect to the Securities
which are included in such Shelf Registration Statement, all requirements
pertaining to legends on such Security will cease to apply, the requirements
requiring any such Security issued to certain Holders be issued in global form
will cease to apply, and, except as provided herein, a certificated Security
without legends will be available to the Holder of such Securities. The Trustee
shall be entitled to receive and rely upon an Officer's Certificate of the
Company to evidence the effectiveness of a Shelf Registration Statement with
respect to the Securities.
Securities offered and sold in their initial distribution in reliance
on Regulation S shall be initially represented by one or more Regulation S
Global Securities issued in fully registered form without interest coupons,
substantially in the form of Security set forth in Sections 2.02 and 2.03, with
such applicable legends as are provided for in Section 2.02. Such Regulation S
Global Security shall be registered in the name of the U.S. Depository or its
nominee and deposited with the Trustee, at its Corporate Trust Office, as
custodian for the U.S. Depository, duly executed by the Company and
authenticated by the Trustee as hereinafter provided, for credit to the
respective accounts at the U.S. Depository of the depositories for Morgan
Guaranty Trust Company of New York, Brussels office, as operator of Euroclear,
or CEDEL. Until such time as the Restricted Period shall have terminated,
Securityholders may hold beneficial interests in such Regulation S Global
Securities only through Euroclear and CEDEL, and transfer or exchange of such
beneficial interest to or for interests in the Restricted Global Note shall be
made only in accordance with the certification requirements discussed below in
Section 3.05(b)(iii). After such time as the Restricted Period shall have
terminated, transfers of beneficial interests on the Regulation S Global
Securities shall not be limited to Euroclear and CEDEL, and transfers or
exchange of interests in the Regulation S Certificate for or to interests in the
Restricted Global Note shall not require compliance with such certification
requirements. As used herein, the term "Restricted Period" means the period up
to (but not including) the 40th day following the later of (a) the day that
Goldman, Sachs & Co., an initial purchaser of the Securities, advises the
Company and the Trustee in writing of the day on which the Securities are first
offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (b) November 17, 1997; if upon the date which is 40
days after the date specified in clause (b) the Trustee has not received a
notice as described in clause (a) specifying a later date, the Trustee shall be
entitled to conclude that the Restricted Period has expired. The Regulation S
Global Security following the Restricted Period and all other Securities that
are not Restricted Securities shall collectively be referred to herein as the
"Unrestricted Securities". The aggregate principal amount of the Regulation S
Global Security may be increased or decreased from time to time by adjustments
on the records of the Trustee, as custodian for the U.S. Depository, in
connection with a corresponding increase or decrease in the aggregate principal
amount of the Restricted Global Security, as hereinafter provided.
Securities offered and sold in their initial distribution in reliance
on Rule 144A shall be issued in the form of one or more Global Securities
(collectively, the "Restricted Global Security") in fully registered form
without interest coupons, substantially in the form of Security set forth in
Sections 2.02 and 2.03, with such applicable legends as are provided for in
Section 2.02, except as otherwise permitted herein. Such Global Security shall
be registered in the name of the U.S. Depository or its nominee and deposited
with the Trustee, at its Corporate Trust Office, as custodian for the U.S.
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Security may be increased or decreased from time to time by adjustments made on
the records of the Trustee, as custodian for the U.S. Depository, in connection
with a corresponding decrease or increase in the aggregate principal amount of
the Regulation S Global Security, as hereinafter provided. The Restricted
Global Security and all other Securities evidencing the debt, or any portion of
the debt, initially evidenced by such Global Security, other than Securities
transferred or exchanged upon certification as provided in Section 3.05(b)(ii)
or (iv), shall collectively be referred to herein as the "Restricted
Securities".
The Securities will be issued only in registered form. The Securities
will be issued in minimum denominations of $1,000, or any integral multiple of
$1,000 in excess thereof, as provided in Section 3.02.
SECTION 2.02. Form of Face of Security.
[INCLUDE IF SECURITY IS A REGULATION S GLOBAL SECURITY--THIS SECURITY
IS A REGULATION S GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE REFERRED
TO HEREINAFTER. EXCEPT IN THE CIRCUMSTANCES DESCRIBED IN SECTION 3.05(b) OF THE
INDENTURE, NO TRANSFER OR EXCHANGE OF AN INTEREST IN THIS REGULATION S GLOBAL
SECURITY MAY BE MADE FOR AN INTEREST IN THE RESTRICTED GLOBAL SECURITY REFERRED
TO IN THE INDENTURE DURING THE RESTRICTED PERIOD.]
[INCLUDE IF SECURITY IS A RESTRICTED SECURITY--THIS SECURITY (OR ITS
PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND THIS SECURITY AND ANY COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY
NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. SECURITIES MAY ONLY BE SOLD IN ACCORDANCE WITH
THE INDENTURE, COPIES OF WHICH ARE AVAILABLE FOR INSPECTION AT THE CORPORATE
TRUST OFFICE OF THE TRUSTEE. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED
THAT THE SELLER OF THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE
PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT
OF AMERICA ONLINE, INC. AND ITS SUCCESSORS (THE "COMPANY") THAT (A) THIS
SECURITY AND ANY COMMON STOCK ISSUABLE UPON ITS CONVERSION MAY BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED ONLY (I) TO A PERSON WHO THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH REGULATION S UNDER THE SECURITIES
ACT, (III) UNLESS PREVIOUSLY AGREED WITH THE COMPANY, TO AN INSTITUTIONAL
ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), OR (V) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; AND IN EACH OF
CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF THE
STATES AND OTHER JURISDICTIONS OF THE UNITED STATES, AND THAT (B) THE HOLDER
WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION
AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME
TO MODIFY THE RESTRICTION ON ANY PROCEDURES FOR RESALES AND OTHER TRANSFERS OF
THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR
REGULATION (OR THE INTERPRETATION THERETO) OR IN PRACTICES RELATING TO THE
RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS
SECURITY AND ANY SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF THIS SECURITY
AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.
CONVERSION OF THIS SECURITY IS SUBJECT TO CERTIFICATION AND OTHER
REQUIREMENTS, AND ANY SECURITIES ISSUED ON SUCH CONVERSION WILL BE SUBJECT TO
THE TRANSFER RESTRICTIONS REFERRED TO ABOVE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY--THIS SECURITY IS A GLOBAL
SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITORY OR A NOMINEE THEREOF. THIS SECURITY MAY
NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER
OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY
PERSON OTHER THAN SUCH DEPOSITORY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS THE U.S. DEPOSITORY--UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY ("DTC"), A NEW YORK
CORPORATION, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF CEDE &
CO. (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER
USE THEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AMERICA ONLINE, INC.
4% CONVERTIBLE SUBORDINATED NOTES
DUE NOVEMBER 15, 2002
No. $
CUSIP No.:
AMERICA ONLINE, INC., a Delaware corporation (herein called the
"Company", which term includes any successor Person under the Indenture referred
to on the reverse hereof), for value received, hereby promises to pay to Cede &
Co., or registered assigns, the principal sum of U.S. Dollars, or
such other amount (not to exceed four hundred million dollars ($350,000,000)
when taken together with all of the Company's 4% Convertible Subordinated Notes
due November 15, 2002 issued and outstanding in definitive certificated form or
in the form of another Global Security) as may from time to time represent the
principal amount of the Company's 4% Convertible Subordinated Notes due November
15, 2002 in respect of which beneficial interests are held through the U.S.
Depositary in the form of a [Restricted] [Regulation S] Global Security, on
November 15, 2002 and to pay interest thereon from November 15, 1997 or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or duly provided for, semiannually in arrears on May 15 and November 15 in
each year, commencing on May 15, 1998, and at Maturity at the rate of 4% per
annum, until the principal hereof is paid or made available for payment;
provided that any amount of such principal or, to the extent permitted by
applicable law, interest that is overdue shall bear interest at the rate of 4%
per annum (to the extent that payment of such interest shall be legally
enforceable), from the date such amount is due until it is paid or made
available for payment, and such interest on any overdue amount shall be payable
on demand. The interest so payable, and punctually paid or duly provided for,
on any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the May 1st or November 1st (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, if such manner shall be deemed practical by the Trustee, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
Payment of the principal of and interest on this Security will be made
in immediately available funds and in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts, at the Corporate Trust Office of the Trustee or at office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York, or, at the option of the Holder and subject to any fiscal
or other laws and regulations, at any other office or agency maintained by the
Company for such purpose; provided, however, that upon written application
(including wire payment instructions) by the Holder to the Security Registrar
not later than the 10th day immediately preceding the relevant Regular Record
Date, such Holder may receive payment by wire transfer to a U.S. Dollar account
(such transfers to be made only to Holders of an aggregate principal amount in
excess of U.S. $2,000,000) maintained by the payee with a bank in The City of
New York; and provided further that, subject to the preceding proviso, payment
of interest may, at the option of the Company, be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register; and provided further that with respect to payments otherwise
required pursuant to the terms of this Agreement to be made at an office outside
the United States maintained for such purpose by the Company, payment of
principal of, or interest on this Security and payment of any Liquidated Damages
(as defined on the reverse hereof) may be made from the Corporate Trust Office
of the Trustee or an office or agency of the Issuer maintained in The City of
New York, if (but only if) payment of the full amount of such principal,
interest or Liquidated Damages, as the case may be, at all offices outside the
United States maintained for such purpose by the Company in accordance with the
Indenture is illegal or effectively precluded because of exchange controls or
other similar restrictions on the full payment or receipt of such amounts in
United States Dollars, as determined by the Company. Unless any designation
made by any Holder is revoked, any such designation made by such Holder with
respect to this Security will remain in effect with respect to future payments
with respect to this Security payable to the Holder. The Company will pay any
administrative costs imposed by banks in connection with making any such
payments upon application of such Holder for reimbursement. If this Security is
a Global Security, then, notwithstanding the second sentence of this paragraph,
each such payment will be made in accordance with the procedures of the U.S.
Depository as then in effect.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof (or an Authenticating Agent acting
on its behalf) by the manual signature of one of its authorized signatories,
this Security shall not be entitled to any benefit under the Indenture or be
valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed under its corporate seal.
AMERICA ONLINE, INC.,
[Corporate Seal] by
__________________________
Title:
Attest:
______________________
Title:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: ____________________________,
as Trustee,
By
________________________
Authorized Signatory
SECTION 2.03. Form of Reverse of Security. This Security is one of a
duly authorized issue of securities of the Company designated as its "4%
Convertible Subordinated Notes due November 15, 2002" (herein called the
"Securities"), limited in aggregate principal amount to $350,000,000, issued and
to be issued under an Indenture, dated as of November 15, 1997 (herein called
the ("Indenture") between the Company and State Street Bank and Trust Company,
as Trustee (herein called the "Trustee", which term includes any successor
trustee under the Indenture), to which the Indenture and all indentures sup
plemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Company,
the Trustee, the Holders of Senior Debt of the Company and the Holders of the
Securities and of the terms upon which the Securities are, and are to be, authen
ticated and delivered.
No sinking fund is provided for in the Securities. The Securities may
not be redeemed at the option of the Company prior to November 15, 2000.
Thereafter, the Securities may be redeemed at the option of the Company, in
whole or in part, at the Redemption Prices set forth below.
The Redemption Prices (expressed as a percentage of principal amount)
are as follows for the 12-month period beginning on November 15 of the following
years:
Redemption
Year Price
2000 101.6%
2001 100.8%
and thereafter at a Redemption Price equal to 100% of the principal amount, in
each case together with accrued interest to the Redemption Date.
Notice of redemption (which notice shall be irrevocable) will be given
by first-class mail to Holders of Securities at their registered addresses as
recorded in the Security Register. Notice will be given not more than 60 nor
less than 30 days prior to the Redemption Date, as provided in the Indenture.
In any case where the due date for the payment of the principal of or
interest, including Liquidated Damages, on any Security or the last day on which
a Holder of a Security has a right to convert his Security shall be at any place
of payment or place of conversion, as the case may be, a day on which banking
institutions at such place of payment or place of conversion are authorized or
obligated by law or executive order to close, then payment of principal or
interest, including Liquidated Damages, or delivery for conversion of such
Security need not be made on or by such date at such place but may be made on or
by the next succeeding day at such place which is not a day on which banking
institutions are authorized or obligated by law or executive order to close,
with the same force and effect as if made on the date for such payment or the
date fixed for redemption or repurchase, or at the Stated Maturity or by such
last day for conversion, and no interest shall accrue for the period after such
date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or after
February 16, 1998, (the period prior to February 16, 1998 being referred to
herein as the "Non-Conversion Period") and prior to the close of business on
November 15, 2002, or in case this Security is called for redemption or the
Holder hereof has exercised its right to require the Company to repurchase this
Security, then in respect of this Security until and including, but (unless the
Company defaults in making the payment due upon redemption or repurchase, as the
case may be) not after, the close of business on the Redemption Date or the
Repurchase Date, as the case may be, to convert this Security into validly
issued fully paid and nonassessable Common Stock of the Company at an initial
Conversion Rate equal to 9.5797 shares of Common Stock per $1,000 principal
amount of Securities (or at the current adjusted Conversion Rate if an
adjustment has been made as provided in the Indenture) by surrender of this
Security, and also a duly executed conversion notice, substantially in the form
provided in Annex A of the Indenture (including the tax certification contained
in such notice), to the Company, subject to any laws or regulations applicable
thereto and subject to the right of the Company to terminate the appointment of
the Conversion Agent (as defined below), at the Corporate Trust Office of the
Trustee, or at the office or agency of the Company maintained in The City of
New York for such purpose, or at such other offices or agencies outside the
United States that the Company may designate for such purpose (each a
"Conversion Agent"). The Issuer hereby appoints State Street Bank and Trust
Company, N.A., having an office at 61 Broadway, New York, New York 10005 as such
an agent in The City of New York. No payment or adjustment is to be made on
conversion for cash dividends on the Common Stock issued on conversion or, if
the date of conversion is not an Interest Payment Date, interest accrued hereon
from the Interest Payment Date next preceding the date of conversion. No
fractions of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture, or alternatively, at the Company's option, the Company shall round up
the conversion transaction to the next higher whole share. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the sale or transfer of all or substantially all of
the assets of the Company, the Indenture shall be amended, without the consent
of any Holders of Securities, so that this Security, if then Outstanding, will
be convertible thereafter, during the period this Security shall be convertible
as specified above, only into the kind and amount of securities, cash and other
property receivable upon consolidation, merger, sale or transfer by a holder of
the number of Common Stock of the Company into which this Security might have
been converted immediately prior to such consolidation, merger, sale or transfer
(assuming such holder of Common Stock failed to exercise any rights of election
and received per share the kind and amount received per share by a plurality of
Non-Electing Shares). Adjustments in the Conversion Rate of less than one
percent of such price will not be required, but any adjustment that would
otherwise be required to be made will be carried forward and taken into account
in the computation of any subsequent adjustment.
Notwithstanding any provision hereof, no securities will be delivered
on conversion of this Security or any portion hereof unless the certification
and other requirements described in the Indenture are satisfied.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Restricted
Security or the holder of Common Stock issued upon conversion thereof, the
Company will promptly furnish or cause to be furnished Rule 144A Information (as
defined below) to such Holder of Restricted Securities or such holder of Common
Stock issued upon conversion of Restricted Securities, or to a prospective
purchaser of any such security designated by any such Holder or holder, as the
case may be, to the extent required to permit compliance by any such holder with
Rule 144A under the Securities Act of 1933, as amended (the "Securities Act").
"Rule 144A Information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
The Holder of this Security and the Common Stock of the Company
issuable upon conversion thereof is entitled to the benefits of a Registration
Rights Agreement (subject to the provisions thereof), dated as of November 17,
1997, among the Company and Goldman, Sachs & Co., BT Alex. Brown, Cowen &
Company and Lehman Brothers Inc. (the "Registration Rights Agreement").
Pursuant to the Registration Rights Agreement, the Company has agreed for the
benefit of the Holders from time to time of the Securities and the Common Stock
issuable upon conversion thereof that it will, at its expense, (a) within
90 days after the date of issuance of the original Securities, file a shelf
registration statement (the "Shelf Registration Statement") with the Commission
with respect to resales of the Securities and the Common Stock issuable upon
conversion thereof, (b) use its best efforts to cause such Shelf Registration
Statement to be declared effective by the Commission within 180 days after the
date of original issuance of the Securities, and (c) use its best efforts to
maintain such Shelf Registration Statement continuously effective under the
Securities Act, until the second anniversary of the date of the effectiveness of
the Shelf Registration Statement or such earlier date as is provided in the
Registration Rights Agreement.
If (a) on or prior to 90 days following the date of original issuance
of the Securities, a Shelf Registration Statement has not been filed with the
Commission, or (b) on or prior to the 180th day following the date of original
issuance of the Securities, such Shelf Registration Statement is not declared
effective (each, a "Registration Default"), additional interest ("Liquidated
Damages") will accrue on this Security from and including the day following such
Registration Default to but excluding the day on which such Registration Default
has been cured. Liquidated Damages will be paid semiannually in arrears, with
the first semiannual payment due on the first interest payment date in respect
of the Securities following the date on which such Liquidated Damages begin to
accrue, and will accrue at a rate per annum equal to an additional one-quarter
of one percent (0.25%) of the principal amount of the Securities outstanding to
and including the 90th day following such Registration Default and at a rate per
annum equal to one-half of one percent (0.50%) thereof from and after the 91st
day following such Registration Default. In the event that the Shelf
Registration Statement ceases to be effective prior to the second annual
anniversary of the initial effective date of the Shelf Registration Statement or
such earlier date as is provided in the Registration Rights Agreement for a
period in excess of 60 days, whether or not consecutive, during any 12-month
period, then the interest rate borne by the Securities shall increase by an
additional one-half of one percent (0.50%) per annum from the 61st day of the
applicable 12-month period such Shelf Registration Statement ceases to be
effective to but excluding the day on which the Shelf Registration Statement
again becomes effective.
Whenever in this Security there is a reference, in any context, to the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security such mention shall be deemed to include mention of the payment of
Liquidated Damages payable as described in the preceding paragraph to the extent
that, in such context, Liquidated Damages are, were or would be payable in
respect of such Security and express mention of the payment of Liquidated
Damages (if applicable) in any provisions of this Security shall not be
construed as excluding Liquidated Damages in those provisions of this Security
where such express mention is not made.
The Holder of this Security, by its acceptance thereof, agrees to be
bound by the terms of the Registration Rights Agreement relating to the
Securities and the Common Stock issuable upon conversion thereof.
If a Change in Control (as defined in the Indenture) occurs, the
Holder of this Security shall have the right, at the Holder's option in
accordance with the provisions of the Indenture, to require the Company to
repurchase this Security (or any portion of the principal amount hereof that is
an integral multiple of $1,000) for cash at a Repurchase Price equal to 100% of
the principal amount thereof plus interest accrued to the Repurchase Date. At
the option of the Company, the Repurchase Price may be paid in cash or, except
as otherwise provided in the Indenture, by delivery of Common Stock having a
fair market value equal to the Repurchase Price; provided that payment may not
be made in Common Stock unless at the time of payment such stock is listed on a
national securities exchange or quoted on the Nasdaq National Market. For
purposes of this paragraph, the fair market value of shares of Common Stock
shall be determined by the Company and shall be equal to 95% of the average of
the Closing Prices Per Share for the five consecutive Trading Days ending on and
including the third Trading Day immediately preceding the Repurchase Date.
Whenever in this Security there is a reference, in any context, to the principal
of any Security as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Security to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this Security
shall not be construed as excluding the Repurchase Price in those provisions of
this Security when such express mention is not made.
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all amounts then or thereafter to become
due on all Senior Debt of the Company, and this Security is issued subject to
such provisions of the Indenture with respect thereto. Each Holder of this
Security, by accepting the same, (a) agrees to and shall be bound by such provi
sions, (b) authorizes and directs the Trustee on its behalf to take such action
as may be necessary or appropriate to effectuate the subordination so provided
and (c) appoints the Trustee its attorney-in-fact for any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities may be declared due and payable to the extent, in the manner
and with the effect provided in the Indenture. Upon payment (i) of the amount
of principal so declared due and payable and (ii) of interest on any overdue
principal and, to the extent permitted by applicable law, overdue interest, all
of the Company's obligations in respect of the payment of the principal of and
interest on the Securities shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities under the Indenture at
any time by the Company and the Trustee with the written consent of the Holders
of a majority in aggregate principal amount of the Securities at the time out
standing. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
in exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in aggregate principal amount of the Outstanding Securities shall
have made written request to the Trustee to institute proceedings in respect of
such Event of Default and offered the Trustee indemnity satisfactory to it and
the Trustee shall not have received from the Holders of a majority in aggregate
principal amount of the Securities Outstanding a direction inconsistent with
such request and shall have failed to institute any such proceedings for 60 days
after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or interest hereon (including any
Liquidated Damages) on or after the respective due dates expressed herein.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligations of the Company, which
are absolute and unconditional, to pay the principal of and interest (including
Liquidated Damages) on this Security at the times, places and rate, and in the
coin or currency, herein prescribed or to convert this Security as provided in
the Indenture.
The Securities are issuable only in fully registered form, without
exception, and, except as provided in Section 2.01 of the Indenture, in
denominations of $1,000 and any integral multiple of $1,000 in excess thereof.
As provided in the Indenture and subject to certain limitations and satisfaction
of certain requirements therein set forth, Securities are exchangeable for a
like aggregate principal amount of securities of the same or a different
authorized denomination, as requested by the Holder surrendering the same.
As provided in the Indenture and subject to certain limitations and
satisfaction of certain requirements therein set forth, the transfer of this
Security is registrable on the Security Register upon surrender of this Security
for registration of transfer at the Corporate Trust Office of the Trustee or the
office or agency of the Company as may be designated by it for such purpose in
the Borough of Manhattan, The City of New York, duly endorsed by, or accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to recover
any tax or other governmental charge payable in connection therewith.
Prior to due presentation of this Security for registration of
transfer the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered, as the owner
thereof for all purposes, whether or not such Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 14.01 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay
it an amount in cash or, at the Company's election, Common Stock valued as set
forth in the Indenture, equal to 100% of the principal amount hereof, plus
interest accrued to the Repurchase Date, as provided in the Indenture.
Dated:
Signature
Signature Guaranteed
Notice: Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
(STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock
Exchange Medallion Signature Program (MSP) or such other "signature guarantee
program" as may be determined by the Trustee in addition to, or in substitution
for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of
1934, as amended.
Principal amount to be repurchased:
Remaining principal amount following such repurchase:
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
SECTION 2.04. Form of Trustee's Certificate of Authentication. This
is one of the Securities referred to in the within-mentioned Indenture.
Dated: ___________________________, as Trustee,
by
_________________________
Authorized Signatory
ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal amount of
Securities which may be authenticated and delivered under this Indenture is
limited to $400,000,000, except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other Securities
pursuant to Sections 3.04, 3.05, 3.06, 9.05, or 12.02.
The Securities shall be known and designated as the "4% Convertible
Subordinated Notes due November 15, 2002" of the Company. Their Stated Maturity
shall be November 15, 2002 and they shall bear interest at the rate of 4% per
annum from November 17, 1997 or from the most recent Interest Payment Date to
which interest has been paid or duly provided for, as the case may be, payable
semiannually in arrears on May 15 and November 15 of each year, commencing May
15, 1998, and at Maturity, until the principal thereof is paid or made available
for payment; provided that any amount of such principal or, to the extent
permitted by applicable law, interest that is overdue shall bear interest at the
rate of 4% per annum (to the extent that payment of such interest shall be
legally enforceable), from the date such amount is due until it is paid or made
available for payment, and such interest on any overdue amount shall be payable
on demand.
The principal of and interest on the Securities shall be payable in
immediately available funds and in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts, at the Corporate Trust Office of the Trustee or at an office or
paying agency maintained by the Company for such purpose in the Borough of
Manhattan, The City of New York or, at the option of the Holder and subject to
any fiscal or other laws and regulations applicable thereto, at any other office
of the Trustee or any Paying Agent outside The City of New York; provided,
however, that upon application (including wire payment instructions) by the
Holder to the Trustee not later than the 10th day immediately preceding the
relevant Regular Record Date, such Holder may receive payment by wire transfer
to a U.S. Dollar account (such transfers to be made only to Holders of an
aggregate principal amount in excess of U.S. $2,000,000) maintained by the payee
with a bank in The City of New York, New York; and provided further that subject
to the preceding proviso, payment of interest may, at the option of the Company,
be made by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register. Unless any designation made by
any Holder is revoked, any such designation made by such Holder with respect to
such Security will remain in effect with respect to any future payments with
respect to such Security payable to such Holder. The Company will pay any
administrative costs imposed by banks in connection with making such payments,
upon application by the relevant Holder. Notwithstanding the second sentence of
this paragraph, each payment of principal and interest in respect of a Global
Security will be made in accordance with the procedures of the U.S. Depository
as then in effect.
The Securities shall be redeemable at the Company's option, in whole
or in part, under the circumstances and at the Redemption Prices specified in
the form of Securities set forth in Sections 2.02 and 2.03.
The Securities shall be convertible as provided in Article XII.
The Securities shall be subordinated in right of payment to Senior
Debt of the Company as provided in Article XIII.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article XIV.
SECTION 3.02. Denominations. The Securities shall be issuable only in
registered form without coupons and, except as provided in Section 2.01, only in
denominations of $1,000 and any integral multiple of $1,000 in excess thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by any one of its Chairman
of the Board, its Chief Executive Officer, its President, or any one of its Vice
Presidents, under a facsimile of its corporate seal reproduced thereon attested
by its Secretary or one of its Assistant Secretaries. Any such signature may be
manual or facsimile.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper Officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with such Company Order shall authenticate and make available for delivery such
Securities as in this Indenture provided and not otherwise. In connection with
any Company Order for authentication, a compliance certificate and Opinion of
Counsel pursuant to Section 1.02 shall not be required.
Each Security shall be dated the date of its authentication.
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
executed by the Trustee or the Authenticating Agent by manual signature of an
authorized signatory, and such certificate upon such Security shall be
conclusive evidence, and the only evidence, that such Security has been duly
authenticated and delivered hereunder. Notwithstanding the foregoing, if any
Security shall have been authenticated and delivered hereunder but never issued
and sold or delivered by the Company, and the Company shall deliver such
Security to the Trustee for cancelation as provided in Section 3.09, for all
purposes of this Indenture and such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and make available for delivery, 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 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 any office
or agency of the Company designated pursuant to Section 10.2, without charge to
the Holder. Upon surrender for cancelation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.05. Registration, Registration of Transfer and Exchange;
Restrictions on Transfer. (a) The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the register maintained in
such office and in any other office or agency designated pursuant to
Section 10.02 being herein sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company shall provide for the registration of Securities and of transfers of
Securities. The Trustee is hereby appointed "Security Registrar" for the purpose
of registering Securities and transfers of Securities as herein provided. Upon
surrender for registration of transfer of any Security at an office or agency of
the Company designated pursuant to Section 10.02 for such purpose, and subject
to the other provisions of this Section 3.05, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Securities of any
authorized denominations and of a like aggregate principal amount.
At the option of the Holder, and subject to the other provisions of
this Section 3.05, Securities may be exchanged for other Securities of any
authorized denominations and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at such office or agency. Whenever
any Securities are so surrendered for exchange, and subject to the other
provisions of this Section 3.05, the Company shall execute, and the Trustee
shall authenticate and make available for delivery, the Securities which the
Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and subject to the other provisions of this Section 3.05, entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.04, 12.02 or 14.02(f) not involving any transfer
and subject to Section 12.09.
(b) Notwithstanding any other provisions of this Indenture or the
Securities (but subject to Section 2.01), transfers of a Global Security, in
whole or in part, transfers and exchanges of interests therein of the kinds
described in clauses (ii), (iii), (iv) and (v) below and exchanges of interests
in Global Securities, and transfers or exchanges of other Securities as
described in clause (iv) below, shall be made only in accordance with this
Section 3.05(b). Transfers and exchanges subject to this Section 3.05 shall
also be subject to the other provisions of this Indenture that are not
inconsistent with this Section 3.05.
(i) Limitation on Transfers of a Global Security. A Global Security
may not be transferred, in whole or in part, to any Person other than the
U.S. Depository or a nominee thereof, and no such transfer to any such
other Person may be registered; provided that this clause (i) shall not
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to
any Person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of such Person.
Nothing in this Section 3.05(b)(i) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global Security effected in
accordance with the other provisions of this Section 3.05(b).
(ii) Restricted Global Security to Regulation S Global Security. If
the holder of a beneficial interest in the Restricted Global Security
wishes at any time to transfer such interest to a Person who wishes to take
delivery thereof in the form of a beneficial interest in the Regulation S
Global Security, such transfer may be effected, subject to the rules and
procedures of the U.S. Depository, Euroclear and CEDEL, in each case to the
extent applicable (the "Applicable Procedures"), only in accordance with
this Section 3.05(b)(ii). Upon receipt by the Trustee, as Security
Registrar, at its Corporate Trust Office of (A) written (or other format
acceptable to the Trustee) instructions given in accordance with the
Applicable Procedures from an Agent Member directing the Trustee to credit
or cause to be credited to a specified Agent Member's account a beneficial
interest in the Regulation S Global Security in a principal amount equal to
that of the beneficial interest in the Restricted Global Security to be so
transferred, (B) a written (or other format acceptable to the Trustee)
order given in accordance with the Applicable Procedures containing
information regarding the account of the Agent Member (which, if prior to
the expiration of the Restricted Period, shall be for the account of an
Agent Member acting on behalf of Euroclear or CEDEL, as the case may be) to
be credited with (and, if required by the Securities Registrar, the
beneficial owner for whose account such credit is made), and the account of
the Agent Member to be debited for, such beneficial interest and (C) a
certificate in substantially the form set forth in Annex B attached hereto
given by the holder of such beneficial interest, the Trustee, as Security
Registrar, shall instruct the U.S. Depository to reduce the principal
amount of the Restricted Global Security, and to increase the principal
amount of the Regulation S Global Security, by the principal amount of the
beneficial interest in the Restricted Global Security to be so transferred,
and to credit or cause to be credited to the account of the Agent Member
specified in such instructions (which during the Restricted Period shall be
the Agent Member for Euroclear or CEDEL or both, as the case may be) a
beneficial interest in the Regulation S Global Security having a principal
amount equal to the amount by which the principal amount of the Restricted
Global Security was reduced upon such transfer.
(iii) Regulation S Global Security to Restricted Global Security. If
during the Restricted Period the holder of a beneficial interest in the
Regulation S Global Security wishes to transfer such interest to a Person
who wishes to take delivery thereof in the form of a beneficial interest in
the Restricted Global Security, such transfer may be effected, subject to
the Applicable Procedures, only in accordance with this
Section 3.05(b)(iii). Upon receipt by the Trustee, as Security Registrar,
at its Corporate Trust Office of (A) written (or other format acceptable to
the Trustee) instructions given in accordance with the Applicable
Procedures from an Agent Member directing the Trustee to credit or cause to
be credited to a specified Agent Member's account a beneficial interest in
the Restricted Global Security in a principal amount equal to that of the
beneficial interest in the Regulation S Global Security to be so
transferred, (B) a written (or other format accessible to the Trustee)
order given in accordance with the Applicable Procedures containing informa
tion regarding the account of the Agent Member to be credited with (and if
required by the Trustee, the beneficial owner for whose account such credit
is made), and the account of the Agent Member to be debited for, such
beneficial interest and (C) a certificate in substantially the form set
forth in Annex C attached hereto given by the holder of such beneficial
interest, the Trustee, as Security Registrar, shall instruct the U.S.
Depository to reduce the principal amount of the Regulation S Global
Security and to increase the principal amount of the Restricted Global
Security, by the principal amount of the beneficial interest in the
Regulation S Global Security to be so transferred, and to credit or cause
to be credited to the account of the Agent Member specified in such instruc
tions a beneficial interest in the Restricted Global Security having a
principal amount equal to the amount by which the principal amount of the
Regulation S Global Security, as the case may be, was reduced upon such
transfer.
(iv) Exchanges. In the event that a Restricted Global Security or
any portion thereof is exchanged for a Regulation S Global Security or
Securities other than Global Securities, such other Securities may in turn
be exchanged (on transfer or otherwise) for Securities that are not Global
Securities or for beneficial interests in a Global Security (if any is then
outstanding) only in accordance with such procedures, which shall be sub
stantially consistent with the provisions of clauses (i) through (iii)
above and (v) below (including the certification requirements intended to
insure that transfers and exchanges of beneficial interests in a Global
Security comply with Rule 144A, Rule 144 or Regulation S, as the case may
be) and any Applicable Procedures, as may be from time to time adopted by
the Company and the Trustee.
(v) Interests in Regulation S Global Security To Be Held Through
Euroclear or CEDEL. Until the termination of the Restricted Period, inter
ests in the Regulation S Global Security may be held only through Agent
Members acting for and on behalf of Euroclear and CEDEL; provided that this
Clause (v) shall not prohibit any transfer in accordance with
Section 3.05(b)(iii) hereof.
(c) Each Restricted Security and Global Security issued hereunder
shall, upon issuance, bear the legends required by Section 2.02 to be applied to
such a Security and such required legends shall not be removed from such
Security except as provided in the next sentence or paragraph (d) of this
Section 3.05. The legend required for a Restricted Security may be removed from
such Security upon the earlier of (i) the later of the expiration of two years
from the last date of original issuance of the Securities and the last date on
which the Company or any affiliate of the Company reacquired such Securities, if
any, and (ii) the date such Security is resold pursuant to an effective
Registration Statement relating thereto. Upon provision to the Trustee of such
satisfactory evidence as it may require as to the occurrence of the earlier of
such dates described in the preceding sentence, the Trustee, at the written
direction of the Company, shall authenticate and deliver in exchange for such
Security another Security or Securities having an equal aggregate principal
amount that does not bear such legend. If such a legend required for a
Restricted Security has been removed from a Security as provided above, no other
Security issued in exchange for all or any part of such Security shall bear such
legend, unless the Company has reasonable cause to believe that such other
Security is a "restricted security" within the meaning of Rule 144 and instructs
the Trustee in writing to cause a legend to appear thereon.
(d) The provisions of clauses (i), (ii), (iii) and (iv) below shall
apply only to Global Securities:
(i) Each Global Security authenticated under this Indenture shall be
registered in the name of the U.S. Depository or a nominee thereof and
delivered to such U.S. Depository or a nominee thereof or custodian
therefor, and each such Global Security shall constitute a single Security
for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this Indenture or the
Securities, no Global Security may be exchanged in whole or in part for
Securities registered, and no transfer of a Global Security in whole or in
part may be registered, in the name of any Person other than the U.S.
Depository or a nominee thereof unless (A) the U.S. Depository (1) has
notified the Company that it is unwilling or unable to continue as U.S.
Depository for such Global Security or (2) has ceased to be a clearing
agency registered under the Exchange Act, (B) in the case of a Global
Security held for an account of Euroclear or CEDEL, Euroclear or CEDEL, as
the case may be, (1) is closed for business for a continuous period of 14
days (other than by reason of statutory or other holidays) or (2) announces
an intention permanently to cease business or does in fact do so, (C) there
shall have occurred and be continuing an Event of Default with respect to
such Global Security or (D) a request for certificates has been made upon
60 days' prior written notice given to the Trustee in accordance with the
U.S. Depository's customary procedures and a copy of such notice has been
received by the Company from the Trustee. Any Global Security exchanged
pursuant to clause (A) or (B) above shall be so exchanged in whole and not
in part and any Global Security exchanged pursuant to clause (C) or (D)
above may be exchanged in whole or from time to time in part as directed by
the U.S. Depository. Any Security issued in exchange for a Global Security
or any portion thereof shall be a Global Security; provided that any such
Security so issued that is registered in the name of a Person other than
the U.S. Depository or a nominee thereof shall not be a Global Security.
(iii) Securities issued in exchange for a Global Security or any
portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global Security or portion
thereof to be so exchanged, shall be registered in such names and be in
such authorized denominations as the U.S. Depository shall designate and
shall bear any legends required hereunder. Any Global Security to be
exchanged in whole shall be surrendered by the U.S. Depository to the
Trustee, as Security Registrar. With regard to any Global Security to be
exchanged in part, either such Global Security shall be so surrendered for
exchange or, if the Trustee is acting as custodian for the U.S. Depository
or its nominee with respect to such Global Security, the principal amount
thereof shall be reduced, by an amount equal to the portion thereof to be
so exchanged, by means of an appropriate adjustment made on the records of
the Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and make available for delivery the Security issuable
on such exchange to or upon the written order of the U.S. Depository or an
authorized representative thereof.
(iv) In the event of the occurrence of any of the events specified in
clause (ii) above, the Company will promptly make available to the Trustee
a reasonable supply of certificated Securities in definitive, fully
registered form, without interest coupons.
(v) Neither any members of, or participants in, the U.S. Depository
("Agent Members") nor any other Persons on whose behalf Agent Members may
act (including Euroclear and CEDEL and account holders and participants
therein) shall have any rights under this Indenture with respect to any
Global Security, or under any Global Security, and the U.S. Depository or
such nominee, as the case may be, may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner
and holder of such Global Security for all purposes whatsoever. Notwith
standing the foregoing, nothing herein shall 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
U.S. Depository or such nominee, as the case may be, or impair, as between
the U.S. Depository, its Agent Members and any other person on whose behalf
an Agent Member may act, the operation of customary practices of such
Persons governing the exercise of the rights of a holder of any Security.
(e) Notwithstanding any term herein to the contrary, neither the
Trustee nor the Securities Registrar shall be responsible for ensuring that or
ascertaining whether any transfer or exchange complies with the registration
requirements of or exemption from the Securities Act or other federal or state
securities laws that may be applicable; provided, however, that if a
certification is specifically required by the express terms of this Section
3.05(b) to be delivered to the Trustee by a purchase or transferee of a
Security, the Trustee shall be under a duty to receive an examine the same and
determine whether it conforms on its face to the requirements hereof and appears
to be delivered by the proper Person, and shall promptly notify the party
delivering the same if such certificate does not so conform.
(f) Neither the Trustee nor the Securities Registrar (nor any Paying
Agent) shall be responsible for the accuracy of the books and records of, and
shall have no liability for any actions or omissions of, the U.S. Depository, or
any Agent Member, or Euroclear or CEDEL.
SECTION 3.06. Mutilated, Destroyed, Lost or Stolen Securities. If
there shall be delivered to the Company and the Trustee (i) (A) any mutilated
Security or (B) evidence to their satisfaction of the destruction, loss or theft
of any Security and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either 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
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security or in exchange for such mutilated Security, a
new Security of like tenor and principal amount and 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, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
A Holder shall bear the cost to the Company of replacing a mutilated,
destroyed, stolen or lost Security. Upon the issuance of any new Security under
this Section, the Company also 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)
connected therewith.
Every new Security issued pursuant to this Section in lieu of any
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 the 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 3.07. Payment of Interest, Interest Rights Preserved.
Interest on any Security which 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 (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Security which 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 Holder 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 (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities (or their respective
Predecessor 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, 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
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 Securities at such Holder's
address as it appears in the Security Register, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names
the Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
clause, such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section and Section 3.05,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
Any Security surrendered for conversion (after the Non-Conversion
Period) during the period from the close of business on any Regular Record Date
to the opening of business on the next succeeding Interest Payment Date (except
Securities called for redemption on a Redemption Date or to be repurchased on a
Repurchase Date and, as a result, the right to convert such Securities with
respect to which the Holder has exercised redemption or repurchase rights would
terminate during such period) must be accompanied by payment in New York
Clearing House Funds or other funds acceptable to the Company of an amount equal
to the Interest payable on such Interest Payment Date on the principal amount of
such Securities being surrendered for conversion. In the case of any Security
which is converted (after the Non-Conversion Period) after any Regular Record
Date and on or prior to the next succeeding Interest Payment Date (other than
any Security whose Maturity is prior to such Interest Payment Date) whose Stated
Maturity is on such Interest Payment Date, interest shall be payable on such
Interest Payment Date notwithstanding such conversion, and such interest
(whether or not punctually paid or duly provided for) shall be paid to the
Person in whose name such Security (or one or more Predecessor Securities) is
registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable.
SECTION 3.08. Persons Deemed Owners. Prior to due presentment of a
Security for registration of transfer, the Company, the Trustee and any agent of
the Company or the Trustee shall treat the Person in whose name such Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of and (subject to Sections 3.05 and 3.07) interest on such Security
and for all other purposes whatsoever, whether or not such Security be overdue,
and neither the Company, the Trustee nor any agent of the Company or the Trustee
shall be affected by notice to the contrary.
SECTION 3.09. Cancelation. All Securities surrendered for payment,
redemption, repurchase, registration of transfer or exchange or conversion
shall, if surrendered to any Person other than the Trustee, be delivered to the
Trustee. All Securities so delivered shall be canceled promptly by the Trustee.
The Company may at any time deliver to the Trustee for cancelation any
Securities previously authenticated and delivered hereunder which the Company
may have acquired in any manner whatsoever, and may deliver to the Trustee for
cancelation any Securities previously authenticated hereunder which the Company
has not issued and sold or delivered, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section 3.09,
except as expressly permitted by this Indenture. The Trustee shall destroy
canceled Securities and deliver a certificate of such destruction to the
Company.
SECTION 3.10. Computation of Interest. Interest on the Securities
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11. CUSIP Numbers. The Company in issuing the Securities
may use "CUSIP" and "CINS" numbers (if then generally in use), and the Trustee
shall use CUSIP numbers or CINS numbers, as the case may be, in notices of
redemption, repurchase or exchange as a convenience to the Holders; provided
that any such notice may state that no representation is made as to the correct
ness of such numbers either as printed on the Securities or as contained in any
notice of redemption, repurchase or exchange and that reliance may be placed
only on the other identification numbers printed on the Securities.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This
Indenture shall upon Company Request cease to be of further effect (except as to
any surviving rights of conversion, or replacement of Securities herein
expressly provided for, any right to receive the payment of principal of, or
interest on, such Securities or Liquidated Damages under the tenth paragraph on
the reverse of the form of Securities set forth in Section 2.03 and the rights,
obligations and immunities of the Trustee hereunder), and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(a) either
(i) all Securities theretofore authenticated and delivered (other
than (A) Securities which have been destroyed, lost or stolen and
which have been replaced or paid as provided in Section 3.06 and
(B) Securities for whose payment money has theretofore been deposited
in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancelation; or
(ii) all such Securities not theretofore delivered to the Trustee
for cancelation
(A) have become due and payable, or
(B) will have become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company;
and the Company, in the case of (A), (B) or (C) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose (1) money in an amount, or (2) U.S. Government Obligations that
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment, money in an amount, or (3) a combination
thereof, sufficient to pay and discharge the entire indebtedness on such
Securities not theretofore delivered to the Trustee for cancelation, for
principal (and premium, if any) and interest to the date of such deposit
(in the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(b) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with, and that any consents required under any document evidencing
and/or securing Senior Debt have been obtained and are in full force and effect.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.07 shall survive.
Funds held in trust pursuant to this Section are not subject to the provisions
of Article XIII or Article XIV (unless a Change in Control shall have occurred
prior to such satisfaciton and discharge).
SECTION 4.02. Application of Trust Money. (a) Subject to the
provisions of the last paragraph of Section 10.03, all moneys and U.S.
Government Obligations deposited with the Trustee pursuant to Section 4.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money has been deposited with the Trustee.
All moneys deposited with the Trustee pursuant to Section 4.01 (and
held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
(b) The Company shall pay and shall indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against U.S. Government
Obligations deposited pursuant to Section 4.01 or the interest and principal
received in respect of such obligations other than any payable by or on behalf
of Holders.
(c) The Trustee shall deliver or pay to the Company from time to time
upon Company Request any U.S. Government Obligations or money held by it
pursuant to and as provided in Section 4.01, which, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof addressed and delivered to the Trustee, are then
in excess of the amount thereof which then would have been required to be
deposited for the purpose for which such obligations or money were deposited or
received.
ARTICLE V
REMEDIES
SECTION 5.01. Events of Default. "Event of Default", whenever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be occasioned by the provisions of
Article XIII or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) default in the payment of any interest (including any Liquidated
Damages) upon any Security when it becomes due and payable, whether or not
such payment is prohibited pursuant to Article XIII hereof, and continuance
of such default for a period of 30 days; or
(b) default in the payment of the principal or Redemption Price or
Repurchase Price of any Security at its Maturity, whether or not such
payment is prohibited pursuant to Article XIII hereof; or
(c) default in the Company's obligation to provide notice of a Change
in Control as provided by Section 14.02; or
(d) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in this Section
specifically dealt with), and continuance of such default or breach for a
period of 60 days after there has been given, by registered or certified
mail, to the Company by the Trustee or to the Company and the Trustee by
the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(e) default under any bond, debenture, note or other evidence of
Indebtedness of the Company or under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or
evidenced any Indebtedness of the Company (including this Indenture),
whether such Indebtedness now exists or shall hereafter be created, which
default shall constitute a failure to pay an aggregate principal amount
exceeding $10,000,000 of such Indebtedness when due and payable after the
expiration of any applicable grace period with respect thereto and shall
have resulted in such Indebtedness in an aggregate principal amount
exceeding $10,000,000 becoming or being declared due and payable prior to
the date on which it would otherwise have become due and payable, without
such Indebtedness having been discharged, or such acceleration having been
rescinded or annulled, within a period of 10 days after there shall have
been given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities a written notice
specifying such default and requiring the Company to cause such
Indebtedness to be discharged or cause such acceleration to be rescinded or
annulled and stating that such notice is a "Notice of Default" hereunder;
provided, however, that if such default under such bond, debenture, note,
mortgage, indenture or other instrument or evidence of Indebtedness shall
be remedied or cured by the Company or waived pursuant to such agreement or
instrument, then, unless the maturity of the Securities shall have been
accelerated as provided herein, the Event of Default hereunder by reason
therefor shall automatically be deemed likewise to have been thereupon
remedied, cured or waived without further action upon the part of either
the Trustee or the Holders. Subject to the provisions of Section 6.01 and
6.02, the Trustee shall not be deemed to have knowledge of such default
unless either (i) a Responsible Officer of the Trustee shall have actual
knowledge of such default or (ii) the Trustee shall have received written
notice thereof from the Company, from any Holder, from the holder of any
such Indebtedness or from the trustee under any such mortgage, indenture or
other instrument;
(f) the entry by a court having jurisdiction in the premises of (i) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under the Bankruptcy Code or any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or (ii) a
decree or order adjudging the Company a bankrupt or insolvent, or approving
as properly filed a petition seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company under any
applicable Federal or State law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
(g) the commencement by the Company of a voluntary case or proceeding
under the Bankruptcy Code or any applicable Federal or state bankruptcy,
insolvency, reorganization or other similar law or of any other case or pro
ceeding to be adjudicated a bankrupt or insolvent, or the consent by it to
the entry of a decree or order for relief in respect of the Company in an
involuntary case or proceeding under any applicable Federal or state
bankruptcy, insolvency, reorganization or other similar law or to the com
mencement of any bankruptcy or insolvency case or proceeding against it, or
the filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or State law, or the consent by it
to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or the making by it of an assignment for the benefit
of creditors, or the admission by it in writing of its inability to pay its
debts generally as they become due and its willingness to have a case
commenced against it or to seek an order for relief under the Bankruptcy
code or any applicable bankruptcy, insolvency or other similar law or the
taking of corporate action by the Company in furtherance of any such
action.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default (other than an Event of Default specified in Section 5.01(f)
or (g)) occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
may declare the principal amount of all the Securities to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), and upon any such declaration such principal amount (or specified
amount) and any accrued interest and any unpaid Liquidated Damages thereon shall
become immediately due and payable. If an Event of Default specified in
Sections 5.01(f) and (g) occurs and is continuing, the principal and any accrued
interest, together with any Liquidated Damages thereon, on all of the Securities
then Outstanding shall ipso facto become due and payable immediately without any
declaration or other Act on the part of the Trustee or any Holder.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this Article V provided, the Holders of a majority
in aggregate principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all overdue interest and any Liquidated Damages thereon on
all Securities,
(ii) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and any interest
thereon at the rate borne by the Securities,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest at a rate per annum equal to the rate
otherwise borne by the Securities plus 1% per annum, and
(iv) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal
of, and any interest on, Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in Sec
tion 5.13.
No such rescission or annulment shall affect any subsequent default or
impair any right consequent thereon.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if
(a) default is made in the payment of any interest on any Security
when such interest becomes due and payable and such default continues for a
period of 30 days, or
(b) default is made in the payment of the principal of any Security at
the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and on
any overdue interest, at a rate of 4% per annum, and in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including amounts due the Trustee and any predecessor Trustee under
Section 6.07.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.04. Trustee May File Proofs of Claim. (a) 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 either of their
creditors, the Trustee (irrespective of whether the principal of, and any
interest on, 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 overdue principal or
interest) shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Securities and to file such
other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee and each
predecessor Trustee, its agents and counsel) and of the Holders of
Securities allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same,
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities by his acceptance thereof 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 of Securities, to pay to the Trustee any amount
due to it for the reasonable compensation, expenses, disbursements and advances
of the Trustee, and each predecessor Trustee, its agents and counsel and any
other amounts due the Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
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 of a Security in any such
proceeding; provided, however, that the Trustee may, on behalf of such Holders,
vote for the election of a trustee in bankruptcy or similar official and be a
member of a creditors' or other similar committee.
(b) If, as of the third day prior to the bar date for filing proofs
of claim in connection with any bankruptcy, reorganization or similar judicial
proceeding relative to the Company or any other obligor upon the Securities or
the property of the Company or of such other obligor, the Trustee has failed to
file such proofs of claim under subparagraph (a) of this Section for any and all
amounts owing and unpaid in respect of the Securities, the holders of Senior
Debt shall be entitled and empowered to file proofs of claim on behalf of the
Trustee in accordance with subparagraph (a) of this Section.
SECTION 5.05. Trustee May Enforce Claims Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, and each predecessor Trustee, its
agents and counsel, be for the ratable benefit of the Holders of the Securities
in respect of which judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money collected by
the Trustee pursuant to this Article V shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution of
such money on account of principal or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under
Section 6.07 (and/or other applicable provisions of this Indenture);
SECOND: Subject to Article XIII, to the payment of the amounts then
due and unpaid for principal of and interest (including Liquidated Damages,
if any) on the Securities in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority of
any kind, according to the amounts due and payable on such Securities for
principal and interest, respectively; and
THIRD: to the Company.
SECTION 5.07. Limitation on Suits. No Holder of any Security shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities shall have made written request to the Trustee
to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee indemnity
satisfactory to it against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest and to Convert. Notwithstanding any other provision in this Indenture,
but subject to the provisions of Article XIII, the Holder of any Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of and (subject to Section 3.07) interest on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article XII; provided
that such Holder delivers the conversion notice required by Section 12.02, and
to institute suit for the enforcement of any such payment and right to convert,
and such rights shall not be impaired without the consent of such Holder.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or
any Holder of a Security has instituted any proceeding to enforce any right or
remedy under this Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case, subject to any determination in such
proceeding, the Company, the Trustee and the Holders of Securities shall be
restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and such Holders shall
continue as though no such proceeding had been instituted.
SECTION 5.10. Rights and Remedies Cumulative. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders of
Securities is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. No delay or omission of
the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or any acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Holders of Securities may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders of Securities, as the
case may be.
SECTION 5.12. Control by Holders of Securities. The Holders of a
majority in aggregate principal amount of the Outstanding Securities shall,
subject to Section 6.03(e), have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee; provided that such
direction shall not be in conflict with any rule of law or with this Indenture,
and provided further that (and subject to the provisions of Sections 6.01 and
6.03) the Trustee shall have the right to decline to follow any such direction
if (a) the Trustee, being advised by counsel, shall determine that the action or
proceeding so directed may not lawfully be taken, (b) the Trustee by its board
of directors or the executive committee thereof or a trust committee of its
directors and/or Responsible Officers shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or
(c) the Trustee shall so determine that the actions or forbearances specified in
or pursuant to such direction would be unduly prejudicial to the interests of
Holders of the Securities not joining in the giving of said direction, it being
understood that (subject to Sections 6.01 and 6.03) the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee to
take any other action deemed proper by the Trustee which is not inconsistent
with such direction.
SECTION 5.13. Waiver of Past Defaults. The Holders of not less than
a majority in aggregate principal amount of the Outstanding Securities may on
behalf of the Holders of all the Securities waive any Event of Default or past
default hereunder and its consequences, except a default which has not been
cured in respect of a covenant or provision hereof which under Article IX cannot
be modified or amended without the consent of the Holders of each Outstanding
Security affected, or in the performance of or compliance with any term for the
personal protection or benefit of the Trustee (without its express, written
consent).
Upon any such waiver, such Event of Default or default shall cease to
exist, and any Event of Default arising from such default shall be deemed to
have been cured, for every purpose of this Indenture; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 5.14. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Security by his acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Trustee for any action taken, suffered or omitted by it as Trustee,
the filing by any party litigant in such suit of an undertaking to pay the costs
of such suit, and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section 5.14
shall not apply to any suit instituted by the Company, to any suit instituted by
the Trustee, to any suit instituted by any Holder, or group of Holders, holding
in the aggregate more than 25% in aggregate principal amount of the Outstanding
Securities, or to any suit instituted by any Holder of any Security for the
enforcement of the payment of the principal of or interest on any Security on or
after the respective Stated Maturity or Maturities expressed in such Security
(or, in the case of redemption or repurchase, on or after the Redemption Date or
the Repurchase Date, as the case may be) or for the enforcement of the right to
convert any Security in accordance with Article XII.
SECTION 5.15. Waiver of Stay or Extension Laws. The Company
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, which may affect the covenants or the performance
of this Indenture; and the Company (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such 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 VI
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) If an Event
of Default has occurred and is continuing, the Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default,
(i) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee and conforming to the requirements of this Indenture; but in
the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(i) this paragraph (c) shall not be construed to limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(iii) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction
of the Holders of a majority in aggregate principal amount of the
Outstanding Securities relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Indenture; and
(iv) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any
of its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or indemnity satisfactory to it against such
risk or liability is not assured to it.
(d) Whether or not therein expressly so provided, every provision of
this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section.
SECTION 6.02. Notice of Defaults. Within 90 days after a Responsible
Officer of the Trustee becomes aware of the occurrence of any default hereunder,
the Trustee shall transmit by mail to all Holders of Securities, as their names
and addresses appear in the Security Register, notice of such default hereunder
known to the Trustee, unless such default shall have been cured or waived;
provided, however, that except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Security, 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
Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interest of the Holders of the Securities;
and provided, further, that in the case of any default of the character
specified in Section 5.01(d), no such notice to Holders of Securities shall be
given until at least 30 days after the occurrence of such default. For the
purpose of this Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any Board Resolution, resolution, Officers'
Certificate, other certificate, statement, instrument, Opinion of Counsel,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors of the Company shall be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
conclusively rely upon an Officers' Certificate or an Opinion of Counsel;
(d) the Trustee may consult with counsel (at the expense of the
Company) and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities pursuant to this Indenture, unless such Holders
shall have offered to the Trustee security or indemnity against the costs,
expenses and liabilities which might be incurred by it in compliance with such
request or direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, attorneys,
custodians or nominees and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed with due care by it hereunder.
(h) any permissive right of the Trustee hereunder shall not be
construed to be a duty.
(i) the Trustee shall not be charged with knowledge of any Event of
Default, other than as described in Section 5.01(a) or (b), unless and except to
the extent actually known by a Responsible Officer of the Trustee or written
notice thereof is received by the Trustee at its Corporate Trust Office.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the Trustee's
certificates of authentication) shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities, Act as Trustee Under
Other Indentures. The Trustee, any Authenticating Agent, any Paying Agent, any
Conversion Agent or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and may otherwise deal with the Company with the same rights it would have if it
were not Trustee, Authenticating Agent, Paying Agent, Conversion Agent, Security
Register or such other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company agrees:
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse each
of the Trustee and any predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by it in accordance with
any provision of this Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), except to the extent any
such expense, disbursement or advance may be attributable to its own negligence
or bad faith; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any loss, liability or expense, arising out of
or in connection with the acceptance or administration of the trust or trusts
hereunder or the performance of its duties hereunder, including the costs and
expenses of defending itself against any claim or liability in connection with
the exercise or performance of any of its power or duties hereunder and the cost
and expenses of enforcing this right of indemnity, except to the extent any such
loss, liability or expense is due to its own negligence, willful misconduct or
bad faith. The Trustee shall notify the Company promptly of any claim asserted
against the Trustee for which it may seek indemnity. However, the failure by
the Trustee to so notify the Company shall not relieve the Company of its
obligations hereunder. The Company shall defend the claim and the Trustee shall
cooperate in the defense (and may employ its own counsel) at the Company's
expense. The Company need not pay for any settlement made without its written
consent, which consent shall not be unreasonably withheld. The Company need not
reimburse any expense or indemnify against any such loss or liability incurred
by the Trustee as a result of the violation of this Indenture by the Trustee if
such violation arose from the Trustee's negligence or bad faith.
To ensure the performance of the obligations of the Company under this
Section, the Trustee shall have a senior claim to which the Securities are
hereby made subordinate upon, and is hereby granted a security interest in and
lien upon, all property and funds held or collected by the Trustee as such,
except property and funds held in trust for the payment of principal of,
premium, if any, or interest on particular Securities.
Without limiting any rights available to the Trustee under applicable
law, when the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(f) or Section 5.01(g), the expenses
(including the reasonable charges and expenses of its counsel) and compensation
for the services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.
SECTION 6.08. Corporate Trustee Required; Eligibility. There shall
at all times be a Trustee hereunder which shall be a corporation organized and
doing business under the laws of the United States of America, any state
thereof, or the District of Columbia, authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at least U.S.
$50,000,000, subject to supervision or examination by Federal or state
authority, in good standing and having an established place of business or an
agent with an established place of business in The City of New York. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time the Trustee shall cease
to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article.
SECTION 6.09. Resignation and Removal; Appointment of Successor
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If the instrument of acceptance by a successor Trustee
required by this Section 6.09 shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Trustee.
(c) The Trustee may be removed at any time by an Act of the Holders
of a majority in aggregate principal amount of the Outstanding Securities,
delivered to the Trustee and the Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 310(b) of the
Trust Indenture Act after written request therefor by the Company or
by any Holder who has been a bona fide Holder of a Security for at
least six months, or
(ii) the Trustee shall cease to be eligible under Section 6.08
and shall fail to resign after written request therefor by the Company
or by any Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by a Board Resolution, shall promptly appoint a successor Trustee and
shall comply with the applicable requirements of this Section 6.09. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in aggregate principal amount of the Outstanding Securities delivered
to the Company and the retiring Trustee, the successor Trustee so appointed
shall, forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of this Section 6.09, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner required by this Section 6.09, any Holder
of a Security who has been a bona fide Holder of a Security for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders of Securities by mailing written notice of such event by first-class
mail, postage prepaid, to all Holders of Securities as their names and addresses
appear in the Security Register. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.10. Acceptance of Appointment by Successor. Every
successor Trustee appointed hereunder shall execute, acknowledge and deliver to
the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign, trans
fer and deliver to such successor Trustee all property and money held by such
retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be eligible under this Article.
Upon the acceptance of appointment by any successor Trustee, all fees,
charges and expenses of the retiring Trustee shall become immediately due and
payable upon the rendering of a statement thereof.
SECTION 6.11. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder;
provided such corporation shall be otherwise eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated with the same
effect as if such successor Trustee had itself authenticated such Securities.
SECTION 6.12. Authenticating Agent. The Trustee may appoint an
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture. Securities so authenticated shall be entitled to the benefits of
this Indenture and shall be valid and obligatory for all purposes as if
authenticated by the Trustee hereunder, and every reference in this Indenture to
the authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall at all times be a corporation organized and
doing business under the laws of the United States of America or any State
thereof and authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of not less than U.S. $50,000,000 or its equivalent
(or its parent holding company has a combined capital and surplus of not less
than U.S. $50,000,000 or its equivalent) in another currency or composite
currencies and subject to supervision or examination by government authority.
If such Authenticating Agent (or its parent holding company) publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section 6.12,
the combined capital and surplus of such Authenticating Agent shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time an Authenticating Agent shall cease to
be eligible in accordance with the provisions of this Section 6.12, such
Authenticating Agent shall resign immediately in the manner and with the effect
specified in this Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent; provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice
of resignation or upon such a termination, or in case at any time such Authen
ticating Agent shall cease to be eligible in accordance with the provisions of
this Section 6.12, the Trustee may appoint a successor Authenticating Agent
which shall be acceptable to the Company. Any successor Authenticating Agent
upon acceptance of its appointment hereunder shall become vested with all the
rights, powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.12.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 6.12, the Securities may have endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: _______________________________,
as Trustee,
by Authenticating Agent (or authorized
representative), as Authenticating Agent,
by ___________________________
Authorized Signatory
ARTICLE VII
Holder's Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after the Regular Record Date,
a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders of Securities as of such Regular Record Date,
and
(b) at such other times as the Trustee may reasonably request in
writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it pursuant to Section
7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act for holders of securities issued under an indenture
qualified pursuant to the Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act or the Code.
SECTION 7.03. Reports by the Company. (a) The Company shall file
with the Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) which the Company is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act. In the event the Company is not subject to Section 13 or 15(d) of
the Exchange Act, it shall file with the Trustee upon request the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
(b) The Company shall file with the Trustee such additional
information, documents and reports with respect to compliance by the Company
with the conditions and covenants provided for in this Indenture as may be
requested from time to time by the Trustee.
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate, etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or,
directly or indirectly, convey, transfer, sell or lease or otherwise dispose of
all or substantially all of its properties and assets to any Person (other than
a wholly owned subsidiary), and the Company shall not permit any Person (other
than a wholly owned Subsidiary of the Company) to consolidate with or merge into
the Company or convey, transfer, sell or lease all or substantially all of its
properties and assets to the Company, unless:
(a) in case the Company shall consolidate with or merge into another
Person or convey, transfer, sell or lease all or substantially all of its
properties and assets to any Person, the Person formed by such
consolidation or into which the Company is merged or the Person which
acquires by conveyance, transfer or sale, or which leases, all or sub
stantially all of the properties and assets of the Company shall be a
corporation, partnership or trust, shall be organized and validly existing
under the laws of the United States of America, any state thereof or the
District of Columbia and shall expressly assume, by an indenture sup
plemental hereto, executed and delivered to the Trustee, the due and
punctual payment of the principal of and interest (including Liquidated
Damages) on all of the Securities, as applicable, and the performance or
observance of every covenant of this Indenture on the part of the Company
to be performed or observed and shall have provided for conversion rights
in accordance with Section 12.11;
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary
as a result of such transaction as having been incurred by the Company or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer, sale or lease and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture
comply with this Article VIII and that all conditions precedent herein
provided for relating to such transaction have been complied with.
SECTION 8.02. Successor Substituted. Upon any consolidation of the
Company with, or merger of the Company into, any other Person or any conveyance,
transfer, sale or lease of all or the properties and assets of the Company in
accordance with Section 8.01, the successor Person formed by such consolidation
or into which the Company is merged or to which such conveyance, transfer or
lease is made shall succeed to, and be substituted for, and may exercise every
right and power of, the Company under this Indenture with the same effect as if
such successor Person had been named as the Company herein, and thereafter the
predecessor Person shall be relieved of all obligations and covenants under this
Indenture and the Securities.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders of
Securities. Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto, for any of the
following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants and obligations of
the Company herein and in the Securities as permitted by this Indenture; or
(b) to add to the covenants of the Company for the benefit of the
Holders of Securities, or to surrender any right or power herein conferred
upon the Company; or
(c) to secure the Securities; or
(d) to modify the restrictions on, and procedures for, resale and
other transfers of the Securities to the extent required by any change in
applicable law or regulation (or the interpretation thereof) or in practice
relating to the resale or transfer of restricted securities generally; or
(e) to make provision with respect to the conversion rights of Holders
of Securities pursuant to Section 12.11; or
(f) to accommodate the issuance, if any, of Securities in book-entry
or definitive form and matters related thereto which do not adversely
affect the interest of the Holders of Securities; or
(g) to comply with any requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act; or
(h) to evidence and provide for the acceptance and appointment
hereunder by a successor trustee with respect to the Securities; or
(i) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which
is otherwise defective, or to make any other provisions with respect to
matters or questions arising under this Indenture as the Company and the
Trustee may deem necessary or desirable; provided that such action pursuant
to this clause (h) shall not adversely affect the rights of the Holders of
Securities in any material respect.
Upon Company Request, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and subject to and upon receipt by
the Trustee of the documents described in Section 9.03 hereof, the Trustee shall
join with the Company in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and any further appropriate
agreements and stipulations which may be therein contained.
SECTION 9.02. Supplemental Indentures with Consent of Holders of
Securities. With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities, by the Act of said
Holders delivered to the Company and the Trustee, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,
(i) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount thereof or the
rate of interest payable thereon or any premium payable upon redemption or
mandatory repurchase thereof, or change the coin or currency in which any
Security or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Stated Maturity thereof (or, in the case of redemption or repurchase, on or
after the Redemption Date or Repurchase Date, as the case may be) or,
except as permitted by Section 12.11, adversely affect the right to convert
any Security as provided in Article XII, or modify the provisions of this
Indenture with respect to the subordination of the Securities in a manner
adverse to the Holders of Securities, or
(ii) reduce the requirements of Section 10.04 for quorum or voting, or
reduce the percentage in aggregate principal amount of the Outstanding
Securities the consent of whose Holders is required for any such
supplemental indenture or the consent of whose Holders is required for any
waiver provided for in this Indenture, or
(iii) modify any of the provisions of this Section, Section 5.13 or
Section 10.11, except to increase any percentage contained herein or
therein or to provide that certain other provisions of this Indenture
cannot be modified or waived without the consent of the Holder of each
Outstanding Security affected thereby, or
(iv) modify any provisions of Article XII, XIII or XIV in a manner
adverse to the Holders.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to
Section 6.01) shall be fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or
permitted by this Indenture and an Officers' Certificate to the effect that all
conditions precedent have been satisfied. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
SECTION 9.04. 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.
SECTION 9.05. Reference in Securities to Supplemental Indentures.
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 Company and the Trustee, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal and Interest. The Company will
duly and punctually pay the principal of and interest on the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 10.02. Maintenance of Offices or Agencies. The Company hereby
appoints State Street Bank and Trust Company, N.A. having an office at 61
Broadway, New York, New York 10005 as its agent in The City of New York where
Securities may be presented or surrendered for payment, where Securities may be
surrendered for registration of transfer or exchange, where conversion notices,
certificates and other items required to be delivered to effect conversion may
be delivered and where notices and demands to or upon the Company in respect of
the Securities and this Indenture may be served.
The Company hereby appoints the principal Corporate Trust Office of
the Trustee (and its agent in The City of New York) as Paying Agent for the
payment of principal of and interest on the Securities and as Conversion Agent
for the Conversion of any of the Securities in accordance with Article XII, and
appoints such office of the Trustee, and its agent in the City of New York, as
transfer agent where Securities may be surrendered for registration of transfer
or exchange.
The Company may at any time and from time to time vary or terminate
the appointment of any such agent or appoint any additional agents with or
without cause for any or all of such purposes; provided, however, that until all
of the Securities have been delivered to the Trustee for cancelation, or moneys
sufficient to pay the principal of and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 10.03, the Company will maintain (i) in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment, where Securities may be surrendered for
registration of transfer or exchange, where Securities may be surrendered for
conversion and where notices and demands to or upon the Company, in respect of
the Securities and this Indenture may be served, and (ii) subject to any laws or
regulations applicable thereto, in any city in a Western European country, an
office or agency where Securities may be presented and surrendered for payment
and where Securities may be presented for registration of transfer or exchange
or conversion thereof. The Company will give prompt written notice to the
Trustee, and will give notice to Holders of Securities in the manner specified
in Section 1.05, of the appointment or termination of any such agents and of the
location and any change in the location of any such 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,
presentations and surrenders may be made and notices and demands may be served
on and Securities may be surrendered for conversion to the Corporate Trust
Office of the Trustee, and the Company hereby appoints the same as its agent to
receive such respective presentations, surrenders, notices and demands.
SECTION 10.03. Money for Security Payments To Be Held in Trust. If
the Company at any time shall act as its own Paying Agent, it will, on or before
each due date of the principal of or interest on any of the Securities,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided and
the Company will promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to or on each due date of the principal of or interest on any Securities,
deposit with a Paying Agent a sum sufficient to pay the principal or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the Trustee or any
affiliate of the Trustee to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of or
interest on Securities in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided;
(b) give the Trustee written notice of any default by the Company (or
any other obligor upon the securities) in the making of any payment of
principal or interest; and
(c) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so
held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of or interest on
(together with any Liquidated Damages in respect thereof) any Security and
remaining unclaimed for two years after such principal or interest (together
with any Liquidated Damages in respect thereof) has become due and payable shall
be paid to the Company on Company Request, or (if then held by the Company)
shall be discharged from such trust; and the Holder of such Security shall
thereafter, as a general unsecured creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before making any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company; and provided further that any such publication
shall not relieve the Trustee or any Paying Agent of their obligation to pay any
amounts to the Company in the manner provided in this Section 10.03.
SECTION 10.04. Corporate Existence. Subject to Article VIII, the
Company will do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence, rights (charter and statutory)
and franchises; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors of the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 10.05. Maintenance of Properties. The Company will cause all
material properties used or useful in the conduct of its business or the busi
ness of any Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made (subject, however, to any limitations on expenditures in any document
evidencing and/or securing Senior Debt) all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section 10.05 shall prevent the Company from
discontinuing the operation or maintenance of any of such properties if such dis
continuance is, in the judgment of the Company, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 10.06. Compliance with Laws. The Company will comply, and
cause each Subsidiary to comply, with the requirements of all applicable laws,
ordinances, rules, regulations, and requirements of any governmental authority
(including, without limitation, ERISA and the rules and regulations thereunder),
except where the necessity of compliance therewith is contested in good faith by
appropriate proceedings or where the failure to comply would not have a material
adverse effect upon the Company and its Subsidiaries taken as a whole.
SECTION 10.07. Payment of Taxes and Other. The Company will pay or
discharge or cause to be paid or discharged, before the same shall become
delinquent, (a) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Subsidiary or upon the income, profits or
property of the Company or any Subsidiary, and (b) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any Subsidiary; provided, however, that the Company
shall not be required to pay or discharge or cause to be paid or discharged any
such tax, assessment, charge or claim whose amount, applicability or validity is
being contested in good faith by appropriate proceedings.
SECTION 10.08. Delivery of Certain Information. At any time when the
Company is not subject to Section 13 or 15(d) of the Exchange Act or is exempt
therefrom, upon the request of a Holder of a Restricted Security or the holder
of Common Stock issued upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Restricted Securities or such holder of Common Stock issued upon
conversion of Restricted Securities, or to a prospective purchaser of such
security designated by any such Holder or holder, as the case may be, to the
extent required to permit compliance by such holder with Rule 144A under the
Securities Act (or any successor provision thereto) in connection with the
resale of such Security by such Holder; provided, however, that the Company
shall not be required to furnish such information in connection with any request
made on or after the date which is two years from the later of (i) the date such
a security (or any predecessor security) was acquired from the Company or
(ii) the date such a security (or any predecessor security) was last acquired
from the Company or an "affiliate" of the Company within the meaning of Rule 144
under the Securities Act (or any successor provision thereto); and provided
further that the Company shall not be required to furnish such information at
any time to a prospective purchaser located outside the United States who is not
a "U.S. Person" within the meaning of Regulation S under the Securities Act if
such Security may then be sold to such prospective purchaser in accordance with
Rule 904 under the Securities Act (or any successor provision thereto).
"Rule 144A Information" shall be such information as is specified pursuant to
Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
SECTION 10.09. Statement by Officers as to Default. The Company
shall deliver to the Trustee within 120 days after the end of each fiscal year
of the Company an Officers' Certificate stating that a review of the activities
of the Company and its Subsidiaries during the preceding fiscal year has been
made under the supervision of the Officers signing such certificate, with a view
to determining whether any default exists in the performance and observance of
any of the terms, provisions and conditions of this Indenture and whether the
Company has observed, performed and fulfilled its obligations under this
Indenture. If the Officers signing the Certificate know of such a default, the
Officers' Certificate shall describe such default and its status with
particularity. The Company shall also promptly notify the Trustee if the
Company's fiscal year is changed so that the end thereof is on any date other
than the then current fiscal year end date.
The Company will also deliver to the Trustee, forthwith upon any
Officer becoming aware of any Event of Default, an Officers' Certificate
specifying with particularity such default or Event of Default and further
stating what action the Company has taken, is taking or proposes to take with
respect thereto.
Any notice required to be given under this Section 10.09 shall be
delivered to the Trustee at its Corporate Trust Office and need not comply with
Section 1.04.
SECTION 10.10. Resale of Certain Securities. During the period
beginning on November 17, 1997, and ending on November 17, 1999, the Company
will not, and will not permit any of its "affiliates" (as defined under Rule 144
under the Securities Act or any successor provision thereto) to, resell (x) any
Securities which constitute "restricted securities" under Rule 144 or (y) any
securities into which such Securities have been converted under this Indenture,
which constitute "restricted securities" under Rule 144 that in either case have
been reacquired by any of them. The Trustee shall have no responsibility in
respect of the Company's performance of its agreement in the preceding sentence.
SECTION 10.11. Waiver of Certain Covenants. The Company may omit in
any particular instance to comply with any covenant or condition set forth in
Section 10.05 or 10.06 if before the time for such compliance the Holders of at
least a majority in aggregate principal amount of the Outstanding Securities (or
such lesser amount as shall have acted at a meeting pursuant to the provisions
of this Indenture) shall either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
SECTION 10.12. Registration Rights. The holders of the Securities
and the Common Stock issuable upon conversion thereof are entitled to the
benefits of a Registration Rights Agreement, dated as of November 17, 1997,
among the Company, Goldman, Sachs & Co., BT Alex. Brown, Lehman Brothers Inc.
and Cowen & Company (the "Registration Rights Agreement").
Whenever in this Indenture there is mentioned, in any context, the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security, such mention shall be deemed to include mention of the payment of
Liquidated Damages provided for in this Section to the extent that, in such
context, Liquidated Damages are, were or would be payable in respect thereof
pursuant to the provisions of this Section and express mention of the payment of
Liquidated Damages (if applicable) in any provisions hereof shall not be
construed as excluding Liquidated Damages in those provisions hereof where such
express mention is not made.
SECTION 10.13. Book-Entry System. If the Securities cease to trade
in the U.S. Depository's book-entry settlement system, the Company covenants and
agrees that it shall use reasonable efforts to make such other book-entry
arrangements that it determines are reasonable for the Securities.
ARTICLE XI
Redemption of Securities
SECTION 11.01. Right of Redemption. The Securities shall be
redeemable at the Company's option, in whole or in part, under the circumstances
and at the Redemption Prices specified in the form of Securities set forth in
Sections 2.02 and 2.03.
SECTION 11.02. Applicability of Article. Redemption of Securities at
the election of the Company, as permitted or required by any provision of the
Securities or this Indenture, shall be made in accordance with such provision
and this Article XI.
SECTION 11.03. Election To Redeem; Notice to Trustee. The election
of the Company to redeem any Securities pursuant to Section 11.01 shall be
evidenced by a Board Resolution. In the case of any redemption at the election
of the Company of all of the Securities, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee in writing of such Redemp
tion Date. If the Securities are to be redeemed pursuant to an election of the
Company which is subject to a condition specified in the forms of Securities set
forth in Section 2.02, the Company shall furnish the Trustee with (a) an
Officers' Certificate stating that the Company is entitled to effect such redemp
tion and setting forth a statement of facts demonstrating the same and (b) an
Opinion of Counsel to the effect that the Company is entitled to effect such
redemption, and such redemption is not otherwise in violation of any provisions
of Senior Debt.
SECTION 11.04. Notice of Redemption. Notice of redemption shall be
given in the manner provided in Section 1.05 to the Holders of Securities to be
redeemed. Notice shall be given at least once not less than 30 nor more than 60
days prior to the Redemption Date.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price, and the amount of accrued interest, if any;
(c) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable, and that interest thereon
shall cease to accrue on and after said date;
(d) the Conversion Price, the date on which the right to convert the
Securities will terminate and the places where the Securities may be
surrendered for conversion; and
(e) the place or places where the Securities are to be surrendered for
payment of the Redemption Price and accrued interest, if any.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name of and at the expense of the Company, and such notice, when
given to the Holders, shall be irrevocable.
SECTION 11.05. Deposit of Redemption Price. At least one Business
Day prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as Paying Agent, segregate and
hold in trust as provided in Section 10.03) an amount of money sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest on, all the Securities which are to be redeemed
on that date other than any Securities called for redemption on that date which
have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money
deposited with the Trustee or with a Paying Agent or so segregated and held in
trust for the redemption of such Security shall (subject to any right of the
Holder of such Security or any Predecessor Security to receive interest as
provided in the last paragraph of Section 3.07) be paid to the Company on
Company Request or, if then held by the Company, shall be discharged from such
trust.
SECTION 11.06. Securities Payable on Redemption Date. Notice of
redemption having been given as aforesaid, the Securities so to be redeemed
shall, on the Redemption Date, become due and payable at the Redemption Price
herein specified, and from and after such date (unless the Company shall default
in the payment of the Redemption Price and accrued interest) such Securities
shall cease to bear interest. Upon surrender of any such Security for redemp
tion in accordance with said notice, the Holder of such Security shall be paid
the Redemption Price, together with accrued interest to the Redemption Date;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Redemption Date shall be payable to the Holders of such Securities,
or one or more Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 3.07.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date at the rate of interest borne by the Security.
ARTICLE XII
Conversion of Securities
SECTION 12.01. Conversion Privilege and Conversion Rate. Subject to
and upon compliance with the provisions of this Article, at any time on or after
the Non-Conversion Period (as defined in Section 2.03), at the option of the
Holder thereof, any Security or any portion of the principal amount thereof
which is $1,000 or any integral multiple of $1,000 in excess thereof, may be
converted at the principal amount thereof, or of such portion thereof, into
fully paid and nonassessable Common Stock of the Company (calculated as to each
conversion to the nearest 1/100 of a share) at the Conversion Rate, determined
as hereinafter provided, in effect at the time of conversion. Such conversion
right shall expire at the close of business on the Redemption Date or Repurchase
Date for such Security (except, in the case of a partial redemption or
repurchase, to the extent of the portion thereof not being redeemed or
repurchased, as the case may be); subject, in the case of conversion of a Global
Security, to any applicable book-entry procedures of the Depository for such
conversion. In case a Security or portion thereof is called for redemption at
the election of the Company or is delivered for repurchase at the option of the
Holder, such conversion right in respect of the Security or portion thereof so
called shall expire at the close of business on the Redemption Date or the
Repurchase Date, unless the Company defaults in making the payment due upon
redemption or the repurchase, as the case may be (subject as aforesaid to any
applicable book-entry procedures).
The rate at which Common Stock shall be delivered upon conversion
(herein called the "Conversion Rate") shall be initially 9.5797 shares of Common
Stock for each U.S.$1,000 principal amount of Securities. The Conversion Rate
shall be adjusted in certain instances as provided in this Article XII. The
price at which Common Stock shall be delivered upon conversion (herein called
the "Conversion Price") shall at any time be equal to U.S. $1,000 divided by the
then applicable Conversion Rate (and rounded to the nearest cent).
SECTION 12.02. Exercise of Conversion Privilege. In order to
exercise the conversion privilege with respect to any Security or portion
thereof, the Holder of any Security to be converted or any other person acting
on its behalf shall surrender such Security, duly endorsed or assigned to the
Company or in blank at any office or agency of the Company maintained for that
purpose pursuant to Section 10.02, accompanied by a duly signed conversion
notice substantially in the form set forth in Annex A stating that the Holder
elects to convert such Security or, if less than the entire principal amount
thereof is to be converted, the portion thereof to be converted. Alternatively,
if such security is represented by a Global Security, conversion may be effected
by written order given to the Trustee in accordance with the Applicable
Procedures of the U.S. Depository then in effect. Each Security surrendered for
conversion (in whole or in part) during the period from the close of business on
any Regular Record Date next preceding any Interest Payment Date to the opening
of business on such Interest Payment Date shall (except in the case of any
Security or portion thereof which has been called for redemption on a Redemption
Date or repurchase on a Repurchase Date and, as a result, the right to convert
such Security with respect to which the Holder has exercised redemption or
repurchase rights would terminate during such period) be accompanied by payment
in New York Clearing House funds or other funds acceptable to the Company of an
amount equal to the interest payable on such Interest Payment Date on the
principal amount of such Security (or part thereof as the case may be) being
surrendered for conversion. The interest so payable on such Interest Payment
Date in respect of such Security (or portion thereof, as the case may be)
surrendered for conversion shall be paid to the Holder of such Security as of
such Regular Record Date. In the case of any Security which is converted after
any Regular Date and on or prior to the next succeeding Interest Payment Date
(other than any Security whose Maturity is prior to such Interest Payment Date)
whose Stated Maturity is on such Interest Payment Date, interest shall be
payable on such Interest Payment Date notwithstanding such conversion, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name such Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, interest whose Stated Maturity is after the
date of conversion of such Security shall not be payable. Except as provided in
this paragraph and subject to the last paragraph of Section 3.07, no cash
payment or adjustment shall be made on account of any cash dividends on the
Common Stock issued upon conversion or, if the date of conversion is not an
Interest Payment Date, on account of any interest accrued from the Interest
Payment Date next preceding the conversion date, in respect of any Security (or
part thereof, as the case may be) surrendered for conversion.
Securities shall be deemed to have been converted immediately prior to
the close of business on the day of surrender of such Securities for conversion
in accordance with the foregoing provisions, and at such time the rights of the
Holders of such Securities as Holders shall cease, and the Person or Persons
entitled to receive the Common Stock issuable upon conversion shall be treated
for all purposes as the record holder or holders of such Common Stock at such
time (unless such Holder shall have so surrendered such Security and shall have
instructed the Company to effect the conversion on a particular date following
such surrender and such Holder shall be entitled to convert such Security on
such date, in which case such conversion shall be deemed to be effected
immediately prior to the close of business on such date). As promptly as
practicable on or after the conversion date, the Company shall issue and
deliver, out of its authorized but previously unissued (or, in the case of
treasury stock of the Company, validly issued) Shares of Common Stock, at the
office of such Conversion Agent a certificate or certificates for the number of
full shares of newly issued Common Stock issuable upon conversion, together with
payment in lieu of any fraction of a share, as provided in Section 12.03.
All Common Stock delivered upon such conversion of Restricted Securities
shall bear a restrictive legend substantially in the form of the legend required
to be set forth on the Restricted Securities pursuant to Section 2.02 and shall
be subject to the restrictions on transfer provided in such legend. Neither the
Trustee nor any agent maintained for the purpose of such conversion shall have
any responsibility for the inclusion or content of any such restrictive legend
on such Common Stock; provided, however, that the Trustee or any agent
maintained for the purpose of such conversion shall have provided, to the
Company or to the Company's transfer agent for such Common Stock, prior to or
concurrently with a request to the Company to deliver to such agent maintained
for the purpose of such conversion certificates for such Common Stock, written
notice that the Securities delivered for conversion are Restricted Securities.
In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and
deliver to the Holder thereof, at the expense of the Company, a new Security or
Securities of authorized denominations in an aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
If Common Stock to be issued upon conversion of a Security, or
Securities to be issued upon conversion of a Security in part only, are to be
registered in a name other than that of the Holder of such Security, the
Security Registrar shall, prior to the conversion of such Security, record in
the Security Register the transfer of that portion of the Security to be so
converted in the name of the person in whose name such Common Stock or Secu
rities are to be registered.
SECTION 12.03. Fractions of Common Stock. No fractional Common Stock
or scrip certificates in respect thereof shall be issued upon conversion of any
Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities so surrendered. Instead of any
fractional Common Stock which would otherwise be issuable upon conversion of any
Security or Securities, the Company shall pay a cash adjustment in respect of
such fraction (calculated to the nearest 1/100 of a share) in an amount in
Dollars equal to the same fraction of the current market price per Common Share
(calculated in accordance with Section 12.04(h) below) at the close of business
on the day of conversion, or alternatively, at the Company's option, the Company
shall round up the conversion transaction to the next higher whole share.
SECTION 12.04. Adjustment of Conversion Rate. The Conversion Rate
shall be subject to adjustments from time to time as follows:
(a) In case at any time after the date hereof, the Company shall pay
or make a dividend or other distribution on all or any portion of its
Common Stock or shall pay or make a dividend or other distribution on any
other class of capital stock of the Company which dividend or distribution
includes Common Stock, the Conversion Rate in effect at the opening of
business on the day following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall
be increased by dividing such Conversion Rate by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination and the
denominator shall be the sum of such number of shares and the total number
of shares constituting such dividend or other distribution, such increase
to become effective immediately after the opening of business on the day
following the date fixed for such determination. For the purposes of this
paragraph (a), the number of shares of Common Stock at any time outstanding
shall not include shares held in the treasury of the Company but shall
include shares issuable in respect of scrip certificates, if any, issued in
lieu of fractions of Common Stock. If any dividend or distribution of the
type described in this Section 12.04(a) is declared but not so paid or
made, the Conversion Rate shall again be adjusted to the Conversion Rate
which would then be in effect if such dividend or distribution had not been
declared.
(b) In case at any time after the date hereof, the Company shall pay
or make a dividend or other distribution on all of its Common Stock
consisting of, or shall otherwise issue to all holders of its Common Stock,
rights, warrants or options (not being available on an equivalent basis to
Holders of the Securities upon conversion) entitling the holders of its
Common Stock to subscribe for or purchase Common Stock at a price per share
less than the current market price per share (determined as provided in
paragraph (h) of this Section 12.04) of the Common Stock on the date fixed
for the determination of shareholders entitled to receive such rights,
warrants or options (other than pursuant to a dividend reinvestment plan),
the Conversion Rate in effect at the opening of business on the day
following the date fixed for such determination shall be increased by
dividing such Conversion Rate by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business
on the date fixed for such determination plus the number of shares of
Common Stock which the aggregate of the offering price of the total number
of Common Stock so offered for subscription or purchase would purchase at
such current market price and the denominator shall be the number of shares
Common Stock outstanding at the close of business on the date fixed for
such determination plus the number of shares of Common Stock so offered for
subscription or purchase, such increase to become effective immediately
after the opening of business on the day following the date fixed for such
determination. For the purposes of this paragraph (b), the number of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but will include shares issuable in respect of
scrip certificates, if any, issued in lieu of fractions of Common Stock.
The Company will not issue any rights or warrants in respect of Common
Stock held in the treasury of the Company (or, if rights or warrants are
issued in respect of all of the Common Stock of the Company, will not
exercise any such rights or warrants in respect of Common Stock held in the
treasury of the Company). In the event that such rights or warrants are
not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if such date fixed for the
determination of stockholders entitled to receive such rights or warrants
had not been fixed. In determining whether any rights or warrants entitle
the holders to subscribe for or purchase shares of Common Stock at less
than such current market price, and in determining the aggregate offering
price of such share of Common Stock, there shall be taken into account any
consideration received for such rights or warrants, the value of such
consideration, if other than cash, to be determined by the Board of
Directors of the Company.
Notwithstanding the foregoing, in the event that the Company shall
distribute rights or warrants (other than those referred to above in this
paragraph (b)) ("Rights") pro rata to holders of Common Stock, the Company
shall make proper provision so that each holder of a Security who converts
such Security (or any portion thereof) after the record date for such
distribution and prior to the expiration or redemption of the Rights shall
be entitled to receive upon such conversion, in addition to the Conversion
Securities issuable upon such conversion, a number of Rights to be
determined as follows: (i) if such conversion occurs on or prior to the
date for the distribution to the holders of Rights of separate certificates
evidencing such Rights (the "Distribution Date"), the same number of Rights
to which a holder of a number of shares of Common Stock equal to the number
of Conversion Shares is entitled at the time of such conversion in
accordance with the terms and provisions of and applicable to the Rights;
and (ii) if conversion occurs after the Distribution Date, the same number
of Rights to which a holder of the number of shares of Common Stock in to
which the principal amount of the Security so converted was convertible
immediately prior to the Distribution Date would have been entitled on the
Distribution Date in accordance with the terms and provisions of and
applicable to the Rights; provided that any such distribution of Rights
will not constitute a distribution of rights or warrants pursuant to this
paragraph (b).
(c) In case at any time after the date hereof, all or any portion of
the Common Stock outstanding shall be subdivided into a greater number of
Common Stock, the Conversion Rate in effect at the opening of business on
the day following the day upon which such subdivision becomes effective
shall be proportionately increased, and, conversely in case at any time
after the date hereof, all or any portion of the Common Stock outstanding
shall each be combined into a smaller number of Common Stock, the Conver
sion Rate in effect at the opening of business on the day following the day
upon which such combination becomes effective shall be proportionately
reduced, such increase or reduction, as the case may be, to become
effective immediately after the opening of business on the day following
the day upon which such subdivision or combination becomes effective.
(d) In case at any time after the date hereof, the Company shall, by
dividend or otherwise, distribute to all holders of its Common Stock
evidences of its indebtedness or assets (including securities, but
excluding any rights, warrants or options referred to in paragraph (b) of
this Section 12.04, any dividend or distribution paid exclusively in cash,
any dividend or distribution referred to in paragraph (a) of this
Section 12.04 and any dividend or distribution upon a merger or
consolidation referred to in paragraph (e) of this Section 12.04), the
Conversion Rate shall be increased so that the same shall equal the rate
determined by dividing the Conversion Rate in effect immediately prior to
the close of business on the date fixed for the determination of
shareholders entitled to receive such distribution by a fraction (A) the
numerator of which shall be the current market price per share (determined
as provided in paragraph (h) of this Section 12.04) of the Common Stock on
the date fixed for such determination less the then fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) of
the portion of the assets or evidences of indebtedness so distributed
applicable to one Common Share and (B) the denominator of which shall be
such current market price per share of the Common Stock, such adjustment to
become effective immediately prior to the opening of business on the day
following the date fixed for the determination of shareholders entitled to
receive such distribution. If any dividend or distribution of the type
described in this Section 12.04(d) is declared but not so paid or made, the
Conversion Rate shall again be adjusted to the Conversion Rate which would
be in effect if such dividend or distribution had not been declared.
(e) In case at any time after the date hereof, the Company shall, by
dividend or otherwise, make a distribution to all holders of its Common
Stock consisting exclusively of cash (excluding any cash that is
distributed upon a merger or consolidation or a sale or transfer of all or
substantially all of the assets of the Company to which Section 12.11
applies or as part of a distribution referred to in paragraph (d) of this
Section 12.04) in an aggregate amount that, combined together with (i) the
aggregate amount of any other distributions to all holders of its Common
Stock made exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no adjustment pursuant
to this paragraph (e) has been made and (ii) the aggregate of any cash plus
the fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed
with the Trustee) of consideration payable in respect of any tender offer
by the Company or any of its Subsidiaries for all or any portion of the
Common Stock concluded within the 12 months preceding the date of payment
of such distribution and in respect of which no adjustment pursuant to para
graph (f) of this Section 12.04 has been made (the "Combined Cash and
Tender Amount"), exceeds 12.5% of the product of the current market price
per share of the Common Stock on the date for the determination of holders
of Common Stock entitled to receive such distribution times the number of
Common Stock outstanding on such date (the "Aggregate Current Market
Price"), then, and in each such case, immediately after the close of busi
ness on such date for determination, the Conversion Rate shall be adjusted
so that the same shall equal the rate determined by dividing the Conversion
Rate in effect immediately prior to the close of business on the date fixed
for determination of the shareholders entitled to receive such distribution
by a fraction (A) the numerator of which shall be equal to the current
market price per share (determined as provided in paragraph (h) of this
Section 12.04) of the Common Stock on the date fixed for such determination
less an amount equal to the quotient of (x) the excess of the Combined Cash
and Tender Amount over the Aggregate Current Market Price and (y) the
number of shares of Common Stock outstanding on such date for determination
and (B) the denominator of which shall be equal to the current market price
per share (determined as provided in paragraph (h) of this Section 12.04)
of the Common Stock on such date for determination. If any dividend or
distribution of the type described in this Section 12.04(e) is declared but
not so paid or made, the Conversion Rate shall again be adjusted to the
Conversion Rate which would be in effect if such dividend or distribution
had not been declared.
(f) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Stock shall expire and such
tender or exchange offer (as amended upon the expiration thereof) shall
require the payment to shareholders (based on the acceptance (up to any
maximum specified in the terms of the tender offer) of Purchased Shares (as
defined below)) of an aggregate consideration having a fair market value
(as determined by the Board of Directors, whose determination shall be
conclusive and described in a Board Resolution filed with the Trustee) that
combined together with (i) the aggregate of the cash plus the fair market
value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a Board Resolution), as of the expiration of
such tender or exchange offer, of consideration payable in respect of any
other tender or exchange offer, by the Company or any Subsidiary for all or
any portion of the Common Stock expiring within the 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment, pursuant to this paragraph (f) has been made and (ii) the
aggregate amount of any distributions to all holders of the Company's
Common Stock made exclusively in cash within 12 months preceding the
expiration of such tender or exchange offer and in respect of which no
adjustment pursuant to paragraph (e) of this Section 12.04 has been made
(the "Combined Tender and Cash Amount"), exceeds 12.5% of the product of
the current market price per share of the Common Stock (determined as
provided in paragraph (h) of this Section 12.04) as of the last time (the
"Expiration Time") tenders or exchanges could have been made pursuant to
such tender or exchange offer (as it may be amended) times the number of
Common Stock outstanding (including any tendered or exchanged shares) on
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that the same shall equal the rate
determined by dividing the Conversion Rate immediately prior to the close
of business on the date of the Expiration Time by a fraction (A) the
numerator of which shall be equal to (1) the product of (x) the current
market price per share of the Common Stock (determined as provided in
paragraph (h) of this Section 12.04) on the date of the Expiration Time and
(y) the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the date of the Expiration Time less
(2) the Combined Tender and Cash Amount, and (B) the denominator of which
shall be equal to the product of (x) the current market price per share of
the Common Stock (determined as provided in paragraph (h) of this
Section 12.04) as of the Expiration Time and (y) the number of shares of
Common Stock outstanding (including any tendered or exchanged shares) as of
the Expiration Time less the number of all shares validly tendered or
exchanged and not withdrawn as of the Expiration Time (the shares deemed so
accepted up to any such maximum, being referred to as the "Purchased
Shares"). In the event that the Company is obligated to purchase shares
pursuant to any such tender offer, but the Company is permanently prevented
by applicable law from effecting any such purchases or all such purchases
are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender offer had not
been made.
(g) The reclassification of Common Stock into securities other than
Common Stock (other than any reclassification upon a consolidation or
merger to which Section 12.11 applies) shall be deemed to involve (i) a
distribution of such securities other than Common Stock to all holders of
Common Stock (and the effective date of such reclassification shall be
deemed to be "the date fixed for the determination of shareholders entitled
to receive such distribution" and "the date fixed for such determination"
within the meaning of paragraph (c) of this Section 12.04), and (ii) a
subdivision or combination, as the case may be, of the number of Common
Stock outstanding immediately prior to such reclassification into the
number of Common Stock outstanding immediately thereafter (and the
effective date of such reclassification shall be deemed to be "the day upon
which such subdivision becomes effective" or "the day upon which such
combination becomes effective," as the case may be, and "the day upon which
such subdivision or combination becomes effective" within the meaning of
paragraph (3) of this Section 12.04).
(h) For the purpose of any computation under Section 12.03 or
paragraphs (b), (d), (e) or (f) of this Section 12.04, the current market
price per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices Per Share for the five consecutive
Trading Days selected by the Company commencing not more than 10 Trading
Days before, and ending not later than, the earlier of the day in question
and the day before the "ex" date with respect to the issuance or
distribution requiring such computation. For purposes of this paragraph,
the term "'ex' date", when used with respect to any issuance or distribu
tion, means the first date on which the Common Stock trades regular way on
the applicable securities exchange or in the applicable securities market
without the right to receive such issuance or distribution.
(i) No adjustment in the Conversion Rate shall be required unless
such adjustment (plus any adjustments not previously made by reason of this
paragraph (i)) would require an increase or decrease of at least one
percent in such rate; provided, however, that any adjustments which by
reason of this paragraph (i) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. In the case
of any adjustment deferred pursuant to this paragraph (i), the Company
shall make appropriate elections under the Treasury Regulations promulgated
pursuant to Section 305 of the Internal Revenue Code of 1986, as amended.
(j) The Company may make such increases in the Conversion Rate, for
the remaining term of the Securities or any shorter term, in addition to
those required by paragraphs (a), (b), (c), (d), (e) and (f) of this
Section 12.04, as it considers to be advisable in order to avoid or dimin
ish any income tax to any holders of Common Stock resulting from any
dividend or distribution of stock or issuance of rights or warrants to
purchase or subscribe for stock or from any event treated as such for
United States Federal income tax purposes or for any other reasons. The
Company shall have the power to resolve any ambiguity or correct any error
in this paragraph (j) and its actions in so doing shall be final and
conclusive.
(k) Notwithstanding the foregoing provisions of this Section, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan
for the reinvestment of dividends or (b) because of a tender or exchange
offer of the character described in Rule 13e-4(h)(5) under the Exchange Act
or any successor rule thereto.
SECTION 12.05. Notice of Adjustments of Conversion Rate. Whenever
the Conversion Rate is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Rate in
accordance with Section 12.04 and shall prepare a certificate signed by the
Treasurer of the Company setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which such adjustment is based,
and such certificate shall forthwith promptly be filed with the Trustee and
with each Conversion Agent; and
(b) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted Conversion Rate shall forthwith be prepared, and
as soon as practicable after it is prepared, such notice shall be provided
by the Company to all Holders in accordance with Section 1.05.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate, or any Board Resolutions or
other certificate filed with the Trustee pursuant to the terms of this Article
12, except to exhibit the same to any Holder of Securities desiring inspection
thereof at its office during normal business hours.
SECTION 12.06. Notice of Certain Corporate Action. In case:
(a) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of funds from which
such dividend or other distribution is properly payable; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any shares
of capital stock of any class or of any other rights (not being available
on an equivalent basis to Holders of the Securities upon conversion); or
(c) of any reclassification of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock), or of
any consolidation, merger or share exchange to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of any tender offer by the Company or any Subsidiary for all or any portion
of the Common Stock, or of the conveyance, transfer, sale or lease of all
or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 10.02, and shall
cause to be provided to all Holders in accordance with Section 1.05, at least 20
days (or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice stating
(x) the date on which a record is to be taken for the purpose of such dividend,
distribution, rights or warrants, or, if a record is not to be taken, the
effective date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution, rights or warrants are to be determined, or
(y) the date on which such reclassification, consolidation, merger, share
exchange, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, share exchange, conveyance, transfer,
sale, lease, dissolution, liquidation or winding up. Neither the failure to
give such notice or the notice referred to in the following paragraph nor any
defect therein shall affect the legality or validity of the proceedings
described in clauses (a) through (d) of this Section 12.06. If at the time the
Trustee shall not be the Conversion Agent, a copy of such notice and any notice
referred to in the following paragraph shall also forthwith be filed by the
Company with the Trustee.
The Company shall cause to be filed at each office or agency
maintained for the purpose of conversion of Securities pursuant to
Section 10.02, and shall cause to be provided to all Holders in accordance with
Section 1.05, notice of any tender offer by the Company or any Subsidiary for
all or any portion of the Common Stock at or about the time that such notice of
tender offer is provided to the public generally.
SECTION 12.07. Company To Reserve Common Stock. The Company shall at
all times while any Securities are Outstanding reserve and keep available, free
from preemptive rights, out of its authorized but previously unissued Common
Stock, for the purpose of effecting the conversion of Securities, the full
number of Common Stock then issuable upon the conversion of all such Outstanding
Securities.
SECTION 12.08 Taxes on Conversions. Except as provided in the next
sentence, the Company will pay any and all transfer, stamp, documentary and
other similar taxes and duties that may be payable in respect of the issue or
delivery of Common Stock on conversion of Securities pursuant hereto. A Holder
delivering a Security for conversion will be required to pay any tax or duty
which may be payable in respect of any transfer involved in the issue and
delivery of Common Stock in a name other than that of the Holder of the Security
or Securities to be converted, and no such issue or delivery shall be made
unless and until the Person requesting such issue has paid to the Company the
amount of any such tax or duty or has established to the satisfaction of the
Company that such tax or duty has been paid.
SECTION 12.09. Covenant as to Common Stock. The Company covenants
that all Common Stock which may be delivered upon conversion of Securities will
be validly issued shares and upon such delivery, will have been fully paid and
nonassessable and, except as provided in Section 12.08, the Company will pay all
taxes, liens and charges with respect to the issue thereof.
SECTION 12.10. Cancelation of Converted Securities. All Securities
delivered for conversion shall be delivered to the Trustee to be canceled by or
at the direction of the Trustee, which shall dispose of the same as provided in
Section 3.09.
SECTION 12.11 Provision in Case of Consolidation, Merger or
Conveyance of Assets. In case of any consolidation of the Company with, or
merger of the Company into or with any other Person, or in case of any sale of
all or substantially all of the assets of the Company, the Company or the Person
formed by such consolidation or the Person into which the Company shall have
been merged or the Person which shall have acquired such assets, as the case may
be, shall execute and deliver to the Trustee a supplemental indenture providing
that the Holder of each Security then outstanding that is convertible into
Common Stock of the Company shall have the right, which right shall be the
exclusive conversion right thereafter available to said Holder (until the
expiration of the conversion right of such Security), to convert such Security
into the kind and amount of shares of stock or other securities or property
(including cash), if any, receivable upon such consolidation, merger or sale by
a holder of the number of shares of Common Stock of the Company into which such
Security might have been converted immediately prior to such consolidation,
merger or sale, subject to compliance with the other provisions of this
Indenture, such Security and such supplemental indenture. Such supplemental
indenture shall provide for adjustments which shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Indenture. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers or sales. It is expressly agreed and understood that anything in this
Indenture to the contrary notwithstanding, if, pursuant to such merger,
consolidation or sale, holders of outstanding shares of Common Stock of the
Company do not receive shares of common stock of the surviving corporation but
receive other securities, cash or other property or any combination thereof,
Holders of Securities shall not have the right to thereafter convert their
Securities into common stock of the surviving corporation or the corporation
which shall have acquired such assets, but rather, shall have the right upon
such conversion to receive the other securities, cash or other property
receivable by a holder of the number of shares of Common Stock of the Company
into which the Securities held by such holder might have been converted
immediately prior to such consolidation, merger or sale, all as more fully
provided in the first sentence of this Section 12.11. Anything in this
Section 12.11 to the contrary notwithstanding, the provisions of this
Section 12.11 shall not apply to a merger or consolidation of another
corporation with or into the Company pursuant to which both of the following
conditions are applicable: (i) the Company is the surviving corporation and
(ii) the outstanding shares of Common Stock of the Company are not changed or
converted into any other securities or property (including cash) or changed in
number or character or reclassified pursuant to the terms of such merger or
consolidation.
As evidence of the kind and amount of shares of stock or other
securities or property (including cash) into which Securities may properly be
convertible after any such consolidation, merger or sale, or as to the
appropriate adjustments of the conversion prices applicable with respect
thereto, the Trustee shall be furnished with and may accept the certificate or
opinion of an independent certified public accountant with respect thereto; and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely thereon, and shall not be responsible or accountable to any
Holder of Securities for any provision in conformity therewith or approved by
such independent certified accountant which may be contained in said
supplemental indenture.
SECTION 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.01, and any Conversion Agent
shall not at any time be under any duty or responsibility to any Holder of
Securities to determine whether any facts exist which may require any adjustment
of the Conversion Rate, or with respect to the nature, extent or amount of any
such adjustment when made, or with respect to the method employed, or herein or
in any supplemental indenture provided to be employed, in making the same, or
whether a supplemental indenture need be entered into, or to recalculate or
verify the contents of any certificate or Board Resolution filed with it by the
Company pursuant to the terms of this Article 12. Neither the Trustee, subject
to the provisions of Section 6.01, nor any Conversion Agent shall be accountable
with respect to the validity or value (or the kind or amount) of any Common
Stock, or of any other securities or property or cash, which may at any time be
issued or delivered upon the conversion of any Security; and it or they do not
make any representation with respect thereto. Neither the Trustee nor any
Conversion Agent shall be responsible for any failure of the Company to make any
cash payment or to issue, transfer or deliver any Common Stock or share cer
tificates or other securities or property or cash upon the surrender of any
Security for the purpose of conversion; and the Trustee and any Conversion Agent
shall not be responsible for any failure of the Company to comply with any of
the covenants of the Company contained in this Article.
SECTION 12.13. Repayment of Certain Funds Upon Conversion. Any funds
which at any time shall have been deposited by the Company or on its behalf with
the Trustee or any other Paying Agent for the purpose of paying the principal
of, and premium, if any, and interest, if any, on any of the Securities and
which shall not be required for such purposes because of the conversion of such
Securities as provided in this Article XII shall after such conversion be repaid
to the Company by the Trustee upon the Company's written request.
ARTICLE XIII
Subordination
SECTION 13.01. Securities Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Security, by his acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereinafter
set forth in this Article (subject to the provisions of Article IV), the
indebtedness represented by the Securities, and the payment of the principal of,
interest on and all other amounts, if any, owing with respect to each and all of
the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full in cash or other immediately available
funds of all Senior Debt of the Company.
SECTION 13.02. Payment Over of Proceeds Upon Dissolution, Etc. In
the event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding in
connection therewith, relative to the Company or to its creditors, as such, or
to its assets, or (b) any liquidation, dissolution or other winding up of the
Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets and liabilities of the Company, then and in any
such event specified in (a), (b) or (c) above (each such event, if any, herein
sometimes referred to as a "Proceeding") the holders of Senior Debt shall be
entitled to receive payment in full of all amounts due or to become due on or in
respect of all Senior Debt, in cash or other immediately available funds or
provision shall be made for such payment in cash or other immediately available
funds or otherwise in a manner satisfactory to each holder of Senior Debt with
respect to its indebtedness, before the Holders of the Securities are entitled
to receive any payment or distribution of any kind or character, whether (i) in
cash, property or securities, on account of principal of, interest on or any
other amount, if any, owing with respect to the Securities or on account of any
purchase or other acquisition of Securities by the Company or any Subsidiary of
the Company, (ii) by way of cancelation, forgiveness or offset of the
indebtedness evidenced by the Securities against any indebtedness owed by a
Holder to the Company or (iii) payable or deliverable by reason of the payment
of any other indebtedness of the Company being subordinated to the payment of
the Securities (all such payments, distributions, purchases and acquisitions
herein referred to, individually and collectively, as a "Securities Payment"),
and to that end the holders of all Senior Debt shall be entitled to receive, for
application to the payment thereof, any Securities Payment which may be payable
or deliverable in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Debt is paid in full in cash or other
immediately available funds or otherwise in a manner satisfactory to each holder
of Senior Debt with respect to its indebtedness, and if such fact shall, at or
prior to the time of such Securities Payment, have been made actually known to a
Responsible Officer of the Trustee or, as the case may be, such Holder, then and
in such event such Securities Payment shall be paid over or delivered forthwith
to the trustee in bankruptcy, receiver, liquidating trustee, custodian,
assignee, agent or other Person making payment or distribution of assets of the
Company for application to the payment of all Senior Debt, to the extent
necessary to pay all Senior Debt in full, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in cash, property or securities"
shall not be deemed to include a payment or distribution of stock or securities
of the Company provided for by a plan of reorganization or readjustment giving
effect to these subordination provisions authorized by an order or decree of a
court of competent jurisdiction in a reorganization proceeding under any
applicable bankruptcy law or of any other corporation provided for by such plan
of reorganization or readjustment which stock or securities are subordinated in
right of payment to all then outstanding Senior Debt to substantially the same
extent as the Securities are so subordinated as provided in this Article, which
shall require that (A) the final maturity of any such subordinated securities
shall exceed the term of the Senior Debt provided for by such plan of
reorganization or readjustment, and there shall not be any scheduled principal
payment in respect of such subordinated securities prior to that of such Senior
Debt and (B) such subordinated securities shall be unsecured and unguaranteed.
The consolidation of the Company with, or the merger of the Company into,
another Person or the liquidation or dissolution of the Company following the
conveyance, transfer, sale or lease of all or substantially all of its
properties and assets to another Person upon the terms and conditions set forth
in Article VIII shall not be deemed a Proceeding for the purposes of this
Section if the Person formed by such consolidation or into which the Company is
merged or the Person which acquires by conveyance, transfer, sale or lease such
properties and assets, as the case may be, shall, as a part of such
consolidation, merger, conveyance, transfer, sale or lease comply with the
conditions set forth in Article VIII.
SECTION 13.03. No Payment When Senior Debt in Default. In the event
that any Securities are declared or otherwise shall become due and payable
before their Stated Maturity (including by reason of a Change in Control) and
there shall have occurred (i) a default in the payment of principal, premium, if
any, or interest (including a default under any repurchase or redemption
obligation) with respect to any Senior Debt or (ii) any other event of default
with respect to any Senior Debt, permitting the holders thereof to accelerate
the maturity thereof, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall be
entitled to receive payment in full of all amounts then due on or in respect of
all Senior Debt in cash or other immediately available funds or otherwise in a
manner satisfactory to the holders of such Senior Debt, before the Holders of
the Securities are entitled to receive any Securities Payment.
In the event and during the continuation of any default in the payment
of any amount owing in respect of any Senior Debt beyond any applicable grace
period with respect thereto, or in the event that any event of default with
respect to any Senior Debt shall have occurred and be continuing permitting the
holders of such Senior Debt (or a trustee or other representative on behalf of
the holders thereof) to declare such Senior Debt due and payable prior to the
date on which it would otherwise have become due and payable, unless and until
such event of default shall have been cured or waived or shall have ceased to
exist and such acceleration shall have been rescinded or annulled, or in the
event any judicial proceeding shall be pending with respect to any such default
in payment or event of default, then no Securities Payment shall be made.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if (1) such fact shall, at or prior to
the time of such Securities Payment, have been made actually known to a
Responsible Officer of the Trustee or, as the case may be, such Holder or
(2) the Securities have been accelerated, then and in such event such Securities
Payment shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 13.02 would be applicable.
SECTION 13.04. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Securities shall
prevent (a) the Company, at any time except during the pendency of any
proceeding referred to in Section 13.02 or under the conditions described in
Section 13.03, from making Securities Payments, or (b) the application by the
Trustee of any money deposited with it hereunder to Securities Payments or the
retention of such Securities Payment by the Holders, if, at the time of such
application by the Trustee, it did not have actual knowledge that such
Securities Payment would have been prohibited by the provisions of this Article.
SECTION 13.05. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on or in res
pect of Senior Debt, in cash or other immediately available funds or otherwise
in a manner satisfactory to the holders of Senior Debt, the Holders of the
Securities shall be subrogated to the rights of the holders of such Senior Debt
to receive payments and distributions of cash, property and securities applic
able to the Senior Debt until the principal of and interest on the Securities
shall be paid in full. For purposes of such subrogation, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 13.06. Provisions Solely To Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as among the Company, the creditors of the Company other than
holders of Senior Debt and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional (and which, subject to the rights
under this Article of the holders of Senior Debt, is intended to rank equally
with all other general obligations of the Company), to pay to the Holders of the
Securities the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company other than the holders of Senior Debt; or (c) prevent
the Trustee or the Holder of any Security from exercising all remedies otherwise
permitted by applicable law upon default under this Indenture, subject to the
rights, if any, under this Article of the holders of Senior Debt to receive
cash, property and securities otherwise payable or deliverable to the Trustee or
such Holder.
SECTION 13.07. Trustee To Effectuate Subordination. Each Holder of a
Security by his acceptance thereof authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article and appoints the Trustee his attorney-in-
fact for any and all such purposes.
SECTION 13.08. No Waiver of Subordination Provisions. No right of
any present or future holder of any Senior Debt to enforce subordination as
herein provided shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of the Company or by any act or failure to
act, in good faith, by any such holder, or by any noncompliance by the Company
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (a) change the manner, place or terms of payment
or the time of payment of, or renew or alter, Senior Debt, or otherwise amend or
supplement in any manner Senior Debt or any instrument evidencing the same or
any agreement under which Senior Debt is outstanding; (b) sell, exchange,
release or otherwise deal with any property pledged, mortgaged or otherwise sec
uring Senior Debt; (c) release any Person liable in any manner for the
collection of Senior Debt; and (d) exercise or refrain from exercising any
rights against the Company and any other Person.
SECTION 13.09. Notice to Trustee. The Company shall give prompt
written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the
Securities. Notwithstanding the provisions of this Article or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall
have received written notice thereof from the Company or a holder of Senior Debt
or from any trustee therefor or representative thereof; and, prior to the
receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section at least
two Business Days prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of,
the principal of or interest on any Security), then, anything herein contained
to the contrary notwithstanding, the Trustee shall have full power and authority
to receive such money and to apply the same to the purpose for which such money
was received and shall not be affected by any notice to the contrary which may
be received by it within two Business Days prior to such date.
The Trustee shall be entitled to rely conclusively on the delivery to
it of a written notice, and proof of ownership acceptable to the Trustee, by a
Person representing himself to be a holder of Senior Debt (or a trustee therefor
or representative thereof) to establish that such notice has been given by a
holder of Senior Debt (or a trustee therefor or representative thereof). In the
event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Senior Debt to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such Person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Debt held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article, and
if such evidence is not furnished, the Trustee may defer any payment to such
Person pending judicial determination as to the right of such Person to receive
such payment.
SECTION 13.10. Reliance on Judicial Order or Certificate of
Liquidating Agent. Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee and the Holders of the Securities shall
be entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such Proceeding is pending, or a certificate of the
trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Holders of Securities, for the
purpose of ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 13.11. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior
Debt and shall not be liable to any such holders if it shall in good faith and
absent gross negligence or willful misconduct, mistakenly pay over or distribute
to Holders of Securities or to the Company or to any other Person cash, property
or securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
SECTION 13.12. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
be entitled to all the rights set forth in this Article with respect to any
Senior Debt which may at any time be held by it, to the same extent as any other
holder of Senior Debt, and nothing in this Indenture shall deprive the Trustee
of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.07.
SECTION 13.13. Article Applicable to Paying Agents. In case at any
time any Paying Agent other than the Trustee shall have been appointed by the
Company and be then acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context otherwise requires) be construed as
extending to and including such Paying Agent within its meaning as fully for all
intents and purposes as if such Paying Agent were named in this Article in
addition to or in place of the Trustee; provided, however, that Sections 13.09
and 13.12 shall not apply to the Company or any Affiliate of the Company if it
or such Affiliate acts as Paying Agent.
SECTION 13.14. Subsidiaries. No payment, distribution of assets or
other action may be taken by any Subsidiary of the Company with respect to the
Securities if the Company would be prohibited by this Article XIII from taking
such action.
SECTION 13.15. Rescission. The provisions of this Article XIII shall
continue to be effective or be reinstated, as the case may be, if at any time
any payment in respect of any of the Senior Debt is rescinded or must otherwise
be returned by the holder thereof upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
SECTION 13.16. Payment. For purposes of this Article XIII, "payment
in full" of Senior Debt shall mean prior payment in full (including payment of
reimbursement obligations under letters of credit) of such Senior Debt
(including all interest accruing after the commencement of any bankruptcy or
similar proceeding, whether or not a claim for post-petition interest is allowed
as a claim in any such proceeding) in cash or other immediately available funds
and termination, cash collateralization or replacement of contingent obligations
(including all letters of credit issued thereunder but excluding only any
unasserted indemnity obligations) and termination of all commitments thereunder.
ARTICLE XIV
Repurchase of Securities at the Option of the
Holder upon a Change in Control
SECTION 14.01. Right to Require Repurchase. In the event that a
Change in Control (as hereinafter defined) shall occur, then each Holder shall
have the right, at the Holder's option, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities, or any portion of the principal amount thereof that is
equal to U.S. $1,000 or any integral multiple of U.S. $1,000 in excess thereof,
on the date (the "Repurchase Date") that is 45 days after the date of the
Company Notice (as defined in Section 14.02) at a purchase price equal to 100%
of the principal amount of the Securities to be repurchased (the "Repurchase
Price") plus interest accrued to the Repurchase Date; provided, however, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Repurchase Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.07. Such right to
require the repurchase of the Securities shall not continue after a discharge of
the Company from its obligations with respect to the Securities in accordance
with Article IV, unless a Change in Control shall have occurred prior to such
discharge. At the option of the Company, the Repurchase Price may be paid in
cash or, except as otherwise provided in Section 14.02(j), by delivery of shares
of Common Stock having a fair market value equal to the Repurchase Price;
provided that payment may not be made in Common Stock unless at the time of
payment such stock is listed on a national securities exchange or quoted on the
Nasdaq National Market. For purposes of this Section, the fair market value of
shares of Common Stock shall be determined by the Company and shall be equal to
95% of the average of the Closing Prices Per Share for the five consecutive
Trading Days ending on and including the third Trading Day immediately preceding
the Repurchase Date. Whenever in this Indenture there is a reference, in any
context, to the principal of any Security as of any time, such reference shall
be deemed to include reference to the Repurchase Price payable in respect of
such Security to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price in any
provision of this Indenture shall not be construed as excluding the Repurchase
Price in those provisions of this Indenture when such express mention is not
made.
SECTION 14.02. Notices; Method of Exercising Repurchase Right, Etc.
(a) Unless the Company shall have theretofore called for redemption all of the
Outstanding Securities, on or before the 30th day after the occurrence of a
Change in Control, the Company or, at the request and expense of the Company,
the Trustee, shall give to all Holders of Securities, in the manner provided in
Section 1.05, notice (the "Company Notice") of the occurrence of the Change in
Control and of the repurchase right set forth herein arising as a result
thereof. The Company shall also deliver a copy of such notice of a repurchase
right to the Trustee.
Each notice of a repurchase right shall state:
(i) the Repurchase Date,
(ii) the date by which the repurchase right must be exercised,
(iii) the Repurchase Price,
(iv) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Securities
are to be surrendered for payment of the Repurchase Price and accrued
interest, if any,
(v) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security
designated by the Holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date,
(vi) the Conversion Rate then in effect, the date on which the right
to convert the principal amount of the Securities to be repurchased will
terminate and the place or places where such Securities may be surrendered
for conversion, and
(vii) the place or places that the certificate required by Section
2.03 shall be delivered, and the form of such certificate.
In addition, at least two Business Days preceding the Repurchase Date,
the Company shall give to all Holders of the Securities, in the manner provided
in Section 1.05, notice specifying whether the Repurchase Price will be payable
in cash or Common Stock and shall deliver a copy of such notice to the Trustee.
No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the
Trustee or any Paying Agent on or before the 30th day after the date of the
Company Notice (i) written notice of the Holder's exercise of such right, which
notice shall set forth the name of the Holder, the principal amount of the
Securities to be repurchased (and, if any Security is to repurchased in part,
the serial number thereof, the portion of the principal amount thereof to be
repurchased and the name of the Person in which the portion thereof to remain
Outstanding after such repurchase is to be registered) and a statement that an
election to exercise the repurchase right is being made thereby, and, in the
event that the Repurchase Price shall be paid in Common Stock, the name or names
(with addresses) in which the certificate or certificates for Common Stock shall
be issued, and (ii) the Securities with respect to which the repurchase right is
being exercised. Such written notice shall be irrevocable, except that the
right of the Holder to convert the Securities with respect to which the
repurchase right is being exercised shall continue until the close of business
on the Repurchase Date.
(c) In the event a repurchase right shall be exercised in accordance
with the terms hereof, the Company shall pay or cause to be paid to the Trustee
or the Paying Agent the Repurchase Price in cash or Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if Common Stock are
to be paid, as promptly after the Repurchase Date as practicable, together with
accrued and unpaid interest to the Repurchase Date payable with respect to the
Securities as to which the purchase right has been exercised; provided, however,
that installments of interest that mature on or prior to the Repurchase Date
shall be payable in cash, in the case of Securities, to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Regular Record Date, in each case according to
the terms and provisions of Article III.
(d) If any Security (or portion thereof) surrendered for repurchase
shall not be so paid on the Repurchase Date, the principal amount of such
Security (or portion thereof, as the case may be) shall, until paid, bear
interest to the extent permitted by applicable law from the Repurchase Date at
the rate of 4% per annum, and each Security shall remain convertible into Common
Stock until the principal of such Security (or portion thereof, as the case may
be) shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
(f) Any issuance of Common Stock in respect of the Repurchase Price
shall be deemed to have been effected immediately prior to the close of business
on the Repurchase Date and the Person or Persons in whose name or names any
certificate or certificates for Common Stock shall be issuable upon such
repurchase shall be deemed to have become on the Repurchase Date the holder or
holders of record of the shares represented thereby; provided, however, that any
surrender for repurchase on a date when the stock transfer books of the Company
shall be closed shall constitute the Person or Persons in whose name or names
the certificate or certificates for such shares are to be issued as the
recordholder or holders thereof for all purposes at the opening of business on
the next succeeding day on which such stock transfer books are open. No payment
or adjustment shall be made for dividends or distributions on any Common Stock
issued upon repurchase of any Security declared prior to the Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of
Securities. If more than one Security shall be repurchased from the same Holder
and the Repurchase Price shall be payable in Common Stock, the number of full
shares which shall be issuable upon such repurchase shall be computed on the
basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional Common Share which would otherwise be issuable on the
repurchase of any Security or Securities, the Company will deliver to the
applicable Holder its check for the current market value of such fractional
share. The current market value of a fraction of a share is determined by
multiplying the current market price of a full share by the fraction, and
rounding the result to the nearest cent. For purposes of this Section, the
current market price of a Common Share is the Closing Price Per Share of the
Common Stock on the last Trading Day prior to the Repurchase Date.
(h) Any issuance and delivery of certificates for Common Stock on
repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for Common Stock in a name other than that of the Holder of the Securities being
repurchased, and no such issuance or delivery shall be made unless and until the
Person requesting such issuance or delivery has paid to the Company the amount
of any such tax or duty or has established, to the satisfaction of the Company,
that such tax or duty has been paid.
(i) If any Common Stock to be issued upon repurchase of Securities
hereunder require registration with or approval of any governmental authority
under any federal or state law before such shares may be validly issued or
delivered upon repurchase, the Company covenants that it will in good faith and
as expeditiously as possible endeavor to secure such registration or approval,
as the case may be; provided, however, that nothing in this Section shall be
deemed to affect in any way the obligations of the Company to repurchase
Securities as provided in this Article and if such registration is not completed
or does not become effective or such approval is not obtained prior to the
Repurchase Date, the Repurchase Price shall be paid in cash.
(j) The Company covenants that all Common Stock which may be issued
upon repurchase of Securities will upon issue be duly and validly issued and
fully paid and nonassessable.
SECTION 14.03. Certain Definitions. For purposes of this Article
XIV:
(a) the term "beneficial owner" shall be determined in accordance
with Rule 13d-3, as in effect on the date of the original execution
of this Indenture, promulgated by the Commission pursuant to the
Exchange Act;
(b) a "Change in Control" shall be deemed to have occurred at the
time, after the original issuance of the Securities, of:
(i) the acquisition by any Person of beneficial ownership,
directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of
capital stock of the Company entitling such Person to exercise 50% or
more of the total voting power of all shares of capital stock of the
Company entitled to vote generally in the elections of directors (any
shares of voting stock of which such person or group is the beneficial
owner that are not then outstanding being deemed outstanding for
purposes of calculating such percentage) other than any such
acquisition by the Company, any Subsidiary of the Company or any
employee benefit plan of the Company; or
(ii) any consolidation of the Company with, or merger of the
Company into, any other Person, any merger of another Person into the
Company, or any sale or transfer of all or substantially all of the
assets of the Company to another Person (other than (a) any such
transaction (x) which does not result in any reclassification,
conversion, exchange or cancelation of outstanding Common Stock and
(y) pursuant to which holders of Common Stock immediately prior to
such transaction have the entitlement to exercise, directly or
indirectly, 50% or more of the total voting power of all shares of
capital stock entitled to vote generally in the election of directors
of the continuing or surviving person immediately after such
transaction and (b) any merger which is effected solely to change the
jurisdiction of incorporation of the Company and results in a
reclassification, conversion or exchange of outstanding shares of
Common Stock into solely shares of common stock);
provided, however, that a Change in Control shall not be deemed to have
occurred if either (x) the Closing Price Per Share of the Common Stock for
any five Trading Days within the period of 10 consecutive Trading Days
ending immediately after the later of the date of the Change in Control or
the date of the public announcement of the Change in Control (in the case
of a Change in Control under clause (i) above) or the period of 10
consecutive Trading Days ending immediately prior to the date of the Change
in Control (in the case of a Change in Control under clause (ii) above)
shall equal or exceed 105% of the Conversion Price in effect on such
trading day or (y) all of the consideration (excluding cash payments for
fractional shares and cash payments made pursuant to dissenters' appraisal
rights) to be paid for the Common Stock in a transaction or transactions
constituting the Change in Control as described in clause (ii) above
consists of shares of common stock traded on a national securities exchange
or quoted on the Nasdaq National Market and as a result of such transaction
or transactions the Securities become convertible solely into such common
stock; and
(c) the term "Person" shall include any syndicate or group which would
be deemed to be a "person" under Section 13(d)(3) of the Exchange Act, as
in effect on the date of the original execution of this Indenture.
______________________
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
AMERICA ONLINE, INC.,
by /S/LENNERT J. LEADER
Name: Lennert J. Leader
Title: Senior Vice President,
Chief Financial Officer, Treasurer,
Chief Accounting Officer and
Assistant Secretary
Attest:
/S/SHEILA A. CLARK
Name: Sheila A. Clark
Title: Vice President, Deputy General
Counsel and Assistant Secretary
STATE STREET BANK AND TRUST COMPANY, not in its
individual capacity but solely as Trustee,
by/S/ARTHUR J. MACDONALD
Name: Arthur J. MacDonald
Title: Assistant Vice President
Attest:
/S/JACQUELINE RIVERIA-BONHOMME
Name: Jacqueline Riveria-Bonhomme
Title: Assistant Secretary
ANNEX A
FORM OF CONVERSION NOTICE
[Notice pursuant to Section 12.02 of the Indenture]
[ ],
as Conversion Agent
[ ]
New York, New York [ ]
Re America Online, Inc.
4% Convertible Subordinated Notes
due November 15, 2002 (the "Securities")
Reference is hereby made to the Indenture, dated as of November 17,
1997 (the "Indenture"), between America Online, Inc., as Issuer, and State
Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to the Securities specified below, which are
registered in the name of the undersigned (the "Holder"). The Holder hereby
irrevocably exercises its right to convert such Securities, or the portion
thereof, if any, specified below, into Common Shares and, except to the extent
specified or required as described below, directs that certificates representing
such Common Shares, together with any check in payment for a fractional share
and any Security representing any unconverted principal amount, be issued and
delivered through the facilities of the U.S. Depository, for credit to the
account(s) of the Person(s) indicated below.
The Holder acknowledges and agrees that no Common Stock will be
delivered upon conversion of the specified Securities during the Non-Conversion
Period and no Common Shares will be delivered on conversion until any amount
payable by the Holder on account of interest is paid, any certificates
evidencing specified Securities not held in book-entry form are duly endorsed or
assigned to the Company or in blank and surrendered and any taxes or other
charges or documents required in connection with a transfer on conversion, and
any other required items, are delivered to the Conversion Agent.
The Holder acknowledges and agrees that, notwithstanding this request
for conversion, the Company may require that the Common Shares delivered on
conversion of the specified Securities be delivered in certificated form subject
to a restrictive legend, or that additional certifications be delivered on
behalf of the relevant beneficial owner(s), if it determines that doing so is
necessary to comply with the requirements of the Securities Act or otherwise, as
provided in the Indenture.
Conversion of the specified Securities is subject to the requirements
established by the Company as well as to the procedures of the U.S. Depository,
all as in effect from time to time. The specified Securities will be deemed to
have been converted as of the close of business on the first day on which this
conversion notice and all other required items have been delivered to the
Conversion Agent as provided above and, upon such conversion, shall cease to
accrue interest or be Outstanding (subject to the Holder's right to receive the
Conversion Securities as provided in the Indenture). Prior to such conversion,
the Holder will have no rights in the Conversion Securities.
Please provide the information requested below, as applicable.
1. PLEASE SPECIFY THE SECURITIES HELD AND THE PORTION THEREOF TO BE CONVERTED:
Principal amount held: U.S. $
CUSIP number(s):
U.S. Depository (DTC) account where held:
Principal amount being converted (if less than all):
U.S. $
2. UNLESS AND TO THE EXTENT OTHERWISE SPECIFIED BELOW, all Securities
(together with any unconverted Securities) will be delivered in book-entry
form to the DTC account specified in Item 1 above.
3. IF OTHER ARRANGEMENTS ARE DESIRED, please specify the type, number and form
of securities to be delivered on conversion and the name(s) of the account
holder(s) or registered owner(s), by checking the appropriate boxes and
providing the information requested:
[ ] Common Shares
[ ] Book-Entry
Number of Common Shares:
DTC Account:
[ ] Certificates
Number of Common Shares:
Registered Owner:
[ ] Unconverted Securities
[ ] Certificates
Principal Amount: U.S. $
Aggregate principal amount of each certificate must equal
U.S. $1,000 or any amount in excess thereof in integral multiples
of U.S. $1,000.
Registered Owner:
[ ] Book-Entry
Principal Amount: U.S. $
DTC Account:
Please sign and date this notice in the space provided below.
DATE:
Name of Holder
Signature(s) of Holder
Title(s):
(If the Holder is a corporation, partnership or
fiduciary, the title of the Person signing on behalf of
the Holder must be stated.)
Notice: Signature(s) must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Trustee, which requirements will include
membership or participation in the Securities Transfer Agents Medallion Program
(STAMP), the Stock Exchange Medallion Program (SEMP) and the New York Stock
Exchange Medallion Signature Program (MSP) or such other "signature guarantee
program" as may be determined by the Trustee in addition to, or in substitution
for, STAMP, SEMP or MSP, all in accordance with the Securities Exchange Act of
1934.
Signature Guarantee
ANNEX B
FORM OF TRANSFER CERTIFICATE--
RESTRICTED GLOBAL SECURITY TO
REGULATION S GLOBAL SECURITY
(Transfers pursuant to Section 3.05(b)(ii)
of the Indenture)
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02110
Attention: Corporate Trust Department
Re America Online, Inc.
___% Convertible Subordinated Notes
due October , 2002 (the "Securities")
Reference is hereby made to the Indenture, dated as of October __,
1997 (the "Indenture"), between America Online, Inc., as Issuer, and
_________________, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given to them in the Indenture.
This letter relates to U.S. $ aggregate principal amount of
Securities which are evidenced by the Restricted Global Security (CUSIP No.
_________) and held with the U.S. Depository in the name of [insert name of
transferor] (the "Transferor"). The Transferor has requested a transfer of such
beneficial interest in the Securities to a Person who will take delivery thereof
in the form of an equal aggregate principal amount of Securities evidenced by
the Regulation S Global Security (CUSIP No. ) which amount, in the case
of transfers during the Restricted Period, immediately after such transfer, is
to be held with the U.S. Depository through Euroclear or CEDEL or both.
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer has been effected pursuant to
and in accordance with Rule 903 or Rule 904 under the United States Securities
Act of 1933, as amended (the "Securities Act"), and accordingly the Transferor
does hereby further certify that:
(a) the offer of the Securities was not made to a person in the United
States;
(b) either:
(i) at the time the buy order was originated, the transferee was
outside the United States or the Transferor and any person acting on
its behalf reasonably believed that the transferee was outside the
United States, or
(ii) the transaction was executed in, on or through the facilities
of a designated offshore securities market and neither the Transferor
nor any person acting on its behalf knows that the transaction was
prearranged with a buyer in the United States;
(c) no directed selling efforts have been made in contravention of the
requirements of Rule 903(b) or 904(b) of Regulation S, as applicable;
(d) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(e) upon completion of the transaction, the beneficial interest being
transferred as described above was held with the U.S. Depository through
Euroclear or CEDEL or both.
This certificate and the statements contained herein are made for the
benefit of the Company and the Initial Purchasers. Terms used in this
certificate and not otherwise defined in the Indenture have the meanings set
forth in Regulation S under the Securities Act.
Dated:
[INSERT NAME OF TRANSFERROR],
by
Name:
Title:
(If the registered owner is a corporation,
partnership or fiduciary, the title of the Person
signing on behalf of such registered owner must be
stated.)
ANNEX C
FORM OF TRANSFER CERTIFICATE--
REGULATION S GLOBAL SECURITY TO
RESTRICTED GLOBAL SECURITY DURING THE
RESTRICTED PERIOD
(Transfers pursuant to Section 3.05(b)(iii)
of the Indenture)
State Street Bank and Trust Company, as Trustee
Two International Place
Boston, MA 02110
Attention: Corporate Trust Department
Re America Online, Inc.
4% Convertible Subordinated Notes
due November 15, 2002 (the "Securities")
Reference is hereby made to the Indenture, dated as of November 17,
1997 (the "Indenture"), between America Online, Inc., as Issuer, and State
Street Bank and Trust Company, as Trustee. Capitalized terms used but not
defined herein shall have the meanings given to them in the Indenture.
This letter relates to U.S. $ aggregate principal amount of
Securities which are evidenced by the Regulation S Global Security (CUSIP No.
____________) and held with the U.S. Depository through Euroclear or CEDEL or
both in the name of [insert name of transferor] (the "Transferor") during the
Restricted Period. The Transferor has requested a transfer of such beneficial
interest in the Securities to a Person that will take delivery thereof in the
form of an equal principal amount of Securities evidenced by the Restricted
Global Security (CUSIP No. ).
In connection with such request and in respect of such Securities, the
Transferor does hereby certify that such transfer has been effected pursuant to
and in accordance with Rule 144A under the United States Securities Act of 1933,
as amended, and accordingly the Transferor does hereby further certify that the
Securities are being transferred to a person that the Transferor reasonably be
lieves is purchasing the Securities for its own account, or for one or more
accounts with respect to which such Person exercises sole investment discretion,
and such Person and each such account is a "qualified institutional buyer"
within the meaning of Rule 144A, in each case in a transaction meeting the
requirements of Rule 144A.
This certificate and the statements contained herein are made for the
benefit of the Company and the Initial Purchaser.
Dated:
[INSERT NAME OF TRANSFERROR],
by
Name:
Title:
(If the registered owner is a corporation,
partnership or fiduciary, the title of the Person
signing on behalf of such registered owner must be
stated.)
28712
America Online, Inc.
4% Convertible Subordinated Notes
due November 15, 2002
Registration Rights Agreement
Dated as of
November 17, 1997
Goldman, Sachs & Co.
BT Alex. Brown
Lehman Brothers Inc.
Cowen & Company
c/o Goldman Sachs & Co.
85 Broad Street
New York, New York 10004.
Ladies and Gentlemen:
America Online, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the Purchasers (as
defined herein) upon the terms set forth in a purchase
agreement dated November 12, 1997 (the "Purchase Agreement")
between the Purchasers and the Company, its 4% Convertible
Subordinated Notes due November 15, 2002 (the "Securities").
As an inducement to the Purchasers to enter into the
Purchase Agreement and in satisfaction of a condition to the
obligations of the Purchasers thereunder, the Company agrees
with the Purchasers (i) for the benefit of the Purchasers
and (ii) for the benefit of the holders from time to time of
the Securities and the Common Stock, par value $.01 per
share (the "Stock"), of the Company issuable upon conversion
of the Securities (collectively, the "Registrable
Securities"), including the Purchasers (each of the
foregoing a "Holder" and, together, the "Holders"), as
follows:
1. Definitions. (a) Capitalized terms used herein
without definition shall have their respective meanings set
forth in or pursuant to the Purchase Agreement or the
Offering Circular, dated November 12, 1997 in respect of the
Securities. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
"Act" or "Securities Act" means the United States
Securities Act of 1933, as amended.
"Affiliate" of any specified person means any other
person which, directly or indirectly, is in control of, is
controlled by, or is under common control with such
specified person. For purposes of this definition, control
of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of
such person whether by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.
"Commission" means the United States Securities and
Exchange Commission.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in
Section 2 hereof.
"Electing Holder" has the meaning assigned thereto in
Section 3(a)(3) hereof.
"Exchange Act" means the United States Securities and
Exchange Act of 1934, as amended.
"Indenture" means the Indenture, dated as of October
14, 1997, between the Company and State Street Bank and
Trust Company, as amended and supplemented from time to time
in accordance with is terms.
"Managing Underwriters" means the investment banker or
investment bankers and manager or managers that shall
administer an underwritten offering, if any, as set forth in
Section 6 hereof.
"Notice and Questionnaire" means a Notice of
Registration Statement and Selling Securityholder
Questionnaire substantially in the form of Exhibit A hereto.
"Person" shall mean an individual, partnership,
corporation, trust or unincorporated organization, or a
government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (including, without limitation, a
prospectus that discloses information previously omitted
from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A under the Act), as
amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the
Registrable Securities.
"Purchasers" means the Purchasers named in Schedule I
to the Purchase Agreement.
"Registrable Securities" means all or any portion of
the Securities issued from time to time under the Indenture
in registered form and the shares of Stock issuable upon
conversion of such Securities, including any Securities
initially issued in bearer form and constituting the unsold
allotment of a distributor (within the meaning of
Regulation S under the Securities Act) of such Securities
and later exchanged for Securities in registered form;
provided, however, that a security ceases to be a
Registrable Security when it is no longer a Restricted
Security.
"Restricted Security" means any Security or share of
Stock issuable upon conversion thereof except any such
Security or share of Stock which (i) has been effectively
registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has
been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto),
(iii) has been sold in compliance with Regulation S under
the Securities Act (or any successor thereto) and does not
constitute the unsold allotment of a distributor within the
meaning of Regulation S under the Securities Act, or
(iv) has otherwise been transferred and a new Security or
share of Stock not subject to transfer restrictions under
the Securities Act has been delivered by or on behalf of the
Company in accordance with Section 3.05 of the Indenture.
"Shelf Registration" means a registration effected
pursuant to Section 2 hereof.
"Shelf Registration Statement" means a shelf regis
tration statement of the Company pursuant to the provisions
of Section 2 hereof filed with the Commission which covers
some or all of the Registrable Securities, as applicable, on
an appropriate form under Rule 415 under the Act, or any
similar rule that may be adopted by the Commission,
amendments and supplements to such registration statement,
including post-effective amendments, in each case including
the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"underwriter" means any underwriter of Registrable
Securities in connection with an offering thereof under a
Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to
a percentage of the "principal amount" of Registrable
Securities, Common Stock shall be treated as representing
the principal amount of Securities which was surrendered for
conversion or exchange in order to receive such number of
shares of Common Stock.
2. Shelf Registration. (a) The Company shall, within
90 days following the date of original issuance (the "Issue
Date") of the Securities, file with the Commission a Shelf
Registration Statement relating to the offer and sale of the
Registrable Securities by the Holders from time to time in
accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement
and, thereafter, shall use its best efforts to cause such
Shelf Registration Statement to be declared effective under
the Act within 180 calendar days after the Issue Date;
provided, however, that no Holder shall be entitled to have
the Registrable Securities held by it covered by such Shelf
Registration unless such Holder is an Electing Holder.
(b) If (i) on or prior to 90 days following the date
of original issuance of the Securities, a Shelf
Registration Statement has not been filed with the
Commission, or (ii) on or prior to the 180th day
following the date of original issuance of the
Securities, such Shelf Registration Statement is not
declared effective (each, a "Registration Default"),
additional interest ("Liquidated Damages") will accrue
on the Securities from and including the day following
such Registration Default to but excluding the day on
which such Registration Default has been cured.
Liquidated Damages will be paid semi-annually in
arrears, with the first semi-annual payment due on the
first Interest Payment Date in respect of the
Securities following the date on which such Liquidated
Damages begin to accrue, and will accrue at a rate per
annum equal to an additional one-quarter of one percent
(0.25%) of the principal amount of the Securities
outstanding to and including the 90th day following
such Registration Default and at a rate per annum equal
to one-half of one percent (0.50%) thereof from and
after the 90th day following such Registration Default.
In the event that the Shelf Registration Statement
ceases to be effective prior to the second annual
anniversary of the initial effective date of the Shelf
Registration Statement or such earlier date as is
provided in this Agreement for a period in excess of 60
days, whether or not consecutive, during any 12-month
period, then the interest rate borne by the Securities
shall increase by an additional one-half of one percent
(0.50%) per annum on the 61st day of the applicable
12-month period such Shelf Registration Statement
ceases to be effective to but excluding the day on
which the Shelf Registration Statement again becomes
effective.
(c) The Company shall use its best efforts:
(i) To keep the Shelf Registration Statement con
tinuously effective in order to permit the Prospectus
forming part thereof to be usable by Holders for a
period of two years from the date the Shelf
Registration Statement is declared effective or such
shorter period that will terminate upon the earlier of
the following: (A) when all the Securities covered by
the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) when
all shares of Stock issued upon conversion of any such
Securities that had not been sold pursuant to the Shelf
Registration Statement have been sold pursuant to the
Shelf Registration Statement and (C) when, in the
written opinion of independent counsel to the Company,
all outstanding Registrable Securities held by persons
that are not affiliates of the Company may be resold
without registration under the Act pursuant to Rule
144(k) under the Act or any successor provision thereto
(in any such case, such period being called the
"Effectiveness Period"); and
(ii) After the date the Shelf Registration
Statement becomes effective, within 30 days after the
request of any holder of Registrable Securities that is
not then an Electing Holder, to take any action
necessary and required by law to enable such holder to
use the Prospectus forming a part thereof for resales
of Registrable Securities, including, without
limitation, any action necessary to identify such
holder as a selling securityholder in the Shelf
Registration Statement; provided, however, that nothing
in this subparagraph shall relieve such holder of the
obligation to return a completed and signed Notice and
Questionnaire to the Company in accordance with
Section 3(a)(2) hereof; and
(iii) If at any time, the Securities, pursuant to
Article VIII of the Indenture, are convertible into
securities other than Common Stock, the Company shall,
or shall cause any successor under the Indenture to,
cause such securities to be included in the Shelf
Registration Statement no later than the date on which
the Securities may then be convertible into such
securities.
The Company shall be deemed not to have used its best
efforts to keep the Shelf Registration Statement effective
during the requisite period if the Company voluntarily takes
any action that would result in Holders of Registrable
Securities covered thereby not being able to offer and sell
any such Registrable Securities during that period, unless
(i) such action is required by applicable law, or (ii) the
continued effectiveness of the Shelf Registration Statement
would require the Company to disclose a material financing,
acquisition or other corporate transaction, or other
material event or development and the Board of Directors
shall have determined in good faith that such disclosure is
not in the best interests of the Company and its
stockholders; provided that in the case of clause (i) above,
the Company thereafter must promptly comply with the
requirements of paragraph 3(i) below, if applicable and in
the case of clauses (i) and (ii) above, the Company shall be
entitled to suspend the use of any prospectus forming a part
of an effective Registration Statement under this Section 2
for a reasonable period of time (a "Delay Period"), except
that the aggregate number of days included in all Delay
Periods during any consecutive 12 months shall not exceed
the aggregate of 120 days (whether or not consecutive).
3. Registration Procedures. In connection with any
Shelf Registration Statement, the following provisions shall
apply:
(a) (1) Not less than 30 calendar days prior to
the Effective Time of the Shelf Registration Statement,
the Company shall mail the Notice and Questionnaire to
the holders of Registrable Securities. No holder shall
be entitled to be named as a selling securityholder in
the Shelf Registration Statement as of the Effective
Time, and no holder shall be entitled to use the
Prospectus forming a part thereof for resales of
Registrable Securities at any time, unless such holder
has returned a completed and signed Notice and
Questionnaire to the Company by the deadline for
response set forth therein; provided, however, holders
of Registrable Securities shall have at least 28
calendar days from the date on which the Notice and
Questionnaire is first mailed to such holders to return
a completed and signed Notice and Questionnaire to the
Company.
(2) After the Effective Time of the Shelf
Registration Statement, the Company shall, upon the
request of any holder of Registrable Securities that is
not then an Electing Holder, promptly send a Notice and
Questionnaire to such holder. The Company shall not be
required to take any action to name such holder as a
selling securityholder in the Shelf Registration
Statement or to enable such holder to use the
Prospectus forming a part thereof for resales of
Registrable Securities until such holder has returned a
completed and signed Notice and Questionnaire to the
Company.
(3) The term "Electing Holder" shall mean any
holder of Registrable Securities that has returned a
completed and signed Notice and Questionnaire to the
Company in accordance with Section 3(a)(1) or 3(a)(2)
hereof.
(b) The Company shall furnish to the Purchasers,
prior to the filing thereof with the Commission, a copy
of any Shelf Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to
the Prospectus included therein.
(c) Subject to Section 3(j), the Company shall
promptly take such action as may be necessary so that
(i) any Shelf Registration Statement and any amendment
thereto and any Prospectus forming part thereof and any
amendment or supplement thereto (and each report or
other document incorporated therein by reference in
each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective
rules and regulations thereunder, (ii) any Shelf
Registration Statement and any amendment thereto does
not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a
material fact required to be stated therein or
necessary to make the statements therein not misleading
and (iii) any Prospectus forming part of any Shelf
Registration Statement, and any amendment or supplement
to such Prospectus, does not include an untrue
statement of a material fact or omit to state a
material fact necessary in order to make the
statements, in the light of the circumstances under
which they were made, not misleading.
(d) (1) The Company shall advise the Purchasers
and, in the case of clause (i), the Electing Holders,
and, if requested by the Purchasers or any such
Electing Holder, confirm such advice in writing:
(i) when a Shelf Registration Statement and any
amendment thereto has been filed with the Commission
and when the Shelf Registration Statement or any
post-effective amendment thereto has become
effective; and
(ii) of any request by the Commission for
amendments or supplements to the Shelf Registration
Statement or the Prospectus included therein or for
additional information.
(2) The Company shall advise the Purchasers and
the Electing Holders and, if requested by the
Purchasers or any such Electing Holder, confirm such
advice in writing of:
(i) the issuance by the Commission of any stop
order suspending effectiveness of the Shelf
Registration Statement or the initiation of any
proceedings for that purpose;
(ii) the receipt by the Company of any
notification with respect to the suspension of the
qualification of the securities included therein for
sale in any jurisdiction or the initiation of any
proceeding for such purpose; and
(iii) the occurrence of any event that requires
the making of any changes in the Shelf Registration
Statement or the Prospectus so that, as of such
date, the Shelf Registration Statement and the
Prospectus do not contain an untrue statement of a
material fact and do not omit to state a material
fact required to be stated therein or necessary to
make the statements therein (in the case of the
Prospectus, in light of the circumstances under
which they were made) not misleading (which advice
shall be accompanied by an instruction to suspend
the use of the Prospectus until the requisite
changes have been made).
(e) The Company shall use its best efforts to
prevent the issuance and, if issued, to obtain the
withdrawal, of any order suspending the effectiveness
of any Shelf Registration Statement at the earliest
possible time.
(f) The Company shall furnish to each Electing
Holder included within the coverage of any Shelf
Registration Statement, without charge, at least one
copy of such Shelf Registration Statement and any post-
effective amendment thereto, including financial
statements and schedules, and, if the Electing Holder
so requests in writing, all reports, other documents
and exhibits that are filed with or incorporated by
reference in the Shelf Registration Statement.
(g) The Company shall, during the Effectiveness
Period, deliver to each Electing Holder of Registrable
Securities included within the coverage of any Shelf
Registration Statement, without charge, as many copies
of the Prospectus (including each preliminary
Prospectus) included in such Shelf Registration
Statement and any amendment or supplement thereto as
such Electing Holder may reasonably request; and the
Company consents (except during the continuance of any
event described in Section 3(c)(2)(iii)) to the use of
the Prospectus or any amendment or supplement thereto
by each of the Electing Holders of Registrable
Securities in connection with the offering and sale of
the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto during the Shelf
Registration Period.
(h) Prior to any offering of Registrable
Securities pursuant to any Shelf Registration
Statement, the Company shall register or qualify or
cooperate with the Electing Holders of Registrable
Securities included therein and their respective
counsel in connection with the registration or quali
fication of such Registrable Securities for offer and
sale under the securities or blue sky laws of such
jurisdictions in the United States as any such Electing
Holders reasonably request in writing and do any and
all other acts or things necessary or advisable to
enable the offer and sale in such jurisdictions of the
Registrable Securities covered by such Shelf
Registration Statement; provided, however, that in no
event shall the Company be obligated to (i) qualify as
a foreign corporation or as a broker or dealer in
securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Sec
tion 3(h), (ii) file any general consent to service of
process in any jurisdiction where it is not as of the
date hereof then so subject or (iii) subject itself to
taxation in any such jurisdiction if it is not so
subject.
(i) Unless any Registrable Securities shall be in
book-entry only form, the Company shall cooperate with
the Electing Holders of Registrable Securities to
facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be
delivered after sale pursuant to any Shelf Registration
Statement free of any restrictive legends and in such
permitted denominations and registered in such names as
Electing Holders may request in connection with the
sale of Registrable Securities pursuant to such Shelf
Registration Statement.
(j) Upon the occurrence of any event contemplated
by paragraph 3(d)(2)(iii) above, the Company shall
promptly prepare a post-effective amendment to any
Shelf Registration Statement or an amendment or
supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to
purchasers of the Registrable Securities included
therein, the Prospectus will not include an untrue
statement of a material fact or omit to state any
material fact necessary to make the statements therein,
in the light of the circumstances under which they were
made, not misleading (except, in each case, for an
untrue statement of a material fact or omission of a
material fact made in reliance on and in conformity
with written information furnished to the Company by or
on behalf of Electing Holders specifically for use
therein); provided, however, subject to Section 2, if
the Company determines that it is advisable to disclose
in the Shelf Registration Statement a financing,
acquisition or other corporate transaction, or other
material event or development and the Board of
Directors of the Company shall have determined in good
faith that such disclosure would not be in the best
interests of the Company and its stockholders, the
Company shall not be required to prepare and file such
amendment, supplement or document for such period as
the Board of Directors of the Company shall have
determined in good faith is in the best interests of
the Company. If the Company notifies the Electing
Holders of the occurrence of any event contemplated by
paragraph 3(d)(2)(iii) above, the Electing Holders
shall suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made.
(k) Not later than the effective date of any Shelf
Registration Statement hereunder, the Company shall
provide a CUSIP number for the Securities registered
under such Shelf Registration Statement.
(l) The Company shall use its best efforts to
comply with all applicable rules and regulations of the
Commission, and to make generally available to its secu
rityholders as soon as practicable, but in any event
not later than eighteen months after (i) the effective
date (as defined in Rule 158(c) under the Securities
Act) of the Shelf Registration Statement, (ii) the
effective date of each post-effective amendment to the
Shelf Registration Statement, and (iii) the date of
each filing by the Company with the Commission of an
Annual Report on Form 10-K that is incorporated by
reference in the Shelf Registration Statement, an
earning statement of the Company and its subsidiaries
complying with Section 11(a) of the Securities Act and
the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158).
(m) Not later than the Effective Time of the Shelf
Registration Statement, the Company shall cause the
Indenture to be qualified under the Trust Indenture
Act; in connection with such qualification, the Company
shall cooperate with the Trustee under the Indenture
and the Electing Holders to effect such changes to the
Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the Trust
Indenture Act; and the Company shall execute, and shall
use all reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect
such changes and all other forms and documents required
to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner. In
the event that any such amendment or modification
referred to in this Section 3(m) involves the
appointment of a new trustee under the Indenture, the
Company shall appoint a new trustee thereunder pursuant
to the applicable provisions of the Indenture.
(n) The Company may require each Electing Holder
of Registrable Securities to be sold pursuant to any
Shelf Registration Statement to furnish to the Company
such information regarding the Electing Holder and the
distribution of such Registrable Securities as may be
required by applicable law or regulation for inclusion
in such Shelf Registration Statement and the Company
may exclude from such registration the Registrable
Securities of any Electing Holder that fails to furnish
such information within a reasonable time after
receiving such request.
(o) The Company shall, if requested, promptly
include or incorporate in a Prospectus supplement or
post-effective amendment to a Shelf Registration
Statement, such information as the Managing
Underwriters reasonably agree should be included
therein and to which the Company does not reasonably
object and shall make all required filings of such
Prospectus supplement or post-effective amendment as
soon as practicable after they are notified of the
matters to be included or incorporated in such
Prospectus supplement or post-effective amendment.
(p) The Company shall, to the extent applicable,
enter into such customary agreements (including
underwriting agreements in customary form containing a
provision for indemnity by the underwriters) to take
all other appropriate actions in order to expedite or
facilitate the registration or the disposition of the
Registrable Securities, and in connection therewith, if
an underwriting agreement is entered into, cause the
same to contain indemnification provisions and
procedures substantially identical to those set forth
in Section 5 (or such other provisions and procedures
acceptable to the Managing Underwriters, if any) with
respect to all parties to be indemnified pursuant to
Section 5.
(q) The Company shall:
(i) make reasonably available for inspection by
the Electing Holders of Registrable Securities to be
registered thereunder, any underwriter participating
in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant
or other agent retained by such Electing Holders or
any such underwriter all relevant financial and
other records which are material to such Shelf
Registration, pertinent corporate documents which
are material to such Shelf Registration and
properties of the Company and its subsidiaries;
(ii) cause the Company's officers, directors and
employees to make reasonably available for
inspection all relevant information reasonably
requested by such Electing Holders or any such
underwriter, attorney, accountant or agent in
connection with any such Shelf Registration
Statement, in each case, as is customary for similar
due diligence examinations; provided, however, that
any information that is designated in writing by the
Company, in good faith, as confidential at the time
of delivery of such information shall be kept confi
dential by such Electing Holders or any such
underwriter, attorney, accountant or agent, unless
such disclosure is made in connection with a court
proceeding or required by law, or such information
becomes available to the public generally or through
a third party without an accompanying obligation of
confidentiality; and provided further that the
foregoing inspection and information gathering
shall, to the greatest extent possible, be
coordinated on behalf of the Electing Holders and
the other parties entitled thereto by one counsel
designated by and on behalf of such Electing Holders
and other parties reasonably acceptable to the
Company;
(iii) make such representations and warranties to
the Electing Holders of Registrable Securities
registered thereunder and the underwriters, if any,
in form, substance and scope as are customarily made
by the Company to underwriters in primary
underwritten offerings and covering matters
including, but not limited to, those set forth in
the Purchase Agreement;
(iv) obtain opinions of counsel to the Company
and updates thereof (which counsel and opinions (in
form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any)
in customary form addressed to each Electing Holder
and the underwriters, if any, covering such matters
as are customarily covered in opinions requested in
underwritten offerings and such other matters as may
be reasonably requested by such Electing Holders and
underwriters (it being agreed that the matters to be
covered by such opinion or written statement by such
counsel delivered in connection with such opinions
shall include in customary form, without limitation,
as of the date of the opinion and as of the
effective date of the Shelf Registration Statement
or most recent post-effective amendment thereto, as
the case may be, the absence from such Shelf
Registration Statement and the prospectus included
therein, as then amended or supplemented, including
the documents incorporated by reference therein, of
an untrue statement of a material fact or the
omission to state therein a material fact required
to be stated therein or necessary to make the state
ments therein not misleading);
(v) obtain "cold comfort" letters and updates
thereof from the independent public accountants of
the Company (and, if necessary, any other
independent public accountants of any subsidiary of
the Company or of any business acquired by the
Company for which financial statements and financial
data are, or are required to be, included in the
Shelf Registration Statement), addressed to each
such Electing Holder of Registrable Securities
registered thereunder and the underwriters, if any,
in customary form and covering matters of the type
customarily covered in "cold comfort" letters in
connection with primary underwritten offerings;
(vi) deliver such documents and certificates as
may be reasonably requested by any such Electing
Holders and the Managing Underwriters, if any,
including those to evidence compliance with Section
3(i) and with any customary conditions contained in
the underwriting agreement or other agreement
entered into by the Company.
The foregoing actions set forth in clauses (iii), (iv),
(v) and (vi) of this Section 3(q) shall be performed at
each closing under any underwritten offering to the
extent required thereunder.
(r) The Company will use its best efforts to cause
the Stock issuable upon conversion thereof to be listed
for quotation on the NYSE or other stock exchange or
trading system on which the Stock primarily trades on
or prior to the effective date of any Shelf
Registration Statement hereunder.
(s) In the event that any broker-dealer registered
under the Exchange Act shall underwrite any Registrable
Securities or participate as a member of an
underwriting syndicate or selling group or "assist in
the distribution" (within the meaning of the Conduct
Rules and the By-Laws of the National Association of
Securities Dealers, Inc. ("NASD")) thereof, whether as
an Electing Holder of such Registrable Securities or as
an underwriter, a placement or sales agent or a broker
or dealer in respect thereof, or otherwise, the Company
shall assist such broker-dealer in complying with the
requirements of such Rules and By-Laws, including,
without limitation, by (A) such Rules or By-Laws,
including Rule 2720, shall so require, engaging a
"qualified independent underwriter" (as defined in Rule
2720) to participate in the preparation of the Shelf
Registration Statement relating to such Registrable
Securities and to exercise usual standards of due
diligence in respect thereto, (B) indemnifying any such
qualified independent underwriter to the extent of the
indemnification of underwriters provided in Section 5
hereof and (C) providing such information to such
broker-dealer as may be required in order for such
broker-dealer to comply with the requirements of the
Rules of Fair Practice of the NASD.
(t) The Company shall use its best efforts to take
all other steps necessary to effect the registration,
offering and sale of the Registrable Securities covered
by the Shelf Registration Statement contemplated
hereby.
4. Registration Expenses. Except as otherwise provided
in Section 6, the Company shall bear all fees and expenses
incurred in connection with the performance of its
obligations under Sections 2, 3 and 6 hereof.
5. Indemnification and Contribution. (a) In
connection with any Shelf Registration Statement, the
Company shall indemnify and hold harmless the Purchasers,
each Electing Holder, each underwriter who participates in
an offering of Registrable Securities, each person, if any,
who controls any of such parties within the meaning of
Section 15 of the Securities Act or Section 20 of the
Exchange Act and each of their respective directors,
officers, employees, trustees and agents (each such person
being sometimes referred to as an "Indemnified Person"),
against any losses, claims, damages or liabilities, joint or
several, to which such Indemnified Person may become subject
under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Shelf Registration Statement under which
such Registrable Securities are to be registered under the
Securities Act, or any Prospectus contained therein or
furnished by the Company to any Indemnified Person, or any
amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary
to make the statements therein not misleading, and the
Company hereby agrees to reimburse such Indemnified Person
for any reasonable legal or other expenses incurred by them
in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, how
ever, that the Company shall not be liable in any such case
to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission
made in such Shelf Registration Statement or Prospectus in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Indemnified
Person expressly for use therein; and provided further that
the Company shall not be liable to any Indemnified Person
under the indemnity agreement in this subsection (a) with
respect to any Shelf Registration or Prospectus to the
extent that any such loss, claim, damage or liability of
such Indemnified Person results from the fact that such
Indemnified Person sold Securities to a person as to whom it
shall be established that there was not sent or given, at or
prior to the written confirmation of such sale, a copy of
the Shelf Registration Statement or Prospectus in any case
if the Company had previously furnished copies thereof in
sufficient quantity to such Indemnified Person and to the
extent the loss, claim, damage or liability of such
Indemnified Person results from an untrue statement or
omission of a material fact contained in the Shelf
Registration Statement or Prospectus which was identified in
writing to such Indemnified Person and subsequently
corrected in the Shelf Registration Statement or Prospectus
and such loss, claim, damage or liability would have been
eliminated by the delivery of such corrected Shelf
Registration Statement or Prospectus.
(b) Each Electing Holder agrees, severally and not
jointly, to indemnify and hold harmless the Company, the
Purchasers, each underwriter who participates in an offering
of Registrable Securities and the other Electing Holders and
each of their respective directors, officers (including each
officer of the Company who signed the Shelf Registration
Statement), employees, trustees and agents and each Person,
if any, who controls the Company, the Purchasers, any under
writer or any other Electing Holder within the meaning of
Section 15 of the Securities Act or Section 20 of the
Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the
indemnity contained in Section 5(a) hereof, as incurred, but
only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in
reliance upon and in conformity with written information
furnished to the Company by such Electing Holder expressly
for use in the Shelf Registration Statement (or any amend
ment thereto) or any Prospectus (or any amendment or supple
ment thereto); provided, however, that, no such Electing
Holder shall be liable for any claims hereunder in excess of
the amount of net proceeds received by such Electing Holder
from the sale of Registrable Securities pursuant to the
Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice
to each indemnifying party of any action commenced against
it in respect of which indemnity may be sought hereunder,
enclosing a copy of all papers served on such indemnified
party, but failure to so notify an indemnifying party shall
not relieve it of any liability which it may have to the
indemnified party otherwise than on account of this
indemnity agreement. An indemnifying party may participate
at its own expense in the defense of any such action. If an
indemnifying party so elects within a reasonable time after
receipt of such notice, such indemnifying party, jointly
with any other indemnifying party, may assume the defense of
such action with counsel chosen by it and approved by the
indemnified party or parties defendant in such action,
provided that if any such indemnified party reasonably
determines that there may be legal defenses available to
such indemnified party which are different from or in
addition to those available to such indemnifying party or
that representation of such indemnifying party and any
indemnified party by the same counsel would present a
conflict of interest, then such indemnifying party or
parties shall not be entitled to assume such defense. If an
indemnifying party is not entitled to assume the defense of
such action as a result of the proviso to the preceding
sentence, counsel for such indemnifying party shall be
entitled to conduct the defense of such indemnifying party
and counsel for each indemnified party or parties shall be
entitled to conduct the defense of such indemnified party or
parties. If an indemnifying party assumes the defense of an
action in accordance with and as permitted by the provisions
of this paragraph, such indemnifying party shall not be
liable for any fees and expenses of counsel for the
indemnified parties incurred thereafter in connection with
such action. In no event shall the indemnifying party or
parties be liable for the fees and expenses of more than one
counsel (in addition to any local counsel) separate from its
own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in
the same jurisdiction arising out of the same general
allegations or circumstances. In no event shall an
indemnifying party be liable with respect to any action or
claim settled without its written consent.
(d) In order to provide for just and equitable
contribution in circumstances in which the indemnity
provision agreement provided for in this Section 5 is for
any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the
Company, the Purchasers and the Electing Holders shall
contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Purchasers
and the Electing Holders, as incurred; provided that no
Person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any Person that was not guilty
of such fraudulent misrepresentation. As between the C
ompany, the Purchasers and the Electing Holders, such
parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature
contemplated by such indemnity agreement in such proportion
as shall be appropriate to reflect the relative fault of the
Company, on the one hand, and the Purchasers and the
Electing Holders, on the other hand, with respect to the
statements or omissions which resulted in such loss,
liability, claim, damage or expense, or action in respect
thereof, as well as any other relevant equitable consider
ations. The relative fault of the Company, on the one hand,
and of the Purchasers and the Electing Holders, on the other
hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a
material fact relates to information supplied by the
Company, on the one hand, or by or on behalf of the
Purchasers or the Electing Holders, on the other, and the
parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or
omission; including with respect to any Purchaser or
Electing Holder, the extent to which such losses, claims,
damages or liabilities with respect to any Shelf
Registration Statement or Prospectus results from the fact
that the Purchaser or Electing Holder sold Securities to a
person to whom there was not sent or given a copy of the
Shelf Registration Statement or Prospectus, where the
Company had previously furnished copies thereof in
sufficient quantity to such Purchaser or Electing Holder and
to the extent the loss, claim, damage or liability of such
Purchaser or Electing Holder results from an untrue
statement or omission of a material fact contained in the
Shelf Registration Statement or Prospectus which was
identified in writing to such Purchaser or Electing Holder
and subsequently corrected in the Shelf Registration
Statement or Prospectus and such loss, claim, damage or
liability would have been eliminated by the delivery of such
corrected Shelf Registration Statement or Prospectus. The
Company, the Purchasers and the Electing Holders of the
Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 5 were to
be determined by pro rata allocation or by any other method
of allocation that does not take into account the relevant
equitable considerations. For purposes of this Section
5(d), each director, officer, employee, trustee, agent and
Person, if any, who controls the Purchasers or an Electing
Holder within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Purchasers or such Electing
Holder, and each director, officer, employee, trustee and
agent of the Company, and each Person, if any, who controls
the Company within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as the Company. No party
shall be liable for contribution with respect to any action,
suit, proceeding or claim settled without its written
consent.
(e) Notwithstanding any other provision of this
Section 5, in no event will any (i) Electing Holder be
required to undertake liability to any person under this
Section 5 for any amounts in excess of the dollar amount of
the proceeds to be received by such holder from the sale of
such holder's Registrable Securities (after deducting any
fees, discounts and commissions applicable thereto) pursuant
to any Shelf Registration Statement under which such
Registrable Securities are to be registered under the
Securities Act and (ii) underwriter, selling agent or other
securities professional be required to undertake liability
to any person hereunder for any amounts in excess of the
discount, commission or other compensation payable to such
underwriter, selling agent or other securities professional
with respect to the Registrable Securities underwritten by
it and distributed to the public.
(f) The obligations of the Company under this Section
5 shall be in addition to any liability which the Company
may otherwise have and shall extend, or not extend, as the
case may be, to any Indemnified Person, and the obligations
of any Indemnified Person under this Section 5 shall be in
addition to any liability which such Indemnified Person may
otherwise have and shall extend, or not extend, as the case
may be, to the Company. The remedies provided in this
Section 5 are not exclusive and shall not limit any rights
or remedies which may otherwise be available to an
indemnified party at law or in equity.
6. Underwritten Offering. The Electing Holders of
Registrable Securities covered by the Shelf Registration
Statement who desire to do so may sell such Registrable
Securities in an underwritten offering in accordance with
the conditions set forth below. In any such underwritten
offering, the investment banker or bankers and manager or
managers that will administer the offering will be selected
by, and the underwriting arrangements with respect thereto
will be approved by the Electing Holders of a majority of
the Registrable Securities to be included in such offering;
provided, however, that (i) with respect to the investment
bankers and managers, such investment bankers and managers
will be selected by the Company from a list of nationally
recognized firms to be provided by the Electing Holders and
(ii) the Company shall not be obligated to arrange for more
than one underwritten offering during the Effectiveness
Period. No Electing Holder may participate in any
underwritten offering contemplated hereby unless such
Electing Holder (a) agrees to sell such Electing Holder's
Registrable Securities in accordance with any approved
underwriting arrangements, (b) completes and executes all
reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting
arrangements and (c) at least 25% of the outstanding
Registrable Securities are included in such underwritten
offering. The Electing Holders participating in any
underwritten offering shall be responsible for any expenses
customarily borne by selling securityholders, including
underwriting discounts and commissions and fees and expenses
of counsel to the selling securityholders and shall
reimburse the Company for the fees and disbursements of
their counsel, their independent public accountants and any
printing expenses incurred in connection with such
underwritten offerings. Notwithstanding the foregoing or
the provisions of Section 3(n) hereof, upon receipt of a
request from the Managing Underwriter or a representative of
Electing Holders of a majority of the Registrable Securities
outstanding to prepare and file an amendment or supplement
to the Shelf Registration Statement and Prospectus in connec
tion with an underwritten offering, the Company may delay
the filing of any such amendment or supplement for up to 90
days if the Company in good faith has a valid business
reason for such delay.
7. Miscellaneous.
(a) Other Registration Rights. From the date of this
Agreement, the Company may grant registration rights that
would permit any Person that is a third party the right to
piggy-back on any Shelf Registration Statement, provided
that if the Managing Underwriter, if any, of such offering
delivers an opinion to the Electing Holders that the total
amount of securities which they and the holders of such
piggy-back rights intend to include in any Shelf Regis
tration Statement is so large as to materially adversely
affect the success of such offering (including the price at
which such securities can be sold), then only the amount,
the number or kind of securities to be offered for the
account of holders of such piggy-back rights granted after
the date of this agreement will be reduced to the extent
necessary to reduce the total amount of securities to be
included in such offering to the amount, number or kind
recommended by the Managing Underwriter prior to any
reduction in the amount of Registrable Securities to be
included.
(b) Amendments and Waivers. This Agreement,
including this Section 7(b), may be amended, and waivers or
consents to departures from the provisions hereof may be
given, only upon the written consent of Goldman, Sachs & Co.
on behalf of the Purchasers or by a written instrument duly
executed by the Company and the holders of a majority in
aggregate principal amount of Registrable Securities then
outstanding. Each holder of Registrable Securities
outstanding at the time of any such amendment, waiver or
consent or thereafter shall be bound by any amendment,
waiver or consent effected pursuant to this Section 7(b),
whether or not any notice, writing or marking indicating
such amendment, waiver or consent appears on the Registrable
Securities or is delivered to such holder.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be given as
provided in the Indenture.
(d) Parties in Interest. The parties to this
Agreement intend that all holders of Registrable Securities
shall be entitled to receive the benefits of this Agreement
and that any Electing Holder shall be bound by the terms and
provisions of this Agreement by reason of such election with
respect to the Registrable Securities which are included in
a Shelf Registration Statement. All the terms and
provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by the
respective successors and assigns of the parties hereto and
any holder from time to time of the Registrable Securities
to the aforesaid extent. In the event that any transferee
of any holder of Registrable Securities shall acquire
Registrable Securities, in any manner, whether by gift,
bequest, purchase, operation of law or otherwise, such
transferee shall, without any further writing or action of
any kind, be entitled to receive the benefits of and, if an
Electing Holder, be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of
this Agreement to the aforesaid extent.
(e) Counterparts. This agreement may be executed in
any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
(f) Headings. The headings in this agreement are for
convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(g) Governing Law. This agreement shall be governed
by and construed in accordance with the laws of the State of
New York.
(h) Severability. In the event that any one or more
of the provisions contained herein, or the application
thereof in any circumstances, is held invalid, illegal or
unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall
not be in any way impaired or affected thereby, it being
intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted
by law.
(i) Survival. The respective indemnities,
agreements, representations, warranties and other provisions
set forth in this Agreement or made pursuant hereto shall
remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof)
made by or on behalf of any Electing Holder, any director,
officer or partner of such holder, any agent or underwriter,
any director, officer or partner of such agent or
underwriter, or any controlling person of any of the
foregoing, and shall survive the transfer and registration
of the Registrable Securities of such holder. Upon
termination of the Effectiveness Period, this Agreement
shall terminate except for Sections 3(l), 4, 5 and 7, which
shall survive termination.
Please confirm that the foregoing correctly sets forth
the agreement between the Company and you.
Very truly yours,
AMERICA ONLINE, INC.
By:/S/LENNERT J. LEADER
Name: Lennert J. Leader
Title: Senior Vice President,
Chief Financial Officer,
Treasurer, Chief Accounting Officer and
Assistant Secretary
The foregoing Registration Rights Agreement is hereby confirmed
and accepted as of the date first above written:
Goldman, Sach & Co.
BT Alex, Brown
Lehman Brothers Inc.
Cowen & Company
/S/Goldman, Sachs & Co.
(Goldman, Sach & Co.)
Exhibit A
AMERICA ONLINE, INC.
INSTRUCTION TO DTC PARTICIPANTS
(Date of Mailing)
URGENT - IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: [DATE]
The Depository Trust Company ("DTC") has identified you as a
DTC Participant through which beneficial interests in the
America Online, Inc. (the "Company") 4% Convertible
Subordinated Notes due November 15, 2002 (the "Securities")
are held.
The Company is in the process of registering the Securities
under the Securities Act of 1933 for resale by the
beneficial owners thereof. In order to have their
Securities included in the registration statement,
beneficial owners must complete and return the enclosed
Notice of Registration Statement and Selling Securityholder
Questionnaire.
It is important that beneficial owners of the Securities
receive a copy of the enclosed materials as soon as possible
as their rights to have the Securities included in the
registration statement depend upon their returning the
Notice and Questionnaire by [DEADLINE FOR RESPONSE]. Please
forward a copy of the enclosed documents to each beneficial
owner that holds interests in the Securities through you.
If you require more copies of the enclosed materials or have
any questions pertaining to this matter, please contact
[Name, address and telephone number of contact at the
Company).
America Online, Inc.
Notice of Registration Statement
and
Selling Securityholder Questionnaire
(Date)
Reference is hereby made to the Registration Rights
Agreement (the "Registration Rights Agreement") between America
Online, Inc. (the "Company") and the Purchasers named therein.
Pursuant to the Registration Rights Agreement, the Company has
filed with the United States Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (the
"Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the
"Securities Act"), of the Company's 4% Convertible Subordinated
Notes due November 15, 2002 (the "Securities") and the shares of
Common Stock, par value $.01 per share (the "Common Stock"),
issuable upon conversion thereof. A copy of the Registration
Rights Agreement is attached hereto. All capitalized terms not
otherwise defined herein shall have the meanings ascribed thereto
in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities (as defined
below) is entitled to have the Registrable Securities
beneficially owned by it included in the Shelf Registration
Statement. In order to have Registrable Securities included in
the Shelf Registration Statement, this Notice of Registration
Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the
Company's counsel at the address set forth herein for receipt ON
OR BEFORE [DEADLINE FOR RESPONSE]. Beneficial owners of
Registrable Securities who do not complete, execute and return
this Notice and Questionnaire by such date (i) will not be named
as selling securityholders in the Shelf Registration Statement
and (ii) may not use the Prospectus forming a part thereof for
resales of Registrable Securities.
Certain legal consequences arise from being named as a
selling securityholder in the Shelf Registration Statement and
related Prospectus. Accordingly, holders and beneficial owners
of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named
or not being named as a selling securityholder in the Shelf
Registration Statement and related Prospectus.
The term "Registrable Securities" is defined in the
Registration Rights Agreement to mean all or any portion of the
Securities issued from time to time under the Indenture in
registered form and the shares of Common Stock issuable upon
conversion of such Securities, including any Securities initially
issued in bearer form and constituting the unsold allotment of a
distributor (within the meaning of Regulation S under the
Securities Act) of such Securities and later exchanged for
Securities in registered form; provided, however, that a security
ceases to be a Registrable Security when it is no longer a
Restricted Security.
The term "Restricted Security" is defined in the
Registration Rights Agreement to mean any Security or share
of Common Stock issuable upon conversion thereof except any
such Security or share of Common Stock which (i) has been
effectively registered under the Securities Act and sold in
a manner contemplated by the Shelf Registration Statement,
(ii) has been transferred in compliance with Rule 144 under
the Securities Act (or any successor provision thereto) or
is transferable pursuant to paragraph (k) of such Rule 144
(or any successor provision thereto), (ii) has been sold in
compliance with Regulation S under the Securities Act (or
any successor thereto) and does not constitute the unsold
allotment of a distributor within the meaning of Regulation
S under the Securities Act, or (iv) has otherwise been
transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act
has been delivered by or on behalf of the Company in
accordance with Section 3.05 of the Indenture.
ELECTION
The undersigned holder (the "Selling Securityholder")
of Registrable Securities hereby elects to include in the
Shelf Registration Statement the Registrable Securities
beneficially owned by it and listed below in Item (3). The
undersigned, by signing and returning this Notice and
Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this
Notice and Questionnaire and the Registration Rights
Agreement, including, without limitation, Section 5 of the
Registration Rights Agreement, as if the undersigned Selling
Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the
Shelf Registration Statement, the Selling Securityholder
will be required to deliver to the Company and Trustee the
Notice of Transfer set forth in Appendix A to the
Prospectus. This Notice of Transfer is set forth as Exhibit
A to the Prospectus.
The Selling Securityholder hereby provides the
following information to the Company and represents and
warrants that such information is accurate and complete.
The Selling Securityholder also agrees, severally and not
jointly, with respect to the information so provided, to
indemnify and hold harmless the Company, the Purchasers,
each underwriter who participates in the offering and the
other Selling Securityholders and each of their respective
directors, officers (including each officer of the Company
who signed the Shelf Registration Statement), employees,
trustees and agents and each Person, if any, who controls
the Company, the Purchasers, any underwriter or any other
Selling Securityholders within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act, from
and against any and all loss, liability, claim, damage and
expense whatsoever described in the indemnity contained in
Section 5(a) of the Registration Rights Agreement, as
incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made
in the Shelf Registration Statement (or any amendment
thereto) or any Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with the written
information furnished below to the Company by such Selling
Securityholder expressly for use in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus (or
any amendment or supplement thereto); provided, however,
that such Selling Securityholder shall not be liable for any
claims hereunder in excess of the amount of net proceeds
received by such Selling Securityholder from the sale of
Registrable Securities pursuant to the Shelf Registration
Statement.
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
(b) Full Legal Name of Registered Holder (if not the
same as in (a) above) of Registrable Securities
Listed in (3) below:
(c) Full Legal Name of DTC Participant (if applicable
and if not the same as (b) above) Through Which
Registrable Securities Listed in (3) below are
Held:
(2) Address for Notices to Selling Securityholder:
Telephone:
Fax:
Contact Person:
(3) Beneficial Ownership of Securities and shares of Common
Stock issued upon conversion of Securities:
Except as set forth below in this Item (3), the
undersigned does not beneficially own any Securities or
shares of Common Stock issued upon conversion of any
Securities.
(a)Principal amount of Registrable Securities (as
defined in the Registration Rights Agreement)
beneficially owned:
CUSIP No(s). of such Registrable Securities:
Number of shares of Common Stock (if any) issued
upon conversion of such Registrable Securities:
(b)Principal amount of Securities other than
Registrable Securities beneficially owned:
CUSIP No(s). of such other Securities:
Number of shares of Common Stock (if any) issued
upon conversion of such other Securities:
(c)Principal amount of Registrable Securities which
the undersigned wishes to be included in the Shelf
Registration Statement:
CUSIP No(s). of such Registrable Securities to be
included in the Shelf Registration Statement:
Number of shares of Common Stock (if any) issued
upon conversion of Registrable Securities which are
to be included in the Shelf Registration Statement:
(4) Beneficial ownership of Other Securities of the
Company:
Except as set forth below in this Item (4), the
undersigned Selling Securityholder is not the beneficial or
registered owner of any shares of Common Stock or any other
securities of the Company, other than the Securities and
shares of Common Stock listed above in Item (3).
State any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling
Securityholder nor any of its affiliates, officers,
directors or principal equity holders (5% or more) has held
any position or office or has had any other material
relationship with the Company (or its predecessors or
affiliates) during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling
Securityholder intends to distribute the Registrable
Securities listed above in Item (3) only as follows (if at
all): Such Registrable Securities may be sold from time to
time directly by the undersigned Selling Securityholder or,
alternatively, through underwriters, broker-dealers or
agents. Such Registrable Securities may be sold in one or
more transactions at fixed prices, at prevailing market
prices at the time of sale, at varying prices determined at
the time of sale, or at negotiated prices. Such sales may
be effected in transactions (which may involve crosses or
block transactions) (i) on any national securities exchange
or quotation service on which the Registered Securities may
be listed or quoted at the time of sale, (ii) in the over-
the-counter market, (iii) in transactions otherwise than on
such exchanges or services or in the over-the-counter
market, or (iv) through the writing of options. In
connection with sales of the Registrable Securities or
otherwise, the Selling Securityholder may enter into hedging
transactions with broker-dealers, which may in turn engage
in short sales of the Registrable Securities in the course
of hedging the positions they assume. The Selling
Securityholder may also sell Registrable Securities short
and deliver Registrable Securities to close out such short
positions, or loan or pledge Registrable Securities to
broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution
take the form of an underwritten offering of the Registrable
Securities without the prior agreement of the Company.
By signing below, the Selling Securityholder
acknowledges that it understands its obligation to comply,
and agrees that it will comply, with the provisions of the
Exchange Act and the rules and regulations thereunder,
particularly Regulation M.
In the event that the Selling Securityholder transfers
all or any portion of the Registrable Securities listed in
Item (3) above after the date on which such information is
provided to the Company, the Selling Securityholder agrees
to notify the transferees at the time of the transfer of its
rights and obligations under this Notice and Questionnaire
and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents
to the disclosure of the information contained herein in its
answers to Items (1) through (6) above and the inclusion of
such information in the Shelf Registration Statement and
related Prospectus. The Selling Securityholder understands
that such information will be relied upon by the Company in
connection with the preparation of the Shelf Registration
Statement and related Prospectus.
In accordance with the Selling Securityholder's
obligation under Section 3(a) of the Registration Rights
Agreement to provide such information as may be required by
law for inclusion in the Shelf Registration Statement, the
Selling Securityholder agrees to promptly notify the Company
of any inaccuracies or changes in the information provided
herein which may occur subsequent to the date hereof at any
time while the Shelf Registration Statement remains in
effect. All notices hereunder and pursuant to the
Registration Rights Agreement shall be made in writing, by
hand-delivery, first-class mail, or air courier guaranteeing
overnight delivery as follows:
(i) To the Company:
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: Chief Financial Officer
(ii) With a copy to:
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: Sheila A. Clark, Esq.
Deputy General Counsel
Once this Notice and Questionnaire is executed by the
Selling Securityholder and received by the Company's
counsel, the terms of this Notice and Questionnaire, and the
representations and warranties contained herein, shall be
binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal
representatives, and assigns of the Company and the Selling
Securityholder (with respect to the Registrable Securities
beneficially owned by such Selling Securityholder and listed
in Item (3) above. This Agreement shall be governed in all
respects by the laws of the State of New York.
IN WITNESS WHEREOF, the undersigned, by authority duly
given, has caused this Notice and Questionnaire to be
executed and delivered either in person or by its duly
authorized agent.
Dated:
Selling Securityholder
(Print/type full legal
name of beneficial owner
of Registrable
Securities)
By:
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR
RESPONSE] TO THE COMPANY'S COUNSEL AT:
America Online, Inc.
22000 AOL Way
Dulles, VA 20166-9323
Attention: Sheila A. Clark, Esq.
Deputy General Counsel
Exhibit B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
[Trustee]
Attention: Corporate Trust Services
Re:America Online, Inc. (the "Company") 4%
Convertible Subordinated Notes due November
15, 2002 (the "Notes")
Dear Sirs:
Please be advised that_____________________ has
transferred $____________ aggregate principal amount of the
above-referenced Notes pursuant to an effective Registration
Statement on Form S-3 (File No. 333-____) filed by the
Company.
We hereby certify that the prospectus delivery
requirements, if any, of the Securities Act of 1933, as
amended, have been satisfied and that the above-named
beneficial owner of the Notes is named as a "Selling Holder"
in the Prospectus dated _____________ 19__ or in supplements
thereto, and that the aggregate principal amount of the
Notes transferred are the Notes listed in such Prospectus
opposite such owner's name.
Dated:
Very truly yours,
(Name)
By:
(Authorized Signature)
_______________________________
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PURCHAGREE.DOC
America Online, Inc.
4 % Convertible Subordinated Notes
due November 15, 2002
Purchase Agreement
November 12, 1997
Goldman, Sachs & Co.,
BT Alex. Brown
Lehman Brothers Inc.
Cowen & Company
As representatives of the several Purchasers
named in Schedule I hereto,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
America Online, Inc., a Delaware corporation (the "Company"), proposes,
subject to the terms and conditions stated herein, to issue and sell to the
Purchasers named in Schedule I hereto (the "Purchasers") an aggregate of
$350,000,000 principal amount of its 4% Convertible Subordinated Notes due
November 15, 2002 (the "Firm Securities"), and, at the election of the
Purchasers, up to an aggregate of $50,000,000 additional principal amount
thereof (the "Optional Securities") (the Firm Securities and any Optional
Securities which the Purchasers elect to purchase pursuant to the Purchase
Agreement (as hereinafter defined being collectively referred to as the
"Securities") convertible into Common Stock, par value $0.01 per share
("Stock"), of the Company.
The Purchasers and other holders (including subsequent transferees) of
Securities will be entitled to the benefits of the registration rights
agreement, to be dated as of the Time of Delivery (as defined below) (the
"Registration Rights Agreement") between the Company and the Purchasers, in the
form attached hereto as Exhibit B. Pursuant to the Registration Rights
Agreement, the Company will agree to file with the United States Securities and
Exchange Commission (the "Commission") under the circumstances set forth therein
a shelf registration statement pursuant to Rule 415 under the United States
Securities Act of 1933, as amended (the "Securities Act") relating to the resale
of (i) such Securities and (ii) the shares of Stock initially issuable upon
conversion of the Securities by holders thereof, and to use its best efforts to
cause such shelf registration statement to be declared effective.
1. The Company represents and warrants to, and agrees with, each of the
Purchasers that:
(a) An offering circular, dated November 12, 1997 (the "Offering
Circular"), including the international supplement thereto, and the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1997
(the "Form 10-K") filed with the United States Securities and Exchange
Commission (the "Commission") pursuant to Section 13(a), 13(c) or 15(d) of
the United States Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the Company's definitive proxy statement (the "Proxy Statement")
in connection with its 1997 annual meeting of stockholders, which are
attached to and made a part of the Offering Circular, has been prepared in
connection with the offering of the Securities and shares of the Stock
issuable upon conversion thereof. Any reference to the Offering Circular
shall be deemed to refer to and include the Form 10-K and the Proxy
Statement and any reference to the Offering Circular, as amended or
supplemented, as of any specified date, shall be deemed to include (i) any
documents filed with the Commission pursuant to Section 13(a), 13(c) or
15(d) of the Exchange Act after the date of the Offering Circular and prior
to such specified date and (ii) any Additional Issuer Information (as
defined in Section 5(f)) furnished by the Company prior to the completion of
the distribution of the Securities; and all documents filed under the
Exchange Act and so deemed to be included in the Offering Circular or any
amendment or supplement thereto are hereinafter called the "Exchange Act
Reports". The Exchange Act Reports, at the time they were or are filed with
the Commission, conformed or will conform in all material respects to the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder. The Offering Circular and any
amendments or supplements thereto and the Exchange Act Reports did not and
will not, as of their respective dates, contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that this representation and
warranty shall not apply to any statements or omissions made in reliance
upon and in conformity with information furnished in writing to the Company
by a Purchaser by or on behalf of Goldman, Sachs & Co. expressly for use
therein;
(b) Neither the Company nor any of its subsidiaries has sustained since
the date of the latest audited financial statements included in the Offering
Circular any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any
labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, except for any
loss or interference that would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole; and, since the respective
dates as of which information is given in the Offering Circular, there has
not been any change in the capital stock or the Stock, including but not
limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such substantially similar
securities (other than (i) pursuant to employee stock option plans existing
on the date of this Agreement, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of the date of this
Agreement, (ii) upon conversion of, and as contemplated by the Registration
Rights Agreement with respect to the Securities or (iii) as permitted
pursuant to paragraph 5(d)(iii) hereof) or long-term debt of the Company or
any of its subsidiaries (which, for purposes of this representation, shall
not include any increase in, or draw down under, the Company's credit
facility with The Chase Manhattan Bank, the entering into of any lease
financings or the entering into of any mortgage on the Company's real
property) or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of opera
tions of the Company and its subsidiaries, taken as a whole, otherwise than
as set forth or contemplated in the Offering Circular;
(c) Except for a lien held by The Chase Manhattan Bank on all assets
owned by the Company other than real property, a mortgage held by GMAC
Commercial Mortgage Corporation on real property owned by the Company
located on Sunrise Valley Drive in Reston, Virginia, and any lien or
encumbrance relating to the Company's technical center in the leased parcel
on which it is located in Reston, Virginia, the Company and its subsidiaries
have good and marketable title in fee simple to all real property and good
and marketable title to all personal property owned by them, in each case
free and clear of all liens, encumbrances and defects except such as are
described in the Offering Circular or such as would not, individually or in
the aggregate, have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and any real property and buildings held
under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company and its subsidiaries;
(d) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Offering Circular, and has been duly
qualified as a foreign corporation for the transaction of business and is in
good standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except where the failure to be so qualified in any such
jurisdiction would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole; and each significant subsidiary (as defined
in Rule 405 of Regulation C under the Securities Act) (a "Significant
Subsidiary") of the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation;
(e) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable; the shares of Stock initially issuable upon conversion
of the Securities have been duly and validly authorized and reserved for
issuance and, when issued and delivered in accordance with the provisions of
the Securities and the Indenture referred to below and this Agreement, will
be duly and validly issued, fully paid and non-assessable and will conform
in all material respects to the description of the Stock contained in the
Offering Circular; and all of the issued shares of capital stock of each
Significant Subsidiary of the Company have been duly and validly authorized
and issued, are fully paid and non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims, except for a lien on
such shares held by Chase Manhattan Bank in connection with the Company's
credit facility;
(f) The Securities have been duly authorized by the Company and, when
executed and delivered by the Company in accordance with the provisions of
the Indenture and this Agreement and authenticated by the Trustee will
constitute valid and legally binding obligations of the Company (subject as
to enforceability to the qualifications in the next sentence) entitled to
the benefits provided by the indenture to be dated as of November 17, 1997
(the "Indenture"), between the Company and State Street Bank and Trust
Company, as Trustee (the "Trustee"), under which they are to be issued,
which will be substantially in the form previously delivered to you. The
Indenture has been duly authorized and when executed and delivered by the
Company and the Trustee, the Indenture will constitute a valid and legally
binding instrument of the Company, enforceable against the Company in
accordance with its terms, subject as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Securities and the Indenture will conform in all material respects to the
descriptions thereof in the Offering Circular and will be in substantially
the form previously delivered to you;
(g) Prior to the date hereof, neither the Company nor any of its
affiliates has taken any action which is designed to or which has
constituted or which might have been expected to cause or result in
stabilization or manipulation of the price of any security of the Company in
connection with the offering of the Securities;
(h) The issue and sale of the Securities and the compliance by the
Company with all of the provisions of the Securities, the Indenture, the
Registration Rights Agreement and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
result in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for any conflict,
breach or default that would not have, individually or in the aggregate, a
material adverse effect on the Company and its subsidiaries, taken as a
whole, nor will such action result in any violation of (a) the provisions
of the Certificate of Incorporation or By-laws of the Company or (b) any
statute or any order, rule or regulation of any court or governmental agency
or body having jurisdiction over the Company or any of its subsidiaries or
any of their properties; provided, however, that in the case of clause (b)
of this paragraph (h), this representation and warranty shall not extend to
such violations as would not have a material adverse effect on the ability
of the Company to perform its obligations under this Agreement, the
Registration Rights Agreement, the Indenture or the Securities or to
consummate the transactions contemplated thereby; and no consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required other than in connection with the
registration for resale of the Securities and Stock under the Securities Act
pursuant to the Registration Rights Agreement, the qualification of the
Indenture under the Trust Indenture Act in connection with such registration
and actions under Blue Sky laws. Neither the Company nor any of its
Significant Subsidiaries is in violation of its Certificate of Incorporation
or By-laws or in default in the performance or observance of any material
obligation, covenant or condition contained in any indenture, mortgage, deed
of trust, loan agreement, lease or other agreement or instrument to which it
is a party or by which it or any of its properties may be bound, except for
any violation that would not have a material adverse effect on the Company
and its subsidiaries, taken as a whole;
(i) The statements set forth in the Offering Circular under the caption
"Description of Notes" and "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Securities and the
Stock, accurately summarize in all material respects the legal matters,
documents or proceedings referred to therein;
(j) Other than as set forth in the Offering Circular, there are no legal
or governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any of
its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the current or future financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to the best of the Company's knowledge,
no such proceedings are threatened by governmental authorities or threatened
by others;
(k) When the Securities are issued and delivered pursuant to this
Agreement, the Securities will not be of the same class (within the meaning
of Rule 144A under the United States Securities Act) as securities which are
listed on a national securities exchange registered under Section 6 of the
Exchange Act or quoted in a U.S. automated inter-dealer quotation system;
(l) The Company is subject to Section 13 or 15(d) of the Exchange Act;
(m) The Company is not, and after giving effect to the offering and sale
of the Securities, will not be an "investment company", or an entity
"controlled" by an "investment company", as such terms are defined in the
United States Investment Company Act of 1940, as amended (the "Investment
Company Act");
(n) Neither the Company, nor any person acting on its behalf (which
shall not include the Purchasers) has offered or sold the Securities by
means of any general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act or, with respect to Securities sold
outside the United States to non-U.S. persons (as defined in Rule 902 under
the Securities Act), by means of any directed selling efforts within the
meaning of Rule 902 under the Securities Act and the Company, any affiliate
of the Company and any person acting on its or their behalf (which shall not
include the Purchasers) has complied with and will implement the "offering
restriction" within the meaning of such Rule 902;
(o) Within the preceding six months, neither the Company nor any other
person acting on behalf of the Company has offered or sold to any person any
Securities, or any securities of the same or a similar class as the
Securities, other than Securities offered or sold to the Purchasers here
under. The Company will take reasonable precautions designed to insure that
any offer or sale, direct or indirect, in the United States or to any U.S.
person (as defined in Rule 902 under the Securities Act) of any Securities
or any substantially similar security issued by the Company, within six
months subsequent to the date on which the distribution of the Securities
has been completed (as notified to the Company by Goldman, Sachs & Co.), is
made under restrictions and other circumstances reasonably designed not to
affect the status of the offer and sale of the Securities in the United
States and to U.S. persons contemplated by this Agreement as transactions
exempt from the registration provisions of the Securities Act;
(p) Ernst & Young LLP, who have certified certain financial statements
of the Company and its subsidiaries, are independent auditors as required by
the Securities Act and the rules and regulations of the Commission
thereunder;
(q) The Company has all corporate power to enter into this Agreement and
the Registration Rights Agreement. This Agreement has been and, as of the
Time of Delivery, the Registration Rights Agreement will have been, duly
authorized, executed and delivered by the Company;
(r) Except as set forth on Schedule II, there are no registration rights
or other similar rights to have any securities of the Company (other than
the Securities) registered under any Securities Act registration statement;
(s) None of the holders of outstanding shares of capital stock of the
Company and no other person has or will have any preemptive or other rights
to purchase, subscribe for or otherwise acquire (i) the shares of Stock to
be issued upon conversion of the Securities or any rights to such shares or
(ii) as a result of or in connection with the transactions contemplated by
the Indenture, this Agreement or the Registration Rights Agreement, any
other capital stock of the Company or rights thereto; and
(t) Each of the directors and executive officers of the Company listed
in Schedule III hereto has entered into a written agreement with the Company
in the form of Exhibit A hereto (each such agreement, a "Lock-up
Agreement"), and executed originals of each Lock-up Agreement have been
delivered to you.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 97.5% of the principal amount thereof, plus accrued interest, if any,
from November 17, 1997 to the Time of Delivery hereunder, the principal amount
of Firm Securities set forth opposite the name of such Purchaser in Schedule I
hereto and (b) in the event and to the extent that the Purchasers shall exercise
the election to purchase Optional Securities as provided below, the Company
agrees to issue and sell to each of the Purchasers, and each of the Purchasers
agrees, severally and not jointly, to purchase from the Company, at the purchase
price set forth in clause (a) of this Section 2, that portion of the aggregate
principal amount of Optional Securities as to which such election shall have
been exercised (to be adjusted by you so as to eliminate fractions of $1,000)
determined by multiplying such aggregate principal amount of Optional Securities
by a fraction, the numerator of which is the maximum aggregate principal amount
of Optional Securities which such Purchaser is entitled to purchase as set forth
opposite the name of such Purchaser in Schedule I hereto and the denominator of
which is the maximum number of Optional Securities that all of the Purchasers
are entitled to purchase hereunder.
The Company hereby grants to the Purchasers the right to purchase at
their election up to $50,000,000 aggregate principal amount of Optional
Securities, at the purchase price set forth in clause (a) of this Section 2, for
the sole purpose of covering overallotments in the sale of the Firm Securities.
Any such election to purchase Optional Securities may be exercised only by
written notice on one occasion from you to the Company, given within a period of
30 calendar days after the date of this Agreement, setting forth the aggregate
principal amount of Optional Securities to be purchased and the date on which
such Optional Securities are to be delivered, as determined by you but in no
event earlier than the First Time of Delivery (as defined in Section 4 hereof)
or, unless you and the Company otherwise agree in writing, earlier than two or
later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Securities, the
several Purchasers propose to offer the Firm Securities for sale upon the terms
and conditions set forth in this Agreement and the Offering Circular and each
Purchaser hereby represents and warrants to, and agrees with the Company that:
(a) It will offer and sell the Securities only to: (i) persons who it
reasonably believes are "qualified institutional buyers" ("QIBs") within the
meaning of Rule 144A under the Securities Act in transactions meeting the
requirements of Rule 144A or (ii) upon the terms and conditions set forth in
Annex I to this Agreement;
(b) It is an Institutional Accredited Investor; and
(c) It will not offer or sell the Securities by any form of general
solicitation or general advertising, including but not limited to the methods
described in Rule 502(c) under the Securities Act.
4. (a) The Securities to be purchased by each Purchaser hereunder will be
represented by one or more definitive global Securities in book-entry form which
will be deposited by or on behalf of the Company with The Depository Trust
Company ("DTC") or its designated custodian. The Company will deliver the
Securities to Goldman, Sachs & Co., for the account of each Purchaser, against
payment by or on behalf of such Purchaser of the purchase price therefor by wire
transfer to an account designated by the Company, in Federal (same day) funds,
by causing DTC to credit the Securities to the account of Goldman, Sachs & Co.
at DTC. The Company will cause the certificates representing the Securities to
be made available to Goldman, Sachs & Co. for checking at least twenty-four
hours prior to the Time of Delivery (as defined below) at the office of DTC or
its designated custodian (the "Designated Office"). The time and date of such
delivery and payment for the Firm Securities shall be 9:30 a.m., New York City
time, on November 17, 1997 or such other time and date as Goldman, Sachs & Co.
and the Company may agree upon in writing and with respect to the Optional
Securities, 9:30 a.m., New York City time, on the date specified by Goldman,
Sachs & Co. in writing, or such other time and date as Goldman, Sachs & Co. and
the Company may agree upon in writing. Such time and date for delivery of the
Firm Securities is herein called the "First Time of Delivery" and such time and
date for delivery of the Optional Securities, if not the First Time of Delivery,
is herein called the "Second Time of Delivery," and each such time and date for
delivery is herein called the "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross-receipt
for the Securities and any additional documents requested by the Purchasers
pursuant to Section 7(h) hereof, will be delivered at such time and date at the
offices of Ropes & Gray, 885 Third Avenue, New York, NY 10022-4834 (the "Closing
Location"), and the Securities will be delivered at the Designated Office, all
at such Time of Delivery. A meeting will be held at the Closing Location at
10:00 a.m., New York City time, on the New York Business Day next preceding such
Time of Delivery, at which meeting the final drafts of the documents to be
delivered pursuant to the preceding sentence will be available for review by the
parties hereto. For the purposes of this Section 4, "New York Business Day"
shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in New York are generally authorized or
obligated by law or executive order to close.
5. The Company agrees with each of the Purchasers:
(a) To prepare the Offering Circular in a form reasonably acceptable to you;
to make no amendment or any supplement to the Offering Circular which shall be
disapproved by you in your reasonable judgment promptly after reasonable notice
thereof; and to furnish you with copies thereof;
(b) Promptly from time to time to take such action as is required under the
Registration Rights Agreement to qualify the Securities and the shares of Stock
issuable upon conversion of the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction or take any action that would subject it
to taxation in any jurisdiction where it is not so subject;
(c) To furnish the Purchasers with four copies of the Offering Circular and
each amendment or supplement thereto signed by an authorized officer of the
Company with the independent accountants' report(s) in the Offering Circular,
and any amendment or supplement containing amendments to the financial
statements covered by such report(s), signed by the accountants, and additional
copies thereof in such quantities as you may from time to time reasonably
request, and if, at any time prior to the earlier of the expiration of nine
months after the date of the Offering Circular or your completion of the initial
distribution of the Securities, any event shall have occurred as a result of
which the Offering Circular as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under
which they were made when such Offering Circular is delivered, not misleading,
or, if for any other reason it shall be necessary or desirable during such same
period to amend or supplement the Offering Circular, to notify you and upon your
request to prepare and furnish without charge to each Purchaser and to any
dealer in securities as many copies as you may from time to time reasonably
request of an amended Offering Circular or a supplement to the Offering Circular
which will correct such statement or omission or effect such compliance;
(d) During the period beginning from the date hereof and continuing until
the date 90 days after the date hereof, not to offer, sell, contract to sell or
otherwise dispose of, except as provided hereunder any securities of the Company
that are substantially similar to the Securities or the Stock, including but not
limited to any securities that are convertible into or exchangeable for, or that
represent the right to receive, Stock or any such substantially similar
securities (other than (i) pursuant to employee stock option plans existing on
the date of this Agreement, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement (ii) upon
conversion of, and as contemplated by the Registration Rights Agreement with
respect to, the Securities or (iii) any offer, sale, contract to sell or other
disposition by the Company of any shares of Common Stock or any other securities
of the Company in connection with acquisitions, joint ventures, strategic
relationships, lease or other financings, license agreements or similar
transactions (provided that the market value of all such securities issuable
pursuant to this subsection (c) shall not exceed $300 million) without the prior
written consent of Goldman, Sachs & Co.;
(e) Not to be or become, at any time prior to the expiration of two years
after the Time of Delivery, an open-end investment company, unit investment
trust, closed-end investment company or face-amount certificate company that is
or is required to be registered under Section 8 of the Investment Company Act;
(f) At any time when the Company is not subject to Section 13 or 15(d)
of the Exchange Act, for the benefit of holders from time to time of Securities,
to furnish at its expense, upon request, to holders of Securities and the Stock
issuable upon conversion thereof and prospective purchasers of securities
information (the "Additional Issuer Information") satisfying the requirements of
subsection (d)(4)(i) of Rule 144A under the Securities Act;
(g) To use its reasonable best efforts to cause the Securities to be
eligible for the PORTAL trading system of the National Association of Securities
Dealers, Inc;
(h) To furnish to the holders of the Securities as soon as practicable after
the end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders' equity and cash flows of the Company and its
consolidated subsidiaries certified by independent public accountants) and, as
soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the date of the
Offering Circular), consolidated summary financial information of the Company
and its subsidiaries for such quarter in reasonable detail;
(i) During the period of two years after the Time of Delivery (or such
shorter period following the latest date of original issuance of the Securities
after which resales of the Securities may be effected by non-affiliates of the
Company in reliance on paragraph (k) of Rule 144 under the Securities Act, or
any successor provision thereto), the Company will not resell, and will use
reasonable efforts to prevent any of its "affiliates" (as defined in Rule 144
under the Securities Act) from reselling, any of the Securities which constitute
"restricted securities" under Rule 144 that have been reacquired by any of them;
(j) To use the net proceeds received by it from the sale of the Securities
pursuant to this Agreement in the manner specified in the Offering Circular
under the caption "Use of Proceeds" ;
(k) To reserve and keep available at all times, free of preemptive rights,
shares of Stock for the purpose of enabling the Company to satisfy any
obligations to issue shares of Stock upon conversion of the Securities;
(l) Until such time as any Security or any Stock issuable upon conversion
thereof is registered under the Securities Act pursuant to the Registration
Rights Agreement and transferred pursuant to such registration, to include a
legend on the Securities and the Stock issuable upon the conversion thereof to
the effect set forth under "Notice to Investors" in the Offering Circular; and
(m) List the shares of Stock issuable upon conversion of the Securities on
the New York Stock Exchange.
6. The Company covenants and agrees with the several Purchasers that the
Company will pay or cause to be paid the following: (i) the fees, disbursements
and expenses of the Company's counsel and accountants in connection with the
issue of the Securities and the shares of Stock issuable upon conversion of the
Securities and all other expenses of the Company in connection with the
preparation, printing and filing of the Offering Circular and any amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Purchasers and dealers; (ii) the cost of printing or producing any Agreement
among Purchasers, this Agreement, the Indenture, the Registration Rights
Agreement, any Blue Sky Memorandum, closing documents (including any
compilations thereof) and any other documents in connection with the offering,
purchase, sale and delivery of the Securities; (iii) all expenses in connection
with the qualification of the Securities and the shares of Stock issuable upon
conversion of the Securities for offering and sale under state securities laws
as provided in Section 5(b) hereof, including the reasonable fees and
disbursements of counsel for the Purchasers in connection with such
qualification and in connection with the Blue Sky surveys; (iv) any fees charged
by securities rating services for rating the Securities; (v) the cost of
preparing the Securities; (vi) the fees and expenses of the Trustee and any
agent of the Trustee and the fees and disbursements of counsel for the Trustee
in connection with the Indenture and the Securities; (vii) any cost incurred in
connection with the designation of the Securities for trading in PORTAL and the
listing of the shares of Stock issuable upon conversion of the Securities; and
(viii) all other costs and expenses incident to the performance of its
obligations hereunder which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section,
and Sections 8 and 11 hereof, the Purchasers will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Purchasers hereunder, as to the Securities to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Company herein are, at and as of such Time of Delivery, true and correct,
the condition that the Company shall have performed all of its obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) Ropes & Gray, counsel for the Purchasers, shall have furnished to you
such opinion or opinions, dated the Time of Delivery, with respect to such
matters as you may reasonably request, and such counsel shall have received such
papers and information as they may reasonably request to enable them to pass
upon such matters;
(b) George Vradenburg, general counsel for the Company, shall have furnished
to you his written opinion, dated the Time of Delivery, in form and substance
satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with corporate
power and authority to own its properties and conduct its business as
described in the Offering Circular;
(ii) The Company has an authorized capitalization as set forth in the
Offering Circular, and all of the issued shares of capital stock of the
Company have been duly and validly authorized and issued and are fully paid
and non-assessable;
(iii) To such counsel's knowledge, the Company has been duly qualified
as a foreign corporation for the transaction of business and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties or conducts any business so as to require such
qualification, except to the extent that the failure to be so qualified or
in good standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole;
(iv) Each Significant Subsidiary of the Company has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of its jurisdiction of incorporation, except to the extent that the
failure to be so qualified or in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; and
all of the issued shares of capital stock of each Significant Subsidiary
have been duly and validly authorized and issued, are fully paid and
non-assessable, and (except for directors' qualifying shares) are owned
directly or indirectly by the Company, (such counsel being entitled to rely
in respect of the opinion in this clause upon opinions of local counsel and
in respect of matters of fact upon certificates of officers of the Company
or its subsidiaries, provided that such counsel shall state that he believes
that both you and he are justified in relying upon such opinions and
certificates);
(v) To such counsel's knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate reasonably be expected to have a material
adverse effect on the current or future consolidated financial position,
stockholders' equity or results of operations of the Company and its
subsidiaries, taken as a whole; and, to such counsel's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(vi) This Agreement has been duly authorized, executed and delivered by
the Company;
(vii) The issue and sale of the Securities and the performance by the
Company of its obligations under the Securities, the Indenture, the
Registration Rights Agreement and this Agreement with respect to the
Securities and the consummation of the transactions herein and therein
contemplated will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries
is bound or to which any of the property or assets of the Company or any of
its subsidiaries is subject, except for any violation that would not,
individually or in the aggregate, have a material adverse effect on the
Company and its subsidiaries, taken as a whole, nor will such actions result
in any violation of (a) the provisions of the Certificate of Incorporation
or By-laws of the Company or (b) any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction
over the Company or any of its subsidiaries or any of their properties
except, as to clause (b), any violation that would not have a material
adverse effect on the ability of the Company to perform its obligations
under this Agreement, the Registration Rights Agreement, the Securities or
the Indenture or to consummate the transactions contemplated hereby or
thereby;
(viii) To such counsel's knowledge, no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration Rights
Agreement, except such as may be required under the Securities Act in
connection with the registration of the Securities pursuant to the
Registration Rights Agreement, the qualification of the Indenture under the
Trust Indenture Act at the time of the filing of a registration statement
pursuant to the Registration Rights Agreement, and such consents, approvals,
authorizations, registrations or qualifications (i) as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers and (ii) the failure of
which to obtain would not have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement, the
Registration Rights Agreement, the Securities or the Indenture or to
consummate the transactions contemplated hereby or thereby;
(ix) The Exchange Act Reports (other than the financial statements and
schedules and other financial information or financial data included
therein, as to which such counsel need express no opinion), at the time they
were filed with the Commission, complied as to form in all material respects
with the requirements of the Exchange Act, and the rules and regulations of
the Commission thereunder;
(x) Except as set forth on Schedule II, to such counsel's knowledge, no
holder of any security of the Company has any right (except as has been
satisfied or waived) to require registration of shares of Common Stock or
any other security of the Company because of the consummation of the
transactions contemplated by this Agreement, the Registration Rights
Agreement and the Indenture.
Such counsel shall also include a statement to the effect that, although
such counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Offering Circular, such counsel
has no reason to believe that the Offering Circular, as of the date hereof,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (except that such counsel need
express no view as to the financial statements and other financial information
or financial data included or incorporated by reference therein). With respect
to such statements, such counsel may state that his belief is based upon his
participation in the preparation of the Offering Circular and any amendments or
supplements thereto and documents incorporated therein by reference,
certificates of officers of the Company and of state authorities and discussion
of the contents thereof with officers of the Company, but is without independent
check or verification except as specified.
(c) Mintz, Levin , Cohn, Ferris, Glovsky and Popeo, P.C., counsel for the
Company, shall have furnished to you their written opinion, dated the Time of
Delivery, in form and substance satisfactory to you, to the effect that:
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with corporate
power and authority to own its properties and conduct its business as
described in the Offering Circular;
(ii) The shares of Stock initially issuable upon conversion of the
Securities have been duly and validly authorized and reserved for issuance
and, when issued and delivered in accordance with the provisions of the
Securities, the Indenture and this Agreement, will be duly and validly
issued and fully paid and non-assessable, and will conform in all material
respects to the description of the Stock contained in the Offering Circular;
(iii) To such counsel's knowledge and other than as set forth in the
Offering Circular, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property of the Company or any of its subsidiaries is the subject that are
required to be disclosed in the Company's Exchange Act reports that are not
so disclosed and, to such counsel's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(iv) This Agreement has been duly authorized, executed and delivered by
the Company;
(v) The Securities are in the form contemplated by the Indenture, have
been duly authorized and executed by the Company and authenticated by the
Trustee in the manner provided for in the Indenture and when delivered
against the purchase price therefor specified herein, will constitute valid
and legally binding obligations of the Company (subject as to enforceability
to the qualifications in the next paragraph) entitled to the benefits
provided by the Indenture; and the Securities and the Indenture conform in
all material respects to the description thereof in the Offering Circular;
(vi) Each of the Registration Rights Agreement and the Indenture has
been duly authorized, executed and delivered by the Company and constitutes
a valid and legally binding instrument of the Company, enforceable in
accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles;
(vii) The issue and sale of the Securities and the performance by the
Company of its obligations under the Securities, the Indenture, the
Registration Rights Agreement and this Agreement with respect to the
Securities and the consummation of the transactions herein and therein
contemplated will not result in any violation of (a) the provisions of the
Certificate of Incorporation or By-laws of the Company or (b) to such
counsel's knowledge, any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the Company or
any of its subsidiaries or any of their properties except, as to clause
(b), any violation that would not have a material adverse effect on the
ability of the Company to perform its obligations under this Agreement, the
Registration Rights Agreement, the Securities or the Indenture or to
consummate the transactions contemplated hereby or thereby;
(viii) To such counsel's knowledge, no consent, approval, authorization,
order, registration or qualification of or with any such court or
governmental agency or body is required for the issue and sale of the
Securities or the consummation by the Company of the transactions
contemplated by this Agreement, the Indenture or the Registration Rights
Agreement, except such as may be required under the Securities Act in
connection with the registration of the Securities pursuant to the
Registration Rights Agreement, the qualification of the Indenture under the
Trust Indenture Act at the time of the filing of a registration statement
pursuant to the Registration Rights Agreement, and such consents, approvals,
authorizations, registrations or qualifications (i) as may be required under
state securities or Blue Sky laws in connection with the purchase and
distribution of the Securities by the Purchasers and (ii) the failure of
which to obtain would not have a material adverse effect on the ability of
the Company to perform its obligations under this Agreement, the
Registration Rights Agreement, the Securities or the Indenture or to
consummate the transactions contemplated hereby or thereby;
(ix) The statements set forth in the Offering Circular under the caption
"Description of Notes" and "Description of Capital Stock", insofar as they
purport to constitute a summary of the terms of the Securities and the Stock
and under the caption "Certain U.S. Federal Income Tax Consequences",
insofar as they purport to describe the provisions of the laws and documents
referred to therein, fairly summarize such provisions in all material
respects;
(x) Assuming (i) the accuracy of the representations and warranties of
the Company in Sections 1(n) and 1(o) and (ii) the accuracy of the
representations and warranties of the Purchasers in Section 3(b) and the
compliance by the Purchasers with the covenants in Sections 3(a), 3(c) and
Annex I, no registration of the Securities under the Securities Act, and no
qualification of an indenture under the United States Trust Indenture Act of
1939 with respect thereto, is required for the offer, sale and initial
resale of the Securities by the Purchasers in the manner contemplated by
this Agreement; and
(xi) The Company is not an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act;
Such counsel shall also include a statement to the effect that, although
such counsel does not assume any responsibility for the accuracy, completeness
or fairness of the statements contained in the Offering Circular, such counsel
has no reason to believe that the Offering Circular, as of the date hereof,
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (except that such counsel need
express no view as to the financial statements and other financial information
or data included or incorporated by reference therein). With respect to such
statements, such counsel may state that its belief is based upon its
participation in the preparation of the Offering Circular and any amendments or
supplements thereto and documents incorporated therein by reference,
certificates of officers of the Company and of state authorities and discussion
of the contents thereof with officers of the Company, but is without independent
check or verification except as specified.
(d) On the date of the Offering Circular prior to the execution of this
Agreement and also at each Time of Delivery, Ernst & Young LLP shall have
furnished to you a letter or letters, dated the respective dates of delivery
thereof, in form and substance satisfactory to you, to the effect set forth in
Annex II hereto;
(e) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Offering Circular any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Offering Circular, and (ii) since the
respective dates as of which information is given in the Offering Circular there
shall not have been any change in the capital stock or the Stock, including but
not limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such substantially similar
securities (other than (i) pursuant to employee stock option plans existing on
the date of this Agreement, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement (ii) upon
conversion of, and as contemplated by the Registration Rights Agreement with
respect to the Securities or (iii) as permitted pursuant to paragraph 5(d)(iii)
hereof) or long-term debt of the Company or any of its subsidiaries (which, for
purposes hereof, shall not include any increase in, or draw down under, the
Company's credit facility with The Chase Manhattan Bank, the entering into of
any lease financings or the entering into of any mortgage on the Company's real
property) or any change, or any development involving a prospective change, in
or affecting the general affairs, management, financial position, stockholders'
equity or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Offering Circular, the effect of which,
in any such case described in Clause (i) or (ii) is in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities being
delivered at such Time of Delivery on the terms and in the manner contemplated
in this Agreement and in the Offering Circular;
(f) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded the Company's debt securities by any "nationally recognized
statistical rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the Securities Act, and (ii) no such
organization shall have publicly announced that it has under surveillance or
review, with possible negative implications, its rating of any of the Company's
debt securities;
(g) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the Company's securities on the New York Stock
Exchange; (iii) a general moratorium on commercial banking activities declared
by either Federal or New York State authorities; or (iv) the outbreak or
escalation of hostilities involving the United States or the declaration by the
United States of a national emergency or war, if the effect of any such event
specified in this Clause (iv) in the judgment of the Representatives makes it
impracticable or inadvisable to proceed with the offering or the delivery of the
Securities on the terms and in the manner contemplated in the Offering Circular;
(h) The Securities have been designated for trading on PORTAL;
(i) Each Lock-up Agreement shall have been duly executed and delivered to
the Company and you and there shall have occurred no breach of any Lock-up
Agreement; and
(j) The Company shall have furnished or caused to be furnished to you at
such Time of Delivery certificates of officers of the Company satisfactory to
you as to the accuracy of the representations and warranties of the Company
herein at and as of such Time of Delivery, as to the performance by the Company
of all of its obligations hereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsection (d) of this Section and as
to such other matters as you may reasonably request.
8. (a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or otherwise, inso
far as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in the Offering Circular, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact necessary to make the
statements therein not misleading, and will reimburse each Purchaser for any
reasonable legal or other expenses reasonably incurred by such Purchaser in con
nection with investigating or defending any such action or claim as such
expenses are incurred; provided, however, that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage or liability
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in the Offering Circular or any such
amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Purchaser by or on behalf of
Goldman, Sachs & Co. expressly for use therein.
(b) Each Purchaser will indemnify and hold harmless the Company against
any losses, claims, damages or liabilities to which the Company may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in the Offering Circular or the Offering Circular, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in Offering Circular or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of Goldman, Sachs & Co. expressly for use therein; and
will reimburse the Company for any reasonable legal or other expenses reasonably
incurred by the Company in connection with investigating or defending any such
action or claim as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the com
mencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection (a) or (b). In case any such action shall
be brought against any indemnified party and it shall promptly notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and, after notice from the indemnifying party to such indem
nified party of its election so to assume the defense thereof, the indemnifying
party shall not be liable to such indemnified party under such subsection for
any legal expenses of other counsel or any other expenses, in each case
subsequently incurred by such indemnified party, in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the written consent of the indemnified party (which consent shall
not be unreasonably withheld), effect the settlement or compromise of, or
consent to the entry of any judgment with respect to, any pending or threatened
action or claim in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified party is an actual or potential
party to such action or claim) unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all
liability arising out of such action or claim and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act, by
or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Purchasers on the other from the
offering of the Securities. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the one
hand and the Purchasers on the other in connection with the statements or omis
sions which resulted in such losses, claims, damages or liabilities (or actions
in respect thereof), as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Purchasers
on the other shall be deemed to be in the same proportion as the total net pro
ceeds from the offering (before deducting expenses) received by the Company bear
to the total underwriting discounts and commissions received by the Purchasers,
in each case as set forth in the Offering Circular. The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company on the one hand
or the Purchasers on the other and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by pro
rata allocation (even if the Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this
subsection (d), no Purchaser shall be required to contribute any amount in
excess of the amount by which the total price at which the Securities under
written by it and distributed to investors were offered to investors exceeds the
amount of any damages which such Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
Purchasers' obligations in this subsection (d) to contribute are several in
proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act; and the obligations of the
Purchasers under this Section 8 shall be in addition to any liability which the
respective Purchasers may otherwise have and shall extend upon the same terms
and conditions, to each officer and director of the Company and to each person,
if any, who controls the Company within the meaning of the Securities Act.
9. (a) If any Purchaser shall default in its obligation to purchase the
Securities which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Securities on the terms contained herein. If within thirty-six
hours after such default by any Purchaser you do not arrange for the purchase of
such Securities, then the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties satis
factory to you to purchase such Securities on such terms. In the event that,
within the respective prescribed periods, you notify the Company that you have
so arranged for the purchase of such Securities, or the Company notifies you
that it has so arranged for the purchase of such Securities, you or the Company
shall have the right to postpone such Time of Delivery for a period of not more
than seven days, in order to effect whatever changes may thereby be made
necessary in the Offering Circular, or in any other documents or arrangements,
and the Company agrees to prepare promptly any amendments to the Offering
Circular which in your opinion may thereby be made necessary. The term
"Purchaser" as used in this Agreement shall include any person substituted under
this Section with like effect as if such person had originally been a party to
this Agreement with respect to such Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of such
Securities which remains unpurchased does not exceed one-eleventh of the
aggregate principal amount of all the Securities to be purchased at such Time of
Delivery, then the Company shall have the right to require each non-defaulting
Purchaser to purchase the principal amount of Securities which such Purchaser
agreed to purchase hereunder at such Time of Delivery and, in addition, to
require each non-defaulting Purchaser to purchase its pro rata share (based on
the principal amount of Securities which such Purchaser agreed to purchase
hereunder) of the Securities of such defaulting Purchaser or Purchasers for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Purchaser from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Securities of a defaulting Purchaser or Purchasers by you and the Company as
provided in subsection (a) above, the aggregate principal amount of Securities
which remains unpurchased exceeds one-eleventh of the aggregate principal amount
of all the Securities to be purchased at such Time of Delivery, or if the
Company shall not exercise the right described in subsection (b) above to
require non-defaulting Purchasers to purchase Securities of a defaulting
Purchaser or Purchasers, then this Agreement (or, with respect to the Second
Time of Delivery, the obligations of the Purchasers to purchase and of the
Company to sell the Optional Securities) shall thereupon terminate, without
liability on the part of any non-defaulting Purchaser or the Company, except for
the expenses to be borne by the Company and the Purchasers as provided in
Section 6 hereof and the indemnity and contribution agreements in Section 8
hereof; but nothing herein shall relieve a defaulting Purchaser from liability
for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and the several Purchasers, as set forth in
this Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Purchaser or any controlling person of any Purchaser, or the Company, or
any officer or director or controlling person of the Company, and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof, or
if the sale of the Securities shall not have been consummated because the
condition in Section 7(f) shall not have been satisfied or because the condition
in Section 7(a) shall not have been satisfied at a time when all other
conditions in Section 7 shall have been satisfied, the Company shall not then be
under any liability to any Purchaser except as provided in Sections 6 and 8
hereof; but, if for any other reason, any Securities are not delivered by or on
behalf of the Company as provided herein, the Company will reimburse the
Purchasers through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Purchasers in making preparations for the purchase, sale and delivery of the
Securities, but the Company shall then be under no further liability to any
Purchaser except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Purchasers, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Purchaser made or given
by you jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Purchasers shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Goldman,
Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the Offering
Circular, Attention: Secretary; provided, however, that any notice to a
Purchaser pursuant to Section 8(c) hereof shall be delivered or sent by mail,
telex or facsimile transmission to such Purchaser at its address set forth in
its Purchasers' Questionnaire, or telex constituting such Questionnaire, which
address will be supplied to the Company by you upon request. Any such
statements, requests, notices or agreements shall take effect upon receipt
thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Purchasers, the Company and, to the extent provided in Sections 8 and 10
hereof, the officers and directors of the Company and each person who controls
the Company or any Purchaser, and their respective heirs, executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. No purchaser of any of the
Securities from any Purchaser shall be deemed a successor or assign by reason
merely of such purchase.
14. Time shall be of the essence of this Agreement.
15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us seven (7) counterparts hereof, and upon such acceptance hereof by
you, on behalf of each of the Purchasers, this letter and such acceptance hereof
shall constitute a binding agreement between each of the Purchasers and the
Company.
Very truly yours,
AMERICA ONLINE, INC.
By: /S/LENNERT J. LEADER
Name: Lennert J. Leader
Title: Senior Vice President,
Chief Financial Officer, Treasurer,
Chief Accounting Officer and
Assistant Secretary
Accepted as of the date hereof:
Goldman, Sachs & Co.
BT Alex. Brown
Lehman Brothers Inc.
Cowen & Company
By: /S/GOLDMAN, SACHS & CO.
(Goldman, Sachs Co.)
<TABLE>
SCHEDULE I
Aggregate
Total Principal Amount
Aggregate of Optional
Amount of Securities
Firm to be
Securities Purchased if
to be Maximum Option
Purchased Exercised
<S> <C> <C>
Goldman, Sachs & Co. $280,001,000 $40,001,000
BT Alex. Brown. 23,333,000 3,333,000
Lehman Brothers Inc 23,333,000 3,333,000
Cowen & Company 23,333,000 3,333,000
Total $350,000,000 $50,000,000
</TABLE>
SCHEDULE II
EXISTING REGISTRATION RIGHTS
REGISTRATION RIGHTS
<TABLE>
NAME OF ACQUISITION/ REGISTRABLE SHARES*
TRANSACTION
<S> <C>
2Market, Inc. 14,000
Bertelsmann AG 3,609,000
Extreme Fans, Inc. 33,000
The Grandstand Sports 1,000
Services, Inc.
Johnson-Grace Company 1,486,000
Legg Mason 363,000
LightSpeed Media, Inc. 17,000
Mitsui 396,000**
Sprint 3,600,000
TOTAL 9,519,000
</TABLE>
_________
*Rounded to nearest 1,000 shares.
**Estimated number of Common Stock shares issuable upon conversion of 1,000
shares of Series B Convertible Preferred Stock (as of September 30).
SCHEDULE III
LOCK-UP AGREEMENT SIGNATURES
Daniel Akerson
Bruce Bond
Kathryn Bushkin
Stephen Case
Frank Caufield
Robert Frankenberg
Miles Gilburne
Alexander Haig
Richard Hanlon
James Kimsey
Lennert Leader
Theodore Leonsis
William Melton
Thomas Middelhoff
Robert Pittman
Mark Stavish
George Vradenburg
ANNEX I
(1) The Securities have not been and will not be registered under the Act
and may not be offered or sold within the United States or to, or for the
account or benefit of, U.S. persons except in accordance with Regulation S under
the Act or pursuant to an exemption from the registration requirements of the
Act. Each Purchaser represents that it has offered and sold the Securities, and
will offer and sell the Securities (i) as part of their distribution at any time
and (ii) otherwise until 40 days after the later of the commencement of the
offering and the Time of Delivery, only in accordance with Rule 903 of
Regulation S or, Rule 144A under the Act. Accordingly, each Purchaser agrees
that neither it, its affiliates nor any persons acting on its or their behalf
has engaged or will engage in any directed selling efforts with respect to the
Securities, and it and they have complied and will comply with the offering
restrictions requirement of Regulation S. Each Purchaser agrees that, at or
prior to confirmation of sale of Securities (other than a sale pursuant to Rule
144A), it will have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered and
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the commencement of the offering and the
closing date, except in either case in accordance with Regulation S (or
Rule 144A if available) under the Securities Act. Terms used above have
the meaning given to them by Regulation S."
Terms used in this paragraph have the meanings given to them by Regulation S.
(2) Notwithstanding the foregoing, Securities in registered form may be
offered, sold and delivered by the Purchasers in the United States and to
U.S. persons pursuant to Section 3 of this Agreement without delivery of the
written statement required by paragraph (1) above.
(3) Each Purchaser further represents and agrees that (i) it has not
offered or sold and prior to the date six months after the date of issue of the
Securities will not offer or sell any Securities to persons in the United
Kingdom except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent) for the
purposes of their businesses or otherwise in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995, (b) it
has complied, and will comply, with all applicable provisions of the Financial
Services Act of 1986 of Great Britain with respect to anything done by it in
relation to the Securities in, from or otherwise involving the United Kingdom,
and (c) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issuance of
the Securities to a person who is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
of Great Britain or is a person to whom the document may otherwise lawfully be
issued or passed on.
(4) Each Purchaser agrees that it will not offer, sell or deliver any of
the Securities in any jurisdiction outside the United States except under
circumstances that will result in compliance with the applicable laws thereof,
and that it will take at its own expense whatever action is required to permit
its purchase and resale of the Securities in such jurisdictions. Each Purchaser
understands that no action has been taken to permit a public offering in any
jurisdiction outside the United States where action would be required for such
purpose. Each Purchaser agrees not to cause any advertisement of the Securities
to be published in any newspaper or periodical or posted in any public place and
not to issue any circular relating to the Securities, except in any such case
with Goldman, Sachs & Co.'s express written consent and then only at its own
risk and expense.
ANNEX II
Pursuant to Section 7(d) of the Purchase Agreement, the accountants shall
furnish letters to the Purchasers to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Securities
Exchange Act of 1934 (the "Exchange Act") and the applicable published rules
and regulations thereunder;
(ii) In our opinion, the consolidated financial statements and financial
statement schedules audited by us and included in the Offering Circular
comply as to form in all material respects with the applicable requirements
of the Exchange Act and the related published rules and regulations;
(iii) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company for
the five most recent fiscal years included in the Offering Circular agrees
with the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements for such five fiscal years;
(iv) On the basis of limited procedures not constituting an audit in
accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred
to below, a reading of the latest available interim financial statements of
the Company and its subsidiaries, inspection of the minute books of the
Company and its subsidiaries since the date of the latest audited financial
statements included in the Offering Circular, inquiries of officials of the
Company and its subsidiaries responsible for financial and accounting
matters and such other inquiries and procedures as may be specified in such
letter, nothing came to their attention that caused them to believe that:
(A) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Offering Circular are not in conformity with generally
accepted accounting principles applied on the basis substantially
consistent with the basis for the unaudited condensed consolidated
statements of income, consolidated balance sheets and consolidated
statements of cash flows included in the Offering Circular;
(B) any other unaudited income statement data and balance sheet
items included in the Offering Circular do not agree with the
corresponding items in the unaudited consolidated financial statements
from which such data and items were derived, and any such unaudited
data and items were not determined on a basis substantially consistent
with the basis for the corresponding amounts in the audited
consolidated financial statements included in the Offering Circular;
(C) the unaudited financial statements which were not included
in the Offering Circular but from which were derived any unaudited
condensed financial statements referred to in Clause (A) and any
unaudited income statement data and balance sheet items included in
the Offering Circular and referred to in Clause (B) were not
determined on a basis substantially consistent with the basis for the
audited consolidated financial statements included in the Offering
Circular;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Offering Circular do not comply as to form
in all material respects with the applicable accounting requirements
or the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest financial statements
included in the Offering Circular or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any decreases
in consolidated net current assets or stockholders' equity or other
items specified by the Representatives, or any increases in any items
specified by the Representatives, in each case as compared with
amounts shown in the latest balance sheet included in the Offering
Circular except in each case for changes, increases or decreases which
the Offering Circular discloses have occurred or may occur or which
are described in such letter; and
(F) from the period from the date of the latest financial
statements included in the Offering Circular to the specified date
referred to in Clause (E) there were any decreases in consolidated net
revenues or operating profit or the total or per share amounts of
consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Offering Circular discloses have
occurred or may occur or which are described in such letter; and
(v) In addition to the examination referred to in their
report(s) included in the Offering Circular and the limited procedures,
inspection of minute books, inquiries and other procedures referred to in
paragraphs (iii) and (iv) above, they have carried out certain specified
procedures, not constituting an audit in accordance with generally accepted
auditing standards, with respect to certain amounts, percentages and
financial information specified by the Representatives, which are derived
from the general accounting records of the Company and its subsidiaries,
which appear in the Offering Circular, and have compared certain of such
amounts, percentages and financial information with the accounting records
of the Company and its subsidiaries and have found them to be in agreement.
