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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
FEBRUARY 11, 1997
CUC INTERNATIONAL INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 1-10308 06-0918165
- --------------------------------------------------------------------------------
(State or Other (Commission (I.R.S. Employer
Jurisdiction File Number) Identification No.)
of Incorporation)
or Organization)
707 SUMMER STREET, STAMFORD, CONNECTICUT 06901
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(203) 324-9261
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(Registrant's Telephone Number, Including Area Code)
NOT APPLICABLE
- --------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report)
Item 7. Financial Statements and Exhibits.
C. Exhibits
4(a) Indenture dated as of February 11, 1997, between CUC
International Inc. and Marine Midland Bank, as trustee.
4(b) Registration Rights Agreement dated as of February 11,
1997, between CUC International Inc. and Goldman, Sachs
& Co. (for itself and on behalf of the other purchasers
party thereto)
99 Press release of CUC International Inc. issued on
February 12, 1997.
2
Item 9. Sales of Equity Securities Pursuant to Regulation S.
On February 11, 1997, CUC International Inc., a Delaware corporation
(the "Company"), completed the sale of $550.0 million aggregate principal amount
of its 3% Convertible Subordinated Notes due February 15, 2002 (the "Notes").
Interest on the Notes is payable semi-annually on February 15 and August 15 of
each year, commencing on August 15, 1997. The Notes are convertible, in whole or
in part, at the option of the holder at any time from and after May 12, 1997 and
prior to the close of business on February 15, 2002, unless previously redeemed,
into shares of the Company's common stock, $.01 par value ("Common Stock"), at a
conversion price of $30.625 per share (equivalent to a conversion rate of
32.6531 shares of Common Stock per $1,000 principal amount of the Notes and
resulting in the issuance of up to 17,959,184 shares of Common Stock if the
Notes are converted in full), subject to adjustment in certain circumstances.
The Notes are redeemable at the Company's option at any time from and after
February 15, 2000 at the redemption prices specified therein, together with
accrued and unpaid interest thereon to the date of redemption. Moreover, if a
"Change-in-Control" (as defined in the Indenture for the Notes) of the Company
were to occur, each holder of Notes would be entitled to require the Company to
purchase its Notes, in whole or in part, at a purchase price equal to 100% of
the principal amount thereof, together with accrued and unpaid interest thereon
to the date of purchase, for cash or, at the Company's option, Common Stock
(valued at 95% of the average closing sale prices for the five trading days
ending on and including the third trading day prior to the purchase date). No
sinking fund is provided for the Notes, which are general unsecured obligations
of the Company, subordinated in right of payment to all "Senior Debt" (as
defined in the Indenture for the Notes) of the Company and effectively
subordinated in right of payment to the prior payment in full of all
indebtedness and other liabilities of the Company's subsidiaries.
The Notes were sold by the Company to Goldman, Sachs & Co., Morgan
Stanley & Co. Incorporated, Allen & Company Incorporated, Alex. Brown & Sons
Incorporated, Furman Selz LLC and Hambrecht & Quist LLC, as initial purchasers
(collectively, the "Initial Purchasers"), in an unregistered private placement
conducted pursuant to Regulation D under the Securities Act of 1933, as amended
(the "Securities Act"). The discount to the Initial
3
Purchasers was 1.35% of the principal amount of the Notes purchased (or an
aggregate of $7.425 million).
The Company has been advised that the Initial Purchasers
subsequently resold the Notes in the United States to "qualified institutional
buyers" in reliance on Rule 144A under the Securities Act and outside of the
United States in offshore transactions to investors in reliance on Regulation S
under the Securities Act. In addition, the Company has been advised that
Goldman, Sachs & Co. has resold a portion of the Notes in the United States to a
limited number of institutions that are "accredited investors" within the
meaning of Rule 501(a)(1), (2), (3) or (7) under the Securities Act. In respect
of such resales, the Initial Purchasers have represented to the Company that
$484,565,000 principal amount of the Notes were resold by the Initial Purchasers
in the United States to qualified institutional buyers in reliance on Rule 144A,
$57,150,000 principal amount of the Notes were resold by the Initial Purchasers
in offshore transactions to investors in reliance on Regulation S and $8,285,000
principal amount of the Notes were resold in the United States by Goldman, Sachs
& Co. to institutions that are accredited investors.
The net proceeds to the Company from the sale of the Notes to the
Initial Purchasers were approximately $542.1 million (giving effect to the
discount to the Initial Purchasers and after deducting certain transaction
expenses payable by the Company). The Company intends to use such net proceeds
for general corporate purposes, including to finance potential business
acquisitions and strategic alliances that complement the Company's businesses
and implement its growth strategy. Pending all of the foregoing uses, the
Company intends to invest the net proceeds from the sale of the Notes being
offered hereby in short-term, investment grade securities.
4
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
CUC INTERNATIONAL INC.
By: /s/Cosmo Corigliano
----------------------------
Name: Cosmo Corigliano
Title: Senior Vice President
and Chief Financial
Officer
Dated: February 13, 1997
5
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- --- -----------
4(a) Indenture dated as of February 11, 1997, between CUC
International Inc. and Marine Midland Bank, as trustee.
4(b) Registration Rights Agreement dated as of February 11,
1997, between CUC International Inc. and Goldman, Sachs
& Co. (for itself and on behalf of the other purchasers
party thereto)
99 Press release of CUC International Inc. issued on
February 12, 1997.
NYFS01...:\01\39801\0034\2114\FRM2117S.32A
EXHIBIT 4(a)
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CUC International Inc.,
as Issuer
TO
Marine Midland Bank,
as Trustee
----------------
Indenture
Dated as of February 11, 1997
----------------
$550,000,000
3% Convertible Subordinated Notes
due February 15, 2002
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CUC INTERNATIONAL INC.
CERTAIN SECTIONS OF THIS INDENTURE RELATING TO
SECTIONS 310 THROUGH 318, INCLUSIVE, OF THE
TRUST INDENTURE ACT OF 1939:
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
ss.310(a)(1) ................................................ 6.9
(a)(2) ................................................ 6.9
(a)(3) ................................................ Not Applicable
(a)(4) ................................................ Not Applicable
(b) ................................................ 6.8
6.10
ss.311(a) ................................................ 6.13
(b) ................................................ 6.13
ss.312(a) ................................................ 7.1
7.2
(b) ................................................ 7.2
(c) ................................................ 7.2
ss.313(a) ................................................ 7.3
(b) ................................................ 7.3
(c) ................................................ 7.3
(d) ................................................ 7.3
ss.314(a) ................................................ 7.4
(a)(4) ................................................ 1.1
10.4
(b) ................................................ Not Applicable
(c)(1) ................................................ 1.2
(c)(2) ................................................ 1.2
(c)(3) ................................................ Not Applicable
(d) ................................................ Not Applicable
(e) ................................................ 1.2
ss.315(a) ................................................ 6.1
(b) ................................................ 6.2
(c) ................................................ 6.1
(d) ................................................ 6.1
(e) ................................................ 5.14
ss.316(a) ................................................ 1.1
(a)(1)(A) ................................................ 5.2
5.12
(a)(1)(B) ................................................ 5.13
(a)(2) ................................................ Not Applicable
(b) ................................................ 5.8
(c) ................................................ 1.4
ss.317(a)(1) ................................................ 5.3
(a)(2) ................................................ 5.4
(b) ................................................ 10.3
ss.318(a) ................................................ 1.7
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NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
TABLE OF CONTENTS
-----------
Page
RECITALS OF THE COMPANY................................................. 1
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION ....................... 1
SECTION 1.1. Definitions............................................... 1
Act .......................................................... 2
additional interest............................................ 2
Affiliate...................................................... 2
Agent Member................................................... 2
Applicable Procedures.......................................... 2
Authenticating Agent........................................... 2
Board of Directors............................................. 2
Board Resolution............................................... 2
Business Day................................................... 2
Cedel ...................................................... 3
Change in Control.............................................. 3
Closing Price.................................................. 3
Commission..................................................... 3
Common Stock................................................... 3
common stock................................................... 3
Company ...................................................... 3
Company Notice................................................. 3
Company Request" or "Company Order............................. 4
Constituent Person............................................. 4
Conversion Rate................................................ 4
Corporate Trust Office......................................... 4
Corporation.................................................... 4
Defaulted Interest............................................. 4
Depositary..................................................... 4
Dollar" or "U.S.$.............................................. 4
DTC ...................................................... 4
Effectiveness Period........................................... 4
Euroclear...................................................... 4
Event of Default............................................... 4
Exchange Act................................................... 4
Expiration Date................................................ 4
Global Security................................................ 4
Holder ...................................................... 4
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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Page
Indenture..................................................... 5
Interest Payment Date......................................... 5
Maturity ..................................................... 5
Non-electing Share............................................ 5
Officers' Certificate......................................... 5
Opinion of Counsel............................................ 5
Other Securities.............................................. 5
Outstanding................................................... 5
Paying Agent.................................................. 6
Person ..................................................... 6
Post-Effective Registration Default........................... 6
Predecessor Security.......................................... 6
Purchase Agreement............................................ 6
Purchasers.................................................... 6
Record Date................................................... 6
Record Date Period............................................ 6
Redemption Date............................................... 6
Redemption Price.............................................. 6
Registrable Securities........................................ 7
Registration Default.......................................... 7
Registration Rights Agreement................................. 7
Regular Record Date........................................... 7
Regulation S.................................................. 7
Regulation S Certificate...................................... 7
Regulation S Global Security.................................. 7
Regulation S Legend........................................... 7
Regulation S Securities....................................... 7
Repurchase Date............................................... 7
Repurchase Price.............................................. 7
Restricted Global Security.................................... 7
Restricted Period............................................. 7
Restricted Securities......................................... 7
Restricted Securities Certificate............................. 7
Restricted Securities Legend.................................. 7
Rule 144A..................................................... 7
Rule 144A Securities.......................................... 8
Securities.................................................... 8
Securities Act................................................ 8
Securities Act Legend......................................... 8
Security Register" and "Security Registrar.................... 8
Senior Debt................................................... 8
Shelf Registration Statement.................................. 8
Special Record Date........................................... 9
Stated Maturity............................................... 9
Subsidiary.................................................... 9
Note: This table of contents shall not, for any purpose, be deemed
to be a part of the Indenture.
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Page
Successor Security............................................ 9
Surrender Certificate......................................... 9
Trading Day................................................... 9
Trust Indenture Act........................................... 9
Trustee ..................................................... 9
United States................................................. 9
Unrestricted Securities Certificate........................... 10
Vice President................................................ 10
SECTION 1.2. Compliance Certificates and Opinions........... 10
SECTION 1.3. Form of Documents Delivered to the Trustee..... 10
SECTION 1.4. Acts of Holders of Securities.................. 11
SECTION 1.5. Notices, Etc., to Trustee and Company.......... 13
SECTION 1.6. Notice to Holders of Securities; Waiver........ 13
SECTION 1.7. Effect of Headings and Table of Contents....... 14
SECTION 1.8. Successors and Assigns......................... 14
SECTION 1.9. Separability Clause............................ 14
SECTION 1.10. Benefits of Indenture.......................... 14
SECTION 1.11. Governing Law.................................. 14
SECTION 1.12. Legal Holidays................................. 14
SECTION 1.13. Conflict with Trust Indenture Act.............. 15
ARTICLE TWO
SECURITY FORMS........................... 15
SECTION 2.1. Forms Generally................................ 15
SECTION 2.2. Forms of Securities............................ 16
SECTION 2.3. Form of Trustee's Certificate of
Authentication .................................26
SECTION 2.4. Form of Conversion Notice...................... 26
ARTICLE THREE
THE SECURITIES........................... 27
SECTION 3.1. Title and Terms................................ 27
SECTION 3.2. Denominations.................................. 28
SECTION 3.3. Execution, Authentication, Delivery and Dating. 28
SECTION 3.4. Temporary Securities........................... 29
SECTION 3.5. Global Securities; Non-Global Securities....... 29
SECTION 3.6. Registration, Registration of Transfer and
Exchange; Restrictions on Transfer............. 30
SECTION 3.7. Mutilated, Destroyed, Lost or Stolen Securities 35
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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Page
SECTION 3.8. Payment of Interest; Interest Rights Preserved.. 36
SECTION 3.9. Persons Deemed Owners........................... 37
SECTION 3.10. Cancellation.................................... 37
SECTION 3.11. Computation of Interest......................... 37
SECTION 3.12. CUSIP and ISIN Numbers.......................... 37
ARTICLE FOUR
SATISFACTION AND DISCHARGE............... 38
SECTION 4.1. Satisfaction and Discharge of Indenture......... 38
SECTION 4.2. Application of Trust Money...................... 39
ARTICLE FIVE
REMEDIES................................. 39
SECTION 5.1 Events of Default............................... 39
SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment................................... 41
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Trustee....................... 42
SECTION 5.4. Trustee May File Proofs of Claim................ 42
SECTION 5.5. Trustee May Enforce Claims Without Possession of
Securities................................... 43
SECTION 5.6. Application of Money Collected.................. 43
SECTION 5.7. Limitation on Suits............................. 43
SECTION 5.8. Unconditional Right of Holders to Receive
Principal Premium and Interest and to
Convert..................................... 44
SECTION 5.9. Restoration of Rights and Remedies.............. 44
SECTION 5.10. Rights and Remedies Cumulative.................. 44
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......................... 45
SECTION 5.14. Undertaking for Costs........................... 45
SECTION 5.15. Waiver of Stay, Usury or Extension Laws......... 46
ARTICLE SIX
THE TRUSTEE.............................. 46
SECTION 6.1. Certain Duties and Responsibilities............. 46
SECTION 6.2. Notice of Defaults.............................. 46
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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Page
SECTION 6.3. Certain Rights of Trustee........................ 47
SECTION 6.4. Not Responsible for Recitals or Issuance of
Securities.................................... 48
SECTION 6.5. May Hold Securities.............................. 48
SECTION 6.6. Money Held in Trust.............................. 48
SECTION 6.7. Compensation and Reimbursement................... 48
SECTION 6.8. Disqualification; Conflicting Interests.......... 49
SECTION 6.9. Corporate Trustee Required; Eligibility.......... 49
SECTION 6.10. Resignation and Removal; Appointment of Successor 49
SECTION 6.11. Acceptance of Appointment by Successor........... 50
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business................................... 51
SECTION 6.13. Preferential Collection of Claims Against Company 51
SECTION 6.14. Appointment of Authenticating Agent.............. 51
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.... 54
SECTION 7.1. Company to Furnish Trustee Names and Addresses of
Holders.......................................... 54
SECTION 7.2. Preservation of Information; Communications
to Holders ................................... 54
SECTION 7.3. Reports by Trustee............................... 54
SECTION 7.4. Reports by Company............................... 55
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE,
TRANSFER OR LEASE............................... 55
SECTION 8.1. Company May Consolidate, Etc., Only on Certain
Terms......................................... 55
SECTION 8.2. Successor Substituted............................ 56
ARTICLE NINE
SUPPLEMENTAL INDENTURES........................ 56
SECTION 9.1. Supplemental Indentures Without Consent of
Holders of Securities......................... 56
SECTION 9.2. Supplemental Indentures with Consent of Holders
of Securities................................. 57
SECTION 9.3. Execution of Supplemental Indentures............. 58
SECTION 9.4. Effect of Supplemental Indentures................ 58
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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Page
SECTION 9.5. Conformity with Trust Indenture Act.............. 58
SECTION 9.6. Reference in Securities to Supplemental
Indentures.................................... 58
ARTICLE TEN
COVENANTS................................ 59
SECTION 10.1. Payment of Principal, Premium and Interest....... 59
SECTION 10.2. Maintenance of Office or Agency.................. 59
SECTION 10.3. Money for Security Payments to Be Held in
Trust......................................... 59
SECTION 10.4. Statement by Officers as to Default.............. 60
SECTION 10.5. Existence........................................ 61
SECTION 10.6. Maintenance of Properties........................ 61
SECTION 10.7. Payment of Taxes and Other Claims................ 61
SECTION 10.8. Registration and Listing......................... 61
SECTION 10.9. Compliance with Rule 144A........................ 62
SECTION 10.10. Resale of Certain Securities..................... 62
SECTION 10.11. Registration Rights.............................. 62
SECTION 10.12. Waiver of Certain Covenants...................... 63
ARTICLE ELEVEN
REDEMPTION OF SECURITIES................... 64
SECTION 11.1. Right of Redemption.............................. 64
SECTION 11.2. Applicability of Article......................... 64
SECTION 11.3. Election to Redeem; Notice to Trustee............ 64
SECTION 11.4. Selection by Trustee of Securities to Be
Redeemed..................................... 64
SECTION 11.5. Notice of Redemption............................. 65
SECTION 11.6. Deposit of Redemption Price...................... 65
SECTION 11.7. Securities Payable on Redemption Date............ 66
SECTION 11.8. Securities Redeemed in Part...................... 66
ARTICLE TWELVE
CONVERSION OF SECURITIES................... 66
SECTION 12.1. Conversion Privilege and Conversion Rate......... 66
SECTION 12.2. Exercise of Conversion Privilege................. 67
SECTION 12.3 Fractions of Shares.............................. 68
SECTION 12.4. Adjustment of Conversion Rate.................... 69
SECTION 12.5. Notice of Adjustments of Conversion Rate......... 73
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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SECTION 12.6. Notice of Certain Corporate Action...............73
SECTION 12.7. Company to Reserve Common Stock..................74
SECTION 12.8. Taxes on Conversions.............................75
SECTION 12.9. Covenant as to Common Stock......................75
SECTION 12.10. Cancellation of Converted Securities.............75
SECTION 12.11. Provision in Case of Consolidation,
Merger or Sale of Assets......................75
SECTION 12.12 Responsibility of Trustee for Conversion
Provisions....................................76
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES............... 77
SECTION 13.1. Securities Subordinate to Senior Debt............ 77
SECTION 13.2. Payment Over of Proceeds Upon Dissolution, Etc... 77
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration
of Securities................................. 78
SECTION 13.4. No Payment When Senior Debt in Default........... 78
SECTION 13.5. Payment Permitted If No Default.................. 79
SECTION 13.6. Subrogation to Rights of Holders of Senior Debt.. 79
SECTION 13.7. Provisions Solely to Define Relative Rights...... 79
SECTION 13.8. Trustee to Effectuate Subordination.............. 80
SECTION 13.9. No Waiver of Subordination Provisions............ 80
SECTION 13.10. Notice to Trustee................................ 80
SECTION 13.11. Reliance on Judicial Order or Certificate of
Liquidating Agent............................. 81
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt. 81
SECTION 13.13. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights.............. 82
SECTION 13.14. Article Applicable to Paying Agents.............. 82
SECTION 13.15. Certain Conversions and Repurchases Deemed
Payment ...................................... 82
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL............. 83
SECTION 14.1. Right to Require Repurchase...................... 83
SECTION 14.2 Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock............... 83
SECTION 14.3. Notices; Method of Exercising Repurchase Right,
Etc. ......................................... 84
SECTION 14.4. Certain Definitions.............................. 87
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
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Page
ANNEX A ...................................................................A-1
ANNEX B ...................................................................B-1
ANNEX C ...................................................................C-1
ANNEX D ...................................................................D-1
Note: This table of contents shall not, for any purpose, be deemed to be
a part of the Indenture.
-viii-
INDENTURE, dated as of February 11, 1997, between CUC
International Inc., a corporation duly organized and existing under the laws of
Delaware, having its principal executive office at 707 Summer Street, Stamford,
Connecticut 06901 (herein called the "Company"), and Marine Midland Bank, a
banking corporation and trust company duly organized and existing under the laws
of New York, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
its 3% Convertible Subordinated Notes due February 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.
All things necessary to make the Securities, when the
Securities are executed by the Company and authenticated and delivered
hereunder, 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. Further, all things necessary to duly authorize the issuance of the
Common Stock of the Company issuable upon the conversion of the Securities, and
to duly reserve for issuance the number of shares of Common Stock issuable upon
such conversion, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and 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 ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(2) 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;
(3) unless the context otherwise requires, any reference to a
statute, rule or regulation refers to the same (including any successor
statute, rule or regulation thereto) as it may be amended from time to
time; and
(4) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles in the United States, and, except as otherwise
herein expressly provided, the term "generally accepted accounting
principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally
accepted at the date of such computation; and
(5) 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.
"Act", when used with respect to any Holder of a Security, has
the meaning specified in Section 1.4.
"additional interest" has the meaning specified in
Section 10.11
"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 Member" means any member of, or participant in,
the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of Euroclear and Cedel, and of the Depositary for such
Security, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Authenticating Agent" means any Person authorized pursuant to
Section 6.14 to act on behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of
the Company or any duly authorized committee of that board.
"Board Resolution" means a vote duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company 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", when used with respect to any place of
payment, place of conversion or any other place, as the case may be, means each
Monday, Tuesday, Wednesday,
-2-
Thursday and Friday which is not a day on which banking institutions in such
place of payment, place of conversion or other place, as the case may be, are
authorized or obligated by law or executive order to close; provided, however,
that a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to close shall not be a Business Day for
purposes of Sections 10.1, 10.3 or 11.7.
"Cash Distribution" means the distribution by the Company to
all holders of its Common Stock of cash, other than any cash that is distributed
upon a merger or consolidation to which Section 12.11 applies or as part of a
distribution referred to in paragraph (4) of Section 12.4.
"Cedel" means Cedel Bank, S.A. (or any successor securities
clearing agency).
"Change in Control" has the meaning specified in Section 14.4.
"Closing Price" means, with respect to the Common Stock of the
Company, for any day, the reported last sale price per share on the New York
Stock Exchange or, if the Common Stock is not listed on the New York Stock
Exchange, on the principal national securities exchange or inter-dealer
quotation system on which the Common Stock is listed or admitted to trading, or
if not listed on the New York Stock Exchange or listed or admitted to trading on
any national securities exchange or inter-dealer quotation system, the average
of the closing bid and asked prices per share 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.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
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 the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company authorized at the date of this instrument as originally
executed. Subject to the provisions of Section 12.11, shares issuable on
conversion or repurchase of Securities shall include only shares of Common Stock
or shares of any class or classes of common stock resulting from any
reclassification or reclassifications thereof; provided, however, that if at any
time there shall be more than one such resulting class, the shares so issuable
on conversion of Securities shall include shares of all such classes, and 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.
"common stock" includes any stock of any class of capital
stock which has no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the issuer thereof and which is not subject to redemption by the issuer
thereof.
-3-
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 14.3.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, its
Vice Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section
12.11.
"Conversion Rate" has the meaning specified in Section 12.1.
"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 140 Broadway,
12th Floor, New York, New York 10005, Attention Corporate Trust Services-CUC.
"Corporation" means a corporation, company, association,
joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Depositary" means, with respect to any Security, a clearing
agency that is registered as such under the Exchange Act and is designated by
the Company to act as Depositary for such Security (or any successor securities
clearing agency so registered).
"Determination Date" means, in the case of a dividend or other
distribution, including the issuance of rights, options or warrants, to
shareholders, the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution and, in the case of a tender offer,
the last time that tenders could have been made pursuant to such tender offer.
"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, a New York
corporation.
"Effectiveness Period" has the meaning specified in the
Registration Rights Agreement.
"Euroclear" means the Euroclear Clearance System (or any
successor securities clearing agency).
-4-
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange
Act of 1934.
"Excess Purchase Payment" means the excess, if any, of (i) the
amount of cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of any non-cash consideration required to be paid with respect to
one share of Common Stock acquired or to be acquired in a tender offer made by
the Company or any Subsidiary for all or any portion of the Common Stock over
(ii) the current market price per share as of the last time that tenders could
have been made pursuant to such tender offer.
"Expiration Date" has the meaning specified in Section 1.4.
"Global Security" means a Security that is registered in the
Security Register in the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name a Security is
registered in the Security Register.
"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 provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Market Capitalization" means, with respect to a specified
date, the product of (i) the current market price per share (determined as
provided in paragraph (8) of Section 12.4) of the Common Stock as of such date
times (ii) the number of shares of Common Stock outstanding on such date.
"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 Fourteen or otherwise.
"Non-electing Share" has the meaning specified in Section
12.11.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, a Vice Chairman of the Board, the Chief Executive
Officer, the President or a Vice President and by the principal financial
officer, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
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"Opinion of Counsel" means a written opinion of counsel, who
may be counsel for the Company and who shall be reasonably acceptable to the
Trustee.
"Other Securities" means the Securities sold by the Purchasers
in the initial offering contemplated by the Purchase Agreement in reliance on an
exemption from the registration requirements of the Securities Act other than
Rule 144A and Regulation S.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) 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 provision therefor satisfactory to
the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.7 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities 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 relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. 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.
"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, limited liability
company, partnership, joint venture, trust, estate, unincorporated organization
or government or any agency or political subdivision thereof.
"Post-Effective Registration Default" has the meaning
specified in Section 10.11.
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"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 3.7 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.
"Purchase Agreement" means the Purchase Agreement, dated
February 5, 1997, between the Company and the Purchasers, as such agreement may
be amended from time to time.
"Purchasers" means Goldman, Sachs & Co., Morgan Stanley & Co.
Incorporated, Allen & Company Incorporated, Alex. Brown and Sons Incorporated,
Furman SelzLLC, and Hambrecht & Quist LLC.
"Record Date" means any Regular Record Date or Special Record
Date.
"Record Date Period" means the period from the close of
business of any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such Interest Payment 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.
"Registrable Securities" has the meaning specified in the
Registration Rights Agreement.
"Registration Default" has the meaning specified in Section
10.11.
"Registration Rights Agreement" has the meaning specified in
Section 10.11.
"Regular Record Date" for interest payable in respect of any
Security on any Interest Payment Date means the February 1st or August 1st
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Certificate" means a certificate substantially
in the form set forth in Annex A.
"Regulation S Global Security" has the meaning specified in
Section 2.1.
"Regulation S Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.2 to be
placed upon the Regulation S Securities.
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"Regulation S Securities" means all Securities required
pursuant to Section 3.6(c) to bear a Regulation S Legend. Such term includes the
Regulation S Global Security.
"Repurchase Date" has the meaning specified in Section 14.1.
"Repurchase Price" has the meaning specified in Section 14.1.
"Restricted Global Security" has the meaning specified in
Section 2.1.
"Restricted Period" means the period of 41 consecutive days
beginning on and including the later of (i) the day on which Securities are
first offered to persons other than distributors (as defined in Regulation S) in
reliance on Regulation S and (ii) the last original issuance date of the
Securities.
"Restricted Securities" means all Securities required pursuant
to Section 3.6(c) to bear any Restricted Securities Legend. Such term includes
the Restricted Global Security.
"Restricted Securities Certificate" means a certificate
substantially in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the
legends substantially in the forms of the legends required in the form of
Security set forth in Section 2.2 to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Securities" means the Securities purchased by the
Purchasers from the Company pursuant to the Purchase Agreement, other than the
Other Securities and the Regulation S Securities.
"Securities" has the meaning ascribed to it in the first
paragraph under the caption "Recitals of the Company".
"Securities Act" means the United States Securities Act of
1933.
"Securities Act Legend" means a Restricted Securities Legend
or a Regulation S Legend.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 3.6.
"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
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this 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; 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,
deferral, renewal, extension or refunding if it is expressly stated in the
governing terms or in the assumption thereof that the indebtedness involved is
not senior in right of payment to the Securities or that such indebtedness is
pari passu with or junior to the Securities.
"Shelf Registration Statement" has the meaning specified in
the Registration Rights Agreement.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Company pursuant to Section 3.8.
"Stated Maturity", when used with respect to any Security or
any installment of interest thereon, means the date specified in such Security
as the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation, limited liability company,
partnership or other entity 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 or other equity
interests in the corporation, limited liability company, partnership or other
entity which ordinarily has or have voting power for the election of directors,
or persons performing similar functions, whether at all times or only so long as
no senior class of stock or other interests has or have such voting power by
reason of any contingency.
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"Successor Security" of any particular Security means every
Security issued after, and 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 3.7 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.
"Surrender Certificate" means a certificate substantially in
the form set forth in Annex D.
"Trading Day" means (i) if the Common Stock is listed or
admitted for trading on the New York Stock Exchange or any other national
securities exchange, a day on which such exchange is open for business; (ii) if
the Common Stock is quoted on the Nasdaq National Market or any other system of
automated dissemination of quotations of securities prices, a day on which
trades may be effected through such system; or (iii) if the Common Stock is not
listed or admitted for trading on any national securities exchange or quoted on
the Nasdaq National Market or any other system of automated dissemination of
quotation of securities prices, a day 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.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after such
date, "Trust Indenture Act" means, to the extent required by any such amendment,
the Trust Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph 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.
"United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction (its "possessions" include Puerto Rico,
the U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern
Mariana Islands).
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"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".
SECTION 1.2. Compliance Certificates and Opinions.
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
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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:
(1) a statement that each individual signing such certificate
or opinion has read such covenant or condition and the definitions
herein relating thereto;
(2) 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;
(3) a statement that, in the opinion of such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.3. Form of Documents Delivered to the Trustee.
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, 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.
-11-
SECTION 1.4. Acts of Holders of Securities.
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 an agent or proxy duly appointed in writing; and except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments or record is delivered to the Trustee and, where it is
hereby expressly required, to the Company. The Trustee shall promptly deliver to
the Company copies of all such instruments and records delivered to the Trustee.
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. 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 6.3) conclusive in favor of the Trustee and
the Company if made in the manner provided in this Section.
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 acknowledgements 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 execution of any such instrument or
writing and the authority of the Person executing the same may also be proved in
any other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security
Register.
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, regardless of whether notation of such action
is made upon such Security.
The Company may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to give, make or
take any request, demand, authorization, direction, notice, consent, waiver or
other action provided or permitted by this Indenture to be given, made or taken
by Holders, provided that the Company may not set a record date for, and the
provisions of this paragraph shall not apply with respect to, the giving or
making of any notice, declaration, request or direction referred to in the next
paragraph. If any record date is set pursuant to this paragraph, the Holders of
Outstanding Securities on such record date, and no other Holders, shall be
entitled to take the relevant action, regardless of whether such Holders remain
Holders after such record date; provided that no such action shall be effective
hereunder unless taken on or prior to the applicable Expiration Date, if any, by
Holders of the requisite principal amount of Outstanding Securities on such
record date. Nothing in this paragraph shall be construed to prevent the Company
from setting a new record date for
-12-
any action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities on the date such
action is taken. Promptly after any record date is set pursuant to this
paragraph, the Company, at its own expense, shall cause notice of such record
date, the proposed action by Holders and the applicable Expiration Date to be
given to the Trustee in writing and to each Holder of Securities in the manner
set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose
of determining the Holders of Outstanding Securities entitled to join in the
giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2) or (iv) any direction referred to in
Section 5.12. If any record date is set pursuant to this paragraph, the Holders
of Outstanding Securities on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, regardless
whether such Holders remain Holders after such record date; provided that no
such action shall be effective hereunder unless taken on or prior to the
applicable Expiration Date, if any, by Holders of the requisite principal amount
of Outstanding Securities on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action (whereupon the record date previously set shall automatically and without
any action by any Person be cancelled and of no effect), nor shall anything in
this paragraph be construed to render ineffective any action taken by Holders of
the requisite principal amount of Outstanding Securities on the date such action
is taken. Promptly after any record date is set pursuant to this paragraph, the
Trustee, at the Company's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Company in writing and to each Holder of Securities in the manner set forth in
Section 1.6.
With respect to any record date set pursuant to this Section,
the party hereto that sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration Date to any
earlier or later day, provided that no such change shall be effective unless
notice of the proposed new Expiration Date is given to the other party hereto in
writing, and to each Holder of Securities in the manner set forth in Section
1.6, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to
take any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
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SECTION 1.5. Notices, Etc., to Trustee and Company.
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,
(1) the Trustee by any Holder 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 Services-CUC, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing, mailed, first-class postage prepaid,
or telecopied and confirmed by mail, first-class postage prepaid, or
delivered by hand or overnight courier, addressed to the Company at 707
Summer Street, Stamford, Connecticut 06901, telecopy no.: (203)
348-4528, Attention: Secretary or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 1.6. Notice to Holders of Securities; Waiver.
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 address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. 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 Person 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 1.7. 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.
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SECTION 1.8. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind its successors and assigns, whether so expressed or not.
SECTION 1.9. 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 1.10. 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 hereunder, the holders of Senior Debt and the Holders of Securities,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
SECTION 1.11. 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.
SECTION 1.12. 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 at a place of payment or place of conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or conversion of, such
Security need not be made on 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 or Repurchase Date, or at the Stated
Maturity or on such last day for conversion; provided, however, that in the case
that payment is made on such succeeding Business Day, no interest shall accrue
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,
to such succeeding Business Day.
SECTION 1.13. 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, the latter provision of the Trust Indenture
Act 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 of the Trust Indenture Act shall be deemed to apply to this
Indenture as so modified or to be excluded, as the case may be. Until such time
as this Indenture shall be
-15-
qualified under the Trust Indenture Act, this Indenture, the Company and the
Trustee shall be deemed for all purposes hereof to be subject to and governed by
the Trust Indenture Act to the same extent as would be the case if this
Indenture were so qualified on the date hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1. 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 as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
The definitive Securities shall be printed, lithographed or
engraved or produced by any combination of these methods on steel engraved
borders or may be produced in any other manner provided that it is permitted by
the rules of any securities exchange on which the Securities may be listed, all
as determined by the officers executing such Securities, as evidenced by their
execution thereof.
Upon their original issuance, Rule 144A Securities shall be
issued in the form of one or more Global Securities registered in the name of
DTC, as Depositary, or its nominee and deposited with the Trustee, as custodian
for DTC, for credit by DTC to the respective accounts of beneficial owners of
the Securities represented thereby (or such other accounts as they may direct).
Such Global Securities, together with their Successor Securities which are
Global Securities other than the Regulation S Global Security, are collectively
herein called the "Restricted Global Security". Upon their original issuance,
Regulation S Securities shall be issued in the form of one or more Global
Securities registered in the name of DTC, as depositary, or its nominee and
deposited with the Trustee, as custodian for DTC, for credit to the respective
accounts of the beneficial owners of the Securities represented thereby (or such
other accounts as they may direct), provided that upon such deposit all such
Securities shall be credited to or through accounts maintained at DTC by or on
behalf of Euroclear or Cedel. Such Global Securities, together with their
Successor Securities which are Global Securities, are collectively herein called
the "Regulation S Global Security".
Upon their original issuance, Other Securities shall not be
issued in the form of a Global Security or in any other form intended to
facilitate book-entry trading in beneficial interests in such Securities.
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SECTION 2.2. Forms of Securities.
[FORM OF FACE]
[IF THIS SECURITY IS A RESTRICTED SECURITY, THEN INSERT --
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A)
BY THE INITIAL INVESTOR, (1) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES
IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2)
IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE OR TO
AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) or (7) UNDER THE SECURITIES ACT PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE) AND, IN EACH
CASE (A) AND (B), IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE
STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. SECURITIES OWNED BY AN
INITIAL INVESTOR THAT IS NOT A QUALIFIED INSTITUTIONAL BUYER MAY NOT BE HELD IN
BOOK-ENTRY FORM AND MAY NOT BE TRANSFERRED WITHOUT CERTIFICATION THAT THE
TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS, AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW.]
[IF THE SECURITY IS A REGULATION S SECURITY, THEN INSERT --
THIS SECURITY AND THE COMMON STOCK ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON, UNLESS SUCH SECURITIES ARE
REGISTERED UNDER THE SECURITIES ACT OR AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS THEREOF IS AVAILABLE.]
[IF THE SECURITY IS A GLOBAL SECURITY, THEN INSERT -- THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY 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 DEPOSITARY OR A NOMINEE
THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.]
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[IF THE SECURITY IS A GLOBAL SECURITY AND THE DEPOSITORY TRUST
COMPANY IS TO BE THE DEPOSITARY THEREFOR, THEN INSERT -- UNLESS THIS CERTIFICATE
IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.]
CUC INTERNATIONAL INC.
3% CONVERTIBLE SUBORDINATED NOTE DUE FEBRUARY 15, 2002
No. _____________ $_____
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. 126545AB8]
[IF ANY REGULATION S SECURITY - CUSIP NO. U12678AA3]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. - USU12678AA1]
[IF OTHER SECURITY - CUSIP NO. - 126545AC6]
CUC INTERNATIONAL INC., a corporation duly organized and
existing under the laws of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture referred to on the reverse
hereof), for value received, hereby promises to pay to _______________, or
registered assigns, the principal sum of _____________ Dollars ($_____) [IF THIS
SECURITY IS A GLOBAL SECURITY, THEN INSERT -- (which principal amount may from
time to time be increased or decreased to such other principal amounts (which,
taken together with the principal amounts of all other Outstanding Securities,
shall not exceed $550,000,000 in the aggregate at any time) by adjustments made
on the records of the Trustee hereinafter referred to in accordance with the
Indenture)] on February 15, 2002 and to pay interest thereon, from February 11,
1997, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on February 15 and August 15 in each
year, commencing August 15, 1997, at the rate of 3% per annum, until the
principal hereof is due, and at the rate of 3% per annum on any overdue
principal and premium, if any, and, to the extent permitted by law, on any
overdue interest. The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the 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 February 1 or August 1 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Except as
otherwise provided in the Indenture, 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
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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
Company, 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, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture. Payment of the
principal of (and premium, if any, on) this Security shall be made upon the
surrender of this Security at the option of the Holder at 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, in such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts, or at such other offices or agencies as the Company
may designate, by Dollar check or by transfer to a Dollar account (such a
transfer to be made only to a Holder of an aggregate principal amount of
Securities in excess of $5,000,000, and only if such Holder shall have furnished
wire instructions in writing to the Trustee no later than 15 days prior to the
relevant payment date) maintained by the payee with a bank in the United States
of America. Payment of interest on this Security may be made by Dollar check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register, or, upon written application by the Holder to
the Security Registrar setting forth wire instructions not later than the
relevant Record Date, by transfer to a Dollar account (such a transfer to be
made only to a Holder of an aggregate principal amount of Securities in excess
of $5,000,000 and only if such Holder shall have furnished wire instructions in
writing to the Trustee no later than 15 days prior to the relevant payment date)
maintained by the payee with a bank in the United States of America.
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 by manual signature,
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.
Dated:
CUC INTERNATIONAL INC.
By:__________________________
Name:
Title:
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Attest:
- ------------------------
Name:
Title:
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities
of the Company designated as its "3% Convertible Subordinated Notes due February
15, 2002" (herein called the "Securities"), limited in aggregate principal
amount to $550,000,000, issued and to be issued under an Indenture, dated as of
February 11, 1997 (herein called the "Indenture"), between the Company and
Marine Midland Bank, as Trustee, (herein called the "Trustee"), which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee, the holders of Senior Debt and the Holders of the
Securities and of the terms upon which the Securities are, and are to be,
authenticated and delivered.
The Securities are subject to redemption upon not less than 30
nor more than 60 days' notice by mail, at any time on or after February 15,
2000, as a whole or in part, at the election of the Company, at the following
Redemption Prices (expressed as percentages of the principal amount) if redeemed
during the 12-month period beginning February 15 of the years indicated:
Year Redemption Price
2000 ....................................................... 101.2%
2001 ....................................................... 100.6%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant Record Dates referred to on the face hereof, all as provided in the
Indenture.
Subject to and upon compliance with the provisions of the
Indenture, the Holder of this Security is entitled at any time on or after the
90th day following (i) the last issuance of Securities pursuant to the
over-allotment option granted by the Company in connection with the initial
issuance and sale of the Securities or (ii) if such option is not exercised,
March 7, 1997, and before the close of business on February 15, 2002 (or, in
case this Security or a portion hereof is called for redemption or the Holder
hereof has exercised his right to require the Company to repurchase this
Security or a portion hereof, then in respect of this Security or such
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portion hereof, as the case may be, 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 (or any portion of
the principal amount hereof that is an integral multiple of $1,000), into fully
paid and nonassessable shares (calculated as to each conversion to the nearest
1/100 of a share) of Common Stock of the Company at the rate of 32.6531 shares
of Common Stock for each $1,000 principal amount of Security (or at the current
adjusted rate if an adjustment has been made as provided in the Indenture) by
surrender of this Security, duly endorsed or assigned to the Company or in blank
to the Company at the Corporate Trust Office of the Trustee, at the office or
agency of the Company in the Borough of Manhattan, The City of New York, at any
other office or agency of the Company maintained for such purpose and at the
office or agency of any additional conversion agent appointed by the Company,
accompanied by written notice to the Company that the Holder hereof elects to
convert this Security (or if less than the entire principal amount hereof is to
be converted, specifying the portion hereof to be converted) and, in case such
surrender shall be made during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date, also accompanied by payment in New York
Clearing House (next day) 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 this Security then being converted, provided that, if this
Security or any portion hereof has been called for redemption on a Redemption
Date or is repurchasable on a Repurchase Date occurring, in either case, 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 the succeeding Interest
Payment Date and is surrendered for conversion during such period, then the
Holder of this Security who converts this Security or any portion hereof during
such period will be entitled to receive the interest accruing on the principal
amount of this Security so called for redemption or repurchasable and then being
converted from the Interest Payment Date next preceding the date of such
conversion to such succeeding Interest Payment Date and shall not be required to
pay such interest upon surrender of this Security for conversion. Subject to the
provisions of the preceding sentence and, in the case of a conversion after the
close of business on the Regular Record Date next preceding any Interest Payment
Date and before the opening of business on such Interest Payment Date, to the
right of the Holder of this Security (or any Predecessor Security) of record as
of such Regular Record Date to receive the related installment of interest to
the extent and under the circumstances provided in the Indenture, no payment or
adjustment is to be made on conversion for interest accrued hereon from the
Interest Payment Date next preceding the day of conversion, or for dividends on
the Common Stock issued on conversion hereof. Interest payable on any Interest
Payment Date in respect of this Security or any portion hereof surrendered for
conversion on or after such Interest Payment Date shall be paid to the Holder of
such Security as the Regular Record Date next preceding such Interest Payment
Date, notwithstanding the exercise of the right of conversion. No fractions of
shares or scrip representing fractions of shares will be issued on conversion,
but instead of any fractional interest, the Company shall pay a cash adjustment
as provided in the Indenture or, at its option, the Company shall round up to
the next higher whole share.
The Conversion Rate is subject to adjustment as provided in
the Indenture. The Indenture also provides that in case of certain
consolidations or mergers to which the Company is a party or the conveyance,
transfer, sale or lease of all or substantially all of the properties and assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of
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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 such consolidation, merger, conveyance, transfer, sale or lease
(including any Common Stock retainable) by a holder of the number of shares of
Common Stock of the Company into which this Security could have been converted
immediately prior to such consolidation, merger, conveyance, transfer, sale or
lease (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 and further assuming, if such consolidation,
merger, conveyance, transfer, sale or lease is prior to the first date on which
this Security may be converted as provided above, that this Security was
convertible immediately prior to the time of such occurrence at the initial
Conversion Rate specified above as adjusted from the first original issue date
of the Securities to such time as provided in the Indenture). No adjustment in
the Conversion Rate will be made until such adjustment would require an increase
or decrease of at least one percent of such rate, provided that any adjustment
that would otherwise be made will be carried forward and taken into account in
the computation of any subsequent adjustment.
If this Security is a Registrable Security, then the Holder of
this Security [IF THIS SECURITY IS A GLOBAL SECURITY, THEN INSERT-- (and any
Person that has a beneficial interest in this Security)] and the Common Stock
issuable upon conversion hereof is entitled to the benefits of a Registration
Rights Agreement, dated as of February 11, 1997 and as the same may be amended
from time to time (the "Registration Rights Agreement"), executed by the
Company. Pursuant to the Registration Rights Agreement, the Company has agreed
for the benefit of the Holders from time to time of Registrable Securities, at
the Company's expense, (a) to file within 90 days after the first date of
original issuance of the Securities, a Shelf Registration Statement with the
Commission with respect to resales of the Registrable Securities, (b) to use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission as promptly as practicable but within 180
days after the first date of original issuance of the Securities, and (c) to use
its reasonable best efforts to maintain such Shelf Registration Statement
continuously effective under the Securities Act for a period of three years from
the later of (i) the date the Shelf Registration is first declared effective by
the Commission and (ii) the latest date of original issuance of the Securities,
or such earlier time as is specified in the Registration Rights Agreement.
Notwithstanding the foregoing, the Company is entitled to suspend the use of the
prospectus that is part of the Shelf Registration Statement for resales of
Registrable Securities during certain periods as provided in the Registration
Rights Agreement.
If (i) on or prior to 90 days following the first 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
first date of original issuance of the Securities, such Shelf Registration
Statement is not declared effective by the Commission (each, a "Registration
Default"), additional interest will accrue on the principal amount of this
Security from and including the day on which such Registration Default occurs to
but excluding the first day on which such Registration Default has been cured.
In addition, in the event that the Shelf Registration Statement becomes
effective and thereafter either (x) the Shelf Registration Statement ceases to
be effective during the Effectiveness Period or (y) use of the prospectus that
is part of the Shelf Registration Statement for resales of Registrable
Securities is suspended or prohibited (whether as permitted by the Registration
Rights Agreement or otherwise), and the total number
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of days (whether or not consecutive) in which any such cessation, suspension or
prohibition is in effect equals or exceeds 90 during any 12-month period (each,
a "Post-Effective Registration Default"), then additional interest will accrue
on the principal amount of this Security from and including such 90th day to but
excluding the first day thereafter on which the Shelf Registration Statement is
effective and such use of the prospectus is not suspended or prohibited
(provided that any day on which any such cessation, suspension or prohibition is
in effect and that occurs prior to such first day shall, if within the
applicable 12-month period, be taken into account in determining whether
additional interest shall begin to accrue again after such first day). Such
additional interest 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 additional interest begins to
accrue. Upon any Registration Default, additional interest will accrue until
such Registration Default is cured as provided above at a rate per annum equal
to one-quarter of one percent (0.25%) (in addition to the interest rate of 3%
per annum borne by this Security) to and including the 90th day following such
Registration Default, which rate will increase to one-half of one percent
(0.50%) per annum (in addition to such rate of 3% per annum) from and including
the 91st day following such Registration Default until such Registration Default
is cured as provided above. Upon any Post-Effective Registration Default,
additional interest shall accrue until cured at a rate per annum equal to
one-quarter of one percent (0.25%) (in addition to such rate of 3% per annum).
Such additional interest shall constitute the exclusive monetary damage remedy
available to the Holder of this Security in the case of a Registration Default.
Whenever in this Security there is a reference, in any
context, to interest on, or in respect of, any Security such mention shall be
deemed to include mention of additional interest accrued or payable as described
in the preceding paragraph to the extent that, in such context, additional
interest is, was or would be accrued or payable in respect of such Security and
express mention of additional interest in any provisions of this Security shall
not be construed as excluding additional interest in those provisions of this
Security where such express mention is not made.
If this Security is a Registrable Security and the Holder of
this Security [IF THIS SECURITY IS A GLOBAL SECURITY, THEN INSERT-- (and any
Person that has a beneficial interest in this Security)] elects to sell this
Security pursuant to the Shelf Registration Statement then, by such election,
such Holder of this Security agrees to be bound by the terms of the Registration
Rights Agreement relating to the Registrable Securities which are the subject of
such election.
If a Change in Control occurs, the Holder of this Security, at
the Holder's option, shall have the right, 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)
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, subject to the conditions provided in
the Indenture, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price. 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 Price 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
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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 so payable in those provisions of
this Security when such express mention is not made; provided, however, that for
the purposes of the second succeeding paragraph (regarding subordination), such
reference shall be deemed to include reference to the Repurchase Price only if
the Repurchase Price is payable in cash.
[IF NOT A GLOBAL SECURITY INSERT -- In the event of
redemption, repurchase or conversion of this Security in part only, a new
Security or Securities for the unredeemed, unrepurchased or unconverted portion
hereof will be issued in the name of the Holder hereof.]
[IF A GLOBAL SECURITY INSERT -- In the event of a deposit or
withdrawal of an interest in this Security (including upon an exchange,
transfer, redemption, repurchase or conversion of this Security in part only)
effected in accordance with the Applicable Procedures, the Security Registrar,
upon receipt of notice of such event from the Depositary's custodian for this
Security, shall make an adjustment on its records to reflect an increase or
decrease of the Outstanding principal amount of this Security resulting from
such deposit or withdrawal, as the case may be.]
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 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 provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the
principal of all the Securities may be declared due and payable in the manner
and with the effect provided in the Indenture.
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 consent of the
Holders of a majority in principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in 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
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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 with respect to the Securities, the Holders of not
less than 25% in principal amount of the Securities at the time Outstanding
shall have made written request to the Trustee to institute proceedings in
respect of such Event of Default as Trustee and offered the Trustee reasonable
indemnity and the Trustee shall not have received from the Holders of a majority
in principal amount of Securities at the time Outstanding a direction
inconsistent with such request and shall have failed to institute any such
proceeding for 60 days after receipt of such notice, request and offer of
indemnity. The foregoing shall not apply to certain suits described in the
Indenture, including any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium, if any, or
interest hereon on or after the respective due dates expressed herein or for the
enforcement of the right to convert this Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this
Security or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, premium,
if any, and interest 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.
As provided in the Indenture and subject to certain
limitations therein set forth, the transfer of Securities is registrable on the
Security Register upon surrender of a Security for registration of transfer at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, and at such other offices or agencies as the Company may designate, 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 thereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees.
The Securities are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities are exchangeable for a like aggregate principal amount of Securities
of a different authorized denomination, as requested by the Holder surrendering
the same.
No service charge shall be made for any 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 a 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 THIS SECURITY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF
AMERICA.
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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 14.1 of the Indenture, the undersigned
hereby elects to have all or a portion of this Security repurchased by the
Company.
2. The undersigned hereby directs the Trustee or the Company
to pay [choose one] (a) it or (b) Name: __________________; address:
__________________; Social Security or Other Taxpayer Identification Number, if
any: ____________, 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 to
be repurchased (as set forth below), plus interest accrued to the Repurchase
Date, as provided in the Indenture.
Dated: _______________________
-----------------------
Signature
Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if cash or Common Stock is to be delivered other than
to, and in the name of, the registered Holder.
-----------------------
Signature Guarantee
Principal amount to be repurchased
(an integral multiple of $1,000): ______________________
Remaining principal amount following such repurchase
(not less than $1,000): ______________________
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.
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SECTION 2.3. Form of Trustee's Certificate of Authentication.
This is one of the Securities referred to in the
within-mentioned Indenture.
Marine Midland Bank,
as Trustee
By:________________________
Authorized Signatory
SECTION 2.4. Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably
exercises the option to convert this Security, or any portion of the principal
amount hereof (which is an integral multiple of $1,000) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that such shares, together with a check in payment
for any fractional share and any Securities representing any unconverted
principal amount hereof, be delivered to and be registered in the name of the
undersigned unless a different name has been indicated below. If shares of
Common Stock or Securities are to be registered in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated: _____________________
---------------------------
Signature
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If shares or Securities are to be registered in If only a portion of the
Securities is to be the name of a Person other than the Holder, converted,
please indicate: please print such Person's name and address:
1. Principal amount to be converted:
$____________
- -------------------------
Name 2. Principal amount and denomination
of Securities representing uncon-
verted principal amount to be
issued:
- -------------------------
Address
Amount: $________
Denominations: $________
_________________________ (any integral multiple of $1,000)
Social Security or other Taxpayer
Identification Number, if any
Signature must be guaranteed by an eligible Guarantor Institution (banks,
stockbrokers, savings and loan associations and credit unions) with membership
in an approved signature medallion program pursuant to Securities and Exchange
Commission Rule 17Ad-15 if cash or Common Stock is to be delivered other than
to, and in the name of, the registered Holder.
[Signature Guarantee]
ARTICLE THREE
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $550,000,000,
except for Securities authenticated and delivered in exchange for, or in lieu
of, other Securities pursuant to Section 3.4, 3.5, 3.6, 3.7, 9.6, 11.8, 12.2 or
14.3.
The Securities shall be known and designated as the "3%
Convertible Subordinated Notes due February 15, 2002" of the Company. Their
Stated Maturity shall be February 15, 2002, and they shall bear interest at the
rate of 3% per annum, from February 11, 1997 or from the most recent Interest
Payment Date to which interest has been paid or duly
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provided for, as the case may be, payable semi-annually on February 15 and
August 15, commencing August 15, 1997, until the principal thereof is paid or
made available for payment.
The principal of, premium, if any, and interest on the
Securities shall be payable as provided in the forms of Securities set forth in
Section 2.2.
The Securities are entitled to the benefits of a Registration
Rights Agreement as provided by Section 10.11. The Securities are entitled to
the payment of additional interest as provided by Section 10.11.
The Securities shall be redeemable, as provided in Article
Eleven.
The Securities shall be convertible as provided in Article
Twelve.
The Securities shall be subordinated in right of payment to
Senior Debt as provided in Article Thirteen.
The Securities shall be subject to repurchase by the Company
at the option of the Holders as provided in Article Fourteen.
SECTION 3.2. Denominations.
The Securities shall be issuable only in registered form,
without coupons, in denominations of $1,000 and any integral multiple thereof.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by
its Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under 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.
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
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substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities, the Company
may execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as 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 cancellation of any one
or more temporary Securities the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.5. Global Securities; Non-Global Securities.
(a) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, 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 Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be a clearing agency registered as such under the Exchange Act,
and in either case the Company thereupon fails to appoint a successor
Depositary, (ii) there shall have occurred and be continuing an Event of Default
with respect to such Global Security or (iii) the Company executes and delivers
to the Trustee a Company Order stating that all Global Securities shall be
exchanged in whole for Securities that are not Global Securities (in which case
such exchange shall be effected by the Trustee).
(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security
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is to be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 3.6, then either (i) such Global
Security shall be so surrendered for exchange or cancellation as provided in
this Article Three or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
cancelled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 3.6(c) and as
otherwise provided in this Article Three, authenticate and deliver any
Securities issuable in exchange for such Global Security (or any portion
thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Article Three or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders of such Global Security for any purpose of this Indenture
or the Securities.
SECTION 3.6. 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 of the Company designated pursuant to Section 10.2
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 and exchanges of Securities as herein
provided.
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Subject to the other provisions of this Indenture regarding
restrictions on transfer, upon surrender for registration of transfer of any
Security at an office or agency of the Company designated pursuant to Section
10.2 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Securities of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder, and subject to the other
provisions of this Section 3.6, Securities may be exchanged for other Securities
of any authorized denomination and of a like aggregate principal amount, upon
surrender of the Securities to be exchanged at any such office or agency.
Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
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 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 Security
Registrar) 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 3.4, 3.5, 9.6, 11.8, 12.2 or 14.3 not
involving any transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 11.4 and ending at the close of
business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
(b) Certain Transfers and Exchanges. Notwithstanding any other
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.6(b) shall be made only in accordance with this Section
3.6(b).
(i) Restricted Global Security to Regulation S Global
Security. If the owner of a beneficial interest in the Restricted
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Regulation S Global Security, such transfer may be
effected only in accordance with the provisions of this Clause (b)(i)
and Clause (b)(vii) below and subject
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to the Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Regulation S
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Restricted Global Security in an equal principal amount be debited from
another specified Agent Member's account and (B) a Regulation S
Certificate, satisfactory to the Trustee and duly executed by the owner
of such beneficial interest in the Restricted Global Security or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar but subject to Clause (b)(vii) below, shall reduce the
principal amount of the Restricted Global Security and increase the
principal amount of the Regulation S Global Security by such specified
principal amount as provided in Section 3.5(c).
(ii) Regulation S Global Security to Restricted Global
Security. If the owner of a beneficial interest in the Regulation S
Global Security wishes at any time to transfer such interest to a
Person who wishes to acquire the same in the form of a beneficial
interest in the Restricted Global Security, such transfer may be
effected only in accordance with this Clause (b)(ii) and subject to the
Applicable Procedures. Upon receipt by the Trustee, as Security
Registrar, of (A) an order given by the Depositary or its authorized
representative directing that a beneficial interest in the Restricted
Global Security in a specified principal amount be credited to a
specified Agent Member's account and that a beneficial interest in the
Regulation S Global Security in an equal principal amount be debited
from another specified Agent Member's account and (B) if such transfer
is to occur during the Restricted Period, a Restricted Securities
Certificate, satisfactory to the Trustee and duly executed by the owner
of such beneficial interest in the Regulation S Global Security or his
attorney duly authorized in writing, then the Trustee, as Security
Registrar, shall reduce the principal amount of the Regulation S Global
Security and increase the principal amount of the Restricted Global
Security by such specified principal amount as provided in Section
3.5(c).
(iii) Restricted Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a Restricted
Security (other than a Global Security) wishes at any time to transfer
all or any portion of such Restricted Security to a Person who wishes
to take delivery thereof in the form of a beneficial interest in the
Restricted Global Security or the Regulation S Global Security, such
transfer may be effected only in accordance with the provisions of this
Clause (b)(iii) and Clause (b)(vii) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A)
such Restricted Security as provided in Section 3.6(a) and instructions
satisfactory to the Trustee directing that a beneficial interest in the
Restricted Global Security or Regulation S Global Security in a
specified principal amount not greater than the principal amount of
such Security be credited to a specified Agent Member's account and (B)
a Restricted Securities Certificate, if the specified account is to be
credited with a beneficial interest in the Restricted Global Security,
or a Regulation S Certificate, if the specified account is to be
credited with a beneficial interest in the Regulation S Global
Security, in either case satisfactory to the Trustee and duly executed
by such Holder or his attorney duly authorized in writing, then the
Trustee, as Security Registrar but subject to Clause (b)(vii) below,
shall cancel such Restricted Security (and issue a new Restricted
Security in respect of any untransferred portion thereof) as
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provided in Section 3.6(a) and increase the principal amount of the
Restricted Global Security or the Regulation S Global Security, as the
case may be, by the specified principal amount as provided in Section
3.5(c).
(iv) Regulation S Non-Global Security to Restricted Global
Security or Regulation S Global Security. If the Holder of a Regulation
S Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Regulation S Security to a Person
who wishes to acquire the same in the form of a beneficial interest in
the Restricted Global Security or the Regulation S Global Security,
such transfer may be effected only in accordance with this Clause
(b)(iv) and Clause (b)(vii) below and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A)
such Regulation S Security as provided in Section 3.6(a) and
instructions satisfactory to the Trustee directing that a beneficial
interest in the Restricted Global Security or Regulation S Global
Security in a specified principal amount not greater than the principal
amount of such Security be credited to a specified Agent Member's
account and (B) if the transfer is to occur during the Restricted
Period and the specified account is to be credited with a beneficial
interest in the Restricted Global Security, a Restricted Securities
Certificate satisfactory to the Trustee and duly executed by such
Holder or his attorney duly authorized in writing, then the Trustee, as
Security Registrar but subject to Clause (b)(vii) below, shall cancel
such Regulation S Security (and issue a new Regulation S Security in
respect of any untransferred portion thereof) as provided in Section
3.6(a) and increase the principal amount of the Restricted Global
Security or the Regulation S Global Security, as the case may be, by
the specified principal amount as provided in Section 3.5(c).
(v) Non-Global Security to Non-Global Security. A Security
that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is
not a Global Security as provided in Section 3.6(a), provided that, if
the Security to be transferred in whole or in part is a Restricted
Security, or is a Regulation S Security and the transfer is to occur
during the Restricted Period, then the Trustee shall have received (A)
a Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the transferor Holder or his attorney duly authorized
in writing, in which case the transferee Holder shall take delivery in
the form of a Restricted Security, or (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the transferor Holder
or his attorney duly authorized in writing, in which case the
transferee Holder shall take delivery in the form of a Regulation S
Security (subject in every case to Section 3.6(c)).
(vi) Exchanges between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged
for a Security that is not a Global Security as provided in Section
3.5, provided that, if such interest is a beneficial interest in the
Restricted Global Security, or if such interest is a beneficial
interest in the Regulation S Global Security and such exchange is to
occur during the Restricted Period, then such interest shall be
exchanged for a Restricted Security (subject in each case to Section
3.6(c)). A Security that is not a Global Security may be exchanged for
a beneficial interest in a Global Security only if (A) such exchange
occurs in connection
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with a transfer effected in accordance with Clause (b)(iii) or (iv)
above or (B) such Security is a Regulation S Security and such exchange
occurs after the Restricted Period.
(vii) Regulation S Global Security to be Held Through
Euroclear or Cedel during Restricted Period. The Company shall use its
best efforts to cause the Depositary to ensure that, until the
expiration of the Restricted Period, beneficial interests in the
Regulation S Global Security may be held only in or through accounts
maintained at the Depositary by Euroclear or Cedel (or by Agent Members
acting for the account thereof), and no person shall be entitled to
effect any transfer or exchange that would result in any such interest
being held otherwise than in or through such an account; provided that
this Clause (b)(vii) shall not prohibit any transfer or exchange of
such an interest in accordance with Clause (b)(ii) or (vi) above.
(c) Securities Act Legends. Rule 144A Securities, Other
Securities and their respective Successor Securities shall bear a Restricted
Securities Legend, and the Regulation S Securities and their Successor
Securities shall bear a Regulation S Legend, subject to the following:
(i) subject to the following Clauses of this Section 3.6(c), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Securities Act Legend borne by such Global Security while represented
thereby;
(ii) subject to the following Clauses of this Section 3.6(c),
a new Security which is not a Global Security and is issued in exchange
for another Security (including a Global Security) or any portion
thereof, upon transfer or otherwise, shall bear the Securities Act
Legend borne by such other Security, provided that, if such new
Security is required pursuant to Section 3.6(b)(v) or (vi) to be issued
in the form of a Restricted Security, it shall bear a Restricted
Securities Legend and, if such new Security is so required to be issued
in the form of a Regulation S Security, it shall bear a Regulation S
Legend;
(iii) Any Securities which are sold or otherwise disposed of
pursuant to an effective registration statement under the Securities
Act (including the Shelf Registration Statement), together with their
Successor Securities shall not bear a Securities Act Legend; the
Company shall inform the Trustee in writing of the effective date of
any such registration statement registering the Securities under the
Securities Act and shall notify the Trustee at any time when
prospectuses may not be delivered with respect to Securities to be sold
pursuant to such registration statement. The Trustee shall not be
liable for any action taken or omitted to be taken by it in good faith
in accordance with the aforementioned registration statement;
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without
being subject to transfer restrictions pursuant to the Securities Act,
a new Security which does not bear a Securities Act Legend may be
issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if the
Trustee has received an
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Unrestricted Securities Certificate, satisfactory to the Trustee and
duly executed by the Holder of such legended Security or his attorney
duly authorized in writing, and after such date and receipt of such
certificate, the Trustee shall authenticate and deliver such a new
Security in exchange for or in lieu of such other Security as provided
in this Article Three;
(v) a new Security which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security (other
than a Global Security) or any portion thereof which bears such a
legend if, in the Company's judgment, placing such a legend upon such
new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at
the direction of the Company, shall authenticate and deliver such a new
Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this Section
3.6(c), a Successor Security of a Security that does not bear a
particular form of Securities Act Legend shall not bear such form of
legend unless the Company has reasonable cause to believe that such
Successor Security is a "restricted security" within the meaning of
Rule 144, in which case the Trustee, at the direction of the Company,
shall authenticate and deliver a new Security bearing a Restricted
Securities Legend in exchange for such Successor Security as provided
in this Article Three.
SECTION 3.7. Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee or to
a Transfer Agent, the Company shall execute and the Trustee shall authenticate
and deliver in exchange therefor a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be satisfactory to the
Company or the Trustee to save each of them and any agent of either of them
harmless, then, in the absence of actual notice to the Company or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company shall
execute and the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen 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,
but subject to any conversion rights, may, instead of issuing a new Security,
pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
-36-
Every new Security issued pursuant to this Section in lieu of
any mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
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 of any Holder with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
SECTION 3.8. 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 (1) or (2) below:
(1) 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, the date of the proposed payment
and the Special Record Date, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make 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. The Special Record Date
for the payment of such Defaulted Interest 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, 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 (2).
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(2) 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 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, 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.
Interest on any Security which is converted in accordance with
Section 12.2 during a Record Date Period shall be payable in accordance with the
provisions of Section 12.2.
SECTION 3.9. 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
may 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 premium,
if any) and (subject to Section 3.8) 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 3.10. Cancellation.
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
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of as directed by a Company Order.
SECTION 3.11. Computation of Interest.
Interest on the Securities (including any additional interest)
shall be computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.12. CUSIP and ISIN Numbers.
The Company in issuing Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use) in addition to serial numbers; if so, the
Trustee shall use such "CUSIP" and "ISIN" numbers in addition to serial numbers
in notices of redemption and repurchase as a convenience to Holders; provided
that any such notice may state that no representation is made
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as to the correctness of such CUSIP and ISIN numbers either as printed on the
Securities or as contained in any notice of a redemption or repurchase and that
reliance may be placed only on the serial or other identification numbers
printed on the Securities, and any such redemption or repurchase shall not be
affected by any defect in or omission of such CUSIP and ISIN numbers.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as
to any surviving rights of conversion, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or stolen
and which have been replaced or paid as provided in Section 3.7 and
(ii) 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 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year, or
(iii) 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 (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, 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;
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(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) 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.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of Clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive. Funds held in trust pursuant to this
Section are not subject to the provisions of Article Thirteen.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 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 premium, if
any) and interest for whose payment such money has been deposited with the
Trustee.
All moneys deposited with the Trustee pursuant to Section 4.1
(and held by it or any Paying Agent) for the payment of Securities subsequently
converted shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever 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 Thirteen 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):
(1) default in the payment of the principal of or premium,
if any, on any Security at its Maturity; or
(2) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
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(3) failure by the Company to give the Company Notice in
accordance with Section 14.3; or
(4) default in the performance, or breach, of any material
covenant or warranty of the Company in this Indenture (other than a
covenant or warranty a default in the performance or breach of which is
specifically dealt with elsewhere in this Section or a default in the
performance or breach of Section 10.11), 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 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
(5) a default under any bond, debenture, note or other
evidence of indebtedness for money borrowed by the Company, or under
any agreement, mortgage, indenture or instrument under which there may
be issued or by which there may be secured or evidenced any
indebtedness for money borrowed by the Company, with a principal amount
then outstanding in excess of $75,000,000, whether such indebtedness
now exists or shall hereafter be created, which default shall
constitute a failure to pay the principal of such indebtedness (in
whole or in any part greater than $75,000,000) when due and payable or
shall have resulted in such indebtedness (in whole or in any part
greater than $75,000,000) 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 30
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 10% 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; or
(6) the entry by a court having jurisdiction in the premises
of (A) 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 (B) 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
(7) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or of any other case or
proceeding 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
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involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement 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 similar 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, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default
specified in Section 5.1(6) or 5.1(7)) occurs and is continuing, then in every
such case the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Outstanding Securities may declare the principal 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 the Holders), and upon any such
declaration such principal and all accrued interest thereon shall become
immediately due and payable. If an Event of Default specified in Section 5.1(6)
or 5.1(7) occurs and is continuing, the principal of, and accrued interest on,
all the Securities shall ipso facto become immediately due and payable without
any declaration or other Act of the Holders or any act on the part of the
Trustee.
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 provided, the Holders of
a majority in 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
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities,
(B) the principal of and premium, if any, on any
Securities which have become due otherwise than by such
declaration of acceleration and any interest thereon at the
rate borne by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided therefor
in the Securities, and
(D) 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
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(2) all Events of Default, other than the nonpayment of the
principal of, and any premium and interest on, Securities which have
become due solely by such declaration of acceleration, have been cured
or waived as provided in Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when it becomes due and payable and such default continues for
a period of 30 days, or
(2) default is made in the payment of the principal of or
premium, if any, on 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 interest on any overdue principal and
premium, if any, and on any overdue interest, at the rate provided therefor in
the Securities, and in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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 5.4. Trustee May File Proofs of Claim.
In case of any judicial proceeding relative to the Company (or
any other obligor upon the Securities), its property or its creditors, the
Trustee shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator or other similar official in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due it for
the reasonable compensation, expenses, disbursement and advances of the Trustee,
its agents and counsel, and any other amounts due the Trustee under Section 6.7.
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No provision of this Indenture shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on behalf of any
Holder any plan of reorganization, arrangement, adjustment or composition
affecting the Securities or the rights of any Holder thereof or to authorize the
Trustee to vote in respect of the claim of any Holder 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 such committee.
SECTION 5.5. 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, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.
SECTION 5.6. Application of Money Collected.
Subject to Article Thirteen, any money collected by the
Trustee pursuant to this Article 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, premium, if any, or interest, upon presentation
of the Securities, or both, as the case may be, 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 6.7; and
SECOND: To the payment of the amounts then due and unpaid for
principal of, premium, if any, or interest 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, premium, if any, and interest, respectively.
SECTION 5.7. 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:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in 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;
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(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) 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 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 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.
Notwithstanding any other provision in this Indenture, but
subject to the provisions of Article Thirteen, the Holder of any Security shall
have the right, which is absolute and unconditional, to receive payment of the
principal of, premium, if any, and (subject to Section 3.8) interest on such
Security or payment 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 Twelve, 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 5.9. Restoration of Rights and Remedies.
If the Trustee or any Holder 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 shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the 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 3.7, 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
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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 Five or by law to the Trustee or to the Holders may be exercised from
time to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 5.12. Control by Holders of Securities.
The Holders of a majority in principal amount of the
Outstanding Securities shall have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
exercising any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may 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 principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of, premium, if any,
or interest on any Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and
any Event of Default arising therefrom 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.
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 its as Trustee, a court may require any party litigant in
such suit to file an undertaking to pay the costs of such suit, and
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may assess costs against any such party litigant, in the manner and to the
extent provided in the Trust Indenture Act; provided, that neither this Section
nor the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by the
Company, the Trustee or any Holder, or group of Holders, holding in the
aggregate at least 10% in principal amount of the Outstanding Securities or in
any suit instituted by any Holder for the enforcement of principal of (and
premium, if any) or interest on any Security on or after the respective
maturities or Stated Maturities expressed in such Security or for the
enforcement of the right to convert any Security in accordance with Article
Twelve.
SECTION 5.15. Waiver of Stay, Usury 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, usury 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 SIX
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) 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
(2) 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, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs.
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(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 willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit
the effect of paragraph (a) of this Section;
(2) 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;
(3) 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 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
(4) 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 adequate
indemnity against such risk or liability is not reasonably 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 6.2. Notice of Defaults.
The Trustee shall give the Holders notice of any default
hereunder as and to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character specified in Section
5.1(4), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. 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 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, 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;
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(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 may 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, request and rely upon an
Officers' Certificate;
(d) the Trustee may consult with counsel and the written
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 pursuant to this Indenture, unless
such Holders shall have offered to the Trustee reasonable 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;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable in any such
actions other than for its own negligence or willful misconduct; and
(i) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights and
powers conferred upon it by this Indenture.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
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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 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.8 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Security Registrar or such other agent.
The Trustee may become and act as trustee under other
indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding in the same
manner as if it were not Trustee hereunder.
SECTION 6.6. 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 6.7. 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 the Trustee upon its written request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel) as detailed in such request, except any such
expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of this trust, including the reasonable
costs and expenses of defending itself against any claim or liability
in connection with the exercise or performance of any of its powers or
duties hereunder.
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When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Section 5.1(6) or Section
5.1(7), the expenses (including the reasonable charges of counsel) and the
compensation for the services are intended to constitute expenses of the
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 or the earlier resignation or removal of the Trustee.
SECTION 6.8. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall either
eliminate such interest or resign, to the extent and in the manner provided by,
and subject to the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be
a Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000. If such Person
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Person shall be deemed
to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible 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 6.10. 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 under
Section 6.11.
(b) The Trustee may resign at any time by giving written
notice thereof to the Company. If an instrument of acceptance by a successor
Trustee 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 Act of the
Holders of a majority in principal amount of the Outstanding Securities,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 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
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(2) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor by the Company
or by any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder 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.
(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. 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 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, 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 and accepted appointment in the manner hereinafter
provided, any Holder 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 in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. 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 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, transfer 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 qualified and
eligible under this Article.
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SECTION 6.12. 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 the corporate
trust business of the Trustee (including the trust created by this Indenture),
shall be the successor of the Trustee hereunder, provided such corporation shall
be otherwise qualified and 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 6.13. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the
Company (or any other obligor upon the Securities), the Trustee shall be subject
to the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents
which shall be authorized to act on behalf of the Trustee to authenticate
Securities issued upon original issue and upon exchange, registration of
transfer, partial conversion or partial redemption or pursuant to Section 3.7,
and 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. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference 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 be acceptable to the
Company and shall at all times 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 act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent 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
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, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
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
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continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, 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
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. 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.
The Trustee agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services under this Section, and
the Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment is made pursuant to this Section, the
Securities may have endorsed thereon, in addition to the Trustee's certificate
of authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities described in the
within-mentioned Indenture.
Marine Midland Bank,
As Trustee
By___________________________,
As Authenticating Agent
By___________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
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SECTION 7.1. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the
Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders as of such Regular
Record Date, excluding from any such list names and addresses received
by the Trustee in its capacity as Security Registrar; provided, that,
if after so excluding such names and addresses there are no names and
addresses to furnish, the Company shall not be obligated to furnish or
cause to be furnished such list, and
(b) at such other times as the Trustee may 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 7.2. 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 7.1 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 as provided in
Section 7.1 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.
(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.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company. The
Company will notify the Trustee when the Securities are listed on any stock
exchange.
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SECTION 7.4. Reports by Company.
The Company shall file with the Trustee and the Commission,
and transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act; provided that any such
information, documents or reports required to be filed with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act shall be filed with the
Trustee within 15 days after the same is so required to be filed with the
Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. 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 all or
substantially all of its properties and assets to any Person, and the Company
shall not permit any Person to consolidate with or merge into the Company or,
directly or indirectly, convey, transfer, sell or lease all or substantially all
of its properties and assets to the Company, unless:
(1) 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
substantially all the properties and assets of the Company shall be a
corporation, limited liability company, 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 supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of (and premium, if any) and
interest on all the Securities 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 Article Twelve;
(2) 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
(3) 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
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transaction, such supplemental indenture, comply with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 8.2. 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 substantially all of the properties and assets of the Company in accordance
with Section 8.1, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer, sale 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, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Holders of Securities.
Without the consent of any Holders, 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, in form
satisfactory to the Trustee, for any of the following purposes:
(1) 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
(2) 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
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights
of Holders of Securities pursuant to Section 12.11; or
(5) to make any changes or modifications to this Indenture
necessary in connection with the registration of any Registrable
Securities under the Securities Act as contemplated by Section 10.11,
provided such action pursuant to this clause (5) shall not adversely
affect the interests of the Holders of Securities; or
(6) to comply with the requirements of the Trust Indenture Act
or the rules and regulations of the Commission thereunder in order to
effect or maintain the qualification
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of this Indenture under the Trust Indenture Act, as contemplated by
this Indenture or otherwise; or
(7) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture, provided that such action
pursuant to this Clause (7) shall not adversely affect the interests of
the Holders of Securities.
SECTION 9.2. Supplemental Indentures with Consent of Holders of Securities.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by 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 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,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security or reduce the principal amount
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 or any premium thereon
or any other amount in respect thereof is payable, modify the
provisions of Article Fourteen in a manner adverse to the Holders or
impair the right to institute suit for the enforcement of any payment
in respect of any Security on or after the Stated Maturity thereof (or,
in the case of redemption or any repurchase, on or after the Redemption
Date or Repurchase Date, as the case may be) or the right to convert
any Security or, except as permitted by Section 12.11, adversely affect
the right to convert any Security as provided in Article Twelve, 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
(2) reduce the percentage in 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 (of compliance with certain provisions of this Indenture
or certain defaults hereunder and their consequences) provided for in
this Indenture, or
(3) modify the obligation of the Company to maintain an office
or agency in the Borough of Manhattan, The City of New York pursuant to
Section 10.2, or
(4) modify any of the provisions of Section 10.9 or 10.10, or
(5) modify any of the provisions of this Section or Section
5.13 or 10.12, except to increase any percentage contained herein or
therein or to provide that certain other
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provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby.
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 9.3. 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 6.1) 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. 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 9.4. 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 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the Trust Indenture Act.
SECTION 9.6. 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 Trustee and the
Company, 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.
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ARTICLE TEN
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Company will duly and punctually pay the principal of (and
premium, if any) and interest on the Securities in accordance with the terms of
the Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Company will maintain 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. The Company will give prompt written notice to
the Trustee of the location, and any change in the location, of 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,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more
other offices or agencies (in or outside the Borough of Manhattan, The City of
New York) where the Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such designations; provided,
however, that no such designation or rescission shall in any manner relieve the
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York for such purposes. The Company will give prompt
written notice to the Trustee of any such designation or rescission and of any
change in the location of any such other office or agency.
SECTION 10.3. Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent,
it will, on or before each due date of the principal of (and premium, if any) 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 (and
premium, if any) or interest so becoming due until such sums shall be paid to
such Persons or otherwise disposed of as herein provided and 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 each due date of the principal of (and premium, if any) or
interest on any Securities, deposit with a Paying Agent a sum sufficient to pay
such amount, such sum to be held as provided by the Trust Indenture Act, and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
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The Company will cause each Paying Agent other than 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 (i) comply with the provisions of the Trust
Indenture Act applicable to it as a Paying Agent and (ii) during the continuance
of any default by the Company (or any other obligor upon the Securities) in the
making of any payment in respect of the Securities, upon the written request of
the Trustee, forthwith pay to the Trustee all sums held in trust by such Paying
Agent as such.
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.
Subject to any applicable abandoned property laws, 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 (and premium, if any) or interest on
any Security and remaining unclaimed for two years after such principal (and
premium, if any) or interest 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 an
unsecured general 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 being
required to make any such repayment, may at the expense of the Company cause to
be published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in 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.
SECTION 10.4. Statement by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after
the end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
The Company shall deliver to the Trustee, as soon as possible
and in any event within 10 days after the Company becomes aware of the
occurrence of an Event of Default or an event which, with notice or the lapse of
time or both, would constitute an Event of Default, an Officers' Certificate
setting forth the details of such Event of Default or default, and the action
which the Company proposes to take with respect thereto.
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SECTION 10.5. Existence.
Subject to Article Eight, the Company will do or cause to be
done all things necessary to preserve and keep in full force and effect its
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 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 10.6. Maintenance of Properties.
The Company will cause all properties used or useful in the
conduct of its business or the business 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 all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this Section shall prevent the Company or any such
Subsidiary from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
SECTION 10.7. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) 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 (2)
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 10.8. Registration and Listing.
The Company (i) will effect all registrations with, and obtain
all approvals by, all governmental authorities that may be necessary under any
United States Federal or state law (including the Securities Act, the Exchange
Act and state securities and Blue Sky laws) for the shares of Common Stock
issuable upon conversion of Securities to be lawfully issued and delivered as
provided herein, and thereafter publicly traded (if permissible under the
Securities Act) and qualified or listed as contemplated by clause (ii) (it being
understood that the Company shall not be required to register the Securities or
the Common Stock issuable on conversion thereof under the Securities Act, except
pursuant to the Registration Rights Agreement referred to in Section 10.11); and
(ii) will list the shares of Common Stock required to be issued and delivered
upon conversion of Securities, prior to such issuance or delivery, on each
national securities exchange on which outstanding Common Stock is listed or
quoted at the time of such delivery, or if the Common Stock is not then listed
on any securities exchange, to qualify the
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Common Stock for quotation on the Nasdaq National Market or such other
inter-dealer quotation system, if any, on which the Common Stock is then quoted.
Nothing in this Section 10.8 will limit the application of Section 10.11.
SECTION 10.9. Compliance with Rule 144A.
Until the third anniversary of the later of the last date of
original issuance of the Securities and the last date on which any Security was
acquired from an Affiliate of the Company, unless the Securities have become
convertible into securities of another Person in accordance with Section 12.11,
the Company will use its best efforts to be subject to the reporting
requirements of Section 13 or 15(d) of the Exchange Act. At any time during such
period when the Company is not subject to Section 13 or 15(d) of the Exchange
Act, the Company will take all actions necessary to permit resales of the
Securities and shares of Common Stock issued upon conversion thereof to be made
pursuant to Rule 144A, including furnishing to any holder of such a security (or
a beneficial interest therein), or to any prospective purchaser designated by
such holder, upon the request of such holder, such financial and other
information as may be required to be delivered under paragraph (d)(4) of Rule
144A to permit such resales.
SECTION 10.10. Resale of Certain Securities.
Until the third anniversary of the latest date of original
issuance of the Securities or such shorter period following the latest date of
original issuance thereof after which resales of the Securities may be effected
by non-affiliates of the Company in reliance on paragraph (k) of Rule 144, the
Company will not, and will use its reasonable best efforts not to permit any of
its "affiliates" (as defined under Rule 144) to, resell any Securities which
constitute "restricted securities" under Rule 144 that have been reacquired by
any of them.
SECTION 10.11. Registration Rights.
The Company agrees that the Holders (and any Person that has a
beneficial interest in a Security) from time to time of Registrable Securities
are entitled to the benefits of a Registration Rights Agreement, dated as of
February 11, 1997 and as the same may be amended from time to time (the
"Registration Rights Agreement"), executed by the Company. Pursuant to the
Registration Rights Agreement, the Company has agreed for the benefit of the
Holders from time to time of Registrable Securities, at the Company's expense,
(i) to file within 90 days after the first date of original issuance of the
Securities, a Shelf Registration Statement with the Commission with respect to
resales of the Registrable Securities, (ii) to use its reasonable best efforts
to cause such Shelf Registration Statement to be declared effective by the
Commission as promptly as practicable but within the 180 days after such date,
and (iii) to use its reasonable best efforts to maintain such Shelf Registration
Statement continuously effective under the Securities Act during the
Effectiveness Period. Notwithstanding the foregoing, the Company is entitled to
suspend the use of the prospectus that is part of the Shelf Registration
Statement for resales of Registrable Securities during certain periods as
provided in the Registration Rights Agreement.
If (i) on or prior to 90 days following the first date of
original issuance of the Securities, a Shelf Registration Statement has not been
filed with the Commission, or (ii) on or
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prior to the 180th day following the first date of original issuance of the
Securities, such Shelf Registration Statement is not declared effective (each, a
"Registration Default"), additional interest will accrue on the principal amount
of this Security from and including the day following the first day on which
such Registration Default occurs to but excluding the first day on which such
Registration Default has been cured. In addition, in the event that the Shelf
Registration Statement becomes effective and thereafter either (x) the Shelf
Registration Statement ceases to be effective during the Effectiveness Period or
(y) use of the prospectus that is part of the Shelf Registration Statement for
resales of Registrable Securities is suspended or prohibited (whether as
permitted by the Registration Rights Agreement or otherwise), and the total
number of days (whether or not consecutive) in which any such cessation,
suspension or prohibition is in effect equals or exceeds 90 during any 12-month
period (each, a "Post-Effective Registration Default"), then additional interest
will accrue on the principal amount of the Securities from and including such
90th day to but excluding the first day thereafter on which the Shelf
Registration Statement is effective and such use of the prospectus is not
suspended or prohibited (provided that any day on which any such cessation,
suspension or prohibition is in effect and that occurs prior to such first day
shall, if within the applicable 12-month period, be taken into account in
determining whether additional interest shall begin to accrue again after such
first day). Such additional interest 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 additional interest begins to
accrue. Upon any Registration Default, additional interest will accrue until
such Registration Default is cured as provided above at a rate per annum equal
to one-quarter of one percent (0.25%) (in addition to the interest rate of 3%
per annum borne by this Security) to and including the 90th day following such
Registration Default, which rate will increase to one-half of one percent
(0.50%) per annum (in addition to such rate of 3% per annum) from and including
the 91st day following such Registration Default until such Registration Default
is cured as provided above. Upon any Post-Effective Registration Default,
additional interest shall accrue until cured at a rate per annum equal to
one-quarter of one percent (0.25%) (in addition to such rate of 3% per annum).
Whenever in this Indenture there is mentioned, in any context,
interest on, or in respect of, any Security, such mention shall be deemed to
include mention of additional interest provided for in this Section to the
extent that, in such context, additional interest is, was or would be accrued or
payable in respect thereof pursuant to the provisions of this Section and
express mention of additional interest in any provisions hereof shall not be
construed as excluding additional interest in those provisions hereof where such
express mention is not made.
SECTION 10.12. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with
any covenant or conditions set forth in Sections 10.5 to 10.7, inclusive, if
before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Securities, by Act of such Holders, 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.
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ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 11.1. Right of Redemption.
The Securities may be redeemed at the election of the Company,
as a whole or from time to time in part, at any time on or after February 15,
2000, at the Redemption Prices specified in the form of Security hereinbefore
set forth.
SECTION 11.2. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by any provision of this Indenture, shall be made in accordance with
such provision and this Article.
SECTION 11.3. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant
to Section 11.1 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 45 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount of Securities to
be redeemed.
SECTION 11.4. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to $1,000 or any integral multiple thereof) of the principal
amount of Securities of a denomination larger than $1,000.
If any Security selected for partial redemption is converted
in part before termination of the conversion right with respect to the portion
of the Security so selected, the converted portion of such Security shall be
deemed (so far as may be) to be the portion selected for redemption. Securities
which have been converted during a selection of Securities to be redeemed shall
be treated by the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each
Security Registrar in writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities
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redeemed or to be redeemed only in part, to the portion of the principal amount
of such Securities which has been or is to be redeemed.
SECTION 11.5. Notice of Redemption.
Notice of redemption shall be given by first-class mail,
postage prepaid, mailed not less than 30 nor more than 60 days prior to the
Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption of
any Securities, the principal amounts) of the particular Securities to
be redeemed,
(4) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security to be redeemed and that
interest thereon will cease to accrue on and after said date,
(5) the Conversion Rate, the date on which the right to
convert the Securities to be redeemed will terminate and the place or
places where such Securities may be surrendered for conversion,
(6) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
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 and at the expense of the Company and shall
be irrevocable.
SECTION 11.6. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) 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 any 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
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to receive interest as provided in the last paragraph of Section 3.8) be paid to
the Company upon Company Request or, if then held by the Company, shall be
discharged from such trust.
SECTION 11.7. 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 therein 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 redemption in accordance with said notice, such
Security shall be paid by the Company at 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 3.8.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal (and premium, if any)
shall, until paid, bear interest from the Redemption Date at the rate borne by
the Security.
SECTION 11.8. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 10.2 (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 deliver to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
ARTICLE TWELVE
CONVERSION OF SECURITIES
SECTION 12.1. Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this
Article, at the option of the Holder thereof, any Security or any portion which
is $1,000 or an integral multiple thereof may be converted into fully paid and
nonassessable shares (calculated as to each conversion to the nearest 1/100th of
a share) of Common Stock of the Company at the Conversion Rate, determined as
hereinafter provided, in effect at the time of conversion. Such conversion right
shall commence on the 90th day following (i) the last issuance of Securities
upon the Purchaser's exercise of the over-allotment option granted to them in
the Purchase Agreement or (ii), if such
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option is not exercised, March 7, 1997, and shall expire at the close of
business on February 15, 2002, subject, in the case of conversion of any Global
Security, to any Applicable Procedures. In case a Security or portion thereof is
called for redemption at the election of the Company or the Holder thereof
exercises his right to require the Company to repurchase the Security, such
conversion right in respect of the Security, or portion thereof, so called or
repurchasable, shall expire at the close of business on the Redemption Date or
the Repurchase Date, as the case may be, unless the Company defaults in making
the payment due upon redemption or repurchase, as the case may be (in each case
subject as aforesaid to any Applicable Procedures with respect to any Global
Security).
The rate at which shares of Common Stock shall be delivered
upon conversion (herein called the "Conversion Rate") shall be initially 32.6531
shares of Common Stock for each $1,000 principal amount of Securities. The
Conversion Rate shall be adjusted in certain instances as provided in this
Article Twelve.
SECTION 12.2. Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of
any Security to be converted 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 10.2, accompanied by a duly
signed conversion notice substantially in the form provided in Section 2.4
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. 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 is repurchasable on a Repurchase
Date, occurring, in either case, within such period) be accompanied by payment
in New York Clearing House (next day) 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 portion thereof, as the case
may be) being surrendered for conversion. The interest so payable on any
Interest Payment Date with respect to any Security (or portion thereof, if
applicable) which has been called for redemption on a Redemption Date, or is
repurchasable on a Repurchase Date, occurring, in either case, during the period
from the close of business on the Regular Record Date next preceding such
Interest Payment Date to the opening of business on such Interest Payment Date,
which Security (or portion thereof, if applicable) so called for redemption or
repurchasable is surrendered for conversion (in whole or in part) during such
period, shall be paid upon such conversion to the Holder of such Security as of
the conversion date in an amount equal to the interest that would have been
payable on the principal amount of such Security so called for redemption or
repurchasable and being converted if such principal amount had been converted as
of the close of business on such Interest Payment Date. The interest so payable
on any Interest Payment Date in respect of any Security (or portion thereof, as
the case may be) which has not been called for redemption on a Redemption Date,
or is not repurchasable on a Repurchase Date, occurring, in either case, during
the period from the close of business on the Regular Record Date next preceding
such Interest Payment Date to the opening of business on such Interest Payment
Date, which Security (or portion thereof, as the case may be) not so called for
redemption or repurchasable is surrendered for conversion (in whole or in part)
during such
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period, shall be paid to the Holder of such Security as of such Regular Record
Date. Interest payable on any Interest Payment Date in respect of any Security
surrendered for conversion on or after such Interest Payment Date shall be paid
to the Holder of such Security as of the Regular Record Date next preceding such
Interest Payment Date, notwithstanding the exercise of the right of conversion.
Except as provided in this paragraph, no cash payment or adjustment shall be
made upon any conversion 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, or on account of
any dividends on the Common Stock issued upon 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. As promptly as practicable on or after the conversion date, the
Company shall issue and deliver to the Trustee, for delivery to the Holder, a
certificate or certificates for the number of full shares of Common Stock
issuable upon conversion, together with payment in lieu of any fraction of a
share, as provided in Section 12.3.
All shares of Common Stock delivered upon such conversion of
Restricted Securities shall rank pari passu with other shares of Common Stock of
the Company and shall bear restrictive legends substantially in the form of the
legends required to be set forth on the Restricted Securities pursuant to
Section 3.6 and shall be subject to the restrictions on transfer provided in
such legends.
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 shares of Common Stock to be issued upon conversion of a
Restricted Security, or Securities to be issued upon conversion of a Restricted
Security in part only, are to be registered in a name other than that of the
beneficial owner of such Restricted Security, then there must be delivered to
the conversion agent a Surrender Certificate, dated the date of surrender of
such Restricted Security and signed by or on behalf of such beneficial owner, as
to compliance with the restrictions on transfer applicable to such Restricted
Security. Neither the Trustee nor any conversion agent, registrar or transfer
agent shall be required to register in a name other than that of the beneficial
owner, shares of Common Stock or Securities issued upon conversion of any such
Restricted Security not so accompanied by a properly completed Surrender
Certificate.
SECTION 12.3. Fractions of Shares.
No fractional shares of Common Stock 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
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shall be computed on the basis of the aggregate principal amount of the
Securities (or specified portions thereof) so surrendered. Instead of any
fractional share of Common Stock which would otherwise be issuable upon
conversion of any Security or Securities (or specified portions thereof), the
Company shall calculate and pay a cash adjustment in respect of such fraction
(calculated to the nearest 1/100th of a share) in an amount equal to the same
fraction of the Closing Price at the close of business on the day of conversion
(or, if such day is not a Trading Day, on the Trading Day immediately preceding
such day), alternatively, the Company shall round up to the next higher whole
share.
SECTION 12.4. Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time
to time as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the Determination Date for 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 such Determination Date 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 such Determination Date. For the
purposes of this paragraph (1), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of the
Company.
(2) Subject to the last sentence of paragraph (7) of this
Section, in case the Company shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per share less than the current market price per
share (determined as provided in paragraph (8) of this Section 12.4) of the
Common Stock on the Determination Date for such distribution, the Conversion
Rate in effect at the opening of business on the day following such
Determination Date 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 such Determination Date plus the number
of shares of Common Stock which the aggregate of the offering price of the total
number of shares 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 of Common Stock outstanding at the close of business on such
Determination Date 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 such Determination Date. For the
purposes of this paragraph (2), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company but
shall include shares issuable in respect of scrip certificates issued in lieu of
fractions of shares of Common Stock. The Company will not issue any rights,
options or warrants in respect of shares of Common Stock held in the treasury of
the Company.
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(3) In case outstanding shares of Common Stock shall be
subdivided into a greater number of shares 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 outstanding shares of Common Stock shall each be combined
into a smaller number of shares of Common Stock, the Conversion Rate in effect
at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately reduced, such 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.
(4) Subject to the last sentence of paragraph (7) of this
Section, in case the Company shall, by dividend or otherwise, distribute to all
holders of its Common Stock evidences of its indebtedness, shares of any class
of capital stock, or other property (including securities, but excluding (i) any
rights, options or warrants referred to in paragraph (2) of this Section, (ii)
any dividend or distribution paid exclusively in cash, (iii) any dividend or
distribution referred to in paragraph (1) of this Section and (iv) any merger or
consolidation to which Section 12.11 applies), 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
Determination Date for such distribution by a fraction of which the numerator
shall be the current market price per share (determined as provided in paragraph
(8) of this Section 12.4) of the Common Stock on such Determination Date less
the then fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution filed with
the Trustee) of the portion of the assets, shares or evidences of indebtedness
so distributed applicable to one share of Common Stock and the denominator 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 such Determination Date. If the Board of Directors determines the fair
market value of any distribution for purposes of this paragraph (4) by reference
to the actual or when issued trading market for any securities comprising such
distribution, it must in doing so consider the prices in such market over the
same period used in computing the current market price per share pursuant to
paragraph (8) of this Section.
(5) In case the Company shall, by dividend or otherwise, make
a Cash Distribution in an aggregate amount that, combined together with (i) the
aggregate amount of any other Cash Distributions made within the 12 months
preceding the date of payment of such distribution in respect of which no
adjustment pursuant to this paragraph (5) has been made and (ii) any Excess
Purchase Payment made within the 12 months preceding the date of such
distribution and in respect of which no adjustment has been made pursuant to
paragraph (6) of this Section 12.4, exceeds 12.5% of the Company's Market
Capitalization on the Determination Date for such Cash Distribution, then, and
in each such case, immediately after the close of business on the Determination
Date for such Cash Distribution, 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 such Determination Date by
a fraction (a) the numerator of which shall be equal to the current market price
per share (determined as provided in paragraph (8) of this Section) of the
Common Stock on such Determination Date less an amount equal to the quotient of
(1) the amount of such excess divided by (2) the number of shares of Common
Stock outstanding on such Determination Date and (b) the denominator of which
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shall be equal to the current market price per share (determined as provided in
paragraph (8) of this Section 12.4) of the Common Stock on such Determination
Date.
(6) In case the Company or any Subsidiary shall make an Excess
Purchase Payment in an aggregate that, combined together with (i) the aggregate
amount of any other Excess Purchase Payments made by the Company or any
Subsidiary within the 12 months preceding such Excess Purchase Payment in
respect of which no adjustment pursuant to this paragraph (6) has been made and
(ii) the aggregate amount of any Cash Distributions made within the 12 months
preceding such Excess Purchase Payment in respect of which no adjustment
pursuant to paragraph (5) of this Section 12.4 has been made, exceeds 12.5% of
the Company's Market Capitalization as of the Determination Date, then, and in
each such case, immediately prior to the opening of business on the day after
the tender offer in respect of which such Excess Purchase Payment is to be made
expires, 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 Determination Date for such tender offer by a
fraction (a) the numerator of which shall be equal (1) to the product of (A) the
number of shares of Common Stock outstanding (including any tendered shares) at
such Determination Date less (B) the amount of such excess 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 (8) of
this Section 12.4) as of such Determination Date multiplied by (Y) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Determination Date less the number of all shares validly tendered and not
withdrawn as of the Determination Date.
(7) 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 (a) 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
Determination Date), and (b) a subdivision or combination, as the case may be,
of the number of shares of Common Stock outstanding immediately prior to such
reclassification into the number of shares 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 12.4). Rights or warrants issued by the Company
to all holders of its Common Stock entitling the holders thereof to subscribe
for or purchase shares of Common Stock, which rights or warrants (i) are deemed
to be transferred with such shares of Common Stock, (ii) are not exercisable and
(iii) are also issued in respect of future issuances of Common Stock, in each
case in clauses (i) through (iii) until the occurrence of a specified event or
events ("Trigger Event"), shall for purposes of this Section 12.4 not be deemed
issued until the occurrence of the earliest Trigger Event.
(8) For the purpose of any computation under paragraphs (2),
(4), (5) or (6) of this Section 12.4, the current market price per share of
Common Stock on any date shall be calculated by the Company and be deemed to be
the average of the daily Closing Prices 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
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of this paragraph, the term "ex date", when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required
unless such adjustment (plus any adjustments not previously made by reason of
this paragraph (9)) would require an increase or decrease of at least one
percent in such rate; provided, however, that any adjustments which by reason of
this paragraph (9) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Article shall be made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be.
(10) 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 (1), (2), (3), (4), (5) and (6) of this Section
12.4, as it considers to be advisable in order to avoid or diminish any income
tax to any holders of shares 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 income tax purposes. The Company
shall have the power to resolve any ambiguity or correct any error in the
application of this paragraph (10) and its actions in so doing shall, absent
manifest error, be final and conclusive.
(11) The Company from time to time at its option may increase
the Conversion Rate by any amount for any period of at least 20 calendar days if
the Board of Directors has made a determination that such increase would be in
the best interests of the Company, which determination shall be conclusive and
evidenced by a Board Resolution. To exercise this option the Company shall
provide a notice to the Trustee and the Holders in accordance with Sections 1.5
and 1.6 at least 15 calendar days prior to the first day of the period during
which the Conversion Rate will be adjusted stating that the Conversion Rate will
be adjusted pursuant to this provision, the period during which the adjusted
Conversion Rate will be in effect and the adjusted Conversion Rate.
SECTION 12.5. Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as provided in
Section 12.4:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 12.4 and shall prepare a certificate signed by
either the chief financial officer, the treasurer or the controller 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 promptly be filed with the Trustee and at each
office or agency maintained for the purpose of conversion of Securities
pursuant to Section 10.2; and
(2) 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 the Trustee and to all
Holders in accordance with Sections 1.5 and 1.6. Unless and until the
Trustee receives
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such notice, it need not inquire into whether any adjustment of the
Conversion Rate is required and may assume that no such adjustment has
been, or is required to be, made.
SECTION 12.6. Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Stock payable (i) otherwise than
exclusively in cash or (ii) exclusively in cash in an amount that would
require any adjustment pursuant to Section 12.4; or
(b) the Company shall authorize the granting to the holders of
its Common Stock of rights, options or warrants to subscribe for or
purchase any shares of capital stock of any class or of any other
rights; or
(c) of any reclassification of the Common Stock of the
Company, 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 the conveyance, sale, transfer 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; or
(e) the Company or any Subsidiary shall commence a tender
offer for all or a portion of the Company's outstanding shares of
Common Stock (or shall amend any such tender offer);
then the Company shall cause to be filed with the Trustee and at each office or
agency maintained for the purpose of conversion of Securities pursuant to
Section 10.2, and shall cause to be provided to all Holders in accordance with
Section 1.6, at least 20 days (or 10 days in any case specified in clause (a) or
(b) above) prior to the applicable record, expiration 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, options or
warrants, or, if a record is not to be taken, the date as of which the holders
of Common Stock of record to be entitled to such dividend, distribution, rights,
options or warrants are to be determined, (y) the date on which the right to
make tenders under such tender offer expires or (z) the date on which such
reclassification, consolidation, merger, 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 shares of Common Stock for securities, cash or other
property deliverable upon such reclassification, consolidation, merger,
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 (e) of this Section 12.6.
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The preceding paragraph to the contrary notwithstanding, the
Company shall cause to be filed at each office or agency maintained for the
purpose of conversion of Securities pursuant to Section 10.2, and shall cause to
be provided to all Holders in accordance with Section 1.6, 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 12.7. Company to Reserve Common Stock.
The Company shall at all times reserve and keep available,
free from preemptive rights, out of its authorized but unissued Common Stock,
for the purpose of effecting the conversion of Securities, the full number of
shares of Common Stock then issuable upon the conversion of all Outstanding
Securities.
SECTION 12.8. Taxes on Conversions.
Except as provided in the next sentence, the Company will pay
any and all taxes and duties that may be payable in respect of the issue or
delivery of shares of Common Stock on conversion of Securities pursuant hereto.
The Company shall not, however, be required to pay any tax or duty which may be
payable in respect of any transfer involved in the issue and delivery of shares
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 12.9. Covenant as to Common Stock.
The Company agrees that all shares of Common Stock which may
be delivered upon conversion of Securities, upon such delivery, will have been
duly authorized and validly issued and will be fully paid and nonassessable (and
shall be issued out of the Company's authorized but unissued Common Stock) and,
except as provided in Section 12.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
SECTION 12.10. Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to
the Trustee or the Paying Agent or its agent to be canceled by or at the
direction of the Trustee, which shall dispose of the same as provided in Section
3.10.
SECTION 12.11. Provision in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation of the Company with any other
Person, any merger of the Company into another Person or of another Person into
the Company (other than a merger which does not result in any reclassification,
conversion, exchange or cancellation of outstanding shares of Common Stock of
the Company) or any conveyance, sale, transfer or lease of all or substantially
all of the properties and assets of the Company, the Person formed by such
consolidation or resulting from such merger or which acquires such properties
and assets, as the
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case may be, shall execute and deliver to the Trustee a supplemental indenture
providing that the Holder of each Security then Outstanding shall have the right
thereafter, during the period such Security shall be convertible as specified in
Section 12.1, to convert such Security only into the kind and amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (including any Common Stock retainable) 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, conveyance, sale, transfer or lease, (a) assuming such holder of Common
Stock of the Company (i) is not a Person with which the Company consolidated,
into which the Company merged or which merged into the Company or to which such
conveyance, sale, transfer or lease was made, as the case may be (a "Constituent
Person"), or an Affiliate of a Constituent Person and (ii) failed to exercise
his rights of election, if any, as to the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer, or lease is not the same for each share of Common Stock of the Company
held immediately prior to such consolidation, merger, conveyance, sale, transfer
or lease by others than a Constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("Non-electing Share"), then for the purpose of this Section 12.11 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, conveyance, sale, transfer or lease by the holders of
each Non- electing Share shall be deemed to be the kind and amount so receivable
per share by a plurality of the Non-electing Shares), and (b) further assuming
that, if such consolidation, merger, conveyance, transfer, sale or lease occurs
before the first date on which Securities may be converted as provided herein,
such Security was convertible immediately prior to the time of such occurrence
at the initial Conversion Rate as adjusted from the first original issue date of
the Securities to such time as provided herein. Such supplemental indenture
shall provide for adjustments which, for events subsequent to the effective date
of such supplemental indenture, shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The above
provisions of this Section 12.11 shall similarly apply to successive
consolidations, mergers, conveyances, sales, transfers or leases. Notice of the
execution of such a supplemental indenture shall be given by the Company to the
Holder of each Security as provided in Section 1.6 promptly upon such execution.
In this paragraph, "securities of the kind receivable" upon such consolidation,
merger, conveyance, transfer, sale or lease by a holder of Common Stock means
securities that, among other things, are registered and transferable under the
Securities Act, and listed and approved for quotation in all securities markets,
in each case to the same extent as such securities so receivable by a holder of
Common Stock.
Neither the Trustee nor any Paying Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders upon the
conversion of their Securities after any such consolidation, merger, conveyance,
transfer, sale or lease or to any such adjustment, but may accept as conclusive
evidence of the correctness of any such provisions, and shall be protected in
relying upon, an Opinion of Counsel with respect thereto, which the Company
shall cause to be furnished to the Trustee upon request.
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SECTION 12.12. Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1, shall
not at any time be under any duty or responsibility to any Holder to determine
whether any facts exist which may require any adjustment of the Conversion Rate,
or with respect to the nature or extent 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. The Trustee, subject to the provisions of Section 6.1,
shall not 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.
The Trustee, subject to the provisions of Section 6.1, shall not be responsible
for any failure of the Company to make or calculate any cash payment or to
issue, transfer or deliver any shares of Common Stock or share certificates or
other securities or property or cash upon the surrender of any Security for the
purpose of conversion; and the Trustee, subject to the provisions of Section
6.1, shall not be responsible for any failure of the Company to comply with any
of the covenants of the Company contained in this Article.
ARTICLE THIRTEEN
SUBORDINATION OF SECURITIES
SECTION 13.1. 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 Four), the indebtedness represented by the Securities and
the payment of the principal of (and premium, if any) and interest on each and
all of the Securities and any payment of the Repurchase Price (other than by
delivery of shares of Common Stock) are hereby expressly made subordinate and
subject in right of payment to the prior payment in full of all Senior Debt.
SECTION 13.2. 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 marshalling of assets and liabilities of the Company,
then and in any such event 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 before the Holders of the Securities are entitled to receive any
payment on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase, redemption or other acquisition of
Securities, and to that end the holders of Senior Debt shall be entitled to
receive, for application to the payment thereof,
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any payment or distribution of any kind or character, whether in cash, property
or securities, which may be payable or deliverable in respect of the Securities
in any such case, proceeding, dissolution, liquidation or other winding up or
event.
In the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, securities or other property, before all Senior Debt is paid in
full, and if such fact shall, at or prior to the time of such payment or
distribution, have been made known to the Trustee or, as the case may be, such
Holder, then and in such event such payment or distribution 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 remaining unpaid, 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 "cash, securities
or other property" shall not be deemed to include shares of stock of the Company
as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which
shares of stock are subordinated in right of payment to all then outstanding
Senior Debt to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the conveyance
or transfer of its properties and assets substantially as an entirety to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshalling of assets and liabilities of the Company
for the purposes of this Section if the Person formed by such consolidation or
into which the Company is merged or which acquires by conveyance or transfer
such properties and assets substantially as an entirety, as the case may be,
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions set forth in Article Eight.
SECTION 13.3. Prior Payment to Senior Debt Upon Acceleration of Securities.
In the event that any Securities are declared due and payable
before their Stated Maturity pursuant to Section 5.2, 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 due or
to become due on or in respect of all Senior Debt before the Holders of the
Securities are entitled to receive any payment by the Company on account of the
principal of (or premium, if any) or interest on the Securities or on account of
the purchase or other acquisition of Securities.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company.
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The provisions of this Section shall not apply to any payment
with respect to which Section 13.2 would be applicable.
SECTION 13.4. No Payment When Senior Debt in Default.
(a) (i) In the event and during the continuation of any
default in the payment of principal of (or premium, if any) or interest on any
Senior Debt beyond any applicable grace period with respect thereto or (ii) in
the event that any other event of default with respect to any Senior Debt shall
have occurred and be continuing which would then permit the holders of such
Senior Debt (or a trustee 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, in the case of this clause (ii), such
event of default shall have been cured or waived or shall have ceased to exist
after written notice of such event of default to the Company and the Trustee by
any holder of such Senior Debt (or a trustee on behalf of the holders thereof),
or (b) in the event any judicial proceeding shall be pending with respect to any
such default in payment or event of default, then no payment shall be made by
the Company on account of principal of (or premium, if any) or interest on the
Securities or on account of the purchase, redemption or other acquisition of
Securities.
In the event that, notwithstanding the foregoing, the Company
shall make any payment to the Trustee or the Holder of any Security prohibited
by the foregoing provisions of this Section, and if such fact shall, at or prior
to the time of such payment, have been made known to the Trustee or, as the case
may be, such Holder, then and in such event such payment shall be paid over and
delivered forthwith to the Company, in the case of the Trustee, or the Trustee,
in the case of such Holder.
The provisions of this Section shall not apply to any payment
with respect to which Section 13.2 would be applicable.
SECTION 13.5. 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 case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshalling
of assets and liabilities of the Company referred to in Section 13.2 or under
the conditions described in Section 13.3 or 13.4, from making payments at any
time of principal of (and premium, if any) or interest on the Securities, or (b)
the application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
on the Securities or the retention of such payment by the Holders if, at the
time of such application by the Trustee, it did not have knowledge that such
payment would have been prohibited by the provisions of this Article.
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SECTION 13.6. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all Senior Debt, the Holders
of the Securities shall be subrogated to the extent of the payments or
distributions made to the holders of such Senior Debt pursuant to the provisions
of this Article to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of (and premium, if any) 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 13.7. 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, its creditors other than holders
of Senior Debt and the Holders of the Securities, the obligation of the Company,
which is absolute and unconditional, to pay to the Holders of the Securities the
principal of (and premium, if any) 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 13.8. 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 13.9. 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 of any Senior
Debt, or by any non-compliance 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.
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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: (i) change the manner, place
or terms of payment or extend 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; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person
liable in any manner for the collection of Senior Debt; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
SECTION 13.10. 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; and, prior to
the receipt of any such written notice, the Trustee, subject to the provisions
of Sections 6.1 and 6.3, 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 (and premium, if
any) 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.
Subject to the provisions of Sections 6.1 and 6.3, the Trustee
shall be entitled to rely on the delivery to it of a written notice by a Person
representing himself to be a holder of Senior Debt (or a trustee therefor) to
establish that such notice has been given by a holder of Senior Debt (or a
trustee therefor). 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.
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SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company
referred to in this Article, the Trustee, subject to the provisions of Sections
6.1 and 6.3, 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
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or 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 13.12. 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 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 13.13. 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 6.7.
SECTION 13.14. 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 Section 13.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
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SECTION 13.15. Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article only, (1) the issuance and
delivery of junior securities upon conversion of Securities in accordance with
Article Twelve or upon the repurchase of Securities in accordance with Article
Fourteen shall not be deemed to constitute a payment or distribution on account
of the principal of or premium or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section, the term "junior
securities" means (a) shares of any stock of any class of the Company and any
cash, property or securities into which the Securities are convertible pursuant
to Article Twelve and (b) securities of the Company which are subordinated in
right of payment to all Senior Debt which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as, or
to a greater extent than, the Securities are so subordinated as provided in this
Article. Nothing contained in this Article or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as among the Company, its
creditors other than holders of Senior Debt and the Holders of the Securities,
the right, which is absolute and unconditional, of the Holder of any Security to
convert such Security in accordance with Article Twelve or to exchange such
Security for Common Stock in accordance with Article Fourteen if the Company
elects to satisfy the obligations under Article Fourteen by the delivery of
Common Stock.
ARTICLE FOURTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 14.1. 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 such 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 $1,000 or any integral multiple
thereof, on the date (the "Repurchase Date") that is 45 days after the date on
which the Company Notice (as defined in Section 14.3) is given to Holders at a
purchase price equal to 100% of the principal amount of the Securities to be
repurchased plus interest accrued to the Repurchase Date (the "Repurchase
Price"); 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 3.8. At the option of the Company, the Repurchase Price may be paid in
cash or, subject to the fulfillment by the Company of the conditions set forth
Section 14.2, by delivery of shares of Common Stock having a fair market value
equal to the Repurchase Price as described in Section 14.2(a). Whenever in this
Indenture (including Sections 2.2, 3.1, 5.1(1) and 5.8) there is a reference, in
any context, to the principal of any Security as of any time, such reference
shall be deemed to include
-83-
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; provided, however, that
for the purposes of Article Thirteen, such reference shall be deemed to include
reference to the Repurchase Price only if the Repurchase Price is payable in
cash.
SECTION 14.2. Conditions to the Company's Election to Pay the
Repurchase Price in Common Stock.
The Company may elect to pay the Repurchase Price by delivery of shares
of Common Stock pursuant to Section 14.1 if and only if the following conditions
have been satisfied:
(a) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have a fair market value as of the Repurchase Date of not
less than the Repurchase Price. For purposes of this Section 14.2, 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 for the five
consecutive Trading Days ending on and including the third Trading Day
immediately preceding the Repurchase Date;
(b) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration under any Federal
securities law before such shares may be freely transferrable without being
subject to any transfer restrictions under the Securities Act upon issuance,
such registration shall have been completed and shall have become effective
prior to the Repurchase Date;
(c) In the event any shares of Common Stock to be issued upon
repurchase of Securities hereunder require registration with or approval of any
governmental authority under any State law or any other Federal law before such
shares may be validly issued or delivered upon repurchase, such registration
shall have been completed, have become effective and such approval shall have
been obtained, in each case, prior to the Repurchase Date;
(d) The shares of Common Stock deliverable in payment of the
Repurchase Price shall have been listed on the New York Stock Exchange or, if
the Common Stock is not then so listed, such shares shall be have been approved
for quotation in the Nasdaq National Market, in either case, immediately prior
to the Repurchase Date; and
(e) All shares of Common Stock deliverable in payment of the
Repurchase Price shall be issued out of the Company's authorized but unissued
Common Stock and will, upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 14.2 are
not satisfied in accordance with the terms thereof, the Repurchase Price shall
be paid by the Company only in cash.
-84-
SECTION 14.3. 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 of 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 1.6, notice (the "Company Notice") of the
occurrence of the Change of 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:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price
shall be paid by the Company in cash or by delivery of shares of Common
Stock,
(4) the instructions a Holder must follow to exercise a
repurchase right,
(5) 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, and
(6) 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.
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 Fourteen 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 5th day prior to the Repurchase
Date (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 be 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 shares of Common Stock, the name or names
(with addresses) in which the certificate or certificates for shares of 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
-85-
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 the Repurchase Price in cash or shares of Common Stock, as provided
above, for payment to the Holder on the Repurchase Date or, if shares of 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, to the Holders of the Securities, or
one or more Predecessor Securities, registered as such at the close of business
on the relevant Regular Record Date.
(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 per annum borne by such Security, 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 at the office or agency of the Company designated
for that purpose pursuant to Section 10.2 (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 shares 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 shares of 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 record holder or holders thereof for all purposes at the
opening of business on the next succeeding day on which such stock transfer
books are open. No payment or adjustment shall be made for dividends or
distributions on any Common Stock 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 shares of 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
-86-
repurchased. Instead of any fractional share of Common Stock 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 shall be 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 share of Common Stock shall be
the Closing Price of the Common Stock on the Trading Day immediately preceding
the Repurchase Date.
(h) Any issuance and delivery of certificates for shares of
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 any transfer
involved in the issuance or delivery of certificates for shares of 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) All Securities delivered for repurchase shall be delivered
to the Trustee, the Paying Agent or any other agents (as shall be set forth in
the Company Notice) to be canceled at the direction of the Trustee, which shall
dispose of the same as provided in Section 3.10.
SECTION 14.4. Certain Definitions.
For purposes of this Article Fourteen,
(a) the term "beneficial owner" shall be determined in
accordance with Rule 13d-3 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 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 or any
employee benefit plan of the Company; or
(ii) any consolidation or merger of the Company with or into,
any other person, any merger of another person with or into the
Company, or any conveyance, transfer, sale, lease or other disposition
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 cancellation of
outstanding shares of Common
-87-
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 the Closing Price for any five Trading Days within the period of 10
consecutive Trading Days (x) 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 (y)
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 each such Trading Day; provided, that any
temporary increase in the Conversion Rate made by the Company pursuant to
paragraph (11) of Section 12.4 shall not be taken into account for purposes of
the foregoing determination;
(c) the term "Conversion Price" on any day shall equal $1,000
divided by the Conversion Rate in effect on each such day; and
(d) for purposes of this Section 14.4, 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.
-88-
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.
CUC INTERNATIONAL INC.
By_______________________________
Name:
Title:
Attest:
- ------------------------------
Name:
Title:
MARINE MIDLAND BANK,
Trustee
By______________________________
Name:
Title:
Attest:
- -------------------------------
Name:
Title:
-89-
STATE OF ________ )
) : ss.:
COUNTY OF _____ )
On the __th day of February, 1997, before me personally came
_________________, to me known, who, being by me duly sworn, did depose and say
that he is ______________________ of CUC International Inc., one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
------------------------------
Notary Public
STATE OF NEW YORK )
) : ss.:
COUNTY OF NEW YORK )
On the 10th day of February, 1997, before me personally came Teresa
S. Santos, to me known, who, being by me duly sworn, did depose and say that she
is Assistant Corporate Trust Officer of Marine Midland Bank, a New York banking
corporation and trust company described in and which executed the foregoing
instrument; that she knows the seal of said New York banking corporation and
trust company; that the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to the bylaws of said New York banking
corporation and trust company; and that she signed her name thereto by like
authority.
------------------------------
Notary Public
-90-
ANNEX A -- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to ss. 3.6(b)(i), (iii) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway
N.Y., N.Y. 10005
Attention: Corporate Trust Services-CUC
Re: 3% Convertible Subordinated Notes due February 15, 2002
of CUC International Inc. (the "Securities")
Reference is made to the Indenture, dated as of February 11, 1997
(the "Indenture"), between CUC International Inc. (the "Company") and Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 904 or Rule 144 under the Securities Act and with all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
A-1
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting
on behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the
Transferee was outside the United States or the Owner and any
person acting on its behalf reasonably believed that the
Transferee was outside the United States, or
(ii) the transaction is being executed in, on or through
the facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another designated
offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other remuneration in respect of the
Specified Securities, and the transfer is to occur during the
Restricted Period, then the requirements of Rule 904(c)(1) have been
satisfied; and
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least
two years (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
three years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
A-2
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Purchasers.
Dated: _______________________________
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By: ______________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
A-3
ANNEX B -- Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to ss. 3.6(b)(ii), (iii), (iv) and (v)
of the Indenture)
Marine Midland Bank,
as Trustee
140 Broadway
N.Y., N.Y. 10005
Attention: Corporate Trust Services-CUC
Re: 3% Convertible Subordinated Notes due February 15, 2002
of CUC International Inc. (the "Securities")
Reference is made to the Indenture, dated as of February 11, 1997
(the "Indenture"), between CUC International Inc. (the "Company") and Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A or Rule 144 under the Securities Act and all
applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as:
B-1
(1) Rule 144A Transfers. If the transfer is being effected
in accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the
Owner may be relying on Rule 144A in connection with the transfer;
and
(2) Rule 144 Transfers. If the transfer is being effected
pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least
two years (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
three years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
B-2
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Purchasers.
Dated: ________________________
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By: ________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
B-3
ANNEX C -- Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to ss. 3.6(c))
Marine Midland Bank,
as Trustee
140 Broadway
N.Y., N.Y. 10005
Attention: Corporate Trust Services-CUC
Re: 3% Convertible Subordinated Notes due February 15, 2002
of CUC International Inc. (the "Securities")
Reference is made to the Indenture, dated as of February 11, 1997
(the "Indenture"), between CUC International Inc. (the "Company") and Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged
for Securities bearing no Securities Act Legend pursuant to Section 3.6(c) of
the Indenture. In connection with such exchange, the Owner hereby certifies that
the exchange is occurring after a holding period of at least three years
(computed in accordance with paragraph (d) of Rule 144) has elapsed since the
Specified Securities were last acquired from the Company or from an affiliate of
the Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers
C-1
of the Specified Securities must comply with all applicable securities laws of
the states of the United States and other jurisdictions.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Purchasers.
Dated: __________________________________
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By: ________________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
C-2
ANNEX D -- Form of Surrender
Certificate
SURRENDER CERTIFICATE
(For transfer in connection with conversion of
Restricted Securities pursuant to ss. 12.2)
Marine Midland Bank,
as Trustee
140 Broadway
N.Y., N.Y. 10005
Attention: Corporate Trust Services-CUC
Re: 3% Convertible Subordinated Notes due February 15, 2002
of CUC International Inc. (the "Securities")
Reference is made to the Indenture, dated as of February 11, 1997
(the "Indenture"), between CUC International Inc. (the "Company") and Marine
Midland Bank, as Trustee. Terms used herein and defined in the Indenture or in
Regulation S or Rule 144 under the U.S. Securities Act of 1933 (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $_____________ principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). ___________________________
CERTIFICATE No(s). _____________________
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Specified Securities are being surrendered for conversion, and
the Common Stock and/or the Securities issuable on such conversion are to be
registered in the name of a Person other than the Owner. Accordingly, the Owner
hereby certifies that such issuable Common Stock and/or Securities are being
transferred to such other Person (the "Transfer") and that such Transfer
complies with the restrictive legend set forth on the face of the certificate
evidencing the Specified Securities for the reason checked below:
D-1
__________ The transfer of the Specified Securities complies
with Rule 144 under the Securities Act; or
__________ The transfer of the Specified Securities complies
with Rule 144A under the Securities Act; or
__________ The transfer of the Specified Securities complies
with Rule 904 under the Securities Act; or
__________ The transfer of the Specified Securities has been
made to an institution that is an "accredited
investor" within the meaning of Rule 501(a)(1), (2),
(3) or (7) under the Securities Act in a transaction
exempt from the registration requirements of the
Securities Act.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Company and the Purchasers.
Dated: ________________________________
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By: ____________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of
the Undersigned must be stated.)
D-2
EXHIBIT 4(b)
CUC International Inc.
3% Convertible Subordinated Notes due February 15, 2002
REGISTRATION RIGHTS AGREEMENT
Dated as of
February 11, 1997
Goldman, Sachs & Co.,
Morgan Stanley & Co. Incorporated,
Allen & Company Incorporated,
Alex. Brown & Sons Incorporated,
Furman Selz LLC,
Hambrecht & Quist LLC,
c/o Goldman, Sachs & Co.
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
CUC International Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to the Purchasers (as defined herein) upon the terms
set forth in the Purchase Agreement (as defined herein) its 3% Convertible
Subordinated Notes due February 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 for the benefit of holders (as defined herein) from time to
time of the Registrable Securities (as defined herein) as follows:
1. DEFINITIONS. (a) Capitalized terms used herein without definition
shall have the meanings ascribed thereto in the Purchase Agreement. As used in
this Agreement, the following 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 through one or more intermediaries, 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, securities ownership or otherwise; and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Commission" means the United States Securities and Exchange
Commission.
"Common Stock" means the Company's common stock, par value $.01 per
share.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning assigned thereto in Section
2(b)(i) hereof.
"Effective Time" means the date on which the Commission first declares
the Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Electing Holder" has the meaning assigned thereto in Section 3(a)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
The term "holder" means, when used with respect to any Security, the
Holder (as defined in the Indenture) thereof and, with respect to any Common
Stock, the record holder of such Common Stock.
"Indenture" means the Indenture, dated as of February 11, 1997, between
the Company and Marine Midland Bank, as Trustee, as amended and supplemented
from time to time in accordance with its terms.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, conducted pursuant to Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
"Person" means an individual, partnership, limited liability company,
corporation, trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus (including, without limitation, any
preliminary prospectus and any final prospectus filed pursuant to Rule 424(b)
under the Act, including any 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) included in the Shelf Registration
Statement, as amended or supplemented by any prospectus supplement with respect
to the terms of the offering of any portion of the Registrable Securities
covered by the Shelf Registration Statement and by all other amendments and
supplements to such prospectus, including all material incorporated by reference
in such prospectus and all documents filed after the date of such prospectus by
the Company under the Exchange Act and incorporated by reference therein.
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"Purchase Agreement" means the purchase agreement dated February 5,
1997 between the Purchasers and the Company.
"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 and the shares of Common Stock
issued or issuable upon conversion of such Securities; 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 Common Stock
issuable upon conversion thereof except any such Security or share of Common
Stock which (i) has been registered pursuant to an effective registration
statement under the Securities Act and sold in a manner contemplated by the
Prospectus included in 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) or (iii) 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 3.6(c) of the Indenture.
"Rules and Regulations" means the published rules and regulations of
the Commission promulgated under the Securities Act or the Exchange Act, as in
effect at any relevant time.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a "shelf" registration statement
filed under the Securities Act providing for the registration of, and the sale
on a continuous or delayed basis by the holders of, all of the Registrable
Securities pursuant to Rule 415 under the Securities Act and/or any similar rule
that may be adopted by the Commission, filed by the Company pursuant to the
provisions of Section 2 of this Agreement, including the Prospectus contained
therein, any amendments to such registration statement and supplements to such
Prospectus, including post-effective amendments, and all exhibits and all
material incorporated by reference in such registration statement.
"Trust Indenture Act" means the Trust Indenture Act of 1939, or any
successor thereto, and the rules, regulations and forms promulgated by the
Commission thereunder, as the same shall be amended from time to time.
The term "underwriter" means any underwriter of Registrable Securities
in connection with an underwritten offering pursuant to Section 6 hereof.
(b) Wherever there is a reference in this Agreement to a percentage of
the "principal amount" of Registrable Securities or to a percentage 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.
-3-
2. SHELF REGISTRATION. (a) The Company shall, within 90 calendar days
after the First Time of Delivery (as defined in the Purchase Agreement), file
with the Commission a Shelf Registration Statement relating to the offer and
sale of the Registrable Securities and, thereafter, shall use its reasonable
best efforts to cause such Shelf Registration Statement to be declared effective
under the Act as promptly as practicable but not later than 180 calendar days
after the First Time of Delivery; provided, however, that no holder shall be
entitled to be named as a selling securityholder in the Shelf Registration
Statement or to use the Prospectus forming a part thereof for resales of
Registrable Securities unless such holder is in compliance with Section 3(a)
hereof.
(b) The Company shall use its reasonable best efforts:
(i) To keep the Shelf Registration Statement continuously
effective (subject to the provisions of Section 2(c) hereof) in order
to permit the Prospectus forming part thereof to be usable by holders
for resales of Registrable Securities for a period of three years from
the later of (x) the Effective Time of the Shelf Registration Statement
and (y) the last Time of Delivery (as defined in the Purchase
Agreement), or such shorter period that will terminate (A) when all the
Registrable Securities that are covered by the Shelf Registration
Statement have been transferred pursuant to the Shelf Registration
Statement or have been transferred pursuant to Rule 144 under the Act
or otherwise transferred in a manner that results in delivery of a new
security not subject to transfer restrictions under the Act as provided
by the Indenture and (B) when, in the written opinion of 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 or
analogous provision thereto and the legend prescribed by the first
paragraph of Section 2.2 of the Indenture has been removed from such
Registrable Securities (in any such case, such period being called the
"Effectiveness Period");
(ii) Subject to the provisions of Section 3(a) hereof, after the
effectiveness of the Shelf Registration Statement, promptly upon the
request of any Electing Holder, to take any action reasonably necessary
to register the sale of any Registrable Securities of such Electing
Holder, including, without limitation, any action necessary to identify
such Electing Holder as a selling securityholder in a Prospectus
supplement; and
(iii) If at any time, the Securities, pursuant to Article Twelve
of the Indenture, are convertible into securities other than the Common
Stock, the Company shall, or shall cause any successor issuer 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. No later than such date,
the Company shall cause any such successor issuer to execute and
deliver a written agreement to the Trustee under the Indenture, for the
benefit of the Holders, providing such Holders with the benefits
provided to them under this Agreement, but with respect to such other
securities (treating the issuer of such other securities as the Company
for this purpose).
-4-
(c) Notwithstanding the foregoing, the Company may, during the
Effectiveness Period, suspend the use of the Prospectus for a period not to
exceed 90 days (whether or not consecutive) in any 12-month period if the Board
of Directors of the Company shall have determined in good faith that because of
valid business reasons (not including avoidance of the Company's obligations
hereunder), including mergers or other business combination transactions, the
acquisition or divestiture of assets, pending corporate developments and similar
events, it is in the best interests of the Company to suspend such use, and
prior to or contemporaneously with suspending such use the Company provides the
holders with written notice of such suspension, which notice need not specify
the nature of the event giving rise to such suspension. At the end of any such
suspension period, the Company shall provide the holders with written notice of
the termination of such suspension.
3. REGISTRATION PROCEDURES. In connection with the Shelf Registration
Statement, the following provisions shall apply:
(a) The Company shall require each holder of Registrable
Securities to be sold pursuant to a Shelf Registration Statement to
complete and return to the Company a questionnaire substantially in the
form of the Notice of Registration Statement and Selling Securityholder
Questionnaire (the "Notice and Questionnaire") set forth in Appendix A
hereto providing such information regarding the holder and the
distribution of such holder's Registrable Securities as may be required
by applicable law or regulation for inclusion in such Shelf
Registration Statement. The Company shall mail the Notice and
Questionnaire to each holder prior to the filing of the Shelf
Registration Statement. The Company shall include in the Registration
Statement all Registrable Securities which any holder shall have
elected (each, an "Electing Holder") to include in the Shelf
Registration Statement as specified in a signed and completed Notice
and Questionnaire returned to the Company on or prior to the 30th
calendar day after the date the Notice and Questionnaire is mailed to
all holders (the "Initial Questionnaire Deadline"). (For purposes of
this Agreement, by electing to include any Registrable Securities in
the Shelf Registration Statement and unless it specifies otherwise, an
Electing Holder shall be deemed to have elected also to include in the
Shelf Registration Statement all Stock (and other securities) that may
be issued from time to time on conversion of such Registrable
Securities before they are sold pursuant to the Shelf Registration
Statement.) As used herein, the term "Specified Registrable Securities"
shall mean all Registrable Securities that the Electing Holders have
elected to include in the Registration Statement as provided in the
preceding sentences on or prior to the Initial Questionnaire Deadline.
The Company shall include in the Shelf Registration Statement as of the
Effective Time the Specified Registrable Securities of all Electing
Holders who shall have returned a properly completed and signed Notice
and Questionnaire on or prior to the date 10 calendar days prior to the
Effective Time and reasonably promptly after receipt of a returned
Notice and Questionnaire in the case of all other Electing Holders as
provided below (which date of inclusion may be subsequent to the
Effective Time). If any holder does not deliver a properly completed
and signed Notice and Questionnaire on or before the Initial
Questionnaire Deadline, the Company may, in its discretion, decline to
include such holder's Registrable Securities in the Shelf Registration
Statement and (unless the Company elects
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otherwise as provided in the next sentence) such holder shall be deemed
to have waived, on its behalf and on behalf of each person who
subsequently may acquire Registrable Securities from it, all rights to
registration of its Registrable Securities pursuant to this Agreement.
In the event that the Company elects at any time to permit any such
holder to include its Registrable Securities in the Shelf Registration
Statement, such holder will thereafter be an Electing Holder. Each
person acquiring Specified Registrable Securities from an Electing
Holder at any time (including after the date on which such Electing
Holder provided the Company its Notice and Questionnaire) shall also be
entitled to have such Specified Registrable Securities included in the
Registration Statement for its own account so long as such person
provides the Company with an updated and signed Notice and
Questionnaire, at which point it will become an Electing Holder. Any
such transferee shall be entitled to have its Specified Registrable
Securities included in the Registration Statement (i) at the Effective
Time, if the updated Notice and Questionnaire is received by the
Company on or prior to the date 10 calendar days prior to the Effective
Time and (ii) in all other cases, reasonably promptly after the Company
receives the updated Notice and Questionnaire (which date of inclusion
may be subsequent to the Effective Time). In the case of any Specified
Registrable Securities to be included in the Registration Statement
pursuant to clause (ii) of the preceding sentence, the Company shall
effect such inclusion by filing such post-effective amendments to the
Registration Statement or supplements to the Prospectus as may be
required by the Rules and Regulations to permit the resale of such
Specified Registrable Securities for the accounts of the respective
Electing Holders.
(b) Subject to paragraph (a) of this Section (3), the Company
shall furnish to each Electing Holder, prior to the Effective Time, a
copy of the Shelf Registration Statement initially filed with the
Commission, and shall furnish to such holders, prior to the filing
thereof with the Commission, copies of each amendment thereto and each
amendment or supplement, if any, to the Prospectus included therein,
and shall use its best efforts to reflect in each such document, at the
Effective Time or when so filed with the Commission, as the case may
be, such comments as such holders and their respective counsel
reasonably may propose.
(c) The Company shall promptly take such action as may be
necessary so that (i) each of the Shelf Registration Statement and any
amendment thereto and the 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) each of the 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) each
of the Prospectus forming part of the Shelf Registration Statement, and
any amendment or supplement to such Prospectus, does not at any time
during the Effectiveness Period include 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.
-6-
(d) The Company shall promptly notify each Electing Holder, and
shall confirm such notification in writing if so requested by any such
holder:
(1) when the 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
(2) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(3) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement
or the initiation of any proceedings for such purpose;
(4) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the securities
included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such
purpose; and
(5) of the happening of any event or the existence of any
state of facts that requires the making of any changes in the
Shelf Registration Statement or the Prospectus included therein
so that, as of such date, such Shelf Registration Statement and
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 such holders to suspend the use of the
Prospectus until the requisite changes have been made).
(e) The Company shall use its reasonable best efforts to prevent
the issuance, and if issued to use its reasonable best efforts to
obtain the withdrawal, of any order suspending the effectiveness of the
Shelf Registration Statement at the earliest possible time.
(f) The Company shall furnish to each Electing Holder, without
charge, at least one copy of the Shelf Registration Statement and all
post-effective amendments thereto, including all financial statements
and schedules thereto, if any, and, if such 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, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in the
Shelf Registration Statement and any amendment or supplement thereto as
such Electing Holder may reasonably request to facilitate its offer and
sale of Registrable Securities; and the Company consents (except during
the continuance of any event described in Section 3(d)(5) above) to the
use of the
-7-
Prospectus and any amendment or supplement thereto by each of the
Electing Holders in connection with the offering and sale of the
Registrable Securities covered by the Prospectus and any amendment or
supplement thereto during the Effectiveness Period.
(h) Prior to any offering of Registrable Securities pursuant to
the Shelf Registration Statement, the Company shall (1) register or
qualify or cooperate with the Electing Holders and their respective
counsel in connection with the registration or qualification of such
Registrable Securities for offer and sale under the securities or "blue
sky" laws of such jurisdictions within the United States as any
Electing Holder may reasonably request, (2) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers and sales in such jurisdictions for so long as
may be necessary to enable any Electing Holder or underwriter, if any,
to complete its distribution of Registrable Securities pursuant to the
Shelf Registration Statement, and (3) take any and all other actions
necessary or advisable to enable the disposition in such jurisdictions
of such Registrable Securities; provided, however, that in no event
shall the Company be obligated to (i) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it would not
otherwise be required to so qualify but for this Section 3(h) or (ii)
file any general consent to service of process in any jurisdiction
where it is not as of the date hereof so subject.
(i) Unless any Registrable Securities shall be in book-entry only
form, the Company shall cooperate with the Electing Holders to
facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold pursuant to the Shelf
Registration Statement, which certificates, if so required by any
securities exchange upon which any Registrable Securities are listed,
shall be penned, lithographed or engraved, or produced by any
combination of such methods, on steel engraved borders, and which
certificates shall be free of any legends of the type set forth in
Section 2.2 of the Indenture 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 the Shelf
Registration Statement.
(j) Upon the occurrence of any fact or event contemplated by
paragraph 3(d)(5) above, the Company shall promptly prepare a
post-effective amendment or supplement to the Shelf Registration
Statement or the Prospectus, or any document incorporated therein by
reference, 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. If the Company notifies the Electing Holders of the
occurrence of any event contemplated by paragraph 3(d)(5) above or
pursuant to Section 2(c), each Electing Holder agrees, as a consequence
of the inclusion of any of such holder's Registrable Securities in the
Shelf Registration Statement, to suspend the use of the Prospectus
until the requisite changes to the Prospectus (as contemplated by this
Section 3(j)) have been made.
-8-
(k) Not later than the Effective Time of the Shelf Registration
Statement, the Company shall provide a CUSIP number for the Registrable
Securities that are debt securities.
(l) The Company shall use its reasonable best efforts to comply
with all applicable Rules and Regulations, and to make generally
available to its securityholders 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
Holders (as defined in the Indenture) 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) In the event of an underwritten offering conducted pursuant
to Section 6 hereof, the Company shall, if requested, promptly include
or incorporate in a Prospectus supplement or post-effective amendment
to the 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 it is notified of the matters to be included
or incorporated in such Prospectus supplement or post-effective
amendment.
(o) The Company shall enter into such customary agreements
(including an underwriting agreement in customary form in the event of
an underwritten offering conducted pursuant to Section 6 hereof) and
take all other appropriate action in order to expedite and facilitate
the registration and 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 hereof with
respect to all parties to be indemnified pursuant to Section 5 hereof.
-9-
(p) The Company shall:
(i)(A) make reasonably available for inspection by Electing
Holders, any underwriter participating in any disposition
pursuant to the Shelf Registration Statement, and any attorney,
accountant or other agent retained by such holders or any such
underwriter all relevant financial and other records, pertinent
corporate documents and properties of the Company and its
subsidiaries, and (B) cause the Company's officers, directors and
employees to supply all information reasonably requested by such
holders or any such underwriter, attorney, accountant or agent in
connection with the Shelf Registration Statement, in each case,
as is customary for similar due diligence examinations; provided,
however, that all records, information and documents that are
designated in writing by the Company, in good faith, as
confidential, proprietary or containing any material non-public
information shall be kept confidential by such holders and any
such underwriter, attorney, accountant or agent (pursuant to an
appropriate confidentiality agreement in the case of any such
holder or agent), unless such disclosure is made pursuant to
judicial process in a court proceeding (after first giving the
Company an opportunity promptly to seek a protective order or
otherwise limit the scope of the information sought to be
disclosed) or is required by law, or such records, information or
documents become available to the public generally or through a
third party not in violation of an accompanying obligation of
confidentiality; and provided further that, if the foregoing
inspection and information gathering would otherwise disrupt the
Company's conduct of its business, such 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 Electing Holders and other parties;
(ii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, make such representations and
warranties to the holders participating in such underwritten
offering and to the Managing Underwriters, in form, substance and
scope as are customarily made by the Company to underwriters in
secondary underwritten offerings of equity and convertible debt
securities and covering matters including, but not limited to,
those set forth in the Purchase Agreement;
(iii) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain opinions of counsel to the
Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing
Underwriters) addressed to the underwriters, covering such
matters as are customarily covered in opinions requested in
secondary underwritten offerings of equity and convertible debt
securities and such other matters as may be reasonably requested
by such holders and underwriters (it being agreed that the
matters to be covered by such opinions shall include, without
limitation, as of the date of the opinion and as of the Effective
Time of the Shelf Registration Statement or most recent
post-effective amendment thereto, as the case may be, the absence
from the Shelf Registration Statement and the Prospectus,
including the documents incorporated by reference therein, of an
untrue statement of a
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material fact or the omission of 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;
(iv) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, obtain "cold comfort" letters and
updates thereof from the independent public accountants of the
Company (and, if necessary, from the independent public
accountants of any subsidiary of the Company or of any business
acquired by the Company in each case for which financial
statements and financial data are, or are required to be,
included in the Shelf Registration Statement), addressed to each
holder participating in such underwritten offering (if such
holder has provided such letter, representations or
documentation, if any, required for such cold comfort letter to
be so addressed) and the underwriters, in customary form and
covering matters of the type customarily covered in "cold
comfort" letters in connection with secondary underwritten
offerings;
(v) in connection with any underwritten offering conducted
pursuant to Section 6 hereof, deliver such documents and
certificates as may be reasonably requested by the Managing
Underwriters, if any, including, without limitation, certificates
to evidence compliance with Section 3(j) hereof and with any
conditions contained in the underwriting agreement or other
agreements entered into by the Company.
(q) The Company will use its reasonable best efforts to cause the
Common Stock issuable upon conversion of the Securities to be listed
for quotation on the New York Stock Exchange, Inc. or other stock
exchange or trading system on which the Common Stock primarily trades
on or prior to the Effective Time of the Shelf Registration Statement
hereunder.
(r) In the event that any broker-dealer registered under the
Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of
the NASD Rules (or any successor provision thereto)) of the Company or
has a "conflict of interest" (as defined in Rule 2720(b)(7) of the NASD
Rules (or any successor provision thereto)) and such broker-dealer
shall underwrite, participate as a member of an underwriting syndicate
or selling group or assist in the distribution of any Registrable
Securities covered by the Shelf Registration Statement, whether as a
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 the NASD Rules, including, without limitation, by (A)
engaging a "qualified independent underwriter" (as defined in Rule
2720(b)(15) of the NASD Rules (or any successor provision thereto)) to
participate in the preparation of the registration statement relating
to such Registrable Securities, to exercise usual standards of due
diligence in respect thereto and to recommend the public offering price
of such Registrable Securities, (B) indemnifying 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 NASD Rules.
-11-
(s) 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. The Company shall bear all fees and expenses
incurred in connection with the performance of its obligations under Sections 2,
3 and 6 hereof. In addition, in the event of an underwritten offering of
Registrable Securities conducted pursuant to Section 6 hereof, or if in any
other event the Company requires that inspection and information gathering be
coordinated by counsel for the Electing Holders as provided in Section 3(p)(i)
hereof, the Company shall pay up to an aggregate of $75,000 of the fees and
expenses of a single counsel selected by a plurality of the Electing Holders
holding an aggregate of not less than 25% of the Registrable Securities to be
included in such underwritten offering (or, in any such other event, included in
the Shelf Registration Statement) to represent them. The Electing Holders
participating in such offering (or, in any such other event, participating in
such inspection and information gathering) shall be responsible, on a pro rata
basis based on the respective amount of their Registrable Securities included in
such offering for all fees and expenses of such counsel in excess of $75,000.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. Upon the registration of the
Registrable Securities pursuant to Section 2 hereof, the Company shall indemnify
and hold harmless each Electing Holder and each underwriter, if any, which
facilitates the disposition of Registrable Securities, and each of their
respective officers and directors and each person who controls such Electing
Holder or underwriter within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act (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
registered under the Securities Act or an omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading or arise out of or are based upon an untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus contained therein or furnished by the Company to any Indemnified
Person or an omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Shelf Registration Statement or
Prospectus in reliance upon and in conformity with written information furnished
to the Company by such Indemnified Person expressly for use therein or (ii) (x)
the use of a Prospectus during any period when its use has been suspended
pursuant to Section 2(c) or 3(d)(5) after the Company has provided written
-12-
notice of such suspension to the Indemnified Person, unless the untrue
statement(s) or omission(s) or alleged untrue statement(s) or omission(s) giving
rise to such loss, claim, damage or liability was (were) not corrected in the
Prospectus available for use at the end of the period of suspension or (y) the
use of an outdated Prospectus after the Company has provided an updated
Prospectus correcting the untrue statement or alleged untrue statement or
omission or alleged omission giving rise to such loss, claim, damage or
liability and furnished copies to such Indemnified Person.
(b) Indemnification by the Holders and Underwriters. Each Electing
Holder agrees, as a consequence of the inclusion of any of such holder's
Registrable Securities in such Shelf Registration Statement, and each
underwriter, if any, which facilitates the disposition of Registrable Securities
shall agree, as a consequence of facilitating such disposition of Registrable
Securities, severally and not jointly, to (i) indemnify and hold harmless the
Company, its directors (including any person who, with his or her consent, is
named in the Shelf Registration Statement as a director nominee of the Company),
its officers who sign any Shelf Registration Statement and each person, if any,
who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against any losses, claims,
damages or liabilities to which the Company or such other persons 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 such Shelf Registration Statement or Prospectus 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 (in
light of the circumstances under which they were made, in the case of the
Prospectus), 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 reliance upon and in conformity with written information
furnished to the Company by such holder or underwriter expressly for use
therein, and (ii) reimburse the Company for any 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) Notices of Claims, Etc. 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 an indemnifying party under this Section 5, notify such
indemnifying party in writing of the commencement 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 this Section 5. In
case any such action shall be brought against any indemnified party and it shall
notify an indemnifying party of the commencement thereof, such indemnifying
party shall be entitled to participate therein and, to the extent that it shall
elect, jointly with any other indemnifying party similarly notified, to assume
the defense thereof, with counsel satisfactory to such indemnified party (which
counsel 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 indemnified party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 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
-13-
shall, without the written consent of the indemnified party, 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) Contribution. If the indemnification provided for in this Section 5
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 fault of the indemnifying party and the indemnified party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such indemnifying party and
indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by
such indemnifying party or by such indemnified party, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The parties hereto agree that it would not be just
and equitable if contribution pursuant to this Section 5(d) were determined by
pro rata allocation (even if the Electing Holders or any underwriters 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 in this
Section 5(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 shall be deemed to include any legal or other fees or expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. 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 obligations of the Electing Holders and any
underwriters in this Section 5(d) to contribute shall be several in proportion
to the percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(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 be required to undertake liability to any person hereunder for
any amounts in excess of the aggregate discount, commission or other
compensation payable to such underwriter with respect to the Registrable
Securities underwritten by it and distributed pursuant to the Shelf Registration
Statement.
-14-
(f) The obligations of the Company under this Section 5 shall be in
addition to any liability which the Company may otherwise have 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 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. Any holder of Registrable Securities who
desires to do so may sell Registrable Securities (in whole or in part) in an
underwritten offering; provided that (i) the Electing Holders of at least a
majority in aggregate principal amount of the Registrable Securities then
covered by the Shelf Registration Statement shall request such an offering and
(ii) at least such aggregate principal amount of such Registrable Securities
shall be included in such offering; and provided further that the Company shall
not be obligated to effect more than one underwritten offering pursuant to this
Agreement. Upon receipt of such a request, the Company shall provide all holders
of Registrable Securities written notice of the request, which notice shall
inform such holders that they have the opportunity to participate in the
offering. 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 (including the size of
the offering) will be approved by, the holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such
investment bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Company. No holder may participate in any underwritten
offering contemplated hereby unless (a) such holder agrees to sell such holder's
Registrable Securities to be included in the underwritten offering in accordance
with any approved underwriting arrangements, (b) such holder 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) if such holder is not
then an Electing Holder, such holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a) hereof within a
reasonable amount of time before the commencement of such underwritten offering.
The holders participating in any underwritten offering shall be responsible for
any underwriting discounts and commissions and fees and, subject to Section 4
hereof, expenses of their own counsel. The Company shall pay all reasonable
expenses customarily borne by issuers, including but not limited to filing fees,
the fees and disbursements of its counsel and independent public accountants and
any printing expenses incurred in connection with such underwritten offering.
Notwithstanding the foregoing or the provisions of Section 3(n) hereof, upon
receipt of a request from the Managing Underwriter or a representative of
holders of a majority of the Registrable Securities to be included in an
underwritten offering to prepare and file an amendment or supplement to the
Shelf Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Board of Directors of the Company shall have determined
in good faith that the Company has a bona fide business reason for such delay.
-15-
7. MISCELLANEOUS.
(a) Other Registration Rights. The Company may grant registration
rights that would permit any Person the right to piggy-back on any Shelf
Registration Statement, provided that if the Managing Underwriter of any
underwritten offering conducted pursuant to Section 6 hereof notifies the
Company and the Electing Holders that the total amount of securities which the
Electing Holders and the holders of such piggy-back rights intend to include in
any Shelf Registration Statement is so large as to materially threaten the
success of such offering (including the price at which such securities can be
sold), then the amount, number or kind of securities to be offered for the
account of holders of such piggy-back rights will be reduced to the extent
necessary to reduce the total amount of securities to be included in such
offering to the amount, number and kind recommended by the Managing Underwriter
prior to any reduction in the amount of Registrable Securities to be included in
such Shelf Registration Statement.
(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 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 Sections 1.5 and 1.6 of 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.
-16-
(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, without giving effect to any
provisions relating to conflicts of laws.
(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
hereto 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.
(j) Nominees. If any Registrable Securities are held by a nominee or in
"street name" for the beneficial owner thereof, unless the Company is otherwise
aware of the identity of the beneficial owner (including pursuant to a timely
received, properly signed and completed Notice and Questionnaire), the Company
shall be entitled to treat any such holder as the owner of such securities for
all purposes of this Agreement, including, without limitation, the furnishing of
notices and any request or other action by any holder or holders (and any
determination of the number or percentage of Registrable Securities necessary to
effect such action).
(k) Liquidated Damages. Notwithstanding anything to the contrary
contained in this Agreement or the Indenture, it is hereby acknowledged and
agreed that the Company shall have no liability for monetary damages to the
Purchasers or any holder or beneficial owner of Securities (including Common
Stock issuable upon conversion thereof) for any breach, violation, default or
failure to comply with any of the Company's representations, warranties,
covenants or agreements set forth in Section 2 of this Agreement or Section
10.11 of the Indenture except, in the case of this Agreement, as expressly
provided in Section 5 hereof, and except, in the case of Section 10.11 of the
Indenture, as expressly provided in such Section 10.11; provided, however, that
if the Company shall breach, violate, default or fail to comply with any of its
representations, warranties, covenants or agreements set forth in Section 2 of
this Agreement or Section 10.11 of the Indenture, the Purchasers, the holders
and any beneficial owner of Securities (including Common Stock issuable upon
conversion thereof) shall be entitled to, and the Company shall not contest or
oppose the granting of, any equitable relief, including specific performance,
injunctive relief and declaratory orders.
-17-
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
CUC International Inc.
By:_______________________________
Name:
Title:
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
Goldman, Sachs & Co.
Morgan Stanley & Co. Incorporated
Allen & Company Incorporated
Alex. Brown & Sons Incorporated
Furman Selz LLC
Hambrecht & Quist LLC
By: ___________________________________
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
-18-
Exhibit A
CUC INTERNATIONAL 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 CUC International Inc.
(the "Company") 3% Convertible Subordinated Notes due February 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].
CUC INTERNATIONAL INC.
NOTICE OF REGISTRATION STATEMENT
AND
SELLING SECURITYHOLDER QUESTIONNAIRE
(Date)
CUC International Inc. (the "Company") has filed with the United States
Securities and Exchange Commission (the "Commission") a preliminary 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 3% Convertible Subordinated Notes due
February 15, 2002 (CUSIP Nos. 126545AB8, 126545AC6 and U12678AA3) (the "Notes"),
and the shares of common stock, par value $.01 per share, issuable upon
conversation thereof (the "Common Stock"), in accordance with the terms of the
Registration Rights Agreement, dated as of February 11, 1997 (the "Registration
Rights Agreement"), between the Company and the Purchasers named therein (the
"Purchasers"). 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.
In order to have Registrable Securities included in the 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]. Unless the Company otherwise consents,
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 Registration Statement and related Prospectus and
(ii) may not sell their Registrable Securities pursuant thereto, unless the
Company, in its discretion, consents to include such owner's securities in the
Registration Statement.
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 and the shares of Common Stock issuable upon conversion of
such Securities; 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
A-2
Security or share of Common Stock which (i) has been registered pursuant to an
effective registration statement 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) or (iii) 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 3.6(c) 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)
(unless otherwise specified under 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 (completed and signed) set
forth in Appendix I attached to this Notice and Questionnaire and in Appendix A
to the Prospectus and hereby undertakes to do so.
The Selling Securityholder hereby provides the following information to
the Company and represents and warrants that such information is accurate and
complete:
A-3
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:_________________________________
A-4
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 U.S.
inter-dealer quotation system of a registered national securities association on
which the Registrable Securities may be listed or quoted at the time
A-5
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 prospectus
delivery and other 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 transferee(s) 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
A-6
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains in effect. All notices to the Company 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:
CUC International Inc.
707 Summer Street
Stamford, Connecticut 06901
Attention: General Counsel
Once this Notice and Questionnaire is executed by the Selling Securityholder
and received by the Company, 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.
A-7
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 AT:
CUC International Inc.
707 Summer Street
Stamford, Connecticut 06901
Attention: General Counsel
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Appendix I
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Marine Midland Bank, as Trustee
140 Broadway
New York, New York 10005
Attention: Corporate Trust Services-CUC
Re: CUC International Inc. (the "Company") 3% Convertible
Subordinated Notes due February 15, 2002 (the "Notes")
Dear Sirs:
Please be advised that _____________________ has transferred
$___________ aggregate principal amount of the above-referenced Notes or _____
shares of the Company's common stock, par value $.01 per share, issued on
conversion of Notes ("Stock") pursuant to the 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 with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or Stock is named as a "Selling Holder" in the Prospectus dated ___________,
____ or in amendments or supplements thereto, and that the aggregate principal
amount of the Notes or number of shares of Stock transferred are [a portion of]
the Notes or Stock listed in such Prospectus opposite such owner's name.
Dated:
Very truly yours,
___________________________
(Name)
By:________________________
(Authorized Signature)
Exhibit 99
CUC INTERNATIONAL INC. COMPLETES
CONVERTIBLE NOTE OFFERING
Stamford, CT. - February 12, 1997 - CUC International Inc. (NYSE:
CU) announced today that it has completed the sale of $550 million principal
amount of its 3% Convertible Subordinated Notes due February 15, 2002. $100
million principal amount of the Notes represents the exercise of the initial
purchasers' over-allotment option. The offering was made to qualified
institutional buyers and a limited number of institutional accredited investors,
and outside the United States in offshore transactions exempt from registration
under U.S. federal securities laws. The initial purchasers of the Notes were
Goldman, Sachs & Co.; Morgan Stanley & Co. Incorporated; Allen & Company
Incorporated; Alex Brown & Sons Incorporated; Furman Selz; and Hambrecht &
Quist.
The Company intends to use the approximately $542.1 million of net
proceeds from the sale of the Notes for general corporate purposes, including to
finance potential business acquisitions and strategic alliances that complement
the Company's businesses and implement its growth strategy.
The Notes are convertible into shares of the Company's common stock
after May 12, 1997, and prior to February 15, 2002, at a conversion price of
$30.625 per share which represents a premium of 25 percent to the share price of
CUC common stock based on the February 5, 1997 closing price of $24.50. After
giving effect to the full conversion of the Notes and the issuance of up to
17,959,184 shares of CUC common stock upon such conversion, this would represent
approximately four percent of the Company's current outstanding common stock.
Such conversion rate is subject to adjustment in certain circumstances.
CUC International is a leading technology-driven, membership-based
consumer services company that currently provides more than 63.8 million
consumers worldwide with access to home, shopping, travel, insurance,
automobile, dining, home improvement, lifestyle clubs, checking account
enhancement,a nd discount coupon programs. The Company also provides educational
and entertainment interactive media products.
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