EXHIBIT 3(a)
AMENDED ARTICLES OF INCORPORATION
OF
CLEVELAND-CLIFFS INC
FIRST: The name of the Corporation shall be Cleveland-Cliffs Inc
SECOND: The location of the principal office of the Corporation in the
State of Ohio shall be in Cleveland, Cuyahoga County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in
any lawful act or activity for which corporations may be formed under Sections
1701.01 through 1701.98, inclusive, of the Ohio Revised Code.
FOURTH: The maximum number of shares the Corporation is authorized to
have outstanding is Thirty-Five Million (35,000,000) shares, consisting of the
following:
(a) Three Million (3,000,000) shares of Serial Preferred
Stock, Class A, without par value ("Class A Preferred Stock");
(b) Four Million (4,000,000) shares of Serial Preferred
Stock, Class B, without par value ("Class B Preferred Stock"); and
(c) Twenty-Eight Million (28,000,000) Common Shares, par
value $1.00 per share ("Common Shares").
DIVISION A:
EXPRESS TERMS OF THE SERIAL PREFERRED STOCK,
CLASS A, WITHOUT PAR VALUE
The Class A Preferred Stock shall have the following express terms:
SECTION 1. Series The Class A Preferred Stock may be issued from time
to time in one or more series. All shares of Class A Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed by the Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. All shares of Class A Preferred Stock shall
also be of equal rank and shall be identical with shares of Class B Preferred
Stock except in respect of (i) the particulars that may be fixed and determined
by the Directors as hereinafter provided, (ii) the voting rights and provisions
for consent relating to Class A Preferred Stock as fixed and determined by
Section 5 of this Division A and (iii) the conversion rights of any series of
Class A Preferred Stock which may be fixed and determined by the Directors
subject to the provisions of Section 6 of this Division A. Subject to the
provisions of Sections 2 to 7, inclusive, of this Division A, which provisions
shall apply to all Class A Preferred Stock, the Directors hereby are authorized
to cause such shares to be issued in one or more series and with respect to each
such series to fix:
(a) The designation of the series, which may be by
distinguishing number, letter and/or title.
(b) The number of shares of the series, which number the
Directors may (except where otherwise provided in the creation of the
series) increase or decrease (but not below the number of shares
thereof then outstanding).
(c) The dividend rights of the series which may be:
cumulative or non-cumulative; at a specified rate, amount or
proportion; or with or without further participation rights.
(d) The dates at which dividends, if declared, shall be
payable, and the dates from which dividends, if cumulative, shall
accumulate.
(e) The redemption rights and price or prices, if any,
for shares of the series.
(f) The terms and amount of any sinking fund provided for
the purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation.
(h) Whether the shares of the series shall be convertible
into shares of any other class or series of the Corporation, and if so,
the specification of such other class or series, the conversion price
or prices or rate or rates, any adjustments thereof, the date or dates
as of which such shares shall be convertible, and other terms and
conditions upon which such conversion may be made.
(i) Restrictions (in addition to those set forth in
Section 5(c) of this Division) on the issuance of shares of the same
series or of any other class or series.
The Directors are authorized to adopt from time to time amendments to
the Articles of Incorporation fixing, with respect to each such series, the
matters described in clauses (a) to (i), inclusive, of this Section 1.
SECTION 2. Dividends.
(a) The holders of Class A preferred Stock of each
series, in preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class A Preferred Stock, shall be
entitled to receive out of any funds legally available therefor and
when and as declared by the Directors dividends in cash at the rate for
such series fixed in accordance with the provisions of Section 1 of
this Division A and no more, payable on the dividend payment dates
fixed for such series. Such dividends may be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividend may be paid upon or set
apart for any of the Class A Preferred Stock on any dividend payment
date unless (i) all dividends upon all Class A Preferred Stock then
outstanding and all classes of stock then outstanding ranking prior to
or on a parity with the Class A Preferred Stock for all dividend
payment dates prior to
such date shall have been paid or funds therefor set apart and (ii) at
the same time a like dividend upon all series of Class A Preferred
Stock then outstanding and all classes of stock then outstanding
ranking prior to or on a parity with the Class A Preferred Stock and
having a dividend payment date on such date, ratably in proportion to
the respective dividend rates of each such series or class, shall be
paid or funds therefor set apart. Accumulations of dividends, if any,
shall not bear interest.
(b) For the purpose of this Division A, a dividend shall
be deemed to have been paid or funds therefor set apart on any date if
on or prior to such date the Corporation shall have deposited funds
sufficient therefor with a bank or trust company and shall have caused
checks drawn against such funds in appropriate amounts to be mailed to
each holder of record entitled to receive such dividend at such
holder's address then appearing on the books of the Corporation.
(c) In no event so long as any Class A Preferred Stock
shall be outstanding shall any dividends, except a dividend payable in
Common Shares or other shares ranking junior to the Class A Preferred
Stock, be paid or declared or any distribution be made except as
aforesaid on the Common Shares or any other shares ranking junior to
the Class A Preferred Stock, nor shall any Common Shares or any other
shares ranking junior to the Class A Preferred Stock be purchased,
retired or otherwise acquired by the Corporation (except out of the
proceeds of the sale of Common Shares or other shares ranking junior to
the Class A Preferred Stock received by the Corporation on or
subsequent to the date on which shares of any series of Class A
Preferred Stock are first issued), unless (i) all accrued and unpaid
dividends upon all Class A Preferred Stock then outstanding for all
dividend payment dates on or prior to the date of such action shall
have been paid or funds therefor set apart and (ii) as of the date of
such action there shall be no arrearages with respect to the redemption
of Class A Preferred Stock of any series from any sinking fund provided
for shares of such series in accordance with the provisions of Section
1 of this Division A.
SECTION 3. Redemption.
(a) Subject to the express terms of each series and to
the provisions of Section 5(c)(iii) of this Division A, the Corporation
(i) may from time to time redeem all or any part of the Class A
Preferred Stock of any series at the time outstanding at the option of
the Directors at the applicable redemption price for such series fixed
in accordance with the provisions of Section 1 of this Division A, and
(ii) shall from time to time make such redemptions of the Class A
Preferred Stock of any series as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at
the applicable sinking fund redemption price, fixed in accordance with
the provisions of Section 1 of this Division A, together in each case
with (A) all then accrued and unpaid dividends upon such shares for all
dividend payment dates on or prior to the redemption date and (B) if
the redemption date is not a dividend payment date for such series, a
proportionate dividend, based on the number of elapsed days, for the
period from the day after the most recent such dividend payment date
through the redemption date.
(b) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class A Preferred
Stock to be redeemed at their respective addresses then appearing on
the books of the Corporation, not less than 30 days nor more than 60
days prior to the date fixed for such redemption. At any time before or
after notice has been given as above provided, the Corporation may
deposit the aggregate redemption price of the shares of Class A
Preferred Stock to be redeemed, together with an amount equal to the
aggregate amount of dividends payable upon such redemption, with any
bank or trust company in Cleveland, Ohio, or New York, New York, having
capital and surplus of more than $50,000,000, named in such notice, and
direct that such deposited amount be paid to the respective holders of
the shares of Class A Preferred Stock so to be redeemed upon surrender
of the stock certificate or certificates held by such holders. Upon the
giving of such notice and the making of such deposit such holders shall
cease to be shareholders with respect to such shares and shall have no
interest in or claim against the Corporation with respect to such
shares except only the right to receive such money from such bank or
trust company without interest or to exercise, before the redemption
date, any unexpired privileges of conversion. In case less than all of
the outstanding shares of any series of Class A Preferred Stock are to
be redeemed, the Corporation shall select, pro rata or by lot, the
shares so to be redeemed in such manner as shall be prescribed by the
Directors.
(c) If the holders of shares of Class A Preferred Stock
which shall have been called for redemption shall not, within six years
after such deposit, claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all responsibility in
respect thereof to such holder.
(d) Any shares of Class A Preferred Stock which are (i)
redeemed by the Corporation pursuant to the provisions of this Section
3, (ii) purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of any series of Class A Preferred
Stock, (iii) converted in accordance with the express terms of any such
series, or (iv) otherwise acquired by the Corporation, shall resume the
status of authorized and unissued shares of Class A Preferred Stock
without serial designation; provided, however, that any such shares
which are converted in accordance with the express terms thereof shall
not be reissued as convertible shares.
SECTION 4. Liquidation.
(a) (1) The holders of Class A Preferred Stock of
any series, shall, in case of voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class A Preferred Stock, the amounts fixed with respect
to shares of such series in accordance with Section 1 of this Division,
plus an amount equal to (i) all then accrued and unpaid dividends upon
such shares for all dividend payment dates on or prior to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up, and (ii) if such date is not a
dividend payment date for such series, a proportionate dividend, based
on the number of elapsed days, for the period from the day after the
most recent dividend payment date through the date of payment of the
amount due pursuant to such liquidation, dissolution or winding up. In
case the net assets of the Corporation legally available therefor are
insufficient to permit the payment upon all outstanding shares of Class
A Preferred Stock and all outstanding shares of stock of all classes
ranking on a parity with the Class A Preferred Stock of the full
preferential amount to which they are respectively entitled, then such
net assets shall be distributed ratably upon outstanding shares of
Class A Preferred Stock and all outstanding shares of stock of all
classes ranking on a parity with the Class A Preferred Stock in
proportion to the full preferential amount to which each such share is
entitled.
(2) After payment to holders of Class A Preferred
Stock of the full preferential amounts as aforesaid, holders
of Class A Preferred Stock as such shall have no right or
claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into
or with any other corporation, or the merger of any other corporation
into it, or the sale, lease or conveyance of all or substantially all
the property or business of the Corporation, shall not be deemed to be
a dissolution, liquidation or winding up for the purposes of this
Division A.
SECTION 5. Voting.
(a) The holders of Class A Preferred Stock shall be
entitled to one vote for each share of such stock upon all matters
presented to the shareholders; and, except as otherwise provided herein
or required by law, the holders of Class A Preferred Stock and the
holders of Common Shares shall vote together as one class on all
matters presented to the shareholders.
(b) (1) If, and so often as, the Corporation shall be in
default in the payment of dividends on any series of Class A Preferred
Stock at the time outstanding, or funds therefor have not been set
apart, in an amount equivalent to six full quarterly dividends on any
such series of Class A Preferred Stock whether or not consecutive and
whether or not earned or declared, the holders of Class A Preferred
Stock of all series, voting separately as a class, and in addition to
any other rights which the shares of any series of Class A Preferred
Stock may have to vote for Directors, shall thereafter be entitled to
elect, as herein provided, two Directors of the Corporation; provided,
however, that the special class voting rights provided for in this
paragraph when the same shall have become vested shall remain so vested
(i) in the case of cumulative dividends, until all accrued and unpaid
dividends on the Class A Preferred Stock of all series then outstanding
shall have been paid or funds therefor set apart, or (ii) in the case
of non-cumulative dividends, until full dividends on the Class A
Preferred Stock of all series than outstanding shall have been paid or
funds therefor set apart regularly for a period of one year, whereupon
the holders of Class A Preferred Stock shall be divested of their
special class voting rights in respect of subsequent elections of
Directors, subject to the
revesting of such special class voting rights in the event hereinabove
specified in this paragraph.
(2) In the event of default entitling the
holders of Class A Preferred Stock to elect two Directors as specified
in paragraph (1) of this subsection, a special meeting of such holders
for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called
by, the holders of record of at least ten percent (10%) of the shares
of Class A Preferred Stock of all series at the time outstanding, and
notice thereof shall be given in the same manner as that required for
the annual meeting of shareholders; provided, however, that the
Corporation shall not be required to call such special meeting if the
annual meeting of shareholders or any other special meeting of
shareholders called or to be called for a different purpose shall be
held within 120 days after the date of receipt of the foregoing written
request from the holders of Class A Preferred Stock. At any meeting at
which the holders of Class A Preferred Stock shall be entitled to elect
Directors, the holders of thirty-five percent (35%) of the then
outstanding shares of Class A Preferred Stock of all series, present in
person or by proxy, shall be sufficient to constitute a quorum, and the
vote of the holders of a majority of such shares so present at any such
meeting at which there shall be such a quorum shall be sufficient to
elect the Directors which the holders of Class A Preferred Stock are
entitled to elect as hereinabove provided. Notwithstanding any
provision of these Articles of Incorporation or the Regulations of the
Corporation or any action taken by the holders of any class of shares
fixing the number of Directors of the Corporation, the two Directors
who may be elected by the holders of Class A Preferred Stock pursuant
to this subsection shall serve in addition to any other Directors then
in office or proposed to be elected otherwise than pursuant to this
subsection. Nothing in this subsection shall prevent any change
otherwise permitted in the total number of Directors of the Corporation
or require the resignation of any Director elected otherwise than
pursuant to this subsection. Notwithstanding any classification of the
other Directors of the Corporation, the two Directors elected by the
holders of Class A Preferred Stock shall be elected annually for the
terms expiring at the next succeeding annual meeting of shareholders;
provided, however, that whenever the holders of Class A Preferred Stock
shall be divested of the voting power as above provided, the terms of
office of all persons elected as Directors by the holders of the Class
A Preferred Stock as a class shall immediately terminate and the number
of Directors shall be reduced accordingly.
(c) Except as hereinafter provided, the affirmative vote
of the holders of at least two-thirds of the shares of Class A
Preferred Stock at the time outstanding, given in person or by proxy at
a meeting called for the purpose at which the holders of Class A
Preferred Stock shall vote separately as a class, shall be necessary to
effect, any one or more of the following (but so far as the holders of
Class A Preferred Stock are concerned, such action may be effected with
such vote):
(i) Any amendment, alteration or repeal
of any of the provisions of the Articles of
Incorporation or of the Regulations of the
Corporation which affects adversely the preferences
or voting or other rights of the holders of Class A
Preferred Stock; provided, however, that
for the purpose of this paragraph 5(c)(i) only,
neither the amendment of the Articles of
Incorporation so as to authorize, create or change
the authorized or outstanding amount of Class A
Preferred Stock or of any shares of any class ranking
on a parity with or junior to the Class A Preferred
Stock nor the amendment of the provisions of the
Regulations so as to change the number of Directors
of the Corporation shall be deemed to affect
adversely the preferences or voting or other rights
of the holders of Class A Preferred Stock; and
provided further, that if such amendment, alteration
or repeal affects adversely the preferences or voting
or other rights of one or more but not all series of
Class A Preferred Stock at the time outstanding, the
affirmative vote or consent of the holders of at
least two-thirds of the number of shares at the time
outstanding of each series so affected, each such
affected series voting separately as a series, shall
also be required;
(ii) The authorization, creation or the
increase in the authorized amount of any shares of
any class or any security convertible into shares of
any class, in either case, ranking prior to the Class
A Preferred Stock; or
(iii) The purchase or redemption (for
sinking fund purposes or otherwise) of less than all
of the Class A Preferred Stock then outstanding
except in accordance with a stock purchase offer made
to all holders of record of Class A Preferred Stock,
unless all dividends on all Class A Preferred Stock
then outstanding for all previous dividend periods
shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with;
provided, however, that in the case of any authorization, creation or
increase in the authorized amount of any shares of any class or
security convertible into shares of any class, in either case, ranking
prior to the Class A Preferred Stock no such consent of the holders of
Class A Preferred Stock shall be required if the holders of Class A
Preferred Stock have previously received adequate notice of redemption
to occur within 90 days. The foregoing proviso shall not apply and such
consent of the holders of Class A Preferred Stock shall be required if
any such redemption will be effected, in whole or in part, with the
proceeds received from the sale of any such stock or security
convertible into shares of any class, in either case, ranking prior to
the Class A Preferred Stock.
(d) The affirmative vote of the holders of at least a
majority of the shares of Class A Preferred Stock at the time
outstanding, given in person or by proxy at a meeting called for the
purpose at which the holders of Class A Preferred Stock shall vote
separately as a class, shall be necessary to effect any one or more of
the following (but so far as the holders of the Class A Preferred Stock
are concerned, such action may be effected with such vote):
(i) The consolidation or merger of the
Corporation with or into any other corporation to the
extent any such consolidation or merger shall be
required, pursuant to any applicable statute, to be
approved by the
holders of the shares of Class A Preferred Stock
voting separately as a class; or
(ii) The authorization of any shares
ranking on a parity with the Class A Preferred Stock
or an increase in the authorized number of shares of
Class A Preferred Stock.
(e) Neither the vote, consent nor any adjustment of the
voting rights of holders of shares of Class A Preferred Stock shall be
required for an increase in the number of Common Shares authorized or
issued or for stock splits of the Common Shares or for stock dividends
on any class of stock payable solely in Common Shares, and none of the
foregoing actions shall be deemed to affect adversely the preferences
or voting or other rights of Class A Preferred Stock within the meaning
and for the purpose of this Division A.
SECTION 6. Conversion.
(a) If and to the extent that there are created series of
Class A Preferred Stock which are convertible (hereinafter called
"convertible series") into Common Shares, as such shares shall be
constituted as of the date of conversion, or into shares of any other
class or series of the Corporation (hereinafter collectively called
"conversion shares"), the following terms and provisions shall be
applicable to all of such series, except as may be otherwise expressly
provided in the terms of any such series.
(1) The maximum amount of Common Shares which
may be authorized to be received upon conversion by the
holders of any shares of a convertible series shall not exceed
one Common Share for each share of such convertible series,
subject to any adjustments which shall be required pursuant to
any antidilution mechanism which the Directors may approve in
respect of such convertible series.
(2) The holder of each share of a convertible
series may exercise the conversion privilege in respect
thereof by delivering to any transfer agent for the respective
series the certificate for the share to be converted and
written notice that the holder elects to convert such share.
Conversion shall be deemed to have been effected immediately
prior to the close of business on the date when such delivery
is made, and such date is referred to in this Section as the
"conversion date". On the conversion date or as promptly
thereafter as practicable the Corporation shall deliver to the
holder of the stock surrendered for conversion, or as
otherwise directed by such holder in writing, a certificate
for the number of full conversion shares deliverable upon the
conversion of such stock and a check or cash in respect of any
fraction of a share as provided in subsection (3) of this
Section. The person in whose name the stock certificate is to
be registered shall be deemed to have become a holder of the
conversion shares of record on the conversion date. No
adjustment shall be made for any dividends on shares of stock
surrendered for conversion or for dividends on the conversion
shares delivered on conversion.
(3) The Corporation shall not be required to
deliver fractional shares upon conversion of shares of a
convertible series. If more than one share of a convertible
series shall be surrendered for conversion at one time by the
same holder, the number of full conversion shares deliverable
upon conversion thereof shall be computed on the basis of the
aggregate number of shares so surrendered. If any fractional
interest in a conversion share would otherwise be deliverable
upon the conversion, the Corporation shall in lieu of
delivering a fractional share therefor make an adjustment
therefor in cash at the current market value thereof, computed
(to the nearest cent) on the basis of the closing price of the
conversion share on the last business day before the
conversion date.
(4) For the purpose of this Section, the
"closing price of the conversion shares" on any business day
shall be the last reported sales price per share on such day,
or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices, in
either case on the New York Stock Exchange, or, if the
conversion shares are not listed or admitted to the trading on
such Exchange, on the principal national securities exchange
on which the conversion shares are listed or admitted to
trading as determined by the Directors, which determination
shall be conclusive, or, if not listed or admitted to trading
on any national securities exchange, as quoted by the
automated quotation system of the National Association of
Securities Dealers, Inc., or, if not so quoted, the mean
between the average bid and asked prices per conversion share
in the over-the-counter market as furnished by any member of
the National Association of Securities Dealers, Inc. selected
from time to time by the Directors for that purpose; and
"business day" shall be each day on which the New York Stock
Exchange or other national securities exchange or automated
quotation system or over-the-counter market used for purposes
of the above calculation is open for trading.
(b) Upon conversion of any convertible series the stated
capital of the conversion shares delivered upon such conversion shall
be the aggregate par value of the shares so delivered having par value,
or, in the case of conversion shares without par value, shall be an
amount equal to the stated capital represented by each such share
outstanding at the time of such conversion. The stated capital of the
Corporation shall be correspondingly increased or reduced to reflect
the difference between the stated capital of the shares of the
convertible series so converted and the stated capital of the
conversion shares delivered upon such conversion.
(c) In case of any reclassification or change of
outstanding conversion shares (except a split or combination, or a
change in par value, or a change from par value to no par value, or a
change from no par value to par value) , provision shall be made as
part of the terms of such reclassification or change that the holder of
each share of each convertible series then outstanding shall have the
right to receive upon the conversion of such share, at the conversion
rate or price which otherwise would be in effect at the time of
conversion, with substantially the same protection against dilution as
is provided in the terms of such convertible series, the same kind and
amount of stock and other securities and property as such holder would
have owned or have been entitled to receive upon the
happening of any of the events described above had such share been
converted immediately prior to the happening of the event.
(d) In case the Corporation shall be consolidated with or
shall merge into any other corporation, provision shall be made as a
part of the terms of such consolidation or merger whereby the holder of
each share of each convertible series outstanding immediately prior to
such event shall thereafter be entitled to such conversion rights with
respect to securities of the corporation resulting from such
consolidation or merger as shall be substantially equivalent to the
conversion rights specified in the terms of such convertible series;
provided, however, that the provisions of this subsection (d) shall be
deemed to be satisfied if such consolidation or merger shall be
approved by the holders of Class A Preferred Stock in accordance with
the provisions of Section 5(d) of this Division A.
(e) The issue of stock certificates on conversions of
shares of each convertible series shall be without charge to the
converting shareholder for any tax in respect of the issue thereof. The
Corporation shall not, however, be required to pay any tax which may be
payable in respect of any transfer involved in the registration of
shares in any name other than that of the holder of the shares
converted, and the Corporation shall not be required to deliver any
such stock certificate unless and until the person or persons
requesting the delivery thereof shall have paid to the Corporation the
amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid.
(f) The Corporation hereby reserves and shall at all
times reserve and keep available, free from preemptive rights, out of
its authorized but unissued shares or treasury shares, for the purpose
of delivery upon conversion of shares of each convertible series, such
number of conversion shares as shall from time to time be sufficient to
permit the conversion of all outstanding shares of all convertible
series of Class A Preferred Stock.
SECTION 7. Definitions. For the purpose of this Division A:
(a) Whenever reference is made to shares "ranking prior
to the Class A Preferred Stock", such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof either as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation are given preference over
the rights of the holders of Class A Preferred Stock.
(b) Whenever reference is made to shares "on a parity
with the Class A Preferred Stock", such reference shall mean and
include all shares of Class B Preferred Stock and all other shares of
the Corporation in respect of which the rights of the holders thereof
(i) are not given preference over the rights of the holders of Class A
Preferred Stock either as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and (ii) either as to the
payment of dividends or as to distribution in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, or as to both, rank
on an equality (except as to the amounts fixed therefor) with the
rights of the holders of Class A Preferred Stock.
(c) Whenever reference is made to shares "ranking junior
to the Class A Preferred Stock" such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof both as to the payment of dividends and as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation are junior and subordinate
to the rights of the holders of the Class A Preferred Stock.
SUBDIVISION A-2
EXPRESS TERMS OF THE 3.25% REDEEMABLE
CUMULATIVE CONVERTIBLE PERPETUAL
PREFERRED STOCK
There is hereby established a series of Class A Preferred Stock to
which the following provisions, in addition to the provisions of Division A of
this Article Fourth ("DIVISION A"), shall be applicable:
Section 1. Designation of Series. The stock shall be designated "3.25%
Redeemable Cumulative Convertible Perpetual Preferred Stock" (hereinafter called
"SERIES A-2 PREFERRED STOCK").
Section 2. Number of Shares. The number of shares of Series A-2
Preferred Stock shall be 172,500, which number the Board of Directors may
decrease (but not below the number of shares of the series then outstanding).
Section 3. Certain Definitions.
"ADJUSTMENT EVENT" shall have the meaning assigned to it in Section
9(n) of this Subdivision.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "control" when used with
respect to any Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"AGENT MEMBERS" shall have the meaning assigned to it in Section 16(a)
of this Subdivision.
"ARTICLES OF INCORPORATION" means the Corporation's Articles of
Incorporation, as amended.
"BOARD OF DIRECTORS" means either the Board of Directors of the
Corporation or any duly authorized committee of such Board.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"CLOSING SALE PRICE" of the Common Shares or other capital stock or
similar equity interests on any date means the closing sale price per share (or,
if no closing sale price is reported, the average of the closing bid and ask
prices or, if more than one in either case, the average of the average closing
bid and the average closing ask prices) on such date as reported on the
principal United States securities exchange on which the Common Shares or such
other
capital stock or similar equity interests are traded or, if the Common Shares or
such other capital stock or similar equity interests are not listed on a United
States national or regional securities exchange, as reported by Nasdaq or by the
National Quotation Bureau Incorporated. In the absence of such quotations, the
Corporation will determine the Closing Sale Price on the basis it considers
appropriate.
"COMMON SHARE LEGEND" shall have the meaning assigned to it in Section
17(f) of this Subdivision.
"COMMON SHARES" means any shares of stock of any class of the
Corporation that have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Corporation and that are not subject to redemption by the
Corporation. Subject to the provisions of Section 11 of this Subdivision,
however, shares issuable on conversion of the Series A-2 Preferred Stock shall
include only shares of the class designated as common shares of the Corporation
as of January 20, 2004 (namely, the Common Shares, par value $1.00 per share) or
shares of any class or classes resulting from any reclassification or
reclassifications thereof and that have no preference in respect of dividends or
of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and that are not subject to
redemption by the Corporation; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then so issuable on
conversion shall be substantially in the proportion that 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.
"CONVERSION AGENT" shall have the meaning assigned to it in Section
18(a) of this Subdivision.
"CONVERSION DATE" shall have the meaning assigned to it in Section 8(b)
of this Subdivision.
"CONVERSION PRICE" per share of Series A-2 Preferred Stock means, on
any date, the Liquidation Preference divided by the Conversion Rate in effect on
such date.
"CONVERSION RATE" per share of Series A-2 Preferred Stock means 16.1290
Common Shares, subject to adjustment pursuant to Section 9 of this Subdivision.
"CONVERTIBLE SUBORDINATED DEBENTURES" shall have the meaning assigned
to it in Section 10(a) of this Subdivision.
"CORPORATION" means Cleveland-Cliffs Inc, and shall include any
successor to such Corporation.
"CURRENT MARKET PRICE" shall have the meaning assigned to it in Section
9(i) of this Subdivision.
"DEPOSITARY" means DTC or its successor depositary.
"DESIGNATED EVENT" means a Fundamental Change or a Termination of
Trading.
2
"DESIGNATED EVENT PURCHASE DATE" shall have the meaning assigned to it
in Section 13(a) of this Subdivision.
"DESIGNATED EVENT PURCHASE NOTICE" shall have the meaning assigned to
it in Section 13(c) of this Subdivision.
"DETERMINATION DATE" shall have the meaning assigned to it in Section
9(n) of this Subdivision.
"DISTRIBUTED PROPERTY" shall have the meaning assigned to it in Section
9(d) of this Subdivision.
"DIVIDEND PAYMENT DATE" means January 15, April 15, July 15 and October
15 each year, or if any such date is not a Business Day, on the next succeeding
Business Day.
"DIVIDEND PERIOD" shall mean the period beginning on, and including, a
Dividend Payment Date (or, in the case of the first Dividend Period, the first
date of original issuance of the Series A-2 Preferred Stock) and ending on, but
excluding, the immediately succeeding Dividend Payment Date.
"DIVIDEND RATE" shall have the meaning assigned to it in Section 4(a)
of this Subdivision.
"DIVISION A" shall have the meaning assigned to it in the preamble to
this Subdivision.
"DOLLARS" or "$" shall have the meaning assigned to it in Section 15 of
this Subdivision.
"DTC" shall mean The Depository Trust Company.
"EXCHANGE" shall have the meaning assigned to it in Section 10(a) of
this Subdivision.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXCHANGE DATE" shall have the meaning assigned to it in Section 10(a)
of this Subdivision.
"EXCHANGE RIGHT" shall have the meaning assigned to it in Section 10(a)
of this Subdivision.
"EX-DIVIDEND DATE" shall have the meaning assigned to it in Section
9(d) of this Subdivision.
"EXPIRATION TIME" shall have the meaning assigned to it in Section 9(g)
of this Subdivision.
"FAIR MARKET VALUE" shall have the meaning assigned to it in Section
9(i) of this Subdivision.
3
"FUNDAMENTAL CHANGE" means any transaction or event (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with
which all or substantially all of the Common Shares are exchanged for, converted
into, acquired for or constitute solely the right to receive, consideration that
is not all or substantially all common shares that (a) are listed on, or
immediately after the transaction or event will be listed on, a United States
national securities exchange, or (b) are approved, or immediately after the
transaction or event will be approved, for quotation on the Nasdaq National
Market or any similar United States system of automated dissemination of
quotations of securities prices.
"GLOBAL PREFERRED SHARE" shall have the meaning assigned to it in
Section 16(a) of this Subdivision.
"GLOBAL SHARES LEGEND" shall have the meaning assigned to it in Section
16(a) of this Subdivision.
"INDENTURE" shall have the meaning assigned to it in Section 10(a) of
this Subdivision.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"LIQUIDATED DAMAGES AMOUNT" shall have the meaning assigned to it in
the Registration Rights Agreement.
"LIQUIDATION PREFERENCE" shall have the meaning assigned to it in
Section 7 of this Subdivision.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"NON-ELECTING SHARE" shall have the meaning assigned to it in Section
11 of this Subdivision.
"OFFICER" means the Chairman of the Board, the Vice Chairman of the
Board, the President, the Chief Executive Officer, any Vice President, the
Treasurer, any Assistant Treasurer, the Controller, any Assistant Controller,
the Secretary or any Assistant Secretary of the Corporation.
"OUTSTANDING" means, when used with respect to Series A-2 Preferred
Stock, as of any date of determination, all shares of Series A-2 Preferred Stock
outstanding as of such date; provided, however, that, if such Series A-2
Preferred Stock is to be redeemed, notice of such redemption has been duly given
pursuant to Division A and this Subdivision and the Paying Agent holds, in
accordance with this Subdivision and Division A, money sufficient to pay the
Redemption Price for the shares of Series A-2 Preferred Stock to be redeemed,
then immediately after such Redemption Date such shares of Series A-2 Preferred
Stock shall cease to be outstanding; provided further that, in determining
whether the holders of Series A-2 Preferred Stock have given any request,
demand, authorization, direction, notice, consent or waiver or taken any other
action hereunder, Series A-2 Preferred Stock owned by the Corporation shall be
deemed not to be Outstanding, except that, in determining whether the Registrar
shall be
4
protected in relying upon any such request, demand, authorization, direction,
notice, consent, waiver or other action, only Series A-2 Preferred Stock that
the Registrar has actual knowledge of being so owned shall be deemed not to be
Outstanding.
"PAYING AGENT" shall have the meaning assigned to it in Section 18(a)
of this Subdivision.
"PERSON" means an individual, a corporation, an association, a
partnership, a limited liability company, a joint venture, a joint stock
company, a trust, an unincorporated organization or any other entity or
organization, a government or political subdivision or an agency or
instrumentality thereof.
"PURCHASE PRICE" means an amount equal to 100% of the Liquidation
Preference per share of Series A-2 Preferred Stock being purchased, plus an
amount equal to any accumulated and unpaid dividends (whether or not earned or
declared) and Liquidated Damages Amounts, if any, to, but excluding, the
Designated Event Purchase Date; provided that if a Designated Event Purchase
Date falls after a Record Date and on or prior to the corresponding Dividend
Payment Date, the Purchase Price will only be an amount equal to the Liquidation
Preference per share of Series A-2 Preferred Stock being purchased.
"PURCHASED SHARES" shall have the meaning assigned to it in Section
9(g) of this Subdivision.
"RECORD DATE" means with respect to the dividends payable on January
15, April 15, July 15 and October 15 of each year, January 1, April 1, July 1
and October 1 of each year, respectively, or such other record date that may be
fixed by the Board of Directors and that will be not more than 60 nor fewer than
ten days before the applicable Dividend Payment Date.
"REDEMPTION DATE" means a date that is fixed for redemption of the
Series A-2 Preferred Stock by the Corporation in accordance with Section 5 of
this Subdivision.
"REDEMPTION PRICE" means an amount equal to the Liquidation Preference
per share of Series A-2 Preferred Stock being redeemed, plus an amount equal to
all accumulated and unpaid dividends (whether or not earned or declared) and
Liquidated Damages Amounts, if any, to, but excluding, the Redemption Date;
provided that if the Redemption Date shall occur after a Record Date and on or
before the related Dividend Payment Date, the Redemption Price shall be only an
amount equal to the Liquidation Preference per share of Series A-2 Preferred
Stock being redeemed.
"REGISTRABLE SECURITIES" shall have the meaning assigned to it in
Section 17(d) of this Subdivision.
"REGISTRAR" shall mean EquiServe Trust Company, N.A., or any successor
thereto, as may be designated by the Board of Directors.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights Agreement
dated as of January 21, 2004, between the Corporation and the Initial Purchaser
relating to the Series A-2 Preferred Stock.
5
"RESTRICTED SHARES LEGEND" shall have the meaning assigned to it in
Section 16(a) of this Subdivision.
"RIGHTS" shall have the meaning assigned to it in Section 12 of this
Subdivision.
"RIGHTS AGREEMENT" means the Rights Agreement dated as of September 19,
1997 between the Corporation and EquiServe Trust Company, N.A.
(successor-in-interest to First Chicago Trust Company of New York), as Rights
Agent.
"RIGHTS PLAN" shall have the meaning assigned to it in Section 12 of
this Subdivision.
"RULE 144A" shall have the meaning assigned to it in Section 17(a) of
this Subdivision.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERIES A-2 PREFERRED STOCK" shall have the meaning assigned to it in
Section 1 of this Subdivision.
"SHELF REGISTRATION STATEMENT" shall have the meaning assigned to it in
the Registration Rights Agreement.
"SUBDIVISION" means this Subdivision A-2 of Article Fourth of the
Articles of Incorporation.
"SUBSIDIARY" means, with respect to any Person, (a) any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of capital stock or other equity interests
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (b) any partnership
(i) the sole general partner or the managing general partner of which is such
Person or a Subsidiary of such Person or (ii) the only general partners of which
are such Person or one or more Subsidiaries of such Person (or any combination
thereof).
"TERMINATION OF TRADING" will be deemed to have occurred if the Common
Shares (or other Common Shares into which the Series A-2 Preferred Stock is then
convertible) are neither listed for trading on a United States national or
regional securities exchange nor approved for quotation on the Nasdaq National
Market or any similar United States system of automated dissemination of
quotations of securities prices that is a successor thereto.
"TRADING DAY" shall have the meaning assigned to it in Section 9(i) of
this Subdivision.
"TRADING PRICE" of the Series A-2 Preferred Stock, on any date of
determination, means the average of the secondary market bid quotations obtained
by the Corporation or a calculation agent appointed by the Corporation for 5,000
shares of Series A-2 Preferred Stock at approximately 3:30 p.m., New York City
time, on such determination date from three independent nationally recognized
securities dealers that the Corporation or such calculation agent selects;
provided that if three such bids cannot reasonably be obtained by the
Corporation
6
or such calculation agent, but two such bids are obtained, then the average of
the two bids shall be used, and if only one such bid can reasonably be obtained
by the Corporation or the calculation agent, that one bid shall be used;
provided further that if the Corporation or such calculation agent cannot
reasonably obtain at least one bid for 5,000 shares of Series A-2 Preferred
Stock from a nationally recognized securities dealer, then the Trading Price per
share of Series A-2 Preferred Stock shall be deemed to be less than 98% of the
product of (a) the Conversion Rate on such date and (b) the Closing Sale Price
of the Common Shares on such date.
"TRANSFER AGENT" shall mean EquiServe Trust Company, N.A., or any
successor thereto, as may be designated by the Board of Directors.
"TRIGGER EVENT" shall have the meaning assigned to it in Section 9(d)
of this Subdivision.
Section 4. Dividends. Subject to the applicable express provisions of
Division A:
(a) the dividend rate the (the "DIVIDEND RATE") for the Series A-2
Preferred Stock shall be 3.25% per share per annum of the Liquidation Preference
per share of Series A-2 Preferred Stock. Cash dividends at such rate shall be
payable, when and as declared by the Board of Directors, out of funds legally
available therefor, in quarterly installments on each Dividend Payment Date,
commencing April 15, 2004. Such dividends will accumulate from the most recent
date as to which dividends have been paid or, if no dividends have been paid,
from the first date of original issuance of the Series A-2 Preferred Stock and
will be payable to holders of record as they appear on the stock books of the
Corporation at the close of business on a Record Date. Dividends payable for any
partial dividend period shall be computed on the basis of a 360-day year of
twelve 30-day months; and
(b) if the Corporation fails to pay or to set apart funds to pay
dividends on the Series A-2 Preferred Stock for any Dividend Period, then
holders of Series A-2 Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors, out of funds legally available therefor,
cash dividends at a Dividend Rate per annum equal to:
3.25% + (N * 0.02640625)%
where:
N = the number of Dividend Periods for which the
Corporation has failed to pay or to set apart funds
to pay dividends on the Series A-2 Preferred Stock,
for each subsequent Dividend Period until the Corporation has paid or provided
for the payment of all dividends on the Series A-2 Preferred Stock for all
Dividend Periods up to and including the Dividend Payment Date on which the
accumulated and unpaid dividends are paid in full (such accumulated and unpaid
dividends for each prior Dividend Period to be paid at a Dividend Rate
calculated based on the formula set forth above, where N will be equal to the
number of Dividend Periods for which the Corporation has failed to pay or to set
apart funds to pay
7
dividends on the Series A-2 Preferred Stock determined as of, and for, each
prior Dividend Period).
Section 5. Redemption Rights. Subject to the applicable express
provisions of Division A, including, without limitation, Section 5(c) (iii)
thereof, shares of Series A-2 Preferred Stock shall be redeemable by the
Corporation in accordance with this Section 5.
(a) The Corporation may not redeem any shares of Series A-2
Preferred Stock before January 20, 2009. On or after January 20, 2009, the
Corporation shall have the option to redeem, subject to Section 5(c)(iii) of
Division A and Section 5(k) of this Subdivision, some or all of the shares of
Series A-2 Preferred Stock at the Redemption Price, but only if the Closing Sale
Price of the Common Shares for 20 Trading Days within a period of 30 consecutive
Trading Days ending on the Trading Day prior to the date the Corporation gives
notice of such redemption pursuant to this Section 5 exceeds 135% of the
Conversion Price in effect on each such Trading Day.
(b) In the event the Corporation elects to redeem shares of Series
A-2 Preferred Stock, the Corporation shall:
(i) send a written notice (which notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been
duly given, whether or not the holder receives such notice) to the
Registrar and Transfer Agent of the Redemption Date, stating the number
of shares to be redeemed and the Redemption Price, at least 35 calendar
days before the Redemption Date (unless a shorter period shall be
satisfactory to the Registrar and Transfer Agent);
(ii) send a written notice by first class mail to each
holder of record of the Series A-2 Preferred Stock at such holder's
registered address, not fewer than 30 nor more than 60 calendar days
prior to the Redemption Date stating:
(A) the Redemption Date;
(B) the Redemption Price and whether such
Redemption Price will be paid in cash, Common Shares, or, if a
combination thereof, the percentages of the Redemption Price
that the Corporation will pay in cash and Common Shares;
(C) the Conversion Price and the Conversion
Rate;
(D) the name and address of the Paying Agent and
Conversion Agent;
(E) that shares of Series A-2 Preferred Stock
called for redemption may be converted at any time before 5:00
p.m., New York City time on the Business Day immediately
preceding the Redemption Date;
(F) that holders who want to convert shares of
the Series A-2 Preferred Stock must satisfy the requirements
set forth in Section 5 of this Subdivision and in Section 6 of
Division A;
8
(G) that shares of the Series A-2 Preferred
Stock called for redemption must be surrendered to the Paying
Agent to collect the Redemption Price;
(H) if fewer than all the Outstanding shares of
the Series A-2 Preferred Stock are to be redeemed by the
Corporation, the number of shares to be redeemed;
(I) that, unless the Corporation defaults in
making payment of such Redemption Price, dividends in respect
of the shares of Series A-2 Preferred Stock called for
redemption will cease to accumulate on and after the
Redemption Date;
(J) the CUSIP number of the Series A-2 Preferred
Stock; and
(K) any other information the Corporation wishes
to present; and
(iii) (A) issue a press release announcing such redemption,
(B) publish the information set forth in Section 5(b)(ii) of this
Subdivision once in a daily newspaper printed in the English language
and of general circulation in the Borough of Manhattan, City of New
York, and (C) publish such information on the Corporation's website; it
being understood that the form and content of such press release and
such publications shall be determined by the Corporation in its sole
discretion. None of the failure to issue any such press release nor
make such publications nor any defect therein shall affect the validity
of the redemption notice or any of the proceedings for the redemption
of any shares of Series A-2 Preferred Stock called for redemption.
(c) The Redemption Price shall be payable, at the Corporation's
election, in cash, Common Shares, or a combination of cash and Common Shares;
provided that the Corporation shall not be permitted to pay the Redemption Price
in Common Shares or a combination of Common Shares and cash unless:
(i) the Corporation shall have given timely notice
pursuant to Section 5(b) of this Subdivision of its intention to
purchase all or a specified percentage of the Series A-2 Preferred
Stock with Common Shares as provided herein;
(ii) the Corporation shall have registered such Common
Shares under the Securities Act and the Exchange Act, if required;
(iii) any necessary qualification or registration under
applicable state securities laws has been obtained; and
(iv) the Common Shares (including the Common Shares
delivered pursuant to this Section 5) have been approved for listing on
a national securities exchange or have been approved for quotation in
an inter-dealer quotation system of any registered United States
national securities association.
If the foregoing conditions are not satisfied with respect to any holder or
holders of Series A-2 Preferred Stock prior to the close of business on the last
day prior to the Redemption Date and
9
the Corporation has elected to purchase the Series A-2 Preferred Stock pursuant
to this Section through the issuance of Common Shares, then, notwithstanding any
election by the Corporation to the contrary, the Corporation shall pay the
entire Redemption Price of the Series A-2 Preferred Stock of such holder or
holders in cash.
(d) Payment of the specified portion of the Redemption Price in
Common Shares pursuant to Section 5(c) of this Subdivision shall be made by the
issuance of a number of Common Shares equal to the quotient obtained by dividing
(i) the portion of the Redemption Price to be paid in Common Shares by (ii)
97.5% of the average of the Closing Sale Prices of the Common Shares for the 10
consecutive Trading Days ending on the fifth Trading Day prior to the Redemption
Date (appropriately adjusted to take into account the occurrence during such
period of any event described in Section 9 of this Subdivision). The Corporation
shall not issue fractional Common Shares in payment of the Redemption Price.
Instead, the Corporation shall pay cash based on the Closing Sale Price of the
Common Shares on the Redemption Date for all fractional shares. If a holder of
Series A-2 Preferred Stock delivers more than one share of Series A-2 Preferred
Stock for redemption, the number of Common Shares shall be based on the
aggregate number of shares of Series A-2 Preferred Stock to be redeemed. Upon
determination of the actual number of Common Shares to be issued upon redemption
of the Series A-2 Preferred Stock, the Corporation shall be required to
disseminate a press release through Dow Jones & Corporation, Inc. or Bloomberg
Business News containing this information and publish the information on the
Corporation's website or through such other public medium as the Corporation may
use at that time.
(e) If the Corporation gives notice of redemption, then the
Corporation shall, on the Redemption Date, before 12:00 p.m., New York City
time, to the extent funds are legally available, with respect to:
(i) shares of the Series A-2 Preferred Stock held by DTC
or its nominees, deposit or cause to be deposited, irrevocably with DTC
cash or Common Shares, as applicable, sufficient to pay the Redemption
Price and shall give DTC irrevocable instructions and authority to pay
the Redemption Price to holders of such shares of the Series A-2
Preferred Stock; and
(ii) shares of the Series A-2 Preferred Stock held in
certificated form, deposit or cause to be deposited, irrevocably with
the Transfer Agent cash or Common Shares, as applicable, sufficient to
pay the Redemption Price and shall give the Transfer Agent irrevocable
instructions and authority to pay the Redemption Price to holders of
such shares of the Series A-2 Preferred Stock upon surrender of the
certificates evidencing the shares of the Series A-2 Preferred Stock.
(f) If on the Redemption Date, DTC and the Transfer Agent hold
money or Common Shares, as applicable, sufficient to pay the Redemption Price
for the shares of Series A-2 Preferred Stock delivered for redemption as set
forth herein, dividends shall cease to accumulate as of the Redemption Date on
those shares of the Series A-2 Preferred Stock called for redemption and all
rights of holders of such shares shall terminate, except for the right to
receive the Redemption Price pursuant to this Section 5.
10
(g) Payment of the Redemption Price for shares of the Series A-2
Preferred Stock is conditioned upon book-entry transfer or physical delivery of
certificates representing the Series A-2 Preferred Stock, together with
necessary endorsements, to the Transfer Agent, or to the Transfer Agent's
account at DTC, at any time after delivery of the notice of redemption. The
Corporation shall be entitled to retain any interest, yield or gain as funds
deposited with the Transfer Agent pursuant to this Section 5 in excess of the
amounts required to pay the Redemption Price. Payment of the Redemption Price
for the Series A-2 Preferred Stock will be made (i) if book-entry transfer of or
physical delivery of the Series A-2 Preferred Stock has been made by or on the
Redemption Date, on the Redemption Date, or (ii) if book-entry transfer of or
physical delivery of the Series A-2 Preferred Stock has not been made by or on
such date, at the time of book-entry transfer of or physical delivery of the
Series A-2 Preferred Stock. If any shares of Series A-2 Preferred Stock selected
for partial redemption are submitted for conversion in part after such
selection, such shares submitted for conversion shall be deemed (so far as may
be possible) to be the portion to be selected for redemption. If any shares of
Series A-2 Preferred Stock called for redemption are converted pursuant to
Section 8 of this Subdivision prior to the Redemption Date, any money or Common
Shares deposited with the Transfer Agent or so segregated and held in trust for
the redemption of such shares of Series A-2 Preferred Stock shall be paid or
delivered to the Corporation upon its written request, or, if then held by the
Corporation, shall be discharged from such trust.
(h) If the Redemption Date falls after a Record Date and before
the related Dividend Payment Date, holders of the shares of Series A-2 Preferred
Stock at the close of business on that Record Date shall be entitled to receive
the full dividend payable on those shares on the corresponding Dividend Payment
Date. The Redemption Price payable on such Redemption Date will include only the
Liquidation Preference but will not include any amount in respect of dividends
declared and payable on such corresponding Dividend Payment Date.
(i) If fewer than all the Outstanding shares of Series A-2
Preferred Stock are to be redeemed, the Corporation shall select, pro rata or by
lot, the shares to be redeemed in such manner as shall be prescribed by the
Board of Directors.
(j) Upon surrender of a certificate or certificates representing
shares of the Series A-2 Preferred Stock that is or are redeemed in part, the
Corporation shall execute and the Transfer Agent shall authenticate and deliver
to the holder, a new certificate or certificates representing shares of the
Series A-2 Preferred Stock in an amount equal to the unredeemed portion of the
shares of Series A-2 Preferred Stock surrendered for partial redemption.
(k) Notwithstanding the foregoing provisions of this Section 5 and
subject to the provisions of Section 5(c)(iii) of Division A, unless full
cumulative dividends (whether or not declared) on all Outstanding shares of
Series A-2 Preferred Stock have been paid or contemporaneously are declared and
paid or set apart for payment for all Dividend Periods terminating on or before
the Redemption Date, none of the shares of Series A-2 Preferred Stock shall be
redeemed, and no sum shall be set aside for such redemption, unless pursuant to
a purchase or exchange offer made on the same terms to all holders of Series A-2
Preferred Stock and any shares of stock of all classes ranking on parity with
the Series A-2 Preferred Stock.
11
Section 6. No Sinking Fund. The Series A-2 Preferred Stock shall not be
entitled to the benefits of any retirement or sinking fund.
Section 7. Liquidation. Subject to the applicable express provisions of
Division A, the holders of the Series A-2 Preferred Stock shall, in case of
voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the Corporation, be entitled to receive in full out of the assets of the
Corporation, including its capital, before any amount shall be paid or
distributed among the holders of Common Shares or any other shares ranking
junior to the Class A Preferred Stock, the amount of $1,000.00 per share (the
"Liquidation Preference"), plus an amount equal to (i) all then accrued and
unpaid dividends thereon for all Dividend Payment Dates on or prior to the date
of payment of the amount due pursuant to such liquidation, dissolution or
winding up, and (ii) if such date of payment is not a Dividend Payment Date, a
proportionate dividend, based on the number of elapsed days, for the period from
the most recent Dividend Payment Date to but excluding the date of payment of
the amount due pursuant to such liquidation, dissolution or winding up.
Section 8. Conversion Rights. (a) Right to Convert. Subject to the
applicable express provisions of Division A, each share of Series A-2 Preferred
Stock shall be convertible in accordance with, and subject to, this Section 8,
into a number of fully paid and non-assessable Common Shares (as such shares
shall then be constituted) equal to the Conversion Rate in effect at such time.
The Series A-2 Preferred Stock shall be convertible only upon any of the events,
and for the period, specified in the following clauses (i) through (iv) below.
Notwithstanding the foregoing, if any shares of Series A-2 Preferred Stock are
to be redeemed pursuant to Section 5 of this Subdivision, such conversion right
shall cease and terminate, as to the shares of the Series A-2 Preferred Stock to
be redeemed, at 5:00 p.m., New York City time on the Business Day immediately
preceding the Redemption Date, unless the Corporation shall default in the
payment of the Redemption Price therefor, as provided herein. Whenever the
Series A-2 Preferred Stock shall become convertible pursuant to this Section 8,
the Corporation, or, at the Corporation's request, the Transfer Agent in the
name and at the expense of the Corporation, shall notify the holders of the
event triggering such convertibility, and the Corporation shall also issue a
press release and publish such information on its website on the World Wide Web.
Any notice so given shall be conclusively presumed to have been given, whether
or not the holder receives such notice. Shares of Series A-2 Preferred Stock in
respect of which a holder is electing to exercise its option to require the
Corporation to repurchase such holder's Series A-2 Preferred Stock upon a
Designated Event pursuant to Section 13 of this Subdivision may be converted
only if such holder withdraws its election in accordance with Section 13 of this
Subdivision. A holder of Series A-2 Preferred Stock is not entitled to any
rights of a holder of Common Shares until such holder has converted its Series
A-2 Preferred Stock into Common Shares, and only to the extent such Series A-2
Preferred Stock is deemed to have been converted into Common Shares under this
Section 8. Holders of the Series A-2 Preferred Stock shall not have any right to
receive dividends declared by the Corporation on the Common Shares, unless the
record date for the payment of such dividends falls on or after the Conversion
Date for such holder's shares of Series A-2 Preferred Stock. Notwithstanding any
provision herein to the contrary, no holder of Series A-2 Preferred Stock may
convert a number of shares of such Series A-2 Preferred Stock if, as a result of
such conversion, the Common Shares held by such holder immediately after
conversion, together with all other Common Shares owned by such holder, would
entitle such holder to exercise or direct the exercise of 20% or more of the
voting power in the election of the
12
Corporation's directors unless such holder complies with section 1701.831 of the
Ohio Revised Code or any applicable successor provision.
(i) Conversion Rights Based on Common Share Price. During
any fiscal quarter after the fiscal quarter ending March 31, 2004 (and
only during such fiscal quarter), the Series A-2 Preferred Stock may be
surrendered for conversion into Common Shares, if, as of the last day
of the immediately preceding fiscal quarter of the Corporation, the
Closing Sale Price of the Common Shares for at least 20 Trading Days in
a period of 30 consecutive Trading Days ending on the last Trading Day
of such fiscal quarter is more than 110% of the Conversion Price as of
the last day of such preceding fiscal quarter. If this condition is not
satisfied at the end of any fiscal quarter of the Corporation, then
conversion pursuant to this Section 8(a)(i) will not be permitted in
the following fiscal quarter. The Corporation shall determine for each
Trading Day during the 30 consecutive Trading Day period specified in
this Section 8(a)(i) whether the Closing Sale Price exceeds 110% of the
Conversion Price and whether the Series A-2 Preferred Stock shall be
convertible as a result of the occurrence of the event set forth in
this Section 8(a)(i).
(ii) Conversion Rights Upon Notice of Redemption. If any
Series A-2 Preferred Stock has been called for redemption pursuant to
Section 5 of this Subdivision, such Series A-2 Preferred Stock may be
converted at any time on or after the date the notice of redemption has
been given under Section 5(b) of this Subdivision and prior to 5:00
p.m., New York City time, on the Business Day immediately preceding the
Redemption Date, unless the Corporation defaults in the payment of the
Redemption Price with respect to such shares.
(iii) Conversion Rights Upon Occurrence of Certain
Corporate Transactions.
(A) If the Corporation is a party to a
consolidation, merger, binding share exchange or sale of all
or substantially all of its assets, in each case, pursuant to
which Common Shares would be converted into cash, securities
or other property, each share of Series A-2 Preferred Stock
may be surrendered for conversion at any time from and after
the date that is 15 days prior to the anticipated effective
date of the transaction until 15 days after the actual date of
such transaction (or, if such consolidation, merger, binding
share exchange or sale also constitutes a Designated Event,
until the Designated Event Purchase Date), and, at the
effective time, the right to convert a Series A-2 Preferred
Stock into Common Shares shall be changed into a right to
convert such Series A-2 Preferred Stock into the kind and
amount of cash, securities or other property of the
Corporation or another Person that the holder would have
received if the holder had converted such Series A-2 Preferred
Stock immediately prior to the transaction.
(B) If the Corporation distributes to all
holders of Common Shares (1) rights or warrants entitling them
to purchase, for a period expiring within 45 days of the
record date for such distribution, Common Shares at less than
the average Closing Sale Price for the 10 consecutive Trading
Days immediately preceding
13
the declaration date for such distribution, or (2) cash,
assets, debt securities or rights to purchase the
Corporation's securities, which distribution has a Fair Market
Value per Common Share exceeding 5% of the Closing Sale Price
of the Common Shares on the Trading Day immediately preceding
the declaration date for such distribution, then, in either
case, the Series A-2 Preferred Stock may be surrendered for
conversion on the date that the Corporation gives notice to
the holders of such right, which shall not be less than 20
days prior to the Ex-Dividend Date for such distribution, and
the Series A-2 Preferred Stock may be surrendered for
conversion at any time thereafter until the earlier of close
of business on the Business Day immediately preceding the
Ex-Dividend Date and the date the Corporation announces that
such dividend or distribution will not take place.
Notwithstanding the foregoing, holders shall not have the
right to surrender shares of Series A-2 Preferred Stock for
conversion pursuant to this Section 8(a)(iii)(B), and no
adjustment to the Conversion Rate will be made, if all holders
of the Series A-2 Preferred Stock will otherwise participate,
on the same basis as a holder of Common Shares, in the
distribution described above without first converting Series
A-2 Preferred Stock into Common Shares.
(iv) Conversion Upon Satisfaction of Trading Price
Condition. The Series A-2 Preferred Stock may be surrendered for
conversion any time during the five Business Day period after any five
consecutive Trading Day period in which the Trading Price for each day
of such five Trading Day period was less than 98% of the product of the
Closing Sale Price and the Conversion Rate in effect on each such
Trading Day. The Corporation shall determine whether the Series A-2
Preferred Stock may be converted pursuant to this Section 8(a)(iv)
based on Trading Prices obtained from three independent nationally
known securities dealers. The Corporation shall have no obligation to
determine the Trading Price unless a holder of Series A-2 Preferred
Stock provides it with reasonable evidence that the Trading Price was
less than 98% of the product of the Closing Sale Price and the
then-current Conversion Rate. If such evidence is provided, the
Corporation shall determine the Trading Price of the Series A-2
Preferred Stock beginning on the next Trading Day and on each
successive Trading Day until the Trading Price is greater than or equal
to 98% of the product of the Closing Sale Price and the then current
Conversion Rate.
(b) Conversion Procedures. (i) Conversion of shares of the Series
A-2 Preferred Stock may be effected by any holder thereof upon the surrender to
the Corporation, at the principal office of the Corporation or at the office of
the Transfer Agent as may be designated by the Board of Directors, of the
certificate or certificates for such shares of the Series A-2 Preferred Stock to
be converted accompanied by a complete and manually signed Notice of Conversion
(as set forth in the form of Series A-2 Preferred Stock certificate attached
hereto) along with (A) appropriate endorsements and transfer documents as
required by the Registrar or Conversion Agent and (B) if required pursuant to
Section 8(c) of this Subdivision funds equal to the dividend payable on the next
Dividend Payment Date. In case such Notice of Conversion shall specify a name or
names other than that of such holder, such notice shall be accompanied by
payment of all transfer taxes payable upon the issuance of Common Shares in such
name or names. Other than such taxes, the Corporation shall pay any documentary,
stamp or similar issue or transfer taxes that may be payable in respect of any
issuance or delivery of Common Shares
14
upon conversion of shares of the Series A-2 Preferred Stock pursuant hereto. The
conversion of the Series A-2 Preferred Stock will be deemed to have been made on
the date (the "Conversion Date") such certificate or certificates have been
surrendered and the receipt of such Notice of Conversion and payment of all
required transfer taxes, if any (or the demonstration to the satisfaction of the
Corporation that such taxes have been paid). Promptly (but no later than two
Business Days) following the Conversion Date, the Corporation shall deliver or
cause to be delivered (i) certificates representing the number of validly
issued, fully paid and nonassessable full Common Shares to which the holder of
shares of the Series A-2 Preferred Stock being converted (or such holder's
transferee) shall be entitled, and (ii) if less than the full number of shares
of the Series A-2 Preferred Stock evidenced by the surrendered certificate or
certificates is being converted, a new certificate or certificates, of like
tenor, for the number of shares evidenced by such surrendered certificate or
certificates less the number of shares being converted. On the Conversion Date,
the rights of the holder of the Series A-2 Preferred Stock as to the shares
being converted shall cease except for the right to receive Common Shares, and
the Person entitled to receive the Common Shares shall be treated for all
purposes as having become the record holder of such Common Shares at such time.
(ii) Anything herein to the contrary notwithstanding, in
the case of Global Preferred Shares, Notices of Conversion may be
delivered and shares of the Series A-2 Preferred Stock representing
beneficial interests in respect of such Global Preferred Shares may be
surrendered for conversion in accordance with the applicable procedures
of the Depositary as in effect from time to time.
(c) Dividend and Other Payments Upon Conversion. (i) If a holder
of shares of Series A-2 Preferred Stock exercises conversion rights, upon
delivery of the shares for conversion, such shares will cease to accumulate
dividends as of the end of the day immediately preceding the Conversion Date. On
conversion of the Series A-2 Preferred Stock, except for conversion during the
period from the close of business on any Record Date corresponding to a Dividend
Payment Date to the close of business on such Dividend Payment Date, in which
case the holder on such Dividend Record Date shall receive the dividends payable
on such Dividend Payment Date, accumulated and unpaid dividends on the converted
share of Series A-2 Preferred Stock shall be cancelled. Shares of the Series A-2
Preferred Stock surrendered for conversion after the close of business on any
Record Date for the payment of dividends declared and before the opening of
business on the Dividend Payment Date corresponding to that Record Date must be
accompanied by a payment to the Corporation in cash of an amount equal to the
dividend payable in respect of those shares on such Dividend Payment Date. A
holder of shares of the Series A-2 Preferred Stock on a Record Date who converts
such shares into Common Shares on the corresponding Dividend Payment Date shall
be entitled to receive the dividend payable on such shares of the Series A-2
Preferred Stock on such Dividend Payment Date, and such holder need not include
payment to the Corporation of the amount of such dividend upon surrender of
shares of the Series A-2 Preferred Stock for conversion.
(ii) Notwithstanding the foregoing, if shares of the
Series A-2 Preferred Stock are converted during the period between the
close of business on any Record Date and the opening of business on the
corresponding Dividend Payment Date and the Corporation has called such
shares of the Series A-2 Preferred Stock for redemption during such
period, or the Corporation has designated a Designated Event Purchase
Date
15
during such period, then, in each case, the holder who tenders such
shares for conversion shall receive the dividend payable on such
Dividend Payment Date and need not include payment of the amount of
such dividend upon surrender of shares of the Series A-2 Preferred
Stock for conversion.
(d) Fractional Shares. In connection with the conversion of any
shares of the Series A-2 Preferred Stock, no fractional Common Shares shall be
issued, but the Corporation shall pay a cash adjustment in respect of any
fractional interest in an amount equal to the fractional interest multiplied by
the Closing Sale Price of the Common Shares on the Conversion Date, rounded to
the nearest whole cent.
(e) Total Shares. If more than one share of the Series A-2
Preferred Stock shall be surrendered for conversion by the same holder at the
same time, the number of Common Shares issuable on conversion of those shares
shall be computed on the basis of the total number of shares of the Series A-2
Preferred Stock so surrendered.
(f) Reservation of Shares; Shares to be Fully Paid; Compliance
with Governmental Requirements; Listing of Common Shares. The Corporation shall:
(i) at all times reserve and keep available, free from
preemptive rights, for issuance upon the conversion of shares of the
Series A-2 Preferred Stock such number of its authorized but unissued
Common Shares or treasury shares as shall from time to time be
sufficient to permit the conversion of all Outstanding shares of the
Series A-2 Preferred Stock;
(ii) prior to the delivery of any securities that the
Corporation shall be obligated to deliver upon conversion of the Series
A-2 Preferred Stock, comply with all applicable federal and state laws
and regulations that require action to be taken by the Corporation
(including, without limitation, the registration or approval, if
required, of any Common Shares to be provided for the purpose of
conversion of the Series A-2 Preferred Stock hereunder); and
(iii) ensure that all Common Shares delivered upon
conversion of the Series A-2 Preferred Stock, upon delivery, be duly
and validly issued and fully paid and nonassessable, free of all liens
and charges and not subject to any preemptive rights.
Section 9. Adjustments To The Conversion Rate. The Conversion Rate
shall be adjusted from time to time by the Corporation as follows:
(a) In case the Corporation shall hereafter pay a dividend or make
a distribution to all holders of the outstanding Common Shares in Common Shares,
the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect at the opening of
business on the date following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution by a
fraction,
(i) the numerator of which shall be the sum of the number
of Common Shares outstanding at the close of business on the date fixed
for the determination of
16
shareholders entitled to receive such dividend or other distribution
plus the total number of Common Shares constituting such dividend or
other distribution; and
(ii) the denominator of which shall be the number of
Common Shares outstanding at the close of business on the date fixed
for such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 9(a) of this Subdivision is
declared but not so paid or made, the Conversion Rate shall again be adjusted to
the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
(b) In case the Corporation shall issue rights or warrants to all
holders of its outstanding Common Shares entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
shareholders entitled to receive such rights or warrants) to subscribe for or
purchase Common Shares at a price per share less than the average of the Closing
Sale Prices of the Common Shares for the ten (10) consecutive Trading Days
immediately preceding the declaration date for such distribution, the Conversion
Rate shall be increased so that the same shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the date fixed
for determination of shareholders entitled to receive such rights or warrants by
a fraction,
(i) the numerator of which shall be the number of Common
Shares outstanding at the close of business on the date fixed for
determination of shareholders entitled to receive such rights or
warrants plus the total number of additional Common Shares offered for
subscription or purchase, and
(ii) the denominator of which shall be the sum of the
number of Common Shares outstanding at the close of business on the
date fixed for determination of shareholders entitled to receive such
rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase
at a price equal to the average of the Closing Sale Prices of the
Common Shares for the ten (10) consecutive Trading Days immediately
preceding the declaration date for such distribution.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of shareholders
entitled to receive such rights or warrants. To the extent that Common Shares
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the Common Shares actually delivered.
If such rights or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate that would then be in effect if such date
fixed for the determination of stockholders entitled to receive such rights or
warrants had not been fixed. In determining whether any rights or warrants
entitle the holders to subscribe for or purchase Common Shares at a price less
than the average of the Closing Sale Prices of the Common Shares for the ten
(10) consecutive Trading Days
17
immediately preceding the declaration date for such distribution, and in
determining the aggregate offering price of such Common Shares, there shall be
taken into account any consideration received by the Corporation for such rights
or warrants and any amount payable on exercise or conversion thereof, the value
of such consideration, if other than cash, to be determined by the Board of
Directors.
(c) In case outstanding Common Shares shall be subdivided into a
greater number of Common Shares, 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 Common Shares shall be combined into a smaller number of Common
Shares, 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.
(d) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Shares of any class of capital stock of
the Corporation or evidences of its indebtedness or assets (including
securities, but excluding any rights or warrants referred to in Section 9(b) of
this Subdivision, and excluding any dividend or distribution (x) paid
exclusively in cash or (y) referred to in Section 9(a) of this Subdivision) (any
of the foregoing hereinafter in this Section 9(d), called the "DISTRIBUTED
PROPERTY"), then, in each such case (unless the Corporation elects to reserve
such Distributed Property for distribution to the holders of Series A-2
Preferred Stock upon the conversion of the Series A-2 Preferred Stock so that
any such holder converting Series A-2 Preferred Stock will receive upon such
conversion, in addition to the Common Shares to which such holder is entitled,
the amount and kind of such Distributed Property that such holder would have
received if such holder had converted its Series A-2 Preferred Stock into Common
Shares immediately prior to the Record Date for such distribution of the
Distributed Property) the Conversion Rate shall be increased so that the same
shall be equal to the rate determined by multiplying the Conversion Rate in
effect immediately prior to the close of business on the Record Date with
respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market
Price on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Distributed Property so distributed applicable to
one Common Share,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if the then Fair Market
Value (as so determined) of the portion of the Distributed Property so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of Series A-2 Preferred
Stock shall have the right to receive on the date of such dividend or
distribution the amount of Distributed Property
18
such holder would have received had such holder converted each share of Series
A-2 Preferred Stock on the Record Date. If such dividend or distribution is not
so paid or made, the Conversion Rate shall again be adjusted to be the
Conversion Rate that would then be in effect if such dividend or distribution
had not been declared. If the Board of Directors determines the Fair Market
Value of any distribution for purposes of this Section 9(d) by reference to the
actual or when issued trading market for any securities, it must in doing so
consider the prices in such market over the same period used in computing the
Current Market Price on the applicable Record Date.
Notwithstanding the foregoing, if the Distributed Property distributed
by the Corporation to all holders of its Common Shares consists of capital stock
of, or similar equity interests in, a Subsidiary or other business unit (unless
such capital stock or similar equity interests are distributed to the holders of
Series A-2 Preferred Stock in such distribution as if such holders had converted
their shares of Series A-2 Preferred Stock into Common Shares), the Conversion
Rate shall be increased so that the same shall be equal to the rate determined
by multiplying the Conversion Rate in effect immediately prior to the close of
business on the Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the
average of the Closing Sale Prices of the Common Shares for the ten
(10) consecutive Trading Days commencing on and including the fifth
Trading Day after the first date on which the Common Shares trade,
regular way, without the right to receive such distribution, on the New
York Stock Exchange, Nasdaq or such other national or regional exchange
or market on which such securities are then listed or quoted (the
"EX-DIVIDEND DATE") plus (B) the average of the Closing Sale Prices of
the securities distributed in respect of each Common Share for the ten
(10) consecutive Trading Days commencing on and including the fifth
Trading Day after the Ex-Dividend Date; and
(ii) the denominator of which shall be the average of the
Closing Sale Prices of the Common Shares for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date,
such adjustment to become effective ten (10) Trading Days after the effective
date of such distribution of capital stock of, or similar equity interests in, a
Subsidiary or other business unit; provided that the Corporation may in lieu of
the foregoing adjustment make adequate provision so that each holder of Series
A-2 Preferred Stock shall have the right to receive upon conversion the amount
of Distributed Property such holder would have received had such holder
converted each share of Series A-2 Preferred Stock on the Record Date with
respect to such distribution; and provided further that if (x) the average of
the Closing Sale Prices of the Common Shares for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date minus (y) the average of the Closing Sale Prices of the
securities distributed in respect of each Common Share for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date is less than $1.00, then the adjustment provided by for by
this paragraph shall not be made and in lieu thereof the provisions of the first
paragraph of this Section 9(d) shall apply to such distribution. In any case in
which this paragraph is applicable, Section 9(a), Section 9(b) of this
Subdivision and the first paragraph of this Section 9(d) shall not be
applicable.
19
Rights or warrants distributed by the Corporation to all holders of
Common Shares entitling the holders thereof to subscribe for or purchase shares
of the Corporation's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified
event or events ("TRIGGER EVENT"): (i) are deemed to be transferred with such
Common Shares; (ii) are not exercisable; and (iii) are also issued in respect of
future issuances of Common Shares, shall be deemed not to have been distributed
for purposes of this Section 9(d) (and no adjustment to the Conversion Rate
under this Section 9(d) will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 9(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to January 20,
2004, are subject to events, upon the occurrence of which such rights or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event of the
type described in the preceding sentence with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 9(d) was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Shares with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Shares as
of the date of such redemption or repurchase, and (2) in the case of such rights
or warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 9(d) in respect of rights or warrants distributed or deemed distributed
on any Trigger Event to the extent that such rights or warrants are actually
distributed, or reserved by the Corporation for distribution to holders of
Series A-2 Preferred Stock upon conversion by such holders of Series A-2
Preferred Stock to Common Shares.
For purposes of this Section 9(d) and Section 9(a) and Section 9(b) of
this Subdivision, any dividend or distribution to which this Section 9(d) is
applicable that also includes Common Shares, or rights or warrants to subscribe
for or purchase Common Shares (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such Common Shares or rights or warrants (and any
Conversion Rate adjustment required by this Section 9(d) with respect to such
dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such Common Shares or such rights or warrants (and
any further Conversion Rate adjustment required by Section 9(a) and Section 9(b)
of this Subdivision with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of shareholders entitled to
receive such
20
dividend or other distribution", "the date fixed for the determination of
shareholders entitled to receive such rights or warrants" and "the date fixed
for such determination" within the meaning of Section 9(a) and Section 9(b) of
this Subdivision and (B) any Common Shares included in such dividend or
distribution shall not be deemed "outstanding at the close of business on the
date fixed for the determination of shareholders entitled to receive such
dividend or other distribution" or "outstanding at the close of business on the
date fixed for such determination" within the meaning of Section 9(a) of this
Subdivision.
(e) Subject to the provisions of Section 6(c) of Division A, the
reclassification of Common Shares into securities including securities other
than Common Shares (other than any reclassification upon an event to which
Section 11 of this Subdivision applies) shall be deemed to involve (a) a
distribution of such securities other than Common Shares to all holders of
Common Shares (and the effective date of such reclassification shall be deemed
to be "Record Date" within the meaning of Section 9(d) of this Subdivision), and
(b) a subdivision or combination, as the case may be, of the number of Common
Shares outstanding immediately prior to such reclassification into the number of
Common Shares 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 Section 9(c) of this Subdivision).
(f) In case the Corporation shall, by dividend or otherwise,
distribute to all holders of its Common Shares cash (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary), then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on such record date by a fraction,
(i) the numerator of which shall be the Current Market
Price on such record date; and
(ii) the denominator of which shall be the Current Market
Price on such record date less the amount of cash so distributed
applicable to one Common Share,
such adjustment to be effective immediately prior to the opening of business on
the day following the record date; provided that if the portion of the cash so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the record date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each holder of Series A-2 Preferred
Stock shall have the right to receive on the date of such dividend or
distribution the amount of cash such holder would have received had such holder
converted each share of Series A-2 Preferred Stock on the record date. If such
dividend or distribution is not so paid or made, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
dividend or distribution had not been declared.
(g) In case a tender or exchange offer made by the Corporation or
any Subsidiary for all or any portion of the Common Shares shall expire and such
tender or exchange offer (as amended up to the expiration thereof) shall require
the payment to shareholders of consideration
21
per Common Share having a Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a resolution
of the Board of Directors) that as of the last time (the "EXPIRATION TIME")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it may be amended) exceeds the Closing Sale Price of a Common Share on the
Trading Day next succeeding the Expiration Time, the Conversion Rate shall be
increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a
fraction,
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "PURCHASED SHARES") and (y) the product of the
number of Common Shares outstanding (less any Purchased Shares) at the
Expiration Time and the Closing Sale Price of a Common Share on the
Trading Day next succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of
Common Shares outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Sale Price of a Common
Share on the Trading Day next succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Corporation is obligated to
purchase shares pursuant to any such tender or exchange offer, but the
Corporation is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made.
(h) In case of a tender or exchange offer made by a
Person other than the Corporation or any Subsidiary for an amount that
increases the offeror's ownership of Common Shares to more than
twenty-five percent (25%) of the Common Shares outstanding and shall
involve the payment by such Person of consideration per Common Share
having a Fair Market Value (as determined by the Board of Directors,
whose determination shall be conclusive, and described in a resolution
of the Board of Directors) that as of the Expiration Time exceeds the
Closing Sale Price of the Common Shares on the Trading Day next
succeeding the Expiration Time, and in which, as of the Expiration
Time, the Board of Directors is not recommending rejection of the
offer, the Conversion Rate shall be adjusted so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to shareholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
the Purchased Shares and (y) the product of the number of Common Shares
22
outstanding (less any Purchased Shares) at the Expiration Time and the
Closing Sale Price of a Common Share on the Trading Day next succeeding
the Expiration Time, and
(ii) the denominator of which shall be the number of
Common Shares outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Sale Price of a Common
Share on the Trading Day next succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 9(h) shall not be made if, as of the
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Corporation to engage in a consolidation or
merger or a sale of substantially all of its assets.
(i) For purposes of this Section 9, the following terms shall have
the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Closing Sale Prices per Common Share for the ten (10) consecutive
Trading Days ending on the earlier of the day in question and the day
before the "ex date" with respect to the issuance, distribution,
subdivision or combination requiring such computation. For purposes of
this paragraph, the term "EX DATE" (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Shares trade, regular way, on the relevant exchange or in the relevant
market from which the Closing Sale Price was obtained without the right
to receive such issuance or distribution, and (2) when used with
respect to any subdivision or combination of Common Shares, means the
first date on which the Common Shares trade, regular way, on such
exchange or in such market after the time at which such subdivision or
combination becomes effective.
If another issuance, distribution, subdivision or combination to which
Section 9 of this Subdivision applies occurs during the period
applicable for calculating "CURRENT MARKET PRICE" pursuant to the
definition in the preceding paragraph, "CURRENT MARKET PRICE" shall be
calculated for such period in a manner determined by the Board of
Directors to reflect the impact of such issuance, distribution,
subdivision or combination on the Closing Sale Price of the Common
Shares during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iii) "RECORD DATE" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Shares have the right to receive any cash, securities
or other property or in which the Common Shares (or other applicable
security) are exchanged for or converted into any combination of cash,
23
securities or other property, the date fixed for determination of
shareholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(iv) "TRADING DAY" shall mean a day during which trading
in securities generally occurs on the New York Stock Exchange or, if
the applicable security is not listed on the New York Stock Exchange,
on the principal other national or regional securities exchange on
which the applicable security is then listed or, if the applicable
security is not listed on a national or regional securities exchange,
on Nasdaq or, if the applicable security is not quoted on Nasdaq, on
the principal other market on which the applicable security is then
traded.
(j) The Corporation may make such increases in the Conversion
Rate, in addition to those required by Section 9(a), (b), (c), (d), (e), (f),
(g) or (h) of this Subdivision as the Board of Directors considers to be
advisable to avoid or diminish any income tax to holders of Common Shares or
rights to purchase Common Shares resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as such for income
tax purposes.
To the extent permitted by applicable law, the Corporation from time to
time may increase the Conversion Rate by any amount if the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Corporation, which determination shall be conclusive. Whenever
the Conversion Rate is increased pursuant to the preceding sentence, the
Corporation shall mail to holders of record of the Series A-2 Preferred Stock
and file with the Conversion Agent a notice of the increase, and such notice
shall state the increased Conversion Rate and the period during which it will be
in effect.
(k) All calculations under Section 8 and Section 9 of this
Subdivision shall be made by the Corporation and shall be made to the nearest
cent or to the nearest one-ten thousandth (1/10,000) of a share (or if there is
not a nearest one-ten thousandth of a share, to the next lower one-ten
thousandth of a share), as the case may be. No adjustment to the Conversion Rate
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) therein; provided, however, that any adjustments
that by reason of this subparagraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be reduced
below the then par value, if any, of the Common Shares issuable upon conversion
of the Debentures, the Corporation will take all corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue shares of such Common Shares at such adjusted
Conversion Rate.
(l) No adjustment need be made:
(i) upon the issuance of Common Shares pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on securities of the
24
Corporation and the investment of additional optional amounts in Common
Shares under any plan;
(ii) upon the issuance of Common Shares or options or
rights to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed
by the Corporation or any Subsidiary;
(iii) upon the issuance of Common Shares pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible
security not described in (ii) above and outstanding as of the date the
Series A-2 Preferred Stock was first issued;
(iv) for a change in the par value of the Common Shares;
(v) for any repurchases by the Corporation of Common
Shares not expressly described in this Section 9; or
(vi) for accrued and unpaid dividends.
To the extent the Series A-2 Preferred Stock becomes convertible into
cash, assets, property or securities (other than capital stock of the
Corporation or any other Person), no adjustment need be made thereafter as to
the cash, assets, property or securities. Interest will not accrue on any cash
into which the Series A-2 Preferred Stock is convertible.
(m) Whenever the Conversion Rate is adjusted as herein provided,
the Corporation shall promptly file with the Conversion Agent an Officers'
Certificate setting forth the Conversion Rate after such adjustment and setting
forth a brief statement of the facts requiring such adjustment. Unless and until
an officer of the Conversion Agent shall have received such Officers'
Certificate, the Conversion Agent shall not be deemed to have knowledge of any
adjustment of the Conversion Rate and may assume that the last Conversion Rate
of which it has knowledge is still in effect. Promptly after delivery of such
certificate, the Corporation shall prepare a notice of such adjustment of the
Conversion Rate setting forth the adjusted Conversion Rate and the date on which
each adjustment becomes effective and shall promptly mail such notice of such
adjustment of the Conversion Rate to the holders of record of the Series A-2
Preferred Stock at their address in the register. Failure to deliver such notice
shall not affect the legality or validity of any such adjustment.
(n) In any case in which this Section 9 provides that an
adjustment shall become effective immediately after (1) a record date or Record
Date for an event, (2) the date fixed for the determination of shareholders
entitled to receive a dividend or distribution pursuant to Section 9(a) of this
Subdivision, (3) a date fixed for the determination of shareholders entitled to
receive rights or warrants pursuant to Section 9(b) of this Subdivision, or (4)
the Expiration Time for any tender or exchange offer pursuant to Section 9(g) of
this Subdivision, (each a "DETERMINATION DATE"), the Corporation may elect to
defer until the occurrence of the applicable Adjustment Event (as hereinafter
defined) (x) issuing to the holder of any shares of Series A-2 Preferred Stock
converted after such Determination Date and before the occurrence of such
Adjustment Event the additional Common Shares or other securities issuable upon
such conversion by reason of the adjustment required by such Adjustment Event
over and above the Common Shares issuable upon such conversion before giving
effect to such adjustment and (y)
25
paying to such holder any amount in cash in lieu of any fraction pursuant to
Section 8(d) of this Subdivision. For purposes of this Section 9(n), the term
"ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the
date a sale or exchange of Common Shares pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(o) For purposes of this Section 9, the number of Common Shares at
any time outstanding shall not include shares held in the treasury of the
Corporation but shall include shares issuable in respect of scrip certificates
issued in lieu of fractions of Common Shares. The Corporation will not pay any
dividend or make any distribution on Common Shares held in the treasury of the
Corporation.
Section 10. Exchange Provisions. (a) Subject to the limitations set
forth below and subject to the applicable express provisions of Division A,
including without limitation, Section 5(c)(iii) of Division A, the Corporation
will have the right (the "EXCHANGE RIGHT"), if the Corporation has legally
available funds, to require all holders of Outstanding Series A-2 Preferred
Stock to exchange their Series A-2 Preferred Stock for the Corporation's
convertible subordinated debentures (the "CONVERTIBLE SUBORDINATED DEBENTURES")
having a principal amount per Convertible Subordinated Debenture equal to the
Liquidation Preference of the Series A-2 Preferred Stock, and having a
conversion price, conversion rate and interest rate equal to the Conversion
Price, Conversion Rate and Dividend Rate for the Series A-2 Preferred Stock so
exchanged (the "EXCHANGE") and a maturity date of the thirtieth anniversary of
the Exchange Date. The Convertible Subordinated Debentures will be issued under
an indenture substantially in the form of Exhibit A to this Subdivision (the
"INDENTURE"). The Corporation will only be able to exercise the Exchange Right
if:
(i) on the Exchange Date, the holders of Series A-2
Preferred Stock are not entitled to convert their Series A-2 Preferred
Stock into Common Shares pursuant to Section 8 of this Subdivision;
(ii) the Closing Sale Price of the Common Shares on the
Trading Day immediately preceding the Exchange Date does not exceed the
Conversion Price on such Trading Day;
(iii) the Corporation has legally available funds for such
Exchange;
(iv) the Corporation has paid, or provided for the payment
of, all dividends on the Series A-2 Preferred Stock, and all Liquidated
Damages Amounts, if any, for all Dividend Periods ending on or prior to
the Exchange Date; and
26
(v) the Corporation has entered into an Indenture
substantially in the form of Exhibit A to this Subdivision with a
trustee eligible pursuant to the Trust Indenture Act to act as such,
that is a national association or other entity having corporate trust
powers, that is organized and doing business under the laws of the
United States of America or any state thereof or the District of
Columbia and that has a combined capital and surplus of at least
$100,000,000 (or if such person is a member of a bank holding company
system, its bank holding company shall have a combined capital and
surplus of at least $100,000,000) and is otherwise eligible. If such
person publishes reports of condition at least annually, 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;
(vi) the Corporation delivers to the trustee a certificate
of one of its executive officers and an opinion of legal counsel, in
substantially the form attached hereto as Exhibit G.
The Corporation may only exercise the Exchange Right in whole and not
in part.
(b) If the Corporation exercises the Exchange Right, the
Corporation will provide notice to the trustee and each holder of record of the
Series A-2 Preferred Stock not less than 30 nor more than 60 calendar days
preceding the date the Corporation desires the Exchange to be effective (the
"EXCHANGE DATE"). The exchange notice shall state: (i) the Corporation's
election to exercise the Exchange Right, (ii) a description of the type and
amount of Convertible Subordinated Debentures to be delivered in respect of the
Series A-2 Preferred Stock, the place or places where certificates for shares of
Preferred Stock are to be surrendered for exchange, including any procedures
applicable to an Exchange to be accomplished through book-entry transfers, (iii)
the Exchange Date and (iv) that dividends on the shares of Series A-2 Preferred
Stock to be exchanged shall cease to accrue on such Exchange Date whether or not
certificates for shares of Series A-2 Preferred Stock are surrendered for
exchange on such Exchange Date unless the Corporation shall default in the
delivery of the Convertible Subordinated Debentures or the conditions for
Exchange set forth above in Section 10(a) of this Subdivision have not been
satisfied as of the Exchange Date. No failure to give such notice nor any
deficiency therein shall affect the validity of the procedure for the exchange
of any shares of the Series A-2 Preferred Stock to be exchanged except as to the
holder or holders to whom the Corporation has failed to give said notice or
except as to the holder or holders whose notice was defective. The Corporation
will cause the Convertible Subordinated Debentures to be delivered to the
trustee in preparation for the Exchange no later than five Business Days prior
to the Exchange Date.
(c) If the Corporation exercises the Exchange Right, delivery of
the Convertible Subordinated Debentures to the holders of the Series A-2
Preferred Stock to be exchanged will be conditioned upon delivery of the
certificates representing, or other indicia of ownership of, or book-entry
transfer of such Series A-2 Preferred Stock (together with any necessary
endorsements) to the trustee at any time (whether prior to, on or after the
applicable Exchange Date) after notice of the exercise of the Exchange Right is
given to the trustee. In such event, such Convertible Subordinated Debentures
will be delivered to each holder of record of Series A-2 Preferred Stock to be
exchanged no later than the later of (i) the Exchange Date or (ii) the
27
time of delivery or transfer of the certificates representing, or other indicia
of ownership of, or book-entry transfer of such Series A-2 Preferred Stock to
the trustee.
(d) If, following any exercise of the Exchange Right, the trustee
holds Convertible Subordinated Debentures in respect of all the Outstanding
Series A-2 Preferred Stock, then at the close of business on such Exchange Date,
whether or not the certificates representing, or other indicia of ownership of,
or book-entry transfer of such Series A-2 Preferred Stock are delivered to the
trustee, (i) the Corporation will become the owner and record holder of such
Series A-2 Preferred Stock, (ii) the holders of such Series A-2 Preferred Stock
shall have no further rights with respect to the Series A-2 Preferred Stock
other than the right to receive the Convertible Subordinated Debentures upon
delivery of the certificates representing, or other indicia of ownership of, or
book-entry transfer of such Series A-2 Preferred Stock, (iii) dividends on the
Series A-2 Preferred Stock to be exchanged will cease to accrue on the Exchange
Date whether or not certificates for shares of Series A-2 Preferred Stock are
surrendered for exchange on the Exchange Date and (iv) the Depository or its
nominee, as the record holder of the Series A-2 Preferred Stock, will exchange
the global certificate or certificates representing the Series A-2 Preferred
Stock for a global certificate or certificates representing the Convertible
Subordinated Debentures to be delivered upon such Exchange. In the event that
delivery of the Convertible Subordinated Debentures due on the Exchange Date is
improperly withheld or is refused and not paid by the trustee or by the
Corporation, distributions on the Series A-2 Preferred Stock will continue to
accrue from the Exchange Date to the actual date of delivery.
(e) The aggregate principal amount of the Convertible Subordinated
Debentures will be limited to the aggregate Liquidation Preference of the Series
A-2 Preferred Stock Outstanding on the effective date of the Exchange.
Notwithstanding anything herein to the contrary, the Convertible Subordinated
Debentures will be issued in denominations equal to integral multiples of the
Liquidation Preference of one share of Series A-2 Preferred Stock as of the
effective date of the Exchange.
(f) If the conditions to exercising the Exchange Right set forth
in Section 10(a) of this Subdivision have not been satisfied as of the Exchange
Date, the Corporation will be prohibited for making the Exchange and the
Exchange will not be consummated. In such case, the Corporation will (i) issue a
press release indicating that such conditions have not been satisfied and that
the Exchange will not be consummated, and (ii) publish such information on the
Corporation's website on the World Wide Web. Thereafter, the Corporation again
will have the right to exercise the Exchange Right in accordance with the
provisions of this Section 10.
Section 11. Effect of Reclassification, Consolidation, Merger or Sale
on Conversion Privilege. Subject to the applicable express provisions of
Division A, if any of the following events occur, namely (i) any
reclassification or change of the outstanding Common Shares (other than a
subdivision or combination to which Section 9(c) of this Subdivision applies or
a change in par value), (ii) any consolidation, merger or combination of the
Corporation with another Person as a result of which holders of Common Shares
shall be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Shares, or (iii)
any sale or conveyance of all or substantially all of the properties and assets
of the Corporation to any other Person as a result of which holders of Common
Shares shall be entitled to receive stock, other securities or other property or
assets (including cash) with
28
respect to or in exchange for such Common Shares, then each share of Series A-2
Preferred Stock shall be convertible into the kind and amount of shares of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance by a holder of a number of Common Shares issuable upon conversion of
such Series A-2 Preferred Stock (assuming, for such purposes, a sufficient
number of authorized Common Shares are available to convert all such Series A-2
Preferred Stock) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Shares did not exercise his rights of election, if any, as to the kind or
amount of stock, other securities or other property or assets (including cash)
receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance (provided that, if the kind or amount of stock,
other securities or other property or assets (including cash) receivable upon
such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each Common Share in respect of which such rights
of election shall not have been exercised ("NON-ELECTING SHARE"), then for the
purposes of this Section 11 the kind and amount of stock other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance for each
non-electing share shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares. If this Section 11 applies to
any event of occurrence, Section 9 of this Subdivision shall not apply.
Section 12. Rights Issued in Respect of Common Shares Issued Upon
Conversion. Each Common Share issued upon conversion of the Series A-2 Preferred
Stock shall be entitled to receive the appropriate number of common stock or
preferred stock purchase rights, as the case may be, including without
limitation, the rights under the Rights Agreement (collectively, the "RIGHTS"),
if any, that Common Shares are entitled to receive and the certificates
representing the Common Shares issued upon such conversion shall bear such
legends, if any, in each case as may be provided by the terms of any shareholder
rights agreement adopted by the Corporation, as the same may be amended from
time to time (in each case, a "RIGHTS PLAN"). Provided that such Rights Plan
requires that each Common Share issued upon conversion of Series A-2 Preferred
Stock at any time prior to the distribution of separate certificates
representing the Rights be entitled to receive such Rights, then,
notwithstanding anything else to the contrary in this Subdivision, there shall
not be any adjustment to the conversion privilege or Conversion Rate as a result
of the issuance of Rights, but an adjustment to the Conversion Rate shall be
made pursuant to Section 9(d) of this Subdivision upon the separation of the
Rights from the Common Shares.
Section 13. Designated Event. Subject to the applicable express
provisions of Division A:
(a) Repurchase Right. If there shall occur a Designated Event,
subject to Section 5(c)(iii) of Division A, shares of Series A-2 Preferred Stock
shall be purchased by the Corporation at the option of the holders thereof as of
the date (the "DESIGNATED EVENT PURCHASE DATE") specified by the Corporation
that is 30 calendar days after the Corporation has mailed written notice of such
Designated Event to holders of the Series A-2 Preferred Stock as set forth in
Section 13(b) of this Subdivision, subject to satisfaction by or on behalf of
any holder of the requirements set forth in Section 13(c) of this Subdivision.
If such 30th calendar day is not a Business Day, the Designated Event Purchase
Date will be the next succeeding Business Day.
29
The Purchase Price shall be paid, at the option of the Corporation, in cash,
Common Shares, or any combination thereof; provided that the Corporation shall
not be permitted to pay all or any portion of the Purchase Price in Common
Shares unless:
(i) the Corporation shall have given timely notice
pursuant to Section 13(b) of this Subdivision hereof of its intention
to purchase all or a specified percentage of the shares of Series A-2
Preferred Stock with Common Shares as provided herein;
(ii) the Corporation shall have registered such Common
Shares under the Securities Act and the Exchange Act, in each case, if
required;
(iii) any necessary qualification or registration under
applicable state securities laws has been obtained; and
(iv) the Common Shares (including the Common Shares
delivered pursuant to this Section 13) have been approved for listing
on a national securities exchange or have been approved for quotation
in an inter-dealer quotation system of any registered United States
national securities association.
provided further that if the Corporation shall be prohibited under any
agreements applicable to it from paying the Purchase Price in cash, or an event
of default (howsoever described) shall arise under any such agreement upon the
payment of the Purchase Price in cash, then, notwithstanding any notice by the
Corporation to the contrary, the Corporation shall, to the extent not prohibited
by such agreements and applicable law, pay the Purchase Price in Common Shares
or, in the case of a merger in which the Corporation is not the surviving
Person, common stock of the surviving Person or its direct or indirect parent.
If the foregoing conditions to pay the Purchase Price in Common Shares are not
satisfied with respect to any holder or holders of Series A-2 Preferred Stock
prior to the close of business on the last day prior to the Designated Event
Purchase Date, and the Corporation has elected to purchase the Series A-2
Preferred Stock pursuant to this Section through the issuance of Common Shares,
then, notwithstanding any election by the Corporation to the contrary, the
Corporation shall pay the entire Purchase Price of the Series A-2 Preferred
Stock of such holder or holders in cash to the extent not prohibited by such
agreement or applicable law.
(b) Notice to Holders. Within 15 calendar days after the
occurrence of a Designated Event, the Corporation shall mail a written notice of
the Designated Event to each holder of record of the Series A-2 Preferred Stock
at its address shown in the register of the Registrar (and to the beneficial
owners as required by applicable law) as of the date of the Designated Event,
issue a press release containing such notice and publish such notice on its
website on the World Wide Web. The notice shall include the form of a Designated
Event Purchase Notice to be completed by the holder and shall state:
(i) the events causing such Designated Event;
(ii) the date of such Designated Event;
(iii) the date by which the Designated Event Purchase
Notice pursuant to this Section 13(b) must be given;
30
(iv) the Purchase Price that will be payable with respect
to the shares of Series A-2 Preferred Stock as of the Designated Event
Purchase Date, and whether such Purchase Price will be paid in cash,
Common Shares, or, if a combination thereof, the percentages of the
Purchase Price in respect of which the Corporation will pay in cash and
Common Shares;
(v) the Designated Event Purchase Date;
(vi) the name and address of the Paying Agent and
Conversion Agent;
(vii) the Conversion Rate and any adjustments thereto;
(viii) the CUSIP number of the Series A-2 Preferred Stock;
(ix) that Series A-2 Preferred Stock as to which a
Designated Event Purchase Notice has been given may be converted into
Common Shares pursuant to this Subdivision only to the extent that the
Designated Event Purchase Notice has been withdrawn in accordance with
the terms of this Subdivision;
(x) the procedures that the holder of Series A-2
Preferred Stock must follow to exercise rights under this Section 13;
and
(xi) the procedures for withdrawing a Designated Event
Purchase Notice, including a form of notice of withdrawal.
If any of the A-2 Preferred Stock is in the form of Global Preferred Shares,
then the Corporation shall modify such notice to the extent necessary to accord
with the procedures of the Depositary applicable to the purchase of Global
Preferred Shares.
(c) Conditions to Purchase. (i) A holder of shares of Series A-2
Preferred Stock may exercise its rights specified in Section 13(a) of the
Subdivision upon delivery of a written notice (which shall be in substantially
the form included as an attachment to the Series A-2 Preferred Stock (attached
as Exhibit E hereto) and which may be delivered by letter, overnight courier,
hand delivery, facsimile transmission or in any other written form and, in the
case of Global Preferred Shares, may be delivered electronically or by other
means in accordance with the Depositary's customary procedures) of the exercise
of such rights (a "DESIGNATED EVENT PURCHASE NOTICE") to any Transfer Agent at
any time prior to the close of business on the Business Day immediately before
the Designated Event Purchase Date.
(ii) The delivery of such share of Series A-2 Preferred
Stock to the Transfer Agent (together with all necessary endorsements)
at the office of such Transfer Agent shall be a condition to the
receipt by the holder of the Designated Event Purchase Price.
(iii) Any purchase by the Corporation contemplated pursuant
to the provisions of this Section 13 shall be consummated by the
delivery of the consideration to be received by the holder promptly
following the later of the Designated Event Purchase Date and the time
of delivery of such share of Series A-2 Preferred Stock to the Transfer
Agent in accordance with this Section 13(c).
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(d) Withdrawal of Designated Event Purchase Notice.
Notwithstanding anything herein to the contrary, any holder of Series A-2
Preferred Stock delivering to a Transfer Agent the Designated Event Purchase
Notice shall have the right to withdraw such Designated Event Purchase Notice in
whole or as to a portion thereof that is a share of Series A-2 Preferred Stock
or an integral multiple thereof at any time prior to the close of business on
the Business Day before the Designated Event Purchase Date by delivery of a
written notice of withdrawal to the Transfer Agent in accordance with provisions
of this Section 13(d). The Transfer Agent shall promptly notify the Corporation
of the receipt by it of any Designated Event Purchase Notice or written
withdrawal thereof. A Designated Event Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Transfer Agent
in accordance with the Designated Event Purchase Notice at any time prior to the
close of business on the Business Day prior to the applicable Designated Event
Purchase Date specifying:
(i) the number of shares of Series A-2 Preferred Stock,
in integral multiples, with respect to which such notice of withdrawal
is being submitted;
(ii) if certificated shares of Series A-2 Preferred Stock
have been issued, the certificate numbers for such shares in respect of
which such notice of withdrawal is being submitted, or if not, such
information as required by the Depositary; and
(iii) the number of shares of Series A-2 Preferred Stock,
if any, that remain subject to the original Designated Event Purchase
Notice and have been or will be delivered for purchase by the
Corporation.
The Transfer Agent will promptly return to the respective holders thereof any
shares of Series A-2 Preferred Stock with respect to which a Designated Event
Purchase Notice has been withdrawn in compliance with this Subdivision, in which
case, upon such return, the Designated Event Purchase Notice with respect
thereto shall be deemed to have been withdrawn.
(e) Global Preferred Shares. Anything herein to the contrary
notwithstanding, in the case of Global Preferred Shares, any Designated Event
Purchase Notice may be delivered or withdrawn and the shares of Series A-2
Preferred Stock in respect of such Global Preferred Shares may be surrendered or
delivered for purchase in accordance with the applicable procedures of the
Depositary as in effect from time to time.
(f) Effect of Designated Event Purchase Notice. Upon receipt by
the Transfer Agent of the Designated Event Purchase Notice, the holder of the
shares of Series A-2 Preferred Stock in respect of which such Designated Event
Purchase Notice was given shall (unless such Designated Event Purchase Notice is
withdrawn as specified below) thereafter be entitled to receive the Purchase
Price with respect to such shares of Series A-2 Preferred Stock, subject to
Section 13(c) of this Subdivision. Such Purchase Price shall be paid to such
holder promptly following the later of (a) the Designated Event Purchase Date
with respect to such shares of Series A-2 Preferred Stock and (b) the time of
delivery of such shares of Series A-2 Preferred Stock to the Transfer Agent by
the holder thereof in the manner required by this Section. Shares of Series A-2
Preferred Stock in respect of which a Designated Event Purchase Notice has been
given by the holder thereof may not be converted into Common Shares on or after
the date of the delivery of such Designated Event Purchase Notice unless such
Designated Event Purchase
32
Notice has first been validly withdrawn as specified in Section 13(d) of this
Subdivision. If the Designated Event Purchase Date falls after a Record Date and
before the related Dividend Payment Date, holders of the shares of Series A-2
Preferred Stock at the close of business on that Record Date shall be entitled
to receive the full dividend payable on those shares on the corresponding
Dividend Payment Date. The Purchase Price payable on such Designated Event
Purchase Date will include only the Liquidation Preference but will not include
any amount in respect of dividends declared and payable on such corresponding
Dividend Payment Date.
(g) Payment of Purchase Price in Common Shares. Payment of the
specified portion of the Purchase Price in Common Shares pursuant to Section
13(a) of this Subdivision shall be made by the issuance of a number of Common
Shares equal to the quotient obtained by dividing (i) the portion of the
Purchase Price to be paid in Common Shares by (ii) 97.5% of the average of the
Closing Sale Prices of the Common Shares for the ten consecutive Trading Days
ending on the fifth Trading Day prior to the Designated Event Purchase Date
(appropriately adjusted to take into account the occurrence, during such period,
of any event described in Section 9 of this Subdivision). The Corporation will
not issue fractional Common Shares in payment of the Purchase Price. Instead,
the Corporation will pay cash based on the Closing Sale Price for all fractional
shares on the Designated Event Purchase Date. If a holder of Series A-2
Preferred Stock elects to have more than one share of Series A-2 Preferred Stock
purchased, the number of Common Shares shall be based on the aggregate number of
shares of Series A-2 Preferred Stock to be purchased. Upon determination of the
actual number of Common Shares to be issued upon repurchase of Series A-2
Preferred Stock, the Corporation shall be required to disseminate a press
release through Dow Jones & Corporation, Inc. or Bloomberg Business News
containing this information and publish the information on the Corporation's
website or through such other public medium as the Corporation may use at that
time.
(h) Deposit of Purchase Price. Prior to 11:00 a.m. (New York City
time) on the Designated Event Purchase Date, the Corporation shall deposit with
the Paying Agent an amount of cash (in immediately available funds if deposited
on the Designated Event Purchase Date), Common Shares, or combination of cash
and Common Shares, as applicable, sufficient to pay the aggregate Purchase Price
of all shares of Series A-2 Preferred Stock or portions thereof which are to be
purchased pursuant to this Section 13. The manner in which the deposit required
by this Section 13(h) is made by the Corporation shall be at the option of the
Corporation, provided, however, that such deposit shall be made in a manner such
that the Paying Agent shall have immediately available funds on the date of
deposit. If a Paying Agent holds, in accordance with the terms hereof, cash,
Common Shares or cash and Common Shares, as applicable, sufficient to pay the
Purchase Price of any share of Series A-2 Preferred Stock for which a Designated
Event Purchase Notice has been tendered and not withdrawn in accordance with
this Subdivision on the Designated Event Purchase Date then, as of the
Designated Event Purchase Date, such share of Series A-2 Preferred Stock will
cease to be Outstanding, dividends will cease to accrue and the rights of the
holder in respect thereof shall terminate (other than the right to receive the
Purchase Price as aforesaid). The Corporation shall publicly announce the number
of shares of Series A-2 Preferred Stock purchased as a result of such Designated
Event on or as soon as practicable after the Designated Event Purchase Date.
(i) Series A-2 Preferred Stock Purchased in Part. Upon surrender
of a certificate or certificates representing shares of the Series A-2 Preferred
Stock that is or are purchased in part,
33
the Corporation shall execute and the Transfer Agent shall authenticate and
deliver to the holder, a new certificate or certificates representing shares of
the Series A-2 Preferred Stock in an amount equal to the unpurchased portion of
the shares of Series A-2 Preferred Stock surrendered for partial purchase.
(j) Repayment to the Corporation. To the extent that the aggregate
amount of cash or value of Common Shares deposited by the Corporation pursuant
to this Section exceeds the aggregate Purchase Price of the Series A-2 Preferred
Stock or portions thereof which the Corporation is obligated to purchase as of
the Designated Event Purchase Date, then on the Business Day following the
Designated Event Purchase Date, the Paying Agent shall return any such excess to
the Corporation. Thereafter, any holder of Series A-2 Preferred Stock entitled
to payment must look to the Corporation for payment as general creditors, unless
an applicable abandoned property law designates another Person.
(k) The Corporation shall comply with any applicable provisions of
Rule 13e-4 and any other tender offer rules under the Exchange Act (including,
without limitation, filing on Schedule TO or other schedule) to the extent then
applicable in connection with the repurchase rights of the holders of the Series
A-2 Preferred Stock pursuant to this Section 13.
Section 14. Transfer Agent and Registrar. The duly appointed Transfer
Agent and Registrar for the Series A-2 Preferred Stock shall be Equiserve Trust
Company, N.A. The Corporation may, in its sole discretion, remove the Transfer
Agent in accordance with the agreement between the Corporation and the Transfer
Agent; provided that the Corporation shall appoint a successor transfer agent
who shall accept such appointment prior to the effectiveness of such removal.
Section 15. Currency. All shares of Series A-2 Preferred Stock shall be
denominated in U.S. currency, and all payments and distributions thereon or with
respect thereto shall be made in U.S. currency. All references herein to "$"or
"DOLLARS" refer to U.S. currency.
Section 16. Form. (a) Series A-2 Preferred Stock shall be issued in the
form of one or more permanent global shares of Series A-2 Preferred Stock in
definitive, fully registered form with the global legend (the "GLOBAL SHARES
LEGEND") and, until such time as otherwise determined by the Corporation and the
Registrar, the restricted shares legend (the "RESTRICTED SHARES LEGEND"), each
as set forth on the form of Series A-2 Preferred Stock certificate attached
hereto as Exhibit B (each, a "GLOBAL PREFERRED SHARE"), which is hereby
incorporated in and expressly made a part of this Subdivision. The Global
Preferred Share may have notations, legends or endorsements required by law,
stock exchange rules, agreements to which the Corporation is subject, if any, or
usage (provided that any such notation, legend or endorsement is in a form
acceptable to the Corporation). The Global Preferred Share shall be deposited on
behalf of the holders of the Series A-2 Preferred Stock represented thereby with
the Registrar, at its New York office, as custodian for DTC or a Depositary, and
registered in the name of the Depositary or a nominee of the Depositary, duly
executed by the Corporation and countersigned and registered by the Registrar as
hereinafter provided. The aggregate number of shares represented by each Global
Preferred Share may from time to time be increased or decreased by adjustments
made on the records of the Registrar and the Depositary or its nominee as
hereinafter provided. This Section 16(a) shall apply only to a Global Preferred
Share deposited
34
with or on behalf of the Depositary. The Corporation shall execute and the
Registrar shall, in accordance with this Section, countersign and deliver
initially one or more Global Preferred Shares that (i) shall be registered in
the name of Cede & Co. or other nominee of the Depositary and (ii) shall be
delivered by the Registrar to Cede & Co. or pursuant to instructions received
from Cede & Co. or held by the Registrar as custodian for the Depositary
pursuant to an agreement between the Depositary and the Registrar. Members of,
or participants in, the Depositary ("AGENT MEMBERS") shall have no rights under
this Subdivision with respect to any Global Preferred Share held on their behalf
by the Depositary or by the Registrar as the custodian of the Depositary or
under such Global Preferred Share, and the Depositary may be treated by the
Corporation, the Registrar and any agent of the Corporation or the Registrar as
the absolute owner of such Global Preferred Share for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Corporation, the
Registrar or any agent of the Corporation or the Registrar from giving effect to
any written certification, proxy or other authorization furnished by the
Depositary or impair, as between the Depositary and its Agent Members, the
operation of customary practices of the Depositary governing the exercise of the
rights of a holder of a beneficial interest in any Global Preferred Share.
Owners of beneficial interests in Global Preferred Shares shall not be entitled
to receive physical delivery of certificated shares of Series A-2 Preferred
Stock, unless (x) DTC is unwilling or unable to continue as Depositary for the
Global Preferred Share and the Corporation does not appoint a qualified
replacement for DTC within 90 days, (y) DTC ceases to be a "clearing agency"
registered under the Exchange Act and the Corporation does not appoint a
qualified replacement for DTC within 90 days or (z) the Corporation decides to
discontinue the use of book-entry transfer through DTC (or any successor
Depositary). In any such case, the Global Preferred Share shall be exchanged in
whole for definitive shares of Series A-2 Preferred Stock in registered form,
with the same terms and of an equal aggregate Liquidation Preference, and
bearing a Restricted Shares Legend (unless the Corporation determines otherwise
in accordance with applicable law). Definitive shares of Series A-2 Preferred
Stock shall be registered in the name or names of the Person or Person specified
by DTC in a written instrument to the Registrar.
(b) (i) Two officers of the Corporation shall sign the Global
Preferred Share for the Corporation, in accordance with the Corporation's
regulations and applicable law, including Section 1701.24 of the Ohio Revised
Code, by manual or facsimile signature.
(ii) If an Officer whose signature is on a Global
Preferred Share no longer holds that office at the time the Transfer
Agent authenticates the Global Preferred Share, the Global Preferred
Share shall be valid nevertheless.
(iii) A Global Preferred Share shall not be valid until an
authorized signatory of the Transfer Agent manually countersigns the
Global Preferred Share. The signature shall be conclusive evidence that
the Global Preferred Share has been authenticated under this
Subdivision. Each Global Preferred Share shall be dated the date of its
authentication.
Section 17. Registration; Transfer. (a) The Series A-2 Preferred Stock
and the Common Shares issuable upon conversion of the shares of Series A-2
Preferred Stock have not been registered under the Securities Act and may not be
resold, pledged or otherwise transferred prior to the date when they no longer
constitute "RESTRICTED SECURITIES" for purposes of Rule 144(k)
35
under the Securities Act other than (i) to the Corporation, (ii) to "QUALIFIED
INSTITUTIONAL BUYERS" pursuant to and in compliance with Rule 144A under the
Securities Act ("RULE 144A"), (iii) pursuant to a registration statement that
has been declared effective under the Securities Act or (iv) pursuant to and in
compliance with Rule 144 under the Securities Act, in each case, in accordance
with any applicable securities laws of any state of the United States. Any
Series A-2 Preferred Stock or Common Shares issued upon the conversion of Series
A-2 Preferred Stock that are purchased or owned by the Corporation of any
Affiliate thereof may not be resold by the Corporation or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction that results in
such Series A-2 Preferred Stock or Common Shares, as the case may be, no longer
being "RESTRICTED SECURITIES" (as defined under Rule 144 under the Securities
Act).
(b) Notwithstanding any provision to the contrary herein, so long
as a Global Preferred Share remains outstanding and is held by or on behalf of
the Depositary, transfers of a Global Preferred Share, in whole or in part, or
of any beneficial interest therein, shall only be made in accordance with this
Section 17; provided, however, that a beneficial interest in a Global Preferred
Share bearing the Restricted Shares Legend may be transferred to a Person who
takes delivery thereof in the form of a beneficial interest in a different
Global Preferred Share not bearing the Restricted Shares Legend in accordance
with the transfer restrictions set forth in the Restricted Shares Legend and the
provisions set forth in Section 17(c)(ii) of this Subdivision.
(c) (i) Except for transfers or exchanges made in accordance with
Section 17(c)(ii) of this Subdivision, transfers of a Global Preferred Share
shall be limited to transfers of such Global Preferred Share in whole, but not
in part, to nominees of the Depositary or to a successor of the Depositary or
such successor's nominee.
(ii) If an owner of a beneficial interest in a Global
Preferred Share deposited with the Depositary or with the Registrar as
custodian for the Depositary wishes at any time to transfer its
interest in such Global Preferred Share bearing the Restricted Shares
Legend to a Person who is eligible to take delivery thereof in the form
of a beneficial interest in a Global Preferred Share not bearing the
Restricted Shares Legend, such owner may, subject to the rules and
procedures of the Depositary, cause the exchange of such interest for a
new beneficial interest in the applicable Global Preferred Share. Upon
receipt by the Registrar at its office in The City of New York of (A)
instructions from the holder directing the Registrar to transfer its
interest in the applicable Global Preferred Share, such instructions to
contain the name of the transferee and appropriate account information,
(B) a certificate in the form of Certificate of Transfer on the reverse
side of the form of Series A-2 Preferred Stock certificate attached
hereto as Exhibit C, given by the transferor, to the effect set forth
therein, and (C) such other certifications, legal opinions and other
information as the Corporation or the Registrar may reasonably require
to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements
of the Securities Act, then the Registrar shall instruct the Depositary
to reduce or cause to be reduced such Global Preferred Share bearing
the Restricted Shares Legend (in the form attached as Schedule A) by
the number of shares of the beneficial interest therein to be exchanged
and to debit or cause to be debited from the account of the Person
making such transfer the beneficial interest in the Global Preferred
Share that is being transferred, and concurrently with such
36
reduction and debit, the Registrar will instruct the Depositary to
increase or cause to be increased the applicable Global Preferred Share
not bearing the Restricted Shares Legend by the aggregate number of
shares being exchanged and to credit or cause to be credited to the
account of the transferee the beneficial interest in the Global
Preferred Share that is being transferred.
(d) Except in connection with a Shelf Registration Statement
contemplated by and in accordance with the terms of the Registration Rights
Agreement relating to the Series A-2 Preferred Stock and Common Shares issuable
on conversion of the Series A-2 Preferred Stock (collectively, the "REGISTRABLE
SECURITIES") if shares of Series A-2 Preferred Stock are issued upon the
transfer, exchange or replacement of Series A-2 Preferred Stock bearing the
Restricted Shares Legend, or if a request is made to remove such Restricted
Shares Legend on Series A-2 Preferred Stock, the Series A-2 Preferred Stock so
issued shall bear the Restricted Shares Legend and the Restricted Shares Legend
shall not be removed unless there is delivered to the Corporation and the
Registrar such satisfactory evidence, which may include an opinion of counsel
licensed to practice law in the State of New York, as may be reasonably required
by the Corporation or the Registrar, that neither the legend nor the
restrictions on transfer set forth therein are required to ensure that transfers
thereof comply with the provisions of Rule 144A or Rule 144 under the Securities
Act or that such shares of Series A-2 Preferred Stock are not "RESTRICTED
SECURITIES" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Registrar, at the direction of the
Corporation, shall countersign and deliver shares of Series A-2 Preferred Stock
that do not bear the Restricted Shares Legend.
(e) The Corporation will refuse to register any transfer of Series
A-2 Preferred Stock or any Common Shares issuable upon conversion of the shares
of Series A-2 Preferred Stock that is not made in accordance with the provisions
of the Restricted Shares Legend and the provisions of Rule 144A or pursuant to a
registration statement that has been declared effective under the Securities Act
or pursuant to an available exemption from the registration requirements of the
Securities Act; provided that the provisions of this paragraph (e) shall not be
applicable to any Series A-2 Preferred Stock that does not bear any Restricted
Shares Legend or to any Common Shares that do not bear the Common Share Legend.
(f) Common Shares issued upon a conversion of the Series A-2
Preferred Stock prior to the effectiveness of a Shelf Registration Statement
shall be delivered in certificated form and shall bear the common share legend
(the "COMMON SHARE LEGEND") set forth in Exhibit D hereto and include on its
reverse side the Form of Certificate of Transfer for Common Shares set out in
Exhibit E. If (i) the Common Shares issued prior to the effectiveness of a Shelf
Registration Statement are to be registered in a name other than that of the
holder of Series A-2 Preferred Stock or (ii) Common Shares represented by a
certificate bearing the Common Share Legend are transferred subsequently by such
holder, then the holder must deliver to the Registrar a certificate in
substantially the form of Exhibit E as to compliance with the restrictions on
transfer applicable to such Common Shares and the Registrar shall not be
required to register any transfer of such Common Shares not so accompanied by a
properly completed certificate. Such Common Share Legend may be removed, and new
certificates representing the Common Shares may be issued, upon the presentation
of satisfactory evidence that such Common Share Legend is no longer required as
described above in paragraph (c) of this Section 17 with respect to the Series
A-2 Preferred Stock.
37
Section 18. Paying Agent and Conversion Agent. (a) The Corporation
shall maintain in the Borough of Manhattan, City of New York, State of New York
(i) an office or agency where Series A-2 Preferred Stock may be presented for
payment (the "PAYING AGENT") and (ii) an office or agency where Series A-2
Preferred Stock may be presented for conversion (the "CONVERSION AGENT"). The
Transfer Agent shall act as Paying Agent and Conversion Agent, unless another
Paying Agent or Conversion Agent is appointed by the Corporation. The
Corporation may appoint the Registrar, the Paying Agent and the Conversion Agent
and may appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"PAYING AGENT" includes any additional paying agent and the term "CONVERSION
AGENT" includes any additional conversion agent. The Corporation may change any
Paying Agent or Conversion Agent without prior notice to any holder. The
Corporation shall notify the Registrar of the name and address of any Paying
Agent or Conversion Agent appointed by the Corporation. If the Corporation fails
to appoint or maintain another entity as Paying Agent or Conversion Agent, the
Registrar shall act as such. The Corporation or any of its Affiliates may act as
Paying Agent, Registrar, coregistrar or Conversion Agent.
(b) Payments due on the Series A-2 Preferred Stock shall be
payable at the office or agency of the Corporation maintained for such purpose
in The City of New York and at any other office or agency maintained by the
Corporation for such purpose. Payments shall be payable by United States dollar
check drawn on, or wire transfer (provided, that appropriate wire instructions
have been received by the Registrar at least 15 days prior to the applicable
date of payment) to a U.S. dollar account maintained by the holder with, a bank
located in New York City; provided that at the option of the Corporation,
payment of dividends may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Series A-2 Preferred Stock
register. Notwithstanding the foregoing, payments due in respect of beneficial
interests in the Global Preferred Share shall be payable by wire transfer of
immediately available funds in accordance with the procedures of the Depositary.
Section 19. Headings. The headings of the Sections of this Subdivision
are for convenience of reference only and shall not define, limit or affect any
of the provisions hereof.
38
EXHIBIT A
[FORM OF INDENTURE FOR THE CONVERTIBLE
SUBORDINATED DEBENTURES]
A-1
-------------------------------------------------------------
CLEVELAND-CLIFFS INC
To
[Insert name of Trustee],
as Trustee
---------------------------------------------------
INDENTURE
Dated as of
_______ __, ____
------------------------------------------------
3.25% CONVERTIBLE SUBORDINATED DEBENTURES DUE ____
------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE 1 Definitions............................................................. 1
Section 1.01. Definitions.................................................... 1
ARTICLE 2 Issue, Description, Execution, Registration And Exchange Of Debentures.. 10
Section 2.01. Designation Amount And Issue Of Debentures..................... 10
Section 2.02. Form of Debentures............................................. 11
Section 2.03. Date And Denomination Of Debentures; Payments Of Interest...... 12
Section 2.04. Execution of Debentures........................................ 13
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer....................................... 14
Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures................ 20
Section 2.07. Temporary Debentures........................................... 21
Section 2.08. Cancellation of Debentures..................................... 21
Section 2.09. CUSIP Numbers.................................................. 21
ARTICLE 3 Redemption And Repurchase Of Debentures................................. 22
Section 3.01. Redemption of Debentures....................................... 22
Section 3.02. Notice of Optional Redemption; Selection of Debentures......... 22
Section 3.03. Payment of Debentures Called For Redemption by the Company..... 26
Section 3.04. Conversion Arrangement on Call for Redemption.................. 26
Section 3.05. Repurchase at Option of Holders Upon a Designated Event........ 27
Section 3.06. [Reserved.].................................................... 33
Section 3.07. [Reserved.].................................................... 33
Section 3.08. [Reserved.].................................................... 33
Section 3.09. [Reserved.].................................................... 33
Section 3.10. Debentures Repurchased in Part................................. 33
ARTICLE 4 Subordination Of Debentures............................................. 34
Section 4.01. Agreement of Subordination..................................... 34
Section 4.02. Payments to Debentureholders................................... 34
Section 4.03. Subrogation of Debentures...................................... 37
Section 4.04. Obligations of Company Unconditional........................... 38
Section 4.05. Authorization to Effect Subordination.......................... 38
Section 4.06. Notice to Trustee.............................................. 38
Section 4.07. Trustee's Relation to Senior Indebtedness...................... 39
i
Section 4.08. No Impairment of Subordination................................. 40
Section 4.09. Certain Conversions Not Deemed Payment......................... 40
Section 4.10. Article Applicable to Paying Agents............................ 40
Section 4.11. Senior Indebtedness Entitled to Rely........................... 41
Section 4.12. Reliance on Judicial Order or Certificate of
Liquidating Agent.............................................. 41
ARTICLE 5 [Reserved.]............................................................. 41
ARTICLE 6 Particular Covenants Of The Company..................................... 41
Section 6.01. Payment of Principal and Interest.............................. 41
Section 6.02. Maintenance of Office or Agency................................ 41
Section 6.03. Appointments to Fill Vacancies in Trustee's Office............. 42
Section 6.04. Provisions as to Paying Agent.................................. 42
Section 6.05. Existence...................................................... 43
Section 6.06. Rule 144A Information Requirement.............................. 44
Section 6.07. Stay, Extension and Usury Laws................................. 44
Section 6.08. Compliance Certificate......................................... 44
Section 6.09. Liquidated Damages Notice...................................... 45
Section 6.10. [Reserved.].................................................... 45
Section 6.11. Calculation Of Tax Original Issue Discount..................... 45
ARTICLE 7 Debentureholders' Lists And Reports By The Company And The Trustee...... 45
Section 7.01. Debentureholders' Lists........................................ 45
Section 7.02. Preservation And Disclosure Of Lists........................... 46
Section 7.03. Reports By Trustee............................................. 46
Section 7.04. Reports by Company............................................. 47
ARTICLE 8 Remedies Of The Trustee And Debentureholders On An Event Of Default..... 47
Section 8.01. Events Of Default.............................................. 47
Section 8.02. Payments of Debentures on Default; Suit Therefor............... 49
Section 8.03. Application of Monies Collected By Trustee..................... 51
Section 8.04. Proceedings by Debentureholder................................. 52
Section 8.05. Proceedings By Trustee......................................... 53
Section 8.06. Remedies Cumulative And Continuing............................. 53
Section 8.07. Direction of Proceedings and Waiver of Defaults
By Majority of Debentureholders................................ 53
Section 8.08. Notice of Defaults............................................. 54
Section 8.09. Undertaking To Pay Costs....................................... 54
ARTICLE 9 The Trustee............................................................. 55
Section 9.01. Duties and Responsibilities of Trustee......................... 55
Section 9.02. Reliance on Documents, Opinions, Etc........................... 56
ii
Section 9.03. No Responsibility For Recitals, Etc............................ 58
Section 9.04. Trustee, Paying Agents, Conversion Agents or
Registrar May Own Debentures................................... 58
Section 9.05. Monies to Be Held in Trust..................................... 58
Section 9.06. Compensation and Expenses of Trustee........................... 58
Section 9.07. Officers' Certificate As Evidence.............................. 59
Section 9.08. Conflicting Interests of Trustee............................... 59
Section 9.09. Eligibility of Trustee......................................... 59
Section 9.10. Resignation or Removal of Trustee.............................. 60
Section 9.11. Acceptance by Successor Trustee................................ 61
Section 9.12. Succession By Merger........................................... 62
Section 9.13. Preferential Collection of Claims.............................. 62
Section 9.14. Trustee's Application For Instructions From The Company........ 63
ARTICLE 10 The Debentureholders.................................................... 63
Section 10.01. Action By Debentureholders..................................... 63
Section 10.02. Proof of Execution by Debentureholders......................... 63
Section 10.03. Who Are Deemed Absolute Owners................................. 64
Section 10.04. Company-owned Debentures Disregarded........................... 64
Section 10.05. Revocation Of Consents, Future Holders Bound................... 65
ARTICLE 11 Meetings Of Debentureholders............................................ 65
Section 11.01. Purpose Of Meetings............................................ 65
Section 11.02. Call Of Meetings By Trustee.................................... 65
Section 11.03. Call Of Meetings By Company Or Debentureholders................ 66
Section 11.04. Qualifications For Voting...................................... 66
Section 11.05. Regulations.................................................... 66
Section 11.06. Voting......................................................... 67
Section 11.07. No Delay Of Rights By Meeting.................................. 67
ARTICLE 12 Supplemental Indentures................................................. 68
Section 12.01. Supplemental Indentures Without Consent of Debentureholders.... 68
Section 12.02. Supplemental Indenture With Consent Of Debentureholders........ 69
Section 12.03. Effect Of Supplemental Indenture............................... 70
Section 12.04. Notation On Debentures......................................... 71
Section 12.05. Evidence Of Compliance Of Supplemental Indenture
To Be Furnished To Trustee..................................... 71
ARTICLE 13 Consolidation, Merger, Sale, Conveyance And Lease....................... 71
Section 13.01. Company May Consolidate On Certain Terms....................... 71
Section 13.02. Successor To Be Substituted.................................... 72
Section 13.03. Opinion Of Counsel To Be Given To Trustee...................... 73
iii
Section 13.04. Payment Of Additional Amounts.................................. 73
ARTICLE 14 Satisfaction And Discharge Of Indenture................................. 74
Section 14.01. Discharge Of Indenture......................................... 74
Section 14.02. Deposited Monies To Be Held In Trust By Trustee................ 75
Section 14.03. Paying Agent To Repay Monies Held.............................. 75
Section 14.04. Return Of Unclaimed Monies; Repayment To The Company........... 76
Section 14.05. Reinstatement.................................................. 76
ARTICLE 15 Immunity Of Incorporators, Stockholders, Officers And Directors......... 76
Section 15.01. Indenture And Debentures Solely Corporate Obligations.......... 76
ARTICLE 16 Conversion Of Debentures................................................ 77
Section 16.01. Right To Convert............................................... 77
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common Shares
On Conversion; No Adjustment For Interest Or Dividends......... 81
Section 16.03. Cash Payments in Lieu of Fractional Shares..................... 84
Section 16.04. Conversion Rate................................................ 84
Section 16.05. Adjustment Of Conversion Rate.................................. 84
Section 16.06. Effect Of Reclassification, Consolidation, Merger or Sale...... 95
Section 16.07. Taxes On Shares Issued......................................... 96
Section 16.08. Reservation of Shares, Shares to Be Fully Paid; Compliance
With Governmental Requirements; Listing of Common Shares....... 96
Section 16.09. Responsibility Of Trustee...................................... 97
Section 16.10. Notice To Holders Prior To Certain Actions..................... 98
Section 16.11. Shareholder Rights Plans....................................... 99
Section 16.12. Issuer Determination Final..................................... 99
ARTICLE 17 Miscellaneous Provisions................................................ 99
Section 17.01. Provisions Binding On Company's Successors..................... 99
Section 17.02. Official Acts By Successor Corporation......................... 99
Section 17.03. Addresses For Notices, Etc..................................... 99
Section 17.04. Governing Law................................................. 100
Section 17.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee ...................................... 100
Section 17.06. Legal Holidays................................................ 101
Section 17.07. Trust Indenture Act........................................... 101
Section 17.08. No Security Interest Created.................................. 101
Section 17.09. Benefits Of Indenture......................................... 101
iv
Section 17.10. Table Of Contents, Headings, Etc.............................. 101
Section 17.11. Authenticating Agent.......................................... 102
Section 17.12. Execution In Counterparts..................................... 103
Section 17.13. Severability.................................................. 103
v
INDENTURE
INDENTURE dated as of _______ __, ____ between Cleveland-Cliffs Inc, an
Ohio corporation (hereinafter called the "COMPANY"), having its principal office
at 1100 Superior Avenue, Cleveland, OH, 44114-2589 and [Insert name of Trustee],
as trustee hereunder (hereinafter called the "TRUSTEE").
WITNESSETH:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issuance of its 3.25% Convertible Subordinated Debentures Due
____ (hereinafter called the "DEBENTURES"), in an aggregate principal amount not
to exceed $172,500,000, and to provide the terms and conditions upon which the
Debentures are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Debentures, the certificate of authentication to be borne
by the Debentures, a form of assignment, a form of Designated Event Purchase
Notice and a form of conversion notice to be borne by the Debentures are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Debentures, when
executed by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as in this Indenture provided, the valid,
binding and legal obligations of the Company, and to constitute this Indenture a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Debentures have in
all respects been duly authorized,
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the
Debentures are, and are to be, authenticated, issued and delivered, and in
consideration of the premises and of the purchase and acceptance of the
Debentures by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debentures (except as otherwise provided below), as follows:
ARTICLE 1
DEFINITIONS
Section 1.01. Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used
in this Indenture that are defined in the Trust Indenture Act or which are by
reference therein defined in the Securities Act (except as herein otherwise
expressly provided or unless the context otherwise requires) shall have the
respective meanings assigned to such terms in the Trust Indenture Act and in the
Securities Act as in force at the date of the execution of this Indenture. The
words "HEREIN", "HEREOF", "HEREUNDER" and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
"ADDITIONAL AMOUNTS" has the meaning set forth in Section 13.04(a).
"ADJUSTMENT EVENT" has the meaning specified in Section 16.05(n).
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For the purposes of this definition, "CONTROL", when used with
respect to any Person means the power to direct or cause the direction of the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise, and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"AGENT MEMBERS" has the meaning specified in Section 2.05(b)(v).
"APPLICABLE TAXES" has the meaning set forth in Section 13.04(a).
"ARTICLES OF INCORPORATION" means the Company's Articles of
Incorporation, as amended.
"BLACKOUT DATE" means the twenty-fifth anniversary of the Exchange
Date.
"BOARD OF DIRECTORS" means either the Board of Directors of the Company
or any duly authorized committee of such Board.
"BUSINESS DAY" means any day except a Saturday, Sunday or legal holiday
on which banking institutions in The City of New York are authorized or
obligated by law, regulation or executive order to close.
"CLOSING SALE PRICE" of the Common Shares or other capital stock or
similar equity interests on any date means the closing sale price per share (or
if no closing sale price is reported, the average of the closing bid and ask
prices or, if more than one in either case, the average of the average closing
bid and the average closing ask prices) on such date as reported on the
principal United States securities exchange on which the Common Shares are
traded or, if the Common Shares or such other capital stock or similar equity
interests are not listed on a United States national or regional securities
exchange, as reported by Nasdaq or
2
by the National Quotation Bureau Incorporated. In the absence of such
quotations, the Company shall be entitled to determine the Closing Sale Price on
the basis it considers appropriate.
"COMMISSION" means the 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 Indenture 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 SHARE LEGEND" has the meaning specified in Section 2.05(c).
"COMMON SHARES" means any shares of stock of any class of the Company
that have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and that are not subject to redemption by the Company. Subject to
the provisions of Section 16.06, however, shares issuable on conversion of
Debentures shall include only shares of the class designated as common shares of
the Company at the date of this Indenture (namely, the Common Shares, par value
$1.00 per share) or shares of any class or classes resulting from any
reclassification or reclassifications thereof and that have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and that are
not subject to redemption by the Company; provided that if at any time there
shall be more than one such resulting class, the shares of each such class then
so issuable on conversion shall be substantially in the proportion that the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.
"COMPANY" means the corporation named as the "COMPANY" in the first
paragraph of this Indenture, and, subject to the provisions of Article 13 and
Section 16.06, shall include its successors and assigns.
"CONVERSION DATE" has the meaning specified in Section 16.02.
"CONVERSION PRICE" per Debenture means, on any date, $1,000 divided by
the Conversion Rate in effect on such date.
"CONVERSION RATE" has the meaning specified in Section 16.04.
"CORPORATE TRUST OFFICE" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business as it relates to this Indenture shall be administered, which office is,
at the date as of which this Indenture is dated, located at [Insert address of
Trustee].
"CURRENT MARKET PRICE" has the meaning specified in Section 16.05(i).
3
"CUSTODIAN" means [Insert name of Custodian], as custodian for the
Depositary with respect to the Debentures in global form, or any successor
entity thereto.
"DEBENTURE" or "DEBENTURES" means any Debenture or Debentures, as the
case may be, authenticated and delivered under this Indenture, including any
Global Debenture.
"DEBENTURE REGISTER" has the meaning specified in Section 2.05(a).
"DEBENTURE REGISTRAR" has the meaning specified in Section 2.05(a).
"DEBENTUREHOLDER" or "HOLDER" as applied to any Debenture, or other
similar terms, means any Person in whose name at the time a particular Debenture
is registered on the Debenture Registrar's books.
"DEFAULT" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
"DEFAULTED INTEREST" has the meaning specified in Section 2.03.
"DEPOSITARY" means DTC or its successor depositary.
"DESIGNATED EVENT" means a Fundamental Change or a Termination of
Trading.
"DESIGNATED EVENT NOTICE" has the meaning specified in Section 3.05(b).
"DESIGNATED EVENT PURCHASE DATE" has the meaning specified in Section
3.05(a).
"DESIGNATED EVENT PURCHASE NOTICE" has the meaning set forth in Section
3.05(a)(i).
"DESIGNATED EVENT PURCHASE PRICE" has the meaning set forth in Section
3.05(a).
"DESIGNATED SENIOR INDEBTEDNESS" means (i) all obligations of the
Company under the Existing Debt and (ii) any Senior Indebtedness in which the
instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Indebtedness shall be "Designated Senior
Indebtedness" for purposes of this Indenture (provided that such instrument,
agreement or other document may place limitations and conditions on the right of
such Senior Indebtedness to exercise the rights of Designated Senior
Indebtedness). If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded
4
or must otherwise be returned by such holder or Representative upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, the
reinstated indebtedness of the Company arising as a result of such rescission or
return shall constitute Designated Senior Indebtedness effective as of the date
of such rescission or return.
"DETERMINATION DATE" has the meaning specified in Section 16.05(n).
"DISTRIBUTED PROPERTY" has the meaning specified in Section 16.05(d).
"DISTRIBUTION NOTICE DATE" has the meaning specified in Section
16.01(e).
"DTC" means the Depository Trust Company.
"EVENT OF DEFAULT" means any event specified in Section 8.01 as an
Event of Default.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE DATE" means the date on which the Company exchanged the
Series A-2 Preferred Stock for the Debentures.
"EX-DIVIDEND DATE" has the meaning specified in Section 16.05(d).
"EXISTING DEBT" means the Company's [Describe Credit Facilities at the
time this Indenture is executed].
"EXPIRATION TIME" has the meaning specified in Section 16.05(g).
"FAIR MARKET VALUE" has the meaning specified in Section 16.05(i).
"FINAL DISTRIBUTION DATE" has the meaning specified in Section
16.01(e).
"FUNDAMENTAL CHANGE" means any transaction or event (whether by means
of an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise) in connection with
which all or substantially all of the Common Shares are exchanged for, converted
into, acquired for or constitute solely the right to receive, consideration that
is not all or substantially all common shares that (a) are listed on, or
immediately after the transaction or event will be listed on, a United States
national securities exchange, or (b) are approved, or immediately after the
transaction or event will be approved, for quotation on the Nasdaq National
Market or any similar United States system of automated dissemination of
quotations of securities prices.
"GLOBAL DEBENTURE" has the meaning specified in Section 2.02.
5
"INDENTURE" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"INITIAL PURCHASER" means Morgan Stanley & Co. Incorporated.
"JUNIOR SECURITIES" has the meaning set forth in Section 4.09.
"LAST PREFERRED STOCK MEASUREMENT DAY" has the meaning specified in
Section 16.01(c).
"LIQUIDATED DAMAGES" has the meaning specified for "LIQUIDATED DAMAGES
AMOUNTS" in Section 2(e) of the Registration Rights Agreement.
"LIQUIDATED DAMAGES NOTICE" has the meaning specified in Section 6.09.
"MATURITY DATE" means the thirtieth anniversary of the Exchange Date,
or if such day is not a Business Day, the next succeeding Business Day.
"MERGER CONVERSION PERIOD" has the meaning specified in Section
16.01(f).
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation System.
"NON-ELECTING SHARE" has the meaning specified in Section 16.06.
"NON-PAYMENT DEFAULT" has the meaning set forth in Section 4.02(ii).
"NOTICE DATE" means the date of mailing of the notice of redemption
pursuant to Section 3.02.
"OFFICERS' CERTIFICATE", when used with respect to the Company, means a
certificate signed by the Chairman of the Board, the Vice Chairman of the Board,
the Chief Executive Officer, the President, any Vice President (whether or not
designated by a number or numbers or word or words added before or after the
title "VICE PRESIDENT"), the Treasurer or any Assistant Treasurer, or the
Secretary or Assistant Secretary of the Company.
"OPINION OF COUNSEL" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"OUTSTANDING", when used with reference to Debentures and subject to
the provisions of Section 10.04, means, as of any particular time, all
Debentures authenticated and delivered by the Trustee under this Indenture,
except:
6
(a) Debentures theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Debentures, or portions thereof, (i) for the redemption of
which monies in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or (ii) that shall
have been otherwise discharged in accordance with Article 14;
(c) Debentures in lieu of which, or in substitution for which,
other Debentures shall have been authenticated and delivered pursuant to the
terms of Section 2.06; and
(d) Debentures converted into Common Shares pursuant to Article 16
and Debentures deemed not Outstanding pursuant to Article 3.
"PAYMENT BLOCKAGE NOTICE" has the meaning set forth in Section
4.02(ii).
"PAYMENT DEFAULT" has the meaning set forth in Section 4.02(i).
"PERSON" means an individual, a corporation, an association, a
partnership, a limited liability company, a joint venture, a joint stock
company, a trust, an unincorporated organization or a government or political
subdivision or an agency or instrumentality thereof.
"PREDECESSOR DEBENTURE" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture, and, for the purposes of this
definition, any Debenture authenticated and delivered under Section 2.06 in lieu
of a lost, destroyed or stolen Debenture shall be deemed to evidence the same
debt as the lost, destroyed or stolen Debenture that it replaces.
"PURCHASED SHARES" has the meaning specified in Section 16.05(g)(i).
"RECORD DATE" has the meaning, (i) with respect to any interest payment
date, as set forth in Section 2.03 and (ii) with respect to any dividend,
distribution or other transaction or event in which the holders of Common Shares
have the right to receive any cash, securities or other property or in which the
Common Shares (or other applicable security) is exchanged for or converted into
any combination of cash, securities or other property, as set forth in Section
16.05(i).
"REDEMPTION DATE" means a date that is fixed for redemption of the
Debentures by the Company in accordance with Section 3.02 hereof.
"REDEMPTION PRICE" has the meaning set forth in Section 3.01.
7
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of January 21, 2004, by and between the Company and the
Initial Purchaser, as amended from time to time in accordance with its terms.
"REPRESENTATIVE" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"RESPONSIBLE OFFICER" shall mean, when used with respect to the
Trustee, any officer within the corporate trust department of the Trustee with
direct responsibility for the administration of this Indenture and also means,
with respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of such person's knowledge of any familiarity
with the particular subject.
"RESTRICTED DEBENTURE LEGEND" has the meaning specified in Section
2.05(c).
"RESTRICTED SECURITIES" has the meaning specified in Section 2.05(c).
"RIGHTS" has the meaning specified in Section 16.11.
"RIGHTS AGREEMENT" means the Rights Agreement dated as of September 19,
1997 between the Company and Equiserve Trust Company, N.A.
(successor-in-interest to First Chicago Trust Company of New York), as Rights
Agent.
"RIGHTS PLAN" shall have the meaning specified in Section 16.11.
"RULE 144A" means Rule 144A as promulgated under the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means (a) the principal of, premium, if any, and
accrued and unpaid interest on (i) the Company's indebtedness for money
borrowed, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed, (ii) guarantees by the Company of
indebtedness for money borrowed by any other Person, whether outstanding on the
date of execution of this Indenture or thereafter created, incurred or assumed,
(iii) indebtedness evidenced by notes, debentures, bonds or other instruments of
indebtedness for the payment of which the Company is responsible or liable, by
guarantees or otherwise, whether outstanding on the date of execution of this
8
Indenture or thereafter created, incurred or assumed, and (iv) obligations of
the Company under any agreement to lease, or lease of, any real personal
property, whether outstanding on the date of execution of this Indenture or
thereafter created, incurred or assumed; (b) any other indebtedness, liability
or obligation, contingent or otherwise, of the Company and any guarantee,
endorsement or other contingent obligation in respect thereof, whether
outstanding on the date of execution of this Indenture or thereafter created,
incurred or assumed; and (c) modifications, renewals, extensions and refundings
of any such indebtedness, liabilities or obligations; provided that "Senior
Indebtedness" shall not include any of the above in which, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding, it
is provided that such indebtedness, liabilities or obligations, or such
modification, renewal, extension or refunding thereof, or the Company's
obligations pursuant to such a guarantee, are not senior in right of payment to
the Debentures.
"SERIES A-2 PREFERRED STOCK" means the 3.25% Redeemable Cumulative
Convertible Perpetual Preferred Stock, Series A-2, of the Company, the terms of
which are set forth in the Articles of Incorporation, including the Subdivision.
"SUBDIVISION" means Subdivision A-2 of the Company's Articles of
Incorporation.
"SUBSIDIARY" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than fifty percent (50%) of
the total voting power of shares of capital stock or other equity interest
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (ii) any partnership
(a) the sole general partner or managing general partner of which is such Person
or a Subsidiary of such Person or (b) the only general partners of which are
such Person or of one or more Subsidiaries of such Person (or any combination
thereof).
"TAX ORIGINAL ISSUE DISCOUNT" means the amount of ordinary interest
income on a Debenture that must be accrued as original issue discount for United
States Federal income tax purposes pursuant to section 1272 of the Internal
Revenue Code of 1986, as may be amended from time to time and the Treasury
Regulations promulgated thereunder.
"TERMINATION OF TRADING" will be deemed to have occurred if the Common
Shares (or other Common Shares into which the Debentures are then convertible)
are neither listed for trading on a United States national or regional
securities exchange nor approved for quotation on the Nasdaq National Market or
any similar United States system of automated dissemination of quotations of
securities prices that is a successor thereto.
9
"TRADING DAY" has the meaning specified in Section 16.05(i)(iv).
"TRADING PRICE" means, on any date of determination, the average of the
secondary market bid quotations per $1,000 principal amount of Debentures
obtained by the Trustee or the Company for $5,000,000 principal amount of
Debentures at approximately 3:30 p.m., New York City time, on such determination
date from three independent nationally recognized securities dealers that the
Trustee or the Company selects; provided that if at least three such bids cannot
reasonably be obtained by the Trustee or the Company, but two such bids are
obtained, then the average of the two bids shall be used, and if only one such
bid can reasonably be obtained by the Trustee or the Company, that one bid shall
be used; provided further that if the Trustee or the Company cannot reasonably
obtain at least one bid for $5,000,000 principal amount of Debentures from a
nationally recognized securities dealer, then the Trading Price per $1,000
principal amount of Debentures shall be deemed to be less than ninety-eight
percent (98%) of the product of (a) the Conversion Rate on such date and (b) the
Closing Sale Price of the Common Shares on such date.
"TRANSFER" has the meaning set forth in Section 2.05(c).
"TRIGGER EVENT" has the meaning specified in Section 16.05(d).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended, as it was in force at the date of this Indenture, except as provided in
Section 12.03; provided that if the Trust Indenture Act of 1939 is amended after
the date hereof, the term "TRUST INDENTURE ACT" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
"TRUSTEE" means [Insert name of Trustee] and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.
ARTICLE 2
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
DEBENTURES
Section 2.01. Designation Amount And Issue Of Debentures. The
Debentures shall be designated as "3.25% CONVERTIBLE SUBORDINATED DEBENTURES DUE
____". Debentures not to exceed the aggregate principal amount of $172,500,000
(except pursuant to Sections Section 2.05, Section 2.06, Section 3.03, Section
3.05 and Section 16.02 hereof) upon the execution of this Indenture, or from
time to time thereafter, may be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Debentures to or upon the written order of the
10
Company, signed by its Chairman of the Board, its Vice Chairman of the Board,
Chief Executive Officer, President or any Vice President, the Treasurer or any
Assistant Treasurer or the Secretary or Assistant Secretary, without any further
action by the Company hereunder.
Section 2.02. Form of Debentures. The Debentures and the Trustee's
certificate of authentication to be borne by such Debentures shall be
substantially in the form set forth in Exhibit A. The terms and provisions
contained in the form of Debenture attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
Any of the Debentures may have such letters, numbers or other marks of
identification and such notations, legends, endorsements or changes as the
officers executing the same may approve (execution thereof to be conclusive
evidence of such approval) and as are not inconsistent with the provisions of
this Indenture, or as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for the Debentures to
be tradable on The Portal Market operated by the National Association of
Securities Dealers, Inc. (or any successor thereto) or as may be required for
the Debentures to be tradable on any other market developed for trading of
securities pursuant to Rule 144A or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any securities exchange or automated quotation system on
which the Debentures may be listed, or to conform to usage, or to indicate any
special limitations or restrictions to which any particular Debentures are
subject.
So long as the Debentures are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, or otherwise contemplated
by Section 2.05(a), all of the Debentures will be represented by one or more
Debentures in global form registered in the name of the Depositary or the
nominee of the Depositary (a "GLOBAL DEBENTURE"). The transfer and exchange of
beneficial interests in any such Global Debenture shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(a), beneficial owners of a
Global Debenture shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Debenture.
Any Global Debenture shall represent such aggregate amount of the
Outstanding Debentures as shall be specified therein and shall provide that it
shall represent the aggregate amount of Outstanding Debentures from time to time
endorsed thereon and that the aggregate amount of Outstanding Debentures
represented thereby may from time to time be increased or reduced to reflect
redemptions, repurchases, conversions, transfers or exchanges permitted hereby.
11
Any endorsement of a Global Debenture to reflect the amount of any increase or
decrease in the amount of Outstanding Debentures represented thereby shall be
made by the Trustee or the Custodian, at the direction of the Trustee, in such
manner and upon instructions given by the holder of such Debentures in
accordance with this Indenture. Payment of principal of and interest on any
Global Debenture shall be made to the holder of such Debenture.
Section 2.03. Date And Denomination Of Debentures; Payments Of
Interest. The Debentures shall be issuable in registered form without coupons in
denominations of $1,000 principal amount and integral multiples thereof. Each
Debenture shall be dated the date of its authentication and shall bear interest
from the date specified on the face of the form of Debenture attached as Exhibit
A hereto. Interest on the Debentures shall be computed on the basis of a 360-day
year comprised of twelve 30-day months.
The Person in whose name any Debenture (or its Predecessor Debenture)
is registered on the Debenture Register at the close of business on any Record
Date with respect to any interest payment date shall be entitled to receive the
interest payable on such interest payment date, except that the interest payable
upon redemption or repurchase will be payable to the Person to whom principal is
payable pursuant to such redemption or repurchase (unless the Redemption Date or
the Designated Event Purchase Date, as the case may be, falls after a Record
Date and on or prior to the corresponding interest payment date, in which case
the semi-annual payment of interest becoming due on such interest payment date
shall be payable to the holders of such Debentures registered as such on the
applicable Record Date).
Interest shall be payable at the office of the Company maintained by
the Company for such purposes in the Borough of Manhattan, City of New York,
which shall initially be an office or agency of the Trustee. The Company shall
pay interest (i) on any Debentures in certificated form by check mailed to the
address of the Person entitled thereto as it appears in the Debenture Register
(or upon written notice, by wire transfer in immediately available funds, if
such Person is entitled to interest on aggregate principal in excess of $2
million) or (ii) on any Global Debenture by wire transfer of immediately
available funds to the account of the Depositary or its nominee. The term
"RECORD DATE" with respect to any interest payment date shall mean the July 1 or
January 1 preceding the applicable July 15 or January 15 interest payment date,
respectively.
Any interest on any Debenture that is payable, but is not punctually
paid or duly provided for, on any July 15 or January 15 (herein called
"DEFAULTED INTEREST") shall forthwith cease to be payable to the Debentureholder
on the relevant Record Date by virtue of his having been such Debentureholder,
and such Defaulted Interest shall be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below:
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(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) are registered at the close of business on a special
record date for the payment of such Defaulted Interest, which shall be fixed in
the following manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each Debenture and the date
of the proposed payment (which shall be not less than twenty-five (25) calendar
days after the receipt by the Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit on or prior to the date of the proposed payment,
such money when deposited to be held in trust for the benefit of the Persons
entitled to such Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) calendar days and not less
than ten (10) calendar days prior to the date of the proposed payment, and not
less than ten (10) calendar days after the receipt by the Trustee of the notice
of the proposed payment. The Trustee shall promptly notify the Company of such
special record date and, in the name and at the expense of the Company, shall
cause notice of the proposed payment of such Defaulted Interest and the special
record date therefor to be mailed, first-class postage prepaid, to each holder
at his address as it appears in the Debenture Register, not less than ten (10)
calendar days prior to such special record date. Notice of the proposed payment
of such Defaulted Interest and the special record date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered at the
close of business on such special record date and shall no longer be payable
pursuant to the following clause (2) of this Section 2.03.
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange or automated quotation system on which the Debentures may be listed or
designated for issuance, and upon such notice as may be required by such
exchange or automated quotation system, if, after notice given by the Company to
the Trustee of the proposed payment pursuant to this clause, such manner of
payment shall be deemed practicable by the Trustee.
Section 2.04. Execution of Debentures. The Debentures shall be signed
in the name and on behalf of the Company by the manual or facsimile signature of
its Chairman of the Board, the Vice Chairman of the Board, Chief Executive
Officer, President or any Vice President. Only such Debentures as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Debenture attached as Exhibit A hereto, manually executed by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 17.11), shall be entitled to the benefits of this Indenture or be valid
or
13
obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Debenture executed by the Company shall be
conclusive evidence that the Debenture so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any of the
Debentures shall cease to be such officer before the Debentures so signed shall
have been authenticated and delivered by the Trustee, or disposed of by the
Company, such Debentures nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Debentures had not ceased to be
such officer of the Company, and any Debenture may be signed on behalf of the
Company by such persons as, at the actual date of the execution of such
Debenture, shall be the proper officers of the Company, although at the date of
the execution of this Indenture any such person was not such an officer.
Section 2.05. Exchange and Registration of Transfer of Debentures;
Restrictions on Transfer. The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 6.02 being herein
sometimes collectively referred to as the "DEBENTURE REGISTER") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Debentures and of transfers of Debentures. The
Debenture Register shall be in written form or in any form capable of being
converted into written form within a reasonably prompt period of time. The
Trustee is hereby appointed "DEBENTURE REGISTRAR" for the purpose of registering
Debentures and transfers of Debentures as herein provided. The Company may
appoint one or more co-registrars in accordance with Section 6.02.
Upon surrender for registration of transfer of any Debenture to the
Debenture Registrar or any co-registrar, and satisfaction of the requirements
for such transfer set forth in this Section 2.05, the Company shall execute, and
the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Debentures may be exchanged for other Debentures of any authorized
denominations and of a like aggregate principal amount, upon surrender of the
Debentures to be exchanged at any such office or agency maintained by the
Company pursuant to Section 6.02. Whenever any Debentures are so surrendered for
exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Debentures which the Debentureholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding.
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All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
All Debentures presented or surrendered for registration of transfer or
for exchange, redemption, repurchase or conversion shall (if so required by the
Company or the Debenture Registrar) be duly endorsed, or be accompanied by a
written instrument or instruments of transfer in form satisfactory to the
Company, duly executed by the Debentureholder thereof or his attorney duly
authorized in writing.
No service charge shall be made to any holder for any registration of,
transfer or exchange of Debentures, but the Company may require payment by the
holder of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Debentures.
Neither the Company nor the Trustee nor any Debenture Registrar shall
be required to exchange or register a transfer of (a) any Debentures for a
period of fifteen (15) calendar days next preceding any selection of Debentures
to be redeemed, (b) any Debentures or portions thereof called for redemption
pursuant to Section 3.02, (c) any Debentures or portions thereof surrendered for
conversion pursuant to Article 16 or (d) any Debentures or portions thereof
tendered for repurchase (and not withdrawn) pursuant to Section 3.05.
(b) The following provisions shall apply only to Global
Debentures:
(i) Each Global Debenture authenticated under this
Indenture shall be registered in the name of the Depositary or a
nominee thereof and delivered to such Depositary or a nominee thereof
or Custodian therefor, and each such Global Debenture shall constitute
a single Debenture for all purposes of this Indenture.
(ii) Notwithstanding any other provision in this
Indenture, no Global Debenture may be exchanged in whole or in part for
Debentures registered, and no transfer of a Global Debenture in whole
or in part may be registered, in the name of any Person other than the
Depositary or a nominee thereof, unless (A) the Depositary (i) has
notified the Company that it is unwilling or unable to continue as
Depositary for such Global Debenture and a successor depositary has not
been appointed by the Company within ninety (90) calendar days or (ii)
has ceased to be a clearing agency registered under the Exchange Act
and no successor clearing agency has been appointed by the Company
within ninety (90) calendar days, (B) an Event of Default has occurred
and is continuing or (C) the Company, in its sole discretion, notifies
the Trustee in writing that
15
it no longer wishes to have all the Debentures represented by Global
Debentures. Any Global Debenture exchanged pursuant to clause (A) or
(B) above shall be so exchanged in whole and not in part and any Global
Debenture exchanged pursuant to clause (C) above may be exchanged in
whole or from time to time in part as directed by the Company. Any
Debenture issued in exchange for a Global Debenture or any portion
thereof shall be a Global Debenture; provided that any such Debenture
so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Debenture.
(iii) Securities issued in exchange for a Global Debenture
or any portion thereof pursuant to clause (ii) above shall be issued in
definitive, fully registered form, without interest coupons, shall have
an aggregate principal amount equal to that of such Global Debenture or
portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall
designate and shall bear any legends required hereunder. Any Global
Debenture to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Debenture Registrar. With regard to any
Global Debenture to be exchanged in part, either such Global Debenture
shall be so surrendered for exchange or, if the Trustee is acting as
Custodian for the Depositary or its nominee with respect to such Global
Debenture, the principal amount thereof shall be reduced, by an amount
equal to the portion thereof to be so exchanged, by means of an
appropriate adjustment made on the records of the Trustee. Upon any
such surrender or adjustment, the Trustee shall authenticate and make
available for delivery the Debenture issuable on such exchange to or
upon the written order of the Depositary or an authorized
representative thereof.
(iv) In the event of the occurrence of any of the events
specified in clause (ii) above, the Company will promptly make
available to the Trustee a reasonable supply of certificated Debentures
in definitive, fully registered form, without interest coupons.
(v) Neither any members of, or participants in, the
Depositary ("AGENT MEMBERS") nor any other Persons on whose behalf
Agent Members may act shall have any rights under this Indenture with
respect to any Global Debenture registered in the name of the
Depositary or any nominee thereof, and the Depositary or such nominee,
as the case may be, may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner and holder of
such Global Debenture for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the
Depositary, its Agent
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Members and any other Person on whose behalf an Agent Member may act,
the operation of customary practices of such Persons governing the
exercise of the rights of a holder of any Debenture.
(vi) At such time as all interests in a Global Debenture
have been redeemed, repurchased, converted, canceled or exchanged for
Debentures in certificated form, such Global Debenture shall, upon
receipt thereof, be canceled by the Trustee in accordance with standing
procedures and instructions existing between the Depositary and the
Custodian. At any time prior to such cancellation, if any interest in a
Global Debenture is redeemed, repurchased, converted, canceled or
exchanged for Debentures in certificated form, the principal amount of
such Global Debenture shall, in accordance with the standing procedures
and instructions existing between the Depositary and the Custodian, be
appropriately reduced, and an endorsement shall be made on such Global
Debenture, by the Trustee or the Custodian, at the direction of the
Trustee, to reflect such reduction.
(c) Every Debenture that bears or is required under this Section
2.05(c) to bear the legend (the "RESTRICTED DEBENTURE LEGEND") set forth in this
Section 2.05(c) (together with any Common Shares issued upon conversion of the
Debentures and required to bear the Common Share Legend, collectively, the
"RESTRICTED SECURITIES") shall be subject to the restrictions on transfer set
forth in this Section 2.05(c) (including those set forth in the Restricted
Debenture Legend below) unless such restrictions on transfer shall be waived by
written consent of the Company, and the holder of each such Restricted Security,
by such Debenture holder's acceptance thereof, agrees to be bound by all such
restrictions on transfer. As used in this Section 2.05(c), the term "TRANSFER"
encompasses any sale, pledge, loan, transfer or other disposition whatsoever of
any Restricted Security or any interest therein.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Debenture (and all securities issued in exchange
therefor or substitution thereof) and any stock certificate representing Common
Shares issued upon conversion of any Debenture shall bear a legend (the "COMMON
SHARE LEGEND") in substantially the following form, unless such Debenture or
such Common Shares have been sold pursuant to a registration statement that has
been declared effective under the Securities Act (and which continues to be
effective at the time of such transfer) or pursuant to Rule 144 under the
Securities Act or any similar provision then in force, or such Common Shares
have been issued upon conversion of Debentures that have been transferred
pursuant to a registration statement that has been declared effective under the
Securities Act or pursuant to Rule 144 under the Securities Act, or unless
otherwise agreed by the Company in writing, with written notice thereof to the
Trustee:
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NEITHER OF THIS SECURITY NOR THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
SECURITY HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS SECURITY, AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS
SECURITY MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE
SECOND ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR
(Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE
THREE MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1)
TO THE COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN
COMPLIANCE WITH THE SECURITIES ACT.
Any Debenture (or security issued in exchange or substitution therefor)
as to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the Restricted Debenture Legend
set forth therein have been satisfied may, upon surrender of such Debenture for
exchange to the Debenture Registrar in accordance with the provisions of this
Section 2.05(c), be exchanged for a new Debenture or Debentures, of like tenor
and aggregate principal amount, which shall not bear the Restricted Debenture
Legend. If the Restricted Security surrendered for exchange is represented by a
Global Debenture bearing the Restricted Debenture Legend, the principal amount
of the legended Global Debenture shall be reduced by the appropriate principal
amount and the principal amount of a Global Debenture without the Restricted
Debenture Legend shall be increased by an equal principal amount. If a Global
Debenture without the Restricted Debenture Legend is not then outstanding, the
18
Company shall execute and the Trustee shall authenticate and deliver an
unlegended Global Debenture to the Depositary.
Any such Common Shares as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the Common Share Legend set forth therein have been satisfied may,
upon surrender of the certificates representing such Common Shares for exchange
in accordance with the procedures of the transfer agent for the Common Shares,
be exchanged for a new certificate or certificates for a like number of Common
Shares, which shall not bear the Common Share Legend required by this Section
2.05(c).
Any Debenture or Common Shares issued upon the conversion of a
Debenture that are purchased or owned by the Company or any Affiliate thereof
may not be resold by the Company or such Affiliate unless registered under the
Securities Act or resold pursuant to an exemption from the registration
requirements of the Securities Act in a transaction that results in such
Debentures or Common Shares, as the case may be, no longer being "RESTRICTED
SECURITIES" (as defined under Rule 144 under the Securities Act).
(d) The Trustee shall have no responsibility or obligation to any
Agent Members or any other Person with respect to the accuracy of the books or
records, or the acts or omissions, of the Depository or its nominee or of any
participant or member thereof, with respect to any ownership interest in the
Debentures or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice (including any notice of redemption)
or the payment of any amount, under or with respect to such Debentures. All
notices and communications to be given to the Debentureholder and all payments
to be made to Debentureholders under the Debentures shall be given or made only
to or upon the order of the registered Debentureholders (which shall be the
Depository or its nominee in the case of a Global Debenture). The rights of
beneficial owners in any Global Debenture shall be exercised only through the
Depository subject to the customary procedures of the Depository. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depository with respect to its Agent Members.
(e) The Trustee shall have no obligation or duty to monitor,
determine or inquire as to compliance with any restrictions on transfer imposed
under this Indenture or under applicable law with respect to any transfer of any
interest in any Debenture (including any transfers between or among Agent
Members in any Global Indenture) other than to require delivery of such
certificates and other documentation or evidence as are expressly required by,
and to do so if and when expressly required by, the terms of this Indenture, and
to examine the same to determine compliance as to form with the express
requirements hereof.
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Section 2.06. Mutilated, Destroyed, Lost or Stolen Debentures. In case
any Debenture shall become mutilated or be destroyed, lost or stolen, the
Company in its discretion may execute, and upon the Company's written request
the Trustee or an authenticating agent appointed by the Trustee shall
authenticate and make available for delivery, a new Debenture, bearing a number
not contemporaneously outstanding, in exchange and substitution for the
mutilated Debenture, or in lieu of and in substitution for the Debenture so
destroyed, lost or stolen. In every case, the applicant for a substituted
Debenture shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in every case of destruction, loss or
theft, the applicant shall also furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Debenture and make available for delivery such
Debenture. Upon the issuance of any substituted Debenture, the Company may
require the payment by the holder of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in relation thereto
and any other expenses connected therewith. In case any Debenture which has
matured or is about to mature or has been called for redemption or has been
tendered for repurchase upon a Designated Event (and not withdrawn) or is to be
converted into Common Shares shall become mutilated or be destroyed, lost or
stolen, the Company may, instead of issuing a substitute Debenture, pay or
authorize the payment of or convert or authorize the conversion of the same
(without surrender thereof except in the case of a mutilated Debenture), as the
case may be, if the applicant for such payment or conversion shall furnish to
the Company, to the Trustee and, if applicable, to such authenticating agent,
such security or indemnity as may be required by them to save each of them
harmless for any loss, liability, cost or expense caused by or in connection
with such substitution, and, in every case of destruction, loss or theft, the
applicant shall also furnish to the Company, the Trustee and, if applicable, any
paying agent or conversion agent evidence to their satisfaction of the
destruction, loss or theft of such Debenture and of the ownership thereof.
Every substitute Debenture issued pursuant to the provisions of this
Section 2.06 by virtue of the fact that any Debenture is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Debenture shall be found at any
time, and shall be entitled to all the benefits of (but shall be subject to all
the limitations set forth in) this Indenture equally and proportionately with
any and all other Debentures duly issued hereunder. To the extent permitted by
law, all Debentures shall be held
20
and owned upon the express condition that the foregoing provisions are exclusive
with respect to the replacement or payment or conversion or redemption or
repurchase of mutilated, destroyed, lost or stolen Debentures and shall preclude
any and all other rights or remedies notwithstanding any law or statute existing
or hereafter enacted to the contrary with respect to the replacement or payment
or conversion or redemption or repurchase of negotiable instruments or other
securities without their surrender.
Section 2.07. Temporary Debentures. Pending the preparation of
Debentures in certificated form, the Company may execute and the Trustee or an
authenticating agent appointed by the Trustee shall, upon the written request of
the Company, authenticate and deliver temporary Debentures (printed or
lithographed). Temporary Debentures shall be issuable in any authorized
denomination, and substantially in the form of the Debentures in certificated
form, but with such omissions, insertions and variations as may be appropriate
for temporary Debentures, all as may be determined by the Company. Every such
temporary Debenture shall be executed by the Company and authenticated by the
Trustee or such authenticating agent upon the same conditions and in
substantially the same manner, and with the same effect, as the Debentures in
certificated form. Without unreasonable delay, the Company will execute and
deliver to the Trustee or such authenticating agent Debentures in certificated
form and thereupon any or all temporary Debentures may be surrendered in
exchange therefor, at each office or agency maintained by the Company pursuant
to Section 6.02 and the Trustee or such authenticating agent shall authenticate
and make available for delivery in exchange for such temporary Debentures an
equal aggregate principal amount of Debentures in certificated form. Such
exchange shall be made by the Company at its own expense and without any charge
therefor. Until so exchanged, the temporary Debentures shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Debentures in certificated form authenticated and delivered
hereunder.
Section 2.08. Cancellation of Debentures. All Debentures surrendered
for the purpose of payment, redemption, repurchase, conversion, exchange or
registration of transfer shall, if surrendered to the Company or any paying
agent or any Debenture Registrar or any conversion agent, be surrendered to the
Trustee and promptly canceled by it, or, if surrendered to the Trustee, shall be
promptly canceled by it, and no Debentures shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. The
Trustee shall dispose of such canceled Debentures in accordance with its
customary procedures. If the Company shall acquire any of the Debentures, such
acquisition shall not operate as a redemption, repurchase or satisfaction of the
indebtedness represented by such Debentures unless and until the same are
delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Debentures may
use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall
21
use "CUSIP" numbers in notices of redemption or repurchases as a convenience to
Debentureholders; provided that any such notice may state that no representation
is made as to the correctness of such numbers either as printed on the
Debentures or as contained in any notice of a redemption or a repurchase and
that reliance may be placed only on the other identification numbers printed on
the Debentures, and any such redemption or repurchase shall not be affected by
any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
REDEMPTION AND REPURCHASE OF DEBENTURES
Section 3.01. Redemption of Debentures. The Company may not redeem any
Debentures prior to January 20, 2009. On or after January 20, 2009, the Company,
shall have the option to redeem some or all the Debentures at a redemption price
equal to one-hundred percent (100%) of the principal amount of the Debentures
being redeemed, together with accrued and unpaid interest and Liquidated
Damages, if any, to, but excluding, the Redemption Date (the "REDEMPTION
PRICE"), but only if the Closing Sale Price of the Common Shares for 20 Trading
Days within a period of 30 consecutive Trading Days ending on the Trading Day
prior to the date the Company gives notice of such redemption pursuant to this
Section 3.01 exceeds one-hundred-thirty-five percent (135%) of the Conversion
Price in effect on each such Trading Day; provided that if the Redemption Date
shall occur after a Record Date and on or before the related corresponding
interest payment date, then the full amount of interest payable on such interest
payment date shall be paid to the holders of record of such Debentures on the
applicable Record Date and the Redemption Price payable on the Redemption Date
will include only the principal amount of the Debenture but will not include any
amount in respect of interest payable on the corresponding interest payment
date.
Section 3.02. Notice of Optional Redemption; Selection of Debentures.
In case the Company shall desire to exercise the right to redeem all or, as the
case may be, any part of the Debentures pursuant to Section 3.01, it shall fix a
date for redemption and it or, at its written request received by the Trustee
not fewer than thirty-five (35) calendar days prior (or such shorter period of
time as may be acceptable to the Trustee) to the Redemption Date, the Trustee in
the name of and at the expense of the Company, shall mail or cause to be mailed
a notice of such redemption not fewer than thirty (30) nor more than sixty (60)
calendar days prior to the Redemption Date to each holder of Debentures so to be
redeemed as a whole or in part at its last address as the same appears on the
Debenture Register; provided that if the Company shall give such notice, it
shall also give written notice of the Redemption Date to the Trustee. Such
mailing shall be by first class mail. The notice, if mailed in the manner herein
provided, shall be conclusively presumed to have been duly given, whether or not
the holder receives such notice.
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In any case, failure to give such notice by mail or any defect in the notice to
the holder of any Debenture designated for redemption as a whole or in part
shall not affect the validity of the proceedings for the redemption of any other
Debenture. Concurrently with the mailing of any such notice of redemption, the
Company shall (i) issue a press release announcing such redemption, (ii) publish
such information once in a daily newspaper printed in the English language and
of general circulation in the Borough of Manhattan, City of New York, and (iii)
publish such information on the Company's website; it being understood that the
form and content of such press release and such publications shall be determined
by the Company in its sole discretion. None of the failure to issue any such
press release nor make such publications nor any defect therein shall affect the
validity of the redemption notice or any of the proceedings for the redemption
of any Debenture called for redemption.
Each such notice of redemption shall specify the aggregate principal
amount of Debentures to be redeemed, the CUSIP number or numbers of the
Debentures being redeemed, the Redemption Date (which shall be a Business Day),
the Redemption Price at which Debentures are to be redeemed and whether such
Redemption Price will be paid in cash, Common Shares, or, if a combination
thereof, the percentages of the Redemption Price that the Company will pay in
cash and Common Shares, the place or places of payment, that payment will be
made upon presentation and surrender of such Debentures, that interest accrued
and unpaid to the Redemption Date will be paid as specified in said notice, and
that on and after said date interest thereon or on the portion thereof to be
redeemed will cease to accrue. Such notice shall also state the current
Conversion Rate and Conversion Price and the date on which the right to convert
such Debentures or portions thereof into Common Shares will expire. If fewer
than all the Outstanding Debentures are to be redeemed, the notice of redemption
shall identify the Debentures to be redeemed (including CUSIP numbers, if any).
In case any Debenture is to be redeemed in part only, the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that, on and after the Redemption Date, upon surrender of such Debenture,
a new Debenture or Debentures in principal amount equal to the unredeemed
portion thereof will be issued.
The Redemption Price shall be payable, at the Company's election, in
cash, Common Shares, or a combination of cash and Common Shares; provided that
the Company shall not be permitted to pay all or any portion of the Redemption
Price in Common Shares unless:
(a) the Company shall have given timely notice pursuant to this
Section 3.02 of its intention to purchase some or all of the Debentures with
Common Shares as provided herein;
(b) the Company shall have registered such Common Shares under the
Securities Act and the Exchange Act, in each case, if required;
23
(c) any necessary qualification or registration under applicable
state securities laws has been obtained; and
(d) the Common Shares (including the Common Shares delivered
pursuant to this Section 3.02) have been approved for listing on a United States
national securities exchange or have been approved for quotation in an
inter-dealer quotation system of any registered United States national
securities association.
If the foregoing conditions are not satisfied with respect to any
holder or holders of Debentures prior to the close of business on the last day
prior to the Redemption Date and the Company has elected to redeem the
Debentures pursuant to this Section through the issuance of Common Shares, then,
notwithstanding any election by the Company to the contrary, the Company shall
pay the entire Redemption Price of the Debentures of such holder or holders in
cash.
Payment of the specified portion of the Redemption Price in Common
Shares pursuant to this Section 3.02 hereof shall be made by the issuance of a
number of Common Shares equal to the quotient obtained by dividing (i) the
portion of the Redemption Price to be paid in Common Shares by (ii) ninety-seven
and one-half percent (97.5%) of the average of the Closing Sale Prices of the
Common Shares for the ten (10) consecutive Trading Days ending on the fifth
Trading Day prior to the Redemption Date (appropriately adjusted to take into
account the occurrence during such period of any event described in Section
16.05). The Company shall not issue fractional Common Shares in payment of the
Redemption Price. Instead, the Company shall pay cash based on the Closing Sale
Price of the Common Shares on the Redemption Date for all fractional shares. If
a holder of Debentures delivers more than one Debenture for redemption, the
number of Common Shares shall be based on the aggregate number of Debentures to
be redeemed. Upon determination of the actual number of Common Shares to be
issued upon redemption of the Debentures, the Company shall be required to
disseminate a press release through Dow Jones & Corporation, Inc. or Bloomberg
Business News containing this information and publish the information on the
Company's website or through such other public medium as the Company may use at
that time.
If the Company gives notice of redemption, then the Company shall, on
the Redemption Date, before 12:00 p.m., New York City time, to the extent funds
are legally available, with respect to:
(e) Debentures held by DTC or its nominees, deposit or cause to be
deposited, irrevocably with DTC cash or Common Shares, as applicable, sufficient
to pay the Redemption Price and shall give DTC irrevocable instructions and
authority to pay the Redemption Price to holders of such Debentures; and
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(f) Debentures held in certificated form, deposit or cause to be
deposited, irrevocably with the Trustee cash or Common Shares, as applicable,
sufficient to pay the Redemption Price and shall give the Trustee irrevocable
instructions and authority to pay the Redemption Price to holders of such
Debentures upon surrender of their certificates evidencing their Debentures.
Payment of the Redemption Price for Debentures is conditioned upon
book-entry transfer or physical delivery of certificates representing the
Debentures, together with necessary endorsements, to the Trustee at any time
after delivery of the notice of redemption. The Company shall be entitled to
retain any interest, yield or gain on amounts deposited with the Trustee or any
paying agent pursuant to this Section 3.02 in excess of amounts required
hereunder to pay the Redemption Price. Payment of the Redemption Price for the
Debentures will be made (i) if book-entry transfer of or physical delivery of
the Debentures has been made by or on the Redemption Date, on the Redemption
Date or (ii) if book-entry transfer of or physical delivery of the Debentures
has not been made by or on such date, at the time of book-entry transfer or of
physical delivery of the Debentures. If any Debenture called for redemption is
converted pursuant to Section 16.01 hereto prior to such Redemption Date, any
money or Common Shares deposited with the Trustee or any paying agent or so
segregated and held in trust for the redemption of such Debenture shall be paid
or delivered to the Company upon its written request, or, if then held by the
Company, shall be discharged from such trust. Whenever any Debentures are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers' Certificate not fewer than thirty-five (35) calendar days (or such
shorter period of time as may be acceptable to the Trustee) prior to the
Redemption Date as to the aggregate principal amount of Debentures to be
redeemed.
If fewer than all of the Outstanding Debentures are to be redeemed, the
Company shall select, pro rata or by lot, the Debentures or portions thereof of
the Global Debenture or the Debentures in certificated form to be redeemed (in
principal amounts of $1,000 or multiples thereof) in such manner as shall be
prescribed by the Board of Directors. If any Debenture selected for partial
redemption is submitted for conversion in part after such selection, the portion
of such Debenture submitted for conversion shall be deemed (so far as may be
possible) to be the portion to be selected for redemption. The Debentures (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Debenture is submitted for
conversion in part before the mailing of the notice of redemption.
Upon any redemption of less than all of the Outstanding Debentures, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Debentures as are unconverted and Outstanding
at the time of redemption, treat as Outstanding any Debentures surrendered for
conversion during the period of fifteen (15) calendar days next preceding the
mailing of a notice of redemption and may (but need not) treat as
25
Outstanding any Debenture authenticated and delivered during such period in
exchange for the unconverted portion of any Debenture converted in part during
such period.
Section 3.03. Payment of Debentures Called For Redemption by the
Company. If notice of redemption has been given as provided in Section 3.02, the
Debentures or portion of Debentures with respect to which such notice has been
given shall, unless converted into Common Shares pursuant to the terms hereof,
become due and payable on the Redemption Date and at the place or places stated
in such notice at the applicable Redemption Price, and on and after said date
(unless the Company shall default in the payment of such Debentures at the
Redemption Price). Interest on the Debentures or portion of Debentures so called
for redemption shall cease to accrue and, after the close of business on the
Business Day immediately preceding the Redemption Date (unless the Company shall
default in the payment of such Debentures at the Redemption Price) such
Debentures shall cease to be convertible into Common Shares and, except as
provided in Section 9.09 and Section 14.04, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no right in
respect of such Debentures except the right to receive the Redemption Price
thereof. On presentation and surrender of such Debentures at a place of payment
in said notice specified, the said Debentures or the specified portions thereof
shall be paid and redeemed by the Company at the applicable Redemption Price,
provided that if the Redemption Date falls after a Record Date and on or prior
to the corresponding interest payment date, then the interest payable on such
interest payment date shall be paid to the holders of record of such Debentures
on the applicable Record Date instead of the holders surrendering such
Debentures for redemption on such date.
Upon presentation of any Debenture redeemed in part only, the Company
shall execute and the Trustee shall authenticate and make available for delivery
to the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of authorized denominations, in principal amount equal to the
unredeemed portion of the Debentures so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Debentures or mail any notice of redemption during the continuance of an
acceleration in payment of interest on the Debentures, of which the Trustee has
knowledge or has received notice as provided in this Indenture. If any Debenture
called for redemption shall not be so paid upon surrender thereof for
redemption, such Debenture shall remain convertible into Common Shares until the
principal and interest shall have been paid or duly provided for.
Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Debentures, the Company may arrange for the
purchase and conversion of any Debentures by an agreement with one or more
investment banks or other purchasers to purchase such Debentures by paying to
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the Trustee in trust for the Debentureholders, on or before the Redemption Date,
an amount not less than the applicable Redemption Price of such Debentures.
Notwithstanding anything to the contrary contained in this Article 3, the
obligation of the Company to pay the Redemption Price of such Debentures shall
be deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which will be
filed with the Trustee prior to the Redemption Date, any Debentures not duly
surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 16) surrendered by such purchasers for conversion, all as
of the time immediately prior to the close of business on the Redemption Date
(and the right to convert any such Debentures shall be extended through such
time), subject to payment of the above amount as aforesaid. At the direction of
the Company, the Trustee shall hold and dispose of any such amount paid to it in
the same manner as it would monies deposited with it by the Company for the
redemption of Debentures. Without the Trustee's prior written consent, no
arrangement between the Company and such purchasers for the purchase and
conversion of any Debentures shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture.
Section 3.05. Repurchase at Option of Holders Upon a Designated Event.
If there shall occur a Designated Event at any time prior to maturity of the
Debentures, then each Debentureholder shall have the right, at such holder's
option, to require the Company to repurchase all of such holder's Debentures, or
any portion thereof that is a multiple of $1,000 principal amount, as of a date
(the "DESIGNATED EVENT PURCHASE DATE") specified by the Company that is thirty
(30) calendar days after the date on which the Designated Event Notice with
respect to such Designated Event has been mailed to holders of the Debentures
pursuant to Section 3.02(b) at a repurchase price equal to one-hundred percent
(100%) of the principal amount thereof, together with accrued and unpaid
interest and Liquidated Damages, if any, to but excluding, the Designated Event
Purchase Date (the "DESIGNATED EVENT PURCHASE PRICE"); provided that if the
thirtieth calendar day after the date of the Designated Event Notice is not a
Business Day, the Designated Event Purchase Date will be the next succeeding
Business Day; and provided further that if such Designated Event Purchase Date
falls after a Record Date and on or prior the corresponding interest payment
date, then the full amount of interest payable on such interest payment date
shall be paid to the holders of record of the Debentures on the applicable
Record Date instead of the holders surrendering the Debentures for repurchase on
the Designated Event Purchase Date. Repurchases of Debentures under this Section
3.05 shall be made, at the option of the holder thereof, upon:
(i) delivery to the Trustee (or other paying agent
appointed by the Company) by a holder of a duly completed and executed
notice (the
27
"DESIGNATED EVENT PURCHASE NOTICE") in the form set forth on the
reverse of the Debenture prior to the close of business on the Business
Day prior to the Designated Event Purchase Date; and
(ii) delivery or book-entry transfer of the Debentures to
the Trustee (or other paying agent appointed by the Company) at any
time simultaneous with or after delivery of the Designated Event
Purchase Notice (together with all necessary endorsements) at the
Corporate Trust Office of the Trustee (or other paying agent appointed
by the Company) in the Borough of Manhattan as provided in Section
6.02, such delivery being a condition to receipt by the holder of the
Designated Event Purchase Price therefor; provided that such Designated
Event Purchase Price shall be so paid pursuant to this Section 3.05
only if the Debenture so delivered to the Trustee (or other paying
agent appointed by the Company) shall conform in all respects to the
description thereof in the related Designated Event Purchase Notice.
The Company shall purchase from the holder thereof, pursuant to this
Section 3.05, a portion of a Debenture, if the principal amount of such portion
is $1,000 or a whole multiple of $1,000. Provisions of this Indenture that apply
to the purchase of all of a Debenture also apply to the purchase of such portion
of such Debenture.
Notwithstanding anything herein to the contrary, any holder delivering
to the Trustee (or other paying agent appointed by the Company) the Designated
Event Purchase Notice contemplated by this Section 3.05 shall have the right to
withdraw such Designated Event Purchase Notice at any time prior to the close of
business on the Business Day prior to the Designated Event Purchase Date by
delivery of a written notice of withdrawal to the Trustee (or other paying agent
appointed by the Company) in accordance with Section 3.05(c) below.
The Trustee (or other paying agent appointed by the Company) shall
promptly notify the Company of the receipt by it of any Designated Event
Purchase Notice or written notice of withdrawal thereof.
(b) Within 15 calendar days after the occurrence of a Designated
Event, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee, in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Designated Event a notice (the "DESIGNATED EVENT NOTICE") of the
occurrence of such Designated Event and of the repurchase right at the option of
the holders arising as a result thereof. Such notice shall be mailed in the
manner and with the effect set forth in the first paragraph of Section 3.02
(without regard for the time limits set forth therein). If the Company shall
give such notice, the Company
28
shall also deliver a copy of the Designated Event Notice to the Trustee at such
time as it is mailed to Debentureholders. Concurrently with the mailing of any
Designated Event Notice, the Company shall issue a press release announcing such
Designated Event referred to in the Designated Event Notice and publish such
information on its website, the form and content of which press release and
publication shall be determined by the Company in its sole discretion. The
failure to issue any such press release or any defect therein shall not affect
the validity of the Designated Event Notice or any proceedings for the
repurchase of any Debenture which any Debentureholder may elect to have the
Company repurchase as provided in this Section 3.05.
Each Designated Event Notice shall specify the events causing the
Designated Event, the date of such Designated Event, the Designated Event
Purchase Date, the Designated Event Purchase Price that will be payable with
respect to the Debentures as of the Designated Event Purchase Date, and whether
such Designated Event Purchase Price will be paid in cash or Common Shares or
any specified combination thereof, the last date on which the purchase right may
be exercised, the name and address of the Trustee or other Paying Agent, the
applicable Conversion Rate and any adjustments thereto, the requirement that any
Designated Event Purchase Notice delivered with respect to a Debenture must be
withdrawn in accordance with the terms of this Section 3.05 prior to conversion
of the relevant Debenture, the procedures that a Debentureholder must follow to
exercise such repurchase right (including a form of Designated Event Purchase
Notice) and to withdraw any surrendered Debentures (including a form of
withdrawal notice), and the CUSIP number or numbers of the Debentures (if then
generally in use).
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Debentureholders' repurchase rights or affect the
validity of the proceedings for the repurchase of the Debentures pursuant to
this Section 3.05.
(c) Notwithstanding anything herein to the contrary, any holder of
Debentures delivering to the office of the Trustee (or other paying agent
appointed by the Company) the Designated Event Purchase Notice shall have the
right to withdraw such Designated Event Purchase Notice in whole or as to a
portion thereof that is an integral multiple of $1,000 of outstanding principal
amount of the Debentures thereof at any time prior to the close of business on
the Business Day before the Designated Event Purchase Date by delivery of a
written notice of withdrawal to the Trustee (or other paying agent appointed by
the Company) in accordance with provisions of this Section 3.05(c). The Trustee
(or other paying agent appointed by the Company) shall promptly notify the
Company of the receipt by it of any Designated Event Purchase Notice or written
withdrawal thereof. A Designated Event Purchase Notice may be withdrawn by means
of a written notice of withdrawal delivered to the office of the Trustee (or
other paying agent appointed by the Company) in accordance with the Designated
29
Event Purchase Notice at any time prior to the close of business on the Business
Day prior to the applicable Designated Event Purchase Date specifying:
(i) the certificate number, if any, of the Debenture in
respect of which such notice of withdrawal is being submitted, or the
appropriate Depositary information if the Debenture in respect of which
such notice of withdrawal is being submitted is represented by a Global
Debenture,
(ii) the principal amount of the Debenture with respect to
which such notice of withdrawal is being submitted, and
(iii) the principal amount, if any, of such Debenture that
remains subject to the original Designated Event Purchase Notice and
that has been or will be delivered for purchase by the Company.
The Trustee (or other paying agent appointed by the Company) will
promptly return to the respective holders thereof any Debentures with respect to
which a Designated Event Purchase Notice has been withdrawn in compliance with
this Indenture, in which case, upon such return, the Designated Event Purchase
Notice with respect thereto shall be deemed to have been withdrawn.
(d) The Designated Event Purchase Price shall be paid, at the
option of the Company, in cash, Common Shares, or any combination thereof;
provided that the Company shall not be permitted to pay all or any portion of
the Designated Event Purchase Price in Common Shares unless:
(i) the Company shall have given timely notice pursuant
to Section 3.05(b) hereof of its intention to purchase all or a
specified percentage of the Debentures with Common Shares as provided
herein;
(ii) the Company shall have registered such Common Shares
under the Securities Act and the Exchange Act, in each case, if
required;
(iii) the Common Shares (including the Common Shares
delivered pursuant to this Section 3.05) have been approved for listing
of on a United States national securities exchange or have been
approved for quotation in an inter-dealer quotation system of any
registered United States national securities association; and
(iv) any necessary qualification or registration under
applicable state securities laws has been obtained;
provided further that if the Company shall be prohibited under any agreements
applicable to it from paying the Designated Event Purchase Price in cash, or an
event of default (howsoever described) shall arise under any such agreement upon
the payment of the Designated Event Purchase Price in cash, then,
notwithstanding any notice by the Company to the contrary, the Company shall,
30
to the extent not prohibited by such agreements and applicable law, pay the
Designated Event Purchase Price in Common Shares or, in the case of a merger in
which the Company is not the surviving Person, common shares of the surviving
Person or its direct or indirect parent. If the foregoing conditions to pay the
Designated Event Purchase Price in Common Shares are not satisfied with respect
to any holder or holders of Debentures prior to the close of business on the
Business Day prior to the Designated Event Purchase Date and the Company has
elected to purchase the Debentures pursuant to this Section through the issuance
of Common Shares, then, notwithstanding any election by the Company to the
contrary, the Company shall pay the entire Designated Event Purchase Price of
the Debentures of such holder or holders in cash to the extent not prohibited by
law or contract.
Upon receipt by the Trustee of the Designated Event Purchase Notice,
the holder of the Debentures in respect of which such Designated Event Purchase
Notice was given shall (unless such Designated Event Purchase Notice is
withdrawn as specified below) thereafter be entitled to receive the Designated
Event Purchase Price with respect to such Debentures, subject to the
satisfaction of the conditions set forth in this Section 3.05. Such Designated
Event Purchase Price shall be paid to such holder at the later of (a) the
Designated Event Purchase Date with respect to such Debentures and (b) the time
of delivery of such Debentures to the Trustee by the holder thereof in the
manner required by this Section. Debentures in respect of which a Designated
Event Purchase Notice has been given by the holder thereof may not be converted
into Common Shares on or after the date of the delivery of such Designated Event
Purchase Notice unless such Designated Event Purchase Notice has first been
validly withdrawn as specified below.
Payment of the specified portion of the Designated Event Purchase Price
in Common Shares pursuant to this Section 3.05 shall be made by the issuance of
a number of Common Shares equal to the quotient obtained by dividing (x) the
portion of the Designated Event Purchase Price, as the case may be, to be paid
in Common Shares by (y) ninety-seven and one-half percent (97.5%) of the average
of the Closing Sale Prices of the Common Shares for the ten consecutive Trading
Days ending on the fifth Trading Day prior to the Designated Event Purchase Date
(appropriately adjusted to take into account the occurrence, during such period
of any event described in Section 16.05). The Company will not issue fractional
Common Shares in payment of the Designated Event Purchase Price. Instead, the
Company will pay cash based on the Closing Sale Price for all fractional shares
on the Designated Event Purchase Date. If a holder of Debentures elects to have
more than one Debenture repurchased, the number of Common Shares shall be based
on the aggregate number of Debentures to be repurchased. Upon determination of
the actual number of Common Shares to be issued upon repurchase of Debentures,
the Company shall be required to disseminate a press release through Dow Jones &
Corporation, Inc. or Bloomberg Business News containing this information or
publish the information on the
31
Company's website or through such other public medium as the Company may use at
that time.
Prior to 12:00 p.m. (New York City time) on the Designated Event
Purchase Date, the Company shall deposit with the Trustee an amount of cash (in
immediately available funds if deposited on such Business Day), Common Shares,
or combination of cash and Common Shares, as applicable, sufficient to pay the
aggregate Designated Event Purchase Price of all Debentures or portions thereof
that are to be repurchased as of the Designated Event Purchase Date. The manner
in which the deposit required by this Section 3.05 is made by the Company shall
be at the option of the Company, provided, however, that such deposit shall be
made in a manner such that the Trustee shall have immediately available funds on
the date of deposit.
If the Trustee (or other paying agent appointed by the Company) holds,
in accordance with the terms hereof, cash, Common Shares or cash and Common
Shares, as applicable, sufficient to pay the Designated Event Purchase Price of
any Debentures for which a Designated Event Purchase Notice has been tendered
and not withdrawn in accordance with this Indenture on the Business Day prior to
the Designated Event Purchase Date then, as of such Designated Event Purchase
Date, such Debentures will cease to be Outstanding, interest will cease to
accrue thereon and the rights of the holder in respect thereof shall terminate
(other than the right to receive the Designated Event Purchase Price as
aforesaid). The Company shall publicly announce the number of Debentures
repurchased as a result of such Designated Event on or as soon as practicable
after the Designated Event Purchase Date.
The Trustee shall return to the Company any cash that remains unclaimed
for two years, subject to applicable unclaimed property law, together with
interest, if any, thereon held by them for the payment of the Designated Event
Purchase Price; provided, however, that to the extent that the aggregate amount
of cash or value of Common Shares deposited by the Company pursuant to this
Section exceeds the aggregate Designated Event Purchase Price of the Debentures
or portions thereof that the Company is obligated to purchase as of the
Designated Event Purchase Date, then on the Business Day following the
Designated Event Purchase Date, the Trustee shall return any such excess to the
Company. Thereafter, any holders entitled to payment must look to the Company
for payment as general creditors, unless an applicable abandoned property law
designates another Person.
(e) In the case of a reclassification, change, consolidation,
merger, combination, sale or conveyance to which Section 16.06 applies, in which
the Common Shares of the Company issuable upon conversion of the Debentures
changed or exchanged as a result into the right to receive stock, securities or
other property or assets (including cash), which includes Common Shares of the
Company or common shares of another Person that are, or upon issuance will be,
32
traded on a United States national securities exchange or approved for trading
on an established automated over-the-counter trading market in the United States
and such shares constitute at the time such change or exchange becomes effective
in excess of fifty percent (50%) of the aggregate Fair Market Value of such
stock, securities or other property or assets (including cash) (as determined by
the Company, which determination shall be conclusive and binding), then the
Person formed by such consolidation or resulting from such merger or that
acquires such assets, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture (accompanied by an Opinion of Counsel that such
supplemental indenture complies with the Trust Indenture Act as in force at the
date of execution of such supplemental indenture) modifying the provisions of
this Indenture relating to the right of holders of the Debentures to cause the
Company to repurchase the Debentures following a Designated Event, including
without limitation the applicable provisions of this Section 3.05 and the
definitions of Common Shares and Designated Event, as appropriate, as determined
in good faith by the Company (which determination shall be conclusive and
binding), to make such provisions apply to such other Person if different from
the Company and the common shares issued by such Person (in lieu of the Company
and the Common Shares of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and
any other tender offer rules under the Exchange Act (including, without
limitation, filing a Schedule TO or other schedule) to the extent then
applicable in connection with the repurchase rights of the holders of Debentures
in the event of a Designated Event.
Section 3.06. [Reserved.]
Section 3.07. [Reserved.]
Section 3.08. [Reserved.]
Section 3.09. [Reserved.]
Section 3.10. Debentures Repurchased in Part. Upon presentation of any
Debenture repurchased pursuant to Section 3.05 only in part, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Debenture or
Debentures, of any authorized denomination, in aggregate principal amount equal
to the unrepurchased portion of the Debentures presented.
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ARTICLE 4
SUBORDINATION OF DEBENTURES
Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each holder of Debentures issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Debentures shall be issued subject to
the provisions of this Article 4, and each Person holding any Debenture, whether
upon original issue or upon registration of transfer, assignment or exchange
thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of and interest on all Debentures
(including, but not limited to, the Redemption Price with respect to the
Debentures called for redemption in accordance with Section 3.02, the Designated
Event Purchase Price with respect to Debentures submitted for repurchase in
accordance with Section 3.05, and any other payment payable in respect of
Debentures pursuant to the provisions of this Indenture) issued hereunder shall,
to the extent and in the manner hereinafter set forth, be subordinated and
subject in right of payment to the prior payment in full of all Senior
Indebtedness, whether outstanding at the date of this Indenture or thereafter
incurred.
No provision of this Article 4 shall prevent the occurrence of any
Default or Event of Default hereunder.
Section 4.02. Payments to Debentureholders. No payment shall be made
with respect to the principal of or interest on the Debentures (including, but
not limited to, the Redemption Price with respect to the Debentures called for
redemption in accordance with Section 3.02, the Designated Event Purchase Price
with respect to Debentures submitted for repurchase in accordance with Section
3.05 and any other payment payable in respect of Debentures pursuant to the
provisions of this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 4.06, if:
(i) a default in the payment of principal (including any
letter of credit reimbursement obligations), premium, if any, interest,
rent, commissions or other obligations in respect of Senior
Indebtedness occurs and is continuing (or, in the case of Senior
Indebtedness for which there is a period of grace, in the event of such
a default that continues beyond the period of grace, if any, specified
in the instrument or lease evidencing such Senior Indebtedness) or any
other default on Senior Indebtedness occurs and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms (a
"PAYMENT DEFAULT"); or
(ii) a default, other than a Payment Default, on any
Designated Senior Indebtedness occurs and is continuing that permits
holders of such Designated Senior Indebtedness to accelerate its
maturity without further notice (except such notice as may be required
to effect such acceleration)
34
(or in the case of any lease that is Designated Senior Indebtedness, a
default occurs and is continuing that permits the lessor to either
terminate the lease or require the Company to make an irrevocable offer
to terminate the lease following an event of default thereunder) and
the Trustee receives a notice of the default (a "PAYMENT BLOCKAGE
NOTICE") from a Representative of Designated Senior Indebtedness (a
"NON-PAYMENT DEFAULT").
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.02 unless and until at least 360 calendar days shall
have elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. Notwithstanding the foregoing, if any Payment Blockage Notice
within such 360-day period is given by or on behalf of holders of Designated
Senior Indebtedness (other than the administrative agent under the Existing
Debt), the administrative agent under the Existing Debt may give another Payment
Blockage Notice within such period. No Non-Payment Default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice unless
such Non-Payment Default shall have been cured or waived for a period of not
less than 90 consecutive days.
The Company may and shall resume payments on and distributions in
respect of the Debentures (including, but not limited to, the Redemption Price
with respect to the Debentures to be redeemed and Designated Event Purchase
Price with respect to Debentures to be repurchased):
(1) in the case of a Payment Default, on the date upon
which any such Payment Default is cured or waived or ceases to exist,
or
(2) in the case of a Non-Payment Default, on the earlier
of (a) the date upon which such default is cured or waived or ceases to
exist or (b) 179 calendar days after the applicable Payment Blockage
Notice is received by the Trustee if the maturity of such Designated
Senior Indebtedness has not been accelerated and there is no Payment
Default (or in the case of any lease, 179 calendar days after notice is
received if the Company and the Trustee have not received notice that
the lessor under such lease has exercised its right to terminate the
lease or require the Company to make an irrevocable offer to terminate
the lease following an event of default thereunder and there is no
Payment Default), unless this Article 4 otherwise prohibits the payment
or distribution at the time of such payment or distribution (including,
without limitation, by reason of the existence of a Payment Blockage
Notice that is still in effect by the holders of other Designated
Senior Indebtedness).
35
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness before any payment is
made on account of the principal of or interest on the Debentures (except
payments made pursuant to Article 4 from monies deposited with the Trustee
pursuant thereto prior to commencement of proceedings for such dissolution,
winding up, liquidation or reorganization), and upon any such dissolution or
winding up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other similar proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Debentures
or the Trustee would be entitled, except for the provisions of this Article 4,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Debentures or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior
Indebtedness (pro rata to such holders on the basis of the respective amounts of
Senior Indebtedness held by such holders, or as otherwise required by law or a
court order) or their Representative or Representatives, as their respective
interests may appear, to the extent necessary to pay all Senior Indebtedness in
full, in cash or other payment satisfactory to the holders of such Senior
Indebtedness, after giving effect to any concurrent payment or distribution to
or for the holders of Senior Indebtedness, before any payment or distribution is
made to the holders of the Debentures or to the Trustee.
For purposes of this Article 4, the words, "CASH, PROPERTY OR
SECURITIES" shall not be deemed to include Common Shares of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 4 with respect
to the Debentures to the payment of all Senior Indebtedness that may at the time
be outstanding; provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases that are not
assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article 13 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes
36
of this Section 4.02 if such other Person shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article 13.
In the event of the acceleration of the Debentures because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
holder of Debentures in respect of the principal of or interest on the
Debentures (including, but not limited to, the Redemption Price with respect to
the Debentures called for redemption in accordance with Section 3.02 or the
Designated Event Purchase Price with respect to the Debentures submitted for
repurchase in accordance with Section 3.05), except payments and distributions
made by the Trustee as permitted by the second paragraph of Section 4.06, until
all Senior Indebtedness has been paid in full in cash or other payment
satisfactory to the holders of Senior Indebtedness or such acceleration is
rescinded in accordance with the terms of this Indenture. If payment of the
Debentures is accelerated because of an Event of Default, the Company or, at the
Company's request and expense, the Trustee shall promptly notify holders of
Senior Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.02, shall be received by the Trustee or the holders of the Debentures before
all Senior Indebtedness is paid in full in cash or other payment satisfactory to
the holders of such Senior Indebtedness, such payment or distribution shall be
held in trust for the benefit of and shall be paid over or delivered to the
holders of Senior Indebtedness or their Representative or Representatives, as
their respective interests may appear, as calculated by the Company, to be held
or applied to the payment of any Senior Indebtedness remaining unpaid to the
extent necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.06. This Section 4.02 shall be
subject to the further provisions of Section 4.06.
Section 4.03. Subrogation of Debentures. Subject to the payment in full
of all Senior Indebtedness, the rights of the holders of the Debentures shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article 4 (equally
and ratably with the holders of all indebtedness of the Company that by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Debentures are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of Senior
Indebtedness to receive payments or distributions of cash, property or
securities of the Company applicable to the Senior Indebtedness until the
principal of and interest on the
37
Debentures shall be paid in full. For the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the holders of the Debentures or the Trustee
would be entitled except for the provisions of this Article 4, and no payments
over pursuant to the provisions of this Article 4 to or for the benefit of the
holders of Senior Indebtedness by holders of the Debentures or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness and the holders of the Debentures, be deemed to be a payment by the
Company to or on account of the Senior Indebtedness.
Section 4.04. Obligations of Company Unconditional. The provisions of
this Article 4 are intended solely for the purposes of defining the relative
rights of the holders of the Debentures, on the one hand, and the holders of the
Senior Indebtedness, on the other hand. Nothing contained in this Article 4 or
elsewhere in this Indenture or in the Debentures is intended to or shall impair,
as among the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Debentures, the obligation of the Company,
which is absolute and unconditional, to pay to the holders of the Debentures the
principal of, and interest on the Debentures as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holders of the Debentures and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall anything
herein or therein prevent the Trustee or, subject to Section 8.04, the holder of
any Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article 4 of the holders of Senior Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Section 4.05. Authorization to Effect Subordination. Each holder of a
Debenture by the holder's acceptance thereof authorizes and directs the Trustee
on the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and hereby appoints
the Trustee to act as the holder's attorney-in-fact for any and all such
purposes. If the Trustee does not file a proper proof of claim or proof of debt
in the form required in any proceeding referred to in the third paragraph of
Section 8.02 hereof at least thirty (30) calendar days before the expiration of
the time to file such claim, the holders of any Senior Indebtedness or their
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the holders of the Debentures.
Section 4.06. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Debentures pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
38
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Debentures pursuant to the provisions of this Article
4, unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness, and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01, shall be entitled in all
respects to assume that no such facts exist; provided that if on a date not less
than one Business Day prior to the date upon which by the terms hereof any such
monies may become payable for any purpose (including, without limitation, the
payment of the principal of or interest on any Debenture) the Trustee shall not
have received, with respect to such monies, the notice provided for in this
Section 4.06, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.
Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Debenture holders of monies
deposited with it pursuant to Section 14.01.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a Person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 4 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 4.
Section 4.07. Trustee's Relation to Senior Indebtedness. The Trustee,
in its individual capacity, shall be entitled to all the rights set forth in
this Article 4 in respect of any Senior Indebtedness at any time held by it, to
the same extent as any other holder of Senior Indebtedness, and nothing in
Section 9.13 or elsewhere in this Indenture shall deprive the Trustee of any of
its rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee does not and shall not be
deemed to owe any fiduciary duty to the holders of Senior Indebtedness and,
subject to the provisions of Section 9.01, the Trustee shall not be liable to
any holder of Senior
39
Indebtedness (i) for any failure to make any payments or distributions to such
holder or (ii) if it shall pay over or deliver money to holders of Debentures,
the Company or any other Person in compliance with this Article 4.
Section 4.08. No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed or extended and holders of Senior
Indebtedness may exercise any rights under any instrument creating or evidencing
such Senior Indebtedness, including, without limitation, any waiver of default
thereunder, without any notice to or consent from the holders of the Debentures
or the Trustee. No compromise, alteration, amendment, modification, extension,
renewal or other change of, or waiver, consent or other action in respect of,
any liability or obligation under or in respect of the Senior Indebtedness or
any terms or conditions of any instrument creating or evidencing such Senior
Indebtedness shall in any way alter or affect any of the provisions of this
Article 4 or the subordination of the Debentures provided thereby.
Section 4.09. Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of Junior Securities upon
conversion of Debentures in accordance with Article 16 and (2) the payment,
issuance or delivery of cash, property or securities upon conversion of a
Debenture as a result of any transaction specified in Section 16.06 shall not be
deemed to constitute a payment or distribution on account of the principal of or
interest on Debentures or on account of the purchase or other acquisition of
Debentures. For the purposes of this Section 4.09, the term "JUNIOR SECURITIES"
means (a) Common Shares of the Company or (b) securities of the Company that are
subordinated in right of payment to all Senior Indebtedness that may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Debentures
are so subordinated as provided in this Article 4. Nothing contained in this
Article 4 or elsewhere in this Indenture or in the Debentures is intended to or
shall impair, as among the Company, its creditors (other than holders of Senior
Indebtedness) and the Debentureholders, the right, which is absolute and
unconditional, of the Holder of any Debenture to convert such Debenture in
accordance with Article 16.
Section 4.10. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "TRUSTEE" as used in this Article 4 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 4 in addition to or
in place of the
40
Trustee; provided that the first paragraph of Section 4.06 shall not apply to
the Company or any Affiliate of the Company if it or such Affiliate acts as
paying agent.
The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.
Section 4.11. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon and enforce the provisions of
this Article 4, and no amendment or modification of the provisions contained
herein shall diminish the rights of such holders unless such holders shall have
agreed in writing thereto.
Section 4.12. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Debentureholders 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, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the
Debentureholders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 4.
ARTICLE 5
[RESERVED.]
ARTICLE 6
PARTICULAR COVENANTS OF THE COMPANY
Section 6.01. Payment of Principal and Interest. The Company covenants
and agrees that it will duly and punctually pay or cause to be paid the
principal of and interest, on each of the Debentures (including the Redemption
Price upon redemption or the Designated Event Purchase Price upon repurchase, in
each case pursuant to Article 3), at the places, at the respective times and in
the manner provided herein and in the Debentures.
Section 6.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, The City of New York,
where the Debentures may be surrendered for registration of transfer or
41
exchange or for presentation for payment or for conversion, redemption or
repurchase and where notices and demands to or upon the Company in respect of
the Debentures and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency not designated or appointed by the Trustee. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office or the corporate trust office of the Trustee in the Borough of Manhattan
which office is located at [Insert address of Trustee].
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Debentures may be presented or surrendered
for any or all such purposes and may from time to time rescind such
designations. The Company will give prompt written notice of any such
designation or rescission and of any change in the location of any such other
office or agency.
The Company hereby initially designates the Trustee as paying agent,
Debenture Registrar, Custodian and conversion agent and each of the Corporate
Trust Office and the office of agency of the Trustee in the Borough of
Manhattan, shall be considered as one such office or agency of the Company for
each of the aforesaid purposes.
So long as the Trustee is the Debenture Registrar, the Trustee agrees
to mail, or cause to be mailed, the notices set forth in Section 9.10(a) and the
third paragraph of Section 9.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the holders of Debentures it can identify from its records.
Section 6.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 9.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 6.04. Provisions as to Paying Agent. (a) If the Company shall
appoint a paying agent other than the Trustee, or if the Trustee shall appoint
such a paying agent, the Company will cause such paying agent to execute and
deliver to the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section 6.04:
(1) that it will hold all sums held by it as such agent
for the payment of the principal of or interest on the Debentures
(whether such sums have been paid to it by the Company or by any other
obligor on the Debentures) in trust for the benefit of the holders of
the Debentures;
42
(2) that it will give the Trustee notice of any failure
by the Company (or by any other obligor on the Debentures) to make any
payment of the principal of or interest on the Debentures when the same
shall be due and payable; and
(3) that at any time during the continuance of an Event
of Default, upon request of the Trustee, it will forthwith pay to the
Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of or
interest on the Debentures, deposit with the paying agent a sum (in funds which
are immediately available on the due date for such payment) sufficient to pay
such principal or interest and (unless such paying agent is the Trustee) the
Company will promptly notify the Trustee of any failure to take such action;
provided that if such deposit is made on the due date, such deposit shall be
received by the paying agent by 10:00 a.m. New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on
or before each due date of the principal of or interest on the Debentures, set
aside, segregate and hold in trust for the benefit of the holders of the
Debentures a sum sufficient to pay such principal or interest so becoming due
and will promptly notify the Trustee of any failure to take such action and of
any failure by the Company (or any other obligor under the Debentures) to make
any payment of the principal of or interest on the Debentures when the same
shall become due and payable.
(c) Anything in this Section 6.04 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 6.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
(d) Anything in this Section 6.04 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 6.04 is subject
to Sections Section 14.03 and Section 14.04.
The Trustee shall not be responsible for the actions of any other
paying agents (including the Company if acting as its own paying agent) and
shall have no control of any funds held by such other paying agents.
Section 6.05. Existence. Subject to Article 13, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided that the
Company shall
43
not be required to preserve any such right if the Company shall determine that
the preservation thereof is no longer desirable in the conduct of the business
of the Company and that the loss thereof is not disadvantageous in any material
respect to the Debentureholders.
Section 6.06. Rule 144A Information Requirement. Within the period
prior to the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, upon three (3) Business Days'
prior notice, make available to any holder or beneficial holder of Debentures or
any Common Shares issued upon conversion thereof that continue to be Restricted
Securities in connection with any sale thereof and any prospective purchaser of
Debentures or such Common Shares designated by such holder or beneficial holder,
the information required pursuant to Rule 144A(d)(4) under the Securities Act
upon the request of any holder or beneficial holder of the Debentures or such
Common Shares and it will take such further action as any holder or beneficial
holder of such Debentures or such Common Shares may reasonably request, all to
the extent required from time to time to enable such holder or beneficial holder
to sell its Debentures or Common Shares without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A
under the Securities Act, as such Rule may be amended from time to time. Upon
the request of any holder or any beneficial holder of the Debentures or such
Common Shares, the Company will deliver to such holder a written statement as to
whether it has complied with such requirements.
Section 6.07. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Debentures as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Company (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
Section 6.08. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) calendar days after the end of each
fiscal year of the Company, a certificate signed by either the principal
executive officer, principal financial officer or principal accounting officer
of the Company, stating whether or not to the best knowledge of the signer
thereof the Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture (without regard to any
period of grace or requirement
44
of notice provided hereunder) and, if the Company shall be in default,
specifying all such defaults and the nature and the status thereof of which the
signer may have knowledge. The first such certificate to be delivered by the
Company pursuant to this Section 6.10 shall be for the fiscal year ending
December 31, [Insert Fiscal Year in which the Indenture is executed].
The Company will promptly deliver to the Trustee, forthwith upon
becoming aware of (i) any default in the performance or observance of any
covenant, agreement or condition contained in this Indenture, or (ii) any Event
of Default, an Officers' Certificate specifying with particularity such default
or Event of Default and further stating what action the Company has taken, is
taking or proposes to take with respect thereto.
Any notice required to be given under this Section 6.08 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
Section 6.09. Liquidated Damages Notice. In the event that the Company
is required to pay Liquidated Damages to holders of Debentures pursuant to the
Registration Rights Agreement, the Company will provide written notice
("LIQUIDATED DAMAGES NOTICE") to the Trustee of its obligation to pay Liquidated
Damages no later than fifteen (15) calendar days prior to the proposed payment
date for the Liquidated Damages, and the Liquidated Damages Notice shall set
forth the amount of Liquidated Damages to be paid by the Company on such payment
date. The Trustee shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Liquidated Damages, or with respect to
the nature, extent or calculation of the amount of Liquidated Damages when made,
or with respect to the method employed in such calculation of the Liquidated
Damages.
Section 6.10. [Reserved.]
Section 6.11. Calculation Of Tax Original Issue Discount. The Company
shall file with the Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of Tax Original Issue Discount (including
daily rates and accrual periods) accrued on Outstanding Debentures as of the end
of such year and (ii) such other specific information relating to such Tax
Original Issue Discount as may then be required under the Internal Revenue Code
of 1986, as amended from time to time, or the Treasury regulations promulgated
thereunder.
ARTICLE 7
DEBENTUREHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
Section 7.01. Debentureholders' Lists. The Company covenants and agrees
that it will furnish or cause to be furnished to the Trustee, semiannually,
45
not more than fifteen (15) calendar days after each July 1 and January 1 in each
year beginning with [Insert Next January 1 or July 1 After Execution of the
Indenture], and at such other times as the Trustee may request in writing,
within thirty (30) calendar days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Debentures as of a date not more than fifteen (15) calendar days
(or such other date as the Trustee may reasonably request in order to so provide
any such notices) prior to the time such information is furnished, except that
no such list need be furnished by the Company to the Trustee so long as the
Trustee is acting as the sole Debenture Registrar.
Section 7.02. Preservation And Disclosure Of Lists. The Trustee shall
preserve, in as current a form as is reasonably practicable, all information as
to the names and addresses of the holders of Debentures contained in the most
recent list furnished to it as provided in Section 7.01 or maintained by the
Trustee in its capacity as Debenture Registrar or co-registrar in respect of the
Debentures, if so acting. The Trustee may destroy any list furnished to it as
provided in Section 7.01 upon receipt of a new list so furnished.
(a) The rights of Debentureholders to communicate with other
holders of Debentures with respect to their rights under this Indenture or under
the Debentures, and the corresponding rights and duties of the Trustee, shall be
as provided by the Trust Indenture Act.
(b) Every Debentureholder, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the Trustee
nor any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of holders of Debentures
made pursuant to the Trust Indenture Act.
Section 7.03. Reports By Trustee. (a) Within sixty (60) calendar days
after December 15 of each year commencing with the year [Insert Year After the
Indenture Is Executed], the Trustee shall transmit to holders of Debentures such
reports dated as of December 15 of the year in which such reports are made
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided
pursuant thereto. Except to the extent required by the Trust Indenture Act, in
the event that no events have occurred under the applicable sections of the
Trust Indenture Act the Trustee shall be under no duty or obligation to provide
such reports.
(b) A copy of such report shall, at the time of such transmission
to holders of Debentures, be filed by the Trustee with each stock exchange and
automated quotation system upon which the Debentures are listed and with the
46
Company. The Company will promptly notify the Trustee in writing when the
Debentures are listed on any stock exchange or automated quotation system or
delisted therefrom.
Section 7.04. Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Debentures, such
information, documents and other reports and such summaries thereof, as may be
required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act, whether or not the Debentures are governed by
such Act; provided that any such information, documents or reports required to
be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange Act
shall be filed with the Trustee within fifteen (15) calendar days after the same
is so required to be filed with the Commission. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and
the Trustee's receipt of such shall not constitute constructive notice of any
information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on an Officers'
Certificates).
ARTICLE 8
REMEDIES OF THE TRUSTEE AND DEBENTUREHOLDERS ON AN EVENT OF
DEFAULT
Section 8.01. Events Of Default. In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body) shall have occurred and be
continuing:
(a) default in the payment of the principal of any of the
Debentures as and when the same shall become due and payable either at maturity,
in connection with any redemption or repurchase pursuant to Article 3, by
acceleration or otherwise, whether or not such payment is permitted under
Article 4 hereof; or
(b) default in the payment of any installment of interest upon any
of the Debentures as and when the same shall become due and payable, and
continuance of such default for a period of thirty (30) calendar days, whether
or not such payment is permitted under Article 4 hereof; or
(c) default in the Company's obligation to deliver Common Shares,
together with cash in lieu of any fractional shares, when due upon conversion of
Debentures as provided in Article 16, and continuance of such default for a
period of ten (10) Business Days; or
47
(d) failure on the part of the Company to provide timely notice of
a Designated Event as provided in Section 3.05(b); or
(e) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the
Debentures or in this Indenture (other than a covenant or agreement a default in
the performance or breach of which is elsewhere in this Section 8.01
specifically dealt with) continued for a period of sixty (60) calendar days
after the date on which written notice of such failure, requiring the Company to
remedy the same, shall have been given to the Company by the Trustee, or the
Company and a Responsible Officer of the Trustee by the holders of at least
twenty-five percent (25%) in aggregate principal amount of the Debentures at the
time Outstanding determined in accordance with Section 10.04; or
(f) the Company shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
the Company or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, or shall consent to any such
relief or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against the Company, or shall
make a general assignment for the benefit of creditors, or shall admit in
writing its inability to generally to pay its debts as they become due; or
(g) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to the Company or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or any
substantial part of the property of the Company, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of sixty
(60) consecutive calendar days;
then, and in each and every such case (other than an Event of Default specified
in Section 8.01(f) or Section 8.01(g)), unless the principal of all of the
Debentures shall have already become due and payable, either the Trustee or the
holders of not less than twenty-five percent (25%) in aggregate principal amount
of the Debentures then Outstanding hereunder determined in accordance with
Section 10.04, by notice in writing to the Company (and to the Trustee if given
by Debentureholders), may declare the principal of all the Debentures and the
interest accrued and unpaid thereon to be due and payable immediately, and upon
any such declaration the same shall become and shall be immediately due and
payable, anything in this Indenture or in the Debentures contained to the
contrary notwithstanding. If an Event of Default specified in Section 8.01(f) or
Section 8.01(g) occurs, the principal of all the Debentures and the interest
accrued and
48
unpaid thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Debentures shall have
been so declared due and payable, and before any judgment or decree for the
payment of the monies due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all Debentures and
the principal of any and all Debentures which shall have become due otherwise
than by acceleration (with interest on overdue installments of interest (to the
extent that payment of such interest is enforceable under applicable law) and on
such principal at the default rate provided for in the Debentures, to the date
of such payment or deposit) and amounts due to the Trustee pursuant to Section
9.06, and if any and all defaults under this Indenture, other than the
nonpayment of principal of and accrued and unpaid interest on Debentures which
shall have become due by acceleration, shall have been cured or waived pursuant
to Section 8.07, then and in every such case the holders of a majority in
aggregate principal amount of the Debentures then Outstanding, by written notice
to the Company and to the Trustee, may waive all defaults or Events of Default
and rescind and annul such declaration and its consequences; but no such waiver
or rescission and annulment shall extend to or shall affect any subsequent
default or Event of Default, or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such
case, subject to any orders entered in such proceedings the Company, the holders
of Debentures, and the Trustee shall be restored respectively to their several
positions and rights hereunder, and all rights, remedies and powers of the
Company, the holders of Debentures, and the Trustee shall continue as though no
such proceeding had been taken.
Section 8.02. Payments of Debentures on Default; Suit Therefor. The
Company covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Debentures as and when the same shall
become due and payable, and such default shall have continued for a period of
thirty (30) calendar days, or (b) in case default shall be made in the payment
of the principal of any of the Debentures as and when the same shall have become
due and payable, whether at maturity of the Debentures, in connection with any
redemption or repurchase pursuant to Article 3, by declaration or otherwise,
then, upon demand of the Trustee, the Company will pay to the Trustee, for the
benefit of the holders of the Debentures, the whole amount that then shall have
become due and payable on all such Debentures for principal or interest, as the
case may be, with interest upon the overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) upon the overdue
installments of interest at the rate provided for in the Debentures, and, in
addition thereto, such
49
further amount as shall be sufficient to cover the costs and expenses of
collection, including reasonable compensation to the Trustee, its agents,
attorneys and counsel, and all other amounts due the Trustee under Section 9.06.
Until such demand by the Trustee, the Company may pay the principal of and
interest on the Debentures to the registered holders, whether or not the
Debentures are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Debentures and collect in the manner provided by law out of the property of the
Company or any other obligor on the Debentures wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Debentures under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Debentures, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Debentures shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 8.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Debentures, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Debentureholders allowed in such judicial proceedings relative to the
Company or any other obligor on the Debentures, its or their creditors, or its
or their property, and to collect and receive any monies or other property
payable or deliverable on any such claims, and to distribute the same after the
deduction of any amounts due the Trustee under Section 9.06, and to take any
other action with respect to such claims, including participating as a member of
any official committee of creditors, as it reasonably deems necessary or
advisable, and, unless prohibited by law or applicable regulations, and any
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
custodian or similar official is hereby authorized by each of the
Debentureholders to make such payments to the Trustee, and, in the event that
the Trustee shall consent to the making of such payments directly to the
Debentureholders, to pay to the Trustee any amount due it for reasonable
compensation, expenses, advances and disbursements, including reasonable
50
counsel fees and expenses incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a senior lien on, and shall be
paid out of, any and all distributions, dividends, monies, securities and other
property which the holders of the Debentures may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Debentures, may be enforced by the Trustee without the
possession of any of the Debentures, or the production thereof at any trial or
other proceeding relative thereto, and any such suit or proceeding instituted by
the Trustee shall be brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment of the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel, be for the ratable benefit of the holders of the
Debentures.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Debentures, and it shall not be necessary to make any holders of the
Debentures parties to any such proceedings.
Section 8.03. Application of Monies Collected By Trustee. Any monies
collected by the Trustee pursuant to this Article 8 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Debentures, and stamping
thereon the payment, if only partially paid, and upon surrender thereof, if
fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
9.06;
SECOND: Subject to the provisions of Article 4, in case the principal
of the Outstanding Debentures shall not have become due and be unpaid, to the
payment of interest on the Debentures in default in the order of the maturity of
the installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue installments of
interest at the default rate provided for in the Debentures, such payments to be
made ratably to the Persons entitled thereto;
THIRD: Subject to the provisions of Article 4, in case the principal of
the Outstanding Debentures shall have become due, by declaration or otherwise,
and be unpaid to the payment of the whole amount then owing and unpaid upon the
Debentures for principal and interest, with interest on the overdue principal
and (to the extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the default rate provided for in the
Debentures, and in
51
case such monies shall be insufficient to pay in full the whole amounts so due
and unpaid upon the Debentures, then to the payment of such principal and
interest without preference or priority of principal over interest, or of
interest over principal or of any installment of interest over any other
installment of interest, or of any Debenture over any other Debenture, ratably
to the aggregate of such principal and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article 4, to the payment of the
remainder, if any, to the Company or any other Person lawfully entitled thereto.
Section 8.04. Proceedings by Debentureholder. No holder of any
Debenture shall have any right by virtue of or by reference to any provision of
this Indenture to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Indenture, or for the appointment of a
receiver, trustee, liquidator, custodian or other similar official, or for any
other remedy hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the continuance thereof, as
hereinbefore provided, and unless also the holders of not less than twenty-five
percent (25%) in aggregate principal amount of the Debentures then Outstanding
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable security or indemnity as it may require against the
costs, expenses and liabilities to be incurred therein or thereby, and the
Trustee for sixty (60) calendar days after its receipt of such notice, request
and offer of indemnity, shall have neglected or refused to take reasonable
efforts to institute any such action, suit or proceeding and no direction
inconsistent with such written request shall have been given to the Trustee
pursuant to Section 8.07; it being understood and intended, and being expressly
covenanted by the taker and holder of every Debenture with every other taker and
holder and the Trustee, that no one or more holders of Debentures shall have any
right in any manner whatever by virtue of or by reference to any provision of
this Indenture to affect, disturb or prejudice the rights of any other holder of
Debentures, or to obtain or seek to obtain priority over or preference to any
other such holder, or to enforce any right under this Indenture, except in the
manner herein provided and for the equal, ratable and common benefit of all
holders of Debentures (except as otherwise provided herein). For the protection
and enforcement of this Section 8.04, each and every Debentureholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Notwithstanding any other provision of this Indenture and any provision
of any Debenture, the right of any holder of any Debenture to receive payment of
the principal of (including the Redemption Price upon redemption pursuant to
Article 3), and accrued and unpaid interest on such Debenture, on or after the
respective due dates expressed in such Debenture or in the event of redemption,
or to institute suit for the enforcement of any such payment on or after such
52
respective dates against the Company shall not be impaired or affected without
the consent of such holder.
Anything in this Indenture or the Debentures to the contrary
notwithstanding, the holder of any Debenture, without the consent of either the
Trustee or the holder of any other Debenture, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 8.05. Proceedings By Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 8.06. Remedies Cumulative And Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 8 to the Trustee or
to the Debentureholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any thereof or of any other powers and remedies
available to the Trustee or the holders of the Debentures, by judicial
proceedings or otherwise, to enforce the performance or observance of the
covenants and agreements contained in this Indenture, and no delay or omission
of the Trustee or of any holder of any of the Debentures to exercise any right
or power accruing upon any default or Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or any acquiescence therein, and, subject to the
provisions of Section 8.04, every power and remedy given by this Article 8 or by
law to the Trustee or to the Debentureholders may be exercised from time to
time, and as often as shall be deemed expedient, by the Trustee or by the
Debentureholders.
Section 8.07. Direction of Proceedings and Waiver of Defaults By
Majority of Debentureholders. The holders of a majority in aggregate principal
amount of the Debentures at the time Outstanding determined in accordance with
Section 10.04 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 (a) such direction
shall not be in conflict with any rule of law or with this Indenture, (b) the
Trustee may take any other action which is not inconsistent with such direction,
(c) the Trustee may decline to take any action that would benefit some
Debentureholder to the detriment of other Debentureholders and (d) the Trustee
may decline to take any action that would involve the Trustee in personal
liability. The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding determined in accordance with Section 10.04
may, on behalf of the holders of all
53
of the Debentures, waive any past default or Event of Default hereunder and its
consequences except (i) a Default in the payment of interest on, or the
principal of, the Debentures, (ii) a failure by the Company to convert any
Debentures into Common Shares, (iii) a Default in the payment of the Redemption
Price pursuant to Article 3, (iv) a Default in the payment of the Designated
Event Purchase Price pursuant to Article 3 or (v) a Default in respect of a
covenant or provisions hereof that under Article 12 cannot be modified or
amended without the consent of the holders of each or all Debentures then
Outstanding or affected thereby. Upon any such waiver, the Company, the Trustee
and the holders of the Debentures shall be restored to their former positions
and rights hereunder; but no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon. Whenever any
Default or Event of Default hereunder shall have been waived as permitted by
this Section 8.07, said Default or Event of Default shall for all purposes of
the Debentures and this Indenture be deemed to have been cured and to be not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default or impair any right consequent thereon.
Section 8.08. Notice of Defaults. The Trustee shall, within ninety (90)
calendar days after a Responsible Officer of the Trustee has knowledge of the
occurrence of a Default, mail to all Debentureholders, as the names and
addresses of such holders appear upon the Debenture Register, notice of all
Defaults known to a Responsible Officer, unless such Defaults shall have been
cured or waived before the giving of such notice; provided that except in the
case of Default in the payment of the principal of or interest on any of the
Debentures, the Trustee shall be protected in withholding such notice if and so
long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Debentureholders.
Section 8.09. Undertaking To Pay Costs. All parties to this Indenture
agree, and each holder of any Debenture by his acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided that the provisions of this
Section 8.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Debentureholder, or
group of Debentureholders, holding in the aggregate more than ten percent (10%)
in principal amount of the Debentures at the time Outstanding determined in
accordance with Section 10.04, or to any suit instituted by any Debentureholder
for the enforcement of the payment of the principal of or interest on any
Debenture on or after the due date expressed in such Debenture or
54
to any suit for the enforcement of the right to convert any Debenture in
accordance with the provisions of Article 16.
ARTICLE 9
THE TRUSTEE
Section 9.01. Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default which may have occurred:
(i) the duties and obligations of the Trustee shall be
determined solely by the express provisions of this Indenture and the
Trust Indenture Act, and the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set
forth in this Indenture and no implied covenants, duties or obligations
shall be read into or imposed under this Indenture and the Trust
Indenture Act against the Trustee; and
(ii) in the absence of bad faith and willful misconduct on
the part of the Trustee, the Trustee may conclusively rely as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in the case of
any such certificates or opinions which by any provisions hereof are
specifically required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
55
(c) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the written
direction of the holders of not less than a majority in principal amount of the
Debentures at the time Outstanding determined as provided in Section 10.04
relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon
the Trustee, under this Indenture;
(d) whether or not therein provided, every provision of this
Indenture relating to the conduct or affecting the liability of, or affording
protection to, the Trustee shall be subject to the provisions of this Section;
(e) the Trustee shall not be liable in respect of any payment (as
to the correctness of amount, entitlement to receive or any other matters
relating to payment) or notice effected by the Company or any paying agent or
any records maintained by any co-registrar with respect to the Debentures;
(f) if any party fails to deliver a notice relating to an event
the fact of which, pursuant to this Indenture, requires notice to be sent to the
Trustee, the Trustee may conclusively rely on its failure to receive such notice
as reason to act as if no such event occurred; and
(g) the Trustee shall not be deemed to have knowledge of any Event
of Default hereunder unless it shall have been notified in writing of such Event
of Default by the Company or the holders of at least ten percent (10%) in
aggregate principal amount of the Debentures.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 9.02. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 9.01:
(a) the Trustee may conclusively rely and shall be protected in
acting upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by an Officers' Certificate
(unless other evidence in respect thereof be herein specifically prescribed);
and any resolution
56
of the Board of Directors may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and
any advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Debentureholders pursuant to the provisions of this
Indenture, unless such Debentureholders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred therein or thereby;
(e) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
debenture or other paper or document, but the Trustee may make such further
inquiry or investigation into such facts or matters if and 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;
(f) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed by it with due care
hereunder;
(g) 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 or powers conferred upon it by
this Indenture;
(h) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and each agent, custodian and other Person employed
to act hereunder;
(i) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture,
which Officers' Certificate may be signed by any person authorized to sign an
Officers' Certificate, including any person specified as so authorized in any
such certificate previously delivered and not superseded; and
57
(j) any permissive right or authority granted to the Trustee shall
not be construed as a mandatory duty.
Section 9.03. No Responsibility For Recitals, Etc. The recitals
contained herein and in the Debentures (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the accuracy or correctness of the same. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Debentures. The Trustee shall not be accountable for the use
or application by the Company of any Debentures or the proceeds of any
Debentures.
Section 9.04. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Debentures. The Trustee, any paying agent, any conversion agent or
Debenture Registrar, in its individual or any other capacity, may become the
owner or pledgee of Debentures with the same rights it would have if it were not
Trustee, paying agent, conversion agent or Debenture Registrar.
Section 9.05. Monies to Be Held in Trust. Subject to the provisions of
Section 14.04, all monies received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which they were
received. Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no obligation or liability to invest or pay interest on any money received
by it hereunder except as may be agreed in writing from time to time by the
Company and the Trustee.
Section 9.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable and documented compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from the Trustee's own negligence, willful
misconduct, recklessness or bad faith. The Company also covenants to indemnify
the Trustee and any predecessor Trustee (or any officer, director or employee of
the Trustee), in any capacity under this Indenture and its agents and any
authenticating agent for, and to hold them harmless against, any and all loss,
liability, damage, claim or expense including taxes (other than franchise taxes
and taxes based on the income of the Trustee) incurred without negligence,
willful misconduct, recklessness or bad faith on the part of the Trustee or such
officers, directors, employees and agent or authenticating agent, as the case
may be, and
58
arising out of or in connection with the acceptance or administration of this
trust or in any other capacity hereunder, including the costs and expenses of
defending themselves against any claim (whether asserted by the Company, any
holder or any other Person) of liability in connection with the exercise or
performance of any of its or their powers or duties hereunder. If the Company
fails to compensate or indemnify the Trustee and to pay or reimburse the Trustee
for expenses, disbursements and advances under this Section 9.06, the Trustee's
claim shall be secured by a lien prior to that of the Debentures upon all
property and funds held or collected by the Trustee as such. The obligation of
the Company under this Section shall survive the satisfaction and discharge of
this Indenture.
The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee as a result of its own negligence or
willful misconduct.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
8.01(f) or Section 8.01(g) with respect to the Company occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
Section 9.07. Officers' Certificate As Evidence. Except as otherwise
provided in Section 9.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter may, in the absence of bad faith or willful misconduct on the part of the
Trustee, be deemed to be conclusively proved and established by an Officers'
Certificate delivered to the Trustee.
Section 9.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall (i) eliminate such conflicting interest within ninety
(90) calendar days, (ii) apply to the Commission for permission to continue as
trustee hereunder or (iii) resign, in each case to the extent and in the manner
provided by, and subject to the provisions of, the Trust Indenture Act and this
Indenture.
Section 9.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$100,000,000 (or if such Person is a member of a bank holding company system,
its bank holding company shall have a combined capital and surplus of at least
$100,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such Person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
the Trustee shall
59
cease to be eligible in accordance with the provisions of this Section 9.09, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 9.10. Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Debentures. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment sixty (60) calendar days
after the mailing of such notice of resignation to the Debentureholders, the
resigning Trustee may, upon ten (10) Business Days' notice to the Company and
the Debentureholders, appoint a successor identified in such notice or may
petition, at the expense of the Company, any court of competent jurisdiction for
the appointment of a successor trustee, or, if any Debentureholder who has been
a bona fide holder of a Debenture or Debentures for at least six (6) months may,
subject to the provisions of Section 8.09, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with Section 9.08
after written request therefor by the Company or by any Debentureholder
who has been a bona fide holder of a Debenture or Debentures for at
least six (6) months; or
(ii) the Trustee shall cease to be eligible in accordance
with the provisions of Section 9.09 and shall fail to resign after
written request therefor by the Company or by any such Debentureholder;
or
(iii) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation;
then, in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 8.09, any Debentureholder who has been a bona fide holder
of a
60
Debenture or Debentures for at least six (6) months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee;
provided that if no successor Trustee shall have been appointed and have
accepted appointment sixty (60) calendar days after either the Company or the
Debentureholders has removed the Trustee, or the Trustee resigns, the Trustee so
removed may petition, at the expense of the Company, any court of competent
jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may at any time remove the Trustee and
nominate a successor trustee which shall be deemed appointed as successor
trustee unless, within ten (10) calendar days after notice to the Company of
such nomination, the Company objects thereto, in which case the Trustee so
removed or any Debentureholder, or if such Trustee so removed or any
Debentureholder fails to act, the Company, upon the terms and conditions and
otherwise as in Section 9.10(a) provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 9.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 9.11.
(e) Notwithstanding the replacement of the Trustee pursuant to
this Section, the Company's obligations under Section 9.06 shall continue for
the benefit of the retiring Trustee.
Section 9.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 9.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
9.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held
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in trust for the benefit of holders of particular Debentures, to secure any
amounts then due it pursuant to the provisions of Section 9.06.
No successor trustee shall accept appointment as provided in this
Section 9.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 9.08 and be eligible under
the provisions of Section 9.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 9.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Debentures at their addresses as they
shall appear on the Debenture Register. If the Company fails to mail such notice
within ten (10) calendar days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Company.
Section 9.12. Succession By Merger. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 9.08 and eligible
under the provisions of Section 9.09.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Debentures shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor trustee or authenticating agent
appointed by such predecessor trustee, and deliver such Debentures so
authenticated; and in case at that time any of the Debentures shall not have
been authenticated, any successor to the Trustee or any authenticating agent
appointed by such successor trustee may authenticate such Debentures in the name
of the successor trustee; and in all such cases such certificates shall have the
full force that is provided in the Debentures or in this Indenture; provided
that the right to adopt the certificate of authentication of any predecessor
Trustee or authenticate Debentures in the name of any predecessor Trustee shall
apply only to its successor or successors by merger, conversion or
consolidation.
Section 9.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Company (or any other obligor upon
the Debentures), the Trustee shall be subject to the provisions of the Trust
Indenture
62
Act regarding the collection of the claims against the Company (or any such
other obligor).
Section 9.14. Trustee's Application For Instructions From The Company.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Debentures or holders
of Senior Indebtedness under this Indenture) may, at the option of the Trustee,
set forth in writing any action proposed to be taken or omitted by the Trustee
under this Indenture and the date on and/or after which such action shall be
taken or such omission shall be effective. The Trustee shall not be liable for
any action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such application
(which date shall not be less than three (3) Business Days after the date any
officer of the Company actually receives such application, unless any such
officer shall have consented in writing to any earlier date) unless prior to
taking any such action (or the effective date in the case of an omission), the
Trustee shall have received written instructions in response to such application
specifying the action to be taken or omitted, which shall conform to the terms
and conditions set forth in this Indenture.
ARTICLE 10
THE DEBENTUREHOLDERS
Section 10.01. Action By Debentureholders. Whenever in this Indenture
it is provided that the holders of a specified percentage in aggregate principal
amount of the Debentures may take any action (including the making of any demand
or request, the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such action, the holders
of such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Debentureholders in person or by agent or proxy appointed in writing, or (b) by
the record of the holders of Debentures voting in favor thereof at any meeting
of Debentureholders duly called and held in accordance with the provisions of
Article 11, or (c) by a combination of such instrument or instruments and any
such record of such a meeting of Debentureholders. Whenever the Company or the
Trustee solicits the taking of any action by the holders of the Debentures, the
Company or the Trustee may fix in advance of such solicitation, a date as the
record date for determining holders entitled to take such action. The record
date shall be not more than fifteen (15) calendar days prior to the date of
commencement of solicitation of such action.
Section 10.02. Proof of Execution by Debentureholders. Subject to the
provisions of Sections 9.01, 9.02 and 11.05, proof of the execution of any
instrument by a Debentureholder or its agent or proxy shall be sufficient if
made
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in accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Debentures shall be proved by the registry of such Debentures or by a
certificate of the Debenture Registrar.
The record of any Debentureholders' meeting shall be proved in the
manner provided in Section 11.06.
Section 10.03. Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Debenture Registrar may
deem the Person in whose name such Debenture shall be registered upon the
Debenture Register to be, and may treat it as, the absolute owner of such
Debenture (whether or not such Debenture shall be overdue and notwithstanding
any notation of ownership or other writing thereon made by any Person other than
the Company or any Debenture Registrar) for the purpose of receiving payment of
or on account of the principal of and interest on such Debenture, for conversion
of such Debenture and for all other purposes; and neither the Company nor the
Trustee nor any paying agent nor any conversion agent nor any Debenture
Registrar shall be affected by any notice to the contrary. All such payments so
made to any holder for the time being, or upon his order, shall be valid, and,
to the extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Debenture.
Section 10.04. Company-owned Debentures Disregarded. In determining
whether the holders of the requisite aggregate principal amount of Debentures
have concurred in any direction, consent, waiver or other action under this
Indenture, Debentures which are owned by the Company or any other obligor on the
Debentures or any Affiliate of the Company or any other obligor on the
Debentures shall be disregarded and deemed not to be Outstanding for the purpose
of any such determination; provided that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, consent, waiver
or other action, only Debentures which a Responsible Officer of the Trustee
knows are so owned shall be so disregarded. Debentures so owned which have been
pledged in good faith may be regarded as Outstanding for the purposes of this
Section 10.04 if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Debentures and that the pledgee is not the
Company, any other obligor on the Debentures or any Affiliate of the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee. Upon request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Debentures, if
any, known by the Company to be owned or held by or for the account of any of
the above described Persons, and, subject to Section 9.01, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Debentures not listed therein
are Outstanding for the purpose of any such determination.
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Section 10.05. Revocation Of Consents, Future Holders Bound. At any
time prior to (but not after) the evidencing to the Trustee, as provided in
Section 10.01, of the taking of any action by the holders of the percentage in
aggregate principal amount of the Debentures specified in this Indenture in
connection with such action, any holder of a Debenture which is shown by the
evidence to be included in the Debentures the holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 10.02, revoke such
action so far as concerns such Debenture. Except as aforesaid, any such action
taken by the holder of any Debenture shall be conclusive and binding upon such
holder and upon all future holders and owners of such Debenture and of any
Debentures issued in exchange or substitution therefor, irrespective of whether
any notation in regard thereto is made upon such Debenture or any Debenture
issued in exchange or substitution therefor.
ARTICLE 11
MEETINGS OF DEBENTUREHOLDERS
Section 11.01. Purpose Of Meetings. A meeting of Debentureholders may
be called at any time and from time to time pursuant to the provisions of this
Article 11 for any of the following purposes:
(1) to give any notice to the Company or to the Trustee
or to give any directions to the Trustee permitted under this
Indenture, or to consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take any other action
authorized to be taken by Debentureholders pursuant to any of the
provisions of Article 8;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article 9;
(3) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section
12.02; or
(4) to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of
the Debentures under any other provision of this Indenture or under
applicable law.
Section 11.02. Call Of Meetings By Trustee. The Trustee may at any time
call a meeting of Debentureholders to take any action specified in Section
11.01, to be held at such time and at such place as the Trustee shall determine,
at the expense of the Company. Notice of every meeting of the Debentureholders,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting and the establishment of any record
65
date pursuant to Section 10.01, shall be mailed to holders of Debentures at
their addresses as they shall appear on the Debenture Register. Such notice
shall also be mailed to the Company. Such notices shall be mailed not less than
twenty (20) nor more than ninety (90) calendar days prior to the date fixed for
the meeting.
Any meeting of Debentureholders shall be valid without notice if the
holders of all Debentures then Outstanding are present in person or by proxy or
if notice is waived before or after the meeting by the holders of all Debentures
Outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
Section 11.03. Call Of Meetings By Company Or Debentureholders. In case
at any time the Company, pursuant to a resolution of its Board of Directors, or
the holders of at least ten percent (10%) in aggregate principal amount of the
Debentures then Outstanding, shall have requested the Trustee to call a meeting
of Debentureholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within twenty (20) calendar days after receipt
of such request, then the Company or such Debentureholders may determine the
time and the place for such meeting and may call such meeting to take any action
authorized in Section 11.01, by mailing notice thereof as provided in Section
11.02.
Section 11.04. Qualifications For Voting. To be entitled to vote at any
meeting of Debentureholders a person shall (a) be a holder of one or more
Debentures on the record date pertaining to such meeting or (b) be a person
appointed by an instrument in writing as proxy by a holder of one or more
Debentures on the record date pertaining to such meeting. The only persons who
shall be entitled to be present or to speak at any meeting of Debentureholders
shall be the persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 11.05. Regulations. Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Debentureholders, in regard to proof of the holding
of Debentures and of the appointment of proxies, and in regard to the
appointment and duties of inspectors of votes, the submission and examination of
proxies, certificates and other evidence of the right to vote, and such other
matters concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Debentureholders as provided in Section 11.03, in which case the
Company or the Debentureholders calling the meeting, as the case may be, shall
in like manner appoint a temporary chairman. A permanent chairman and a
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permanent secretary of the meeting shall be elected by vote of the holders of a
majority in principal amount of the Debentures represented at the meeting and
entitled to vote at the meeting.
Subject to the provisions of Section 10.04, at any meeting each
Debentureholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Debentures held or represented by him; provided that no vote
shall be cast or counted at any meeting in respect of any Debenture challenged
as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debentures held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Debentureholders. Any
meeting of Debentureholders duly called pursuant to the provisions of Section
11.02 or Section 11.03 may be adjourned from time to time by the holders of a
majority of the aggregate principal amount of Debentures represented at the
meeting, whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
Section 11.06. Voting. The vote upon any resolution submitted to any
meeting of Debentureholders shall be by written ballot on which shall be
subscribed the signatures of the holders of Debentures or of their
representatives by proxy and the Outstanding principal amount of the Debentures
held or represented by them. The permanent chairman of the meeting shall appoint
two inspectors of votes who shall count all votes cast at the meeting for or
against any resolution and who shall make and file with the secretary of the
meeting their verified written reports in duplicate of all votes cast at the
meeting. A record in duplicate of the proceedings of each meeting of
Debentureholders shall be prepared by the secretary of the meeting and there
shall be attached to said record the original reports of the inspectors of votes
on any vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting and
showing that said notice was mailed as provided in Section 11.02. The record
shall show the principal amount of the Debentures voting in favor of or against
any resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee, the latter to have attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 11.07. No Delay Of Rights By Meeting. Nothing contained in this
Article 11 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Debentureholders or any rights expressly or impliedly
conferred hereunder to make such call, any hindrance or delay in the exercise of
any right or rights conferred upon or reserved to the Trustee or to the
67
Debentureholders under any of the provisions of this Indenture or of the
Debentures.
ARTICLE 12
SUPPLEMENTAL INDENTURES
Section 12.01. Supplemental Indentures Without Consent of
Debentureholders. The Company, when authorized by the resolutions of the Board
of Directors, and the Trustee may, from time to time, and at any time enter into
an indenture or indentures supplemental hereto for one or more of the following
purposes:
(a) make provision with respect to the conversion rights of the
holders of Debentures pursuant to the requirements of Section 16.06 and the
repurchase obligations of the Company pursuant to the requirements of Section
3.05(e);
(b) subject to Article 4, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Debentures, any property or assets;
(c) to evidence the succession of another Person to the Company,
or successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 13;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions for the benefit of the holders of Debentures, and to
make the occurrence, or the occurrence and continuance, of a Default in any such
additional covenants, restrictions or conditions a Default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided that in respect of any
such additional covenant, restriction or condition, such supplemental indenture
may provide for a particular period of grace after default (which period may be
shorter or longer than that allowed in the case of other Defaults) or may
provide for an immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such Default;
(e) to provide for the issuance under this Indenture of
uncertificated Debentures in addition to or in place of certificated Debentures;
(f) to provide for the issuance under this Indenture of
certificated Debentures;
(g) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture that may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions
68
arising under this Indenture that shall not materially adversely affect the
interests of the holders of the Debentures;
(h) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Debentures;
(i) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted; or
(j) make other changes to the Indenture or forms or terms of the
Debentures, provided no such change individually or in the aggregate with all
other such changes has or will have an adverse effect on the interests of the
Debentureholders.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, provided that the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
12.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Debentures at the time Outstanding, notwithstanding any of
the provisions of Section 12.02.
Notwithstanding any other provision of the Indenture or the Debentures,
the Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may only be amended, modified or waived in accordance with the
provisions of the Registration Rights Agreement.
Section 12.02. Supplemental Indenture With Consent Of Debentureholders.
With the consent (evidenced as provided in Article 10) of the holders of at
least a majority in aggregate principal amount of the Debentures at the time
Outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Debentures; provided that no such supplemental
69
indenture shall (i) extend the fixed maturity of any Debenture, or reduce the
rate or extend the time of payment of interest thereon, or reduce the principal
amount thereof or reduce any amount payable on redemption or repurchase thereof,
or change the obligation of the Company to redeem any Debenture on a Redemption
Date in a manner adverse to the holders of Debentures, or change the obligation
of the Company to repurchase any Debenture upon the happening of a Designated
Event in a manner adverse to the holders of Debentures, or impair the right of
any Debentureholder to institute suit for the payment thereof, or make the
principal thereof or interest payable in any coin or currency other than that
provided in the Debentures, or impair the right to convert the Debentures into
Common Shares or reduce the number of Common Shares or any other property
receivable by a Debentureholder upon conversion subject to the terms set forth
herein, including Section 16.06, in each case, without the consent of the holder
of each Debenture so affected, or modify any of the provisions of this Section
12.02 or Section 8.07, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the holder of each Debenture so affected, or change any
obligation of the Company to maintain an office or agency in the places and for
the purposes set forth in Section 6.01, or reduce the quorum or voting
requirements set forth in Article 11 or (ii) reduce the aforesaid percentage of
Debentures, the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of all Debentures
then Outstanding.
Nothwithstanding anything to the contrary herein, any amendment to, or
waiver of, the provisions of this Indenture relating to subordination that would
adversely affect the rights of the Debentureholders will require the consent of
at least seventy-five percent (75%) in aggregate principal amount of the
Debentures then Outstanding.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Debentureholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Debentureholders under
this Section 12.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 12.03. Effect Of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 12 shall comply
with
70
the Trust Indenture Act, as then in effect, provided that this Section 12.03
shall not require such supplemental indenture or the Trustee to be qualified
under the Trust Indenture Act prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act, nor shall it constitute any admission
or acknowledgment by any party to such supplemental indenture that any such
qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 12, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Debentures
shall thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 12.04. Notation On Debentures. Debentures authenticated and
delivered after the execution of any supplemental indenture pursuant to the
provisions of this Article 12 may bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company or the Trustee shall so determine, new Debentures so modified as to
conform, in the opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental indenture may,
at the Company's expense, be prepared and executed by the Company, authenticated
by the Trustee (or an authenticating agent duly appointed by the Trustee
pursuant to Section 17.11) and delivered in exchange for the Debentures then
Outstanding, upon surrender of such Debentures then Outstanding.
Section 12.05. Evidence Of Compliance Of Supplemental Indenture To Be
Furnished To Trustee. Prior to entering into any supplemental indenture, the
Trustee shall be provided with an Officers' Certificate and an Opinion of
Counsel as conclusive evidence that any supplemental indenture executed pursuant
hereto complies with the requirements of this Article 12 and is otherwise
authorized or permitted by this Indenture.
ARTICLE 13
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 13.01. Company May Consolidate On Certain Terms. Subject to the
provisions of Section 13.02, the Company shall not consolidate or merge with or
into any other Person or Persons (whether or not affiliated with the Company),
nor shall the Company sell, convey, transfer or lease the property and assets of
the Company substantially as an entirety, to any other Person (whether or not
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affiliated with the Company), unless: (i) upon any such consolidation, merger,
sale, conveyance, transfer or lease, the due and punctual payment of the
principal of and interest on all of the Debentures, according to their tenor and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed by the Company, shall be expressly
assumed, by supplemental indenture satisfactory in form and substance to the
Trustee, executed and delivered to the Trustee by the Person (if other than the
Company and other than a Person who is a successor to the Company's obligations
hereunder and under the Debenture by operation of law) formed by such
consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 16.06; and (ii) immediately after giving effect to the transaction
described above, 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.
Section 13.02. Successor To Be Substituted. In case of any such
consolidation, merger, sale, conveyance, transfer or lease and upon the
assumption by the successor Person, by supplemental indenture, executed and
delivered to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and interest on all of the Debentures and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had been named
herein as the party of this first part. Such successor Person thereupon may
cause to be signed, and may issue either in its own name or in the name of
Cleveland-Cliffs Inc any or all of the Debentures, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Debentures that previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Debentures that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Debentures so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Debentures theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Debentures had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance, transfer or lease, the Person named as
the "COMPANY" in the first paragraph of this Indenture or any successor that
shall thereafter have become such in the manner prescribed in this Article 13
may be dissolved, wound up and liquidated at any time thereafter and such Person
shall be released from its liabilities as obligor and maker of the Debentures
and from its obligations under this Indenture.
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In case of any such consolidation, merger, sale, conveyance, transfer
or lease, such changes in phraseology and form (but not in substance) may be
made in the Debentures thereafter to be issued as may be appropriate.
Section 13.03. Opinion Of Counsel To Be Given To Trustee. The Trustee
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance, transfer or
lease and any such assumption complies with the provisions of this Article 13.
Section 13.04. Payment Of Additional Amounts. (a) If (i) the Company
consolidates or merges with or into another Person (other than a Subsidiary),
(ii) the Company sells, conveys, transfers or leases all or substantially all of
its properties and assets to any Person (other than a Subsidiary), or (iii) any
Person (other than a Subsidiary) consolidates with or merges with or into the
Company, and as a result of such transaction any payments made under or with
respect to the Debentures (including any payment made in Common Shares) will
become subject to any deduction or withholding in respect of any tax, duty,
levy, impost, assessment or governmental charge of whatever nature, which we
refer to as the "APPLICABLE TAXES," imposed by or on behalf of any political
subdivisions or taxing authorities outside of the United States, the Company
shall pay additional amounts to the holders so that the net amount received by
each holder of Debentures will equal the amount that such holder would have
received if any applicable taxes had not been required to be withheld or
deducted. The amounts that the Company is required to pay to preserve the net
amount receivable by the holders of Debentures are referred to as "ADDITIONAL
AMOUNTS."
(b) Additional Amounts shall not be payable with respect to a
payment made to a holder of the Debentures to the extent:
(i) that any applicable taxes would not have been so
imposed but for the existence of any present or former connection
between the holder and the jurisdiction imposing such applicable taxes,
other than the mere receipt of the payment, acquisition, ownership or
disposition of the Debentures or the exercise or enforcement of rights
under the Debentures or this Indenture;
(ii) of any estate, inheritance, gift, sales, transfer or
personal property taxes imposed with respect to the Debentures, except
described below or as otherwise provided in this Indenture; or
(iii) that any such applicable taxes would not have been
imposed but for the presentation of the Debentures, where presentation
is required, for payment on a date more than fifteen (15) calendar days
after the date on which the payment became due and payable or the date
on which payment thereof is duly provided for, whichever is later,
except to the extent that the beneficiary or holder thereof would have
been entitled
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to Additional Amounts had the Debentures been presented for payment on
any date during such 15-day period.
(c) The Company shall also:
(i) withhold or deduct such applicable taxes as required;
(ii) remit the full amount of taxes deducted or withheld
to the relevant taxing authority in accordance with all applicable
laws;
(iii) use its best efforts to obtain from each relevant
taxing authority imposing the applicable taxes certified copies of tax
receipts evidencing the payment of any taxes deducted or withheld; and
(iv) upon request, make available to the holders of the
Debentures, within sixty (60) calendar days after the date the payment
of any taxes deducted or withheld is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by the Company
and, notwithstanding its efforts to obtain the receipts, if the same
are not obtainable, other evidence of such payments.
(d) At least thirty (30) calendar days prior to each date on which
any payment under or with respect to the Debentures is due and payable, if the
Company is obligated to pay Additional Amounts with respect to such payment, the
Company shall deliver to the Trustee an Officer's Certificate stating the fact
that such Additional Amounts shall also be payable, the amounts so payable, and
such other information as is necessary to enable the Trustee to pay such
Additional Amounts to holders of the Debentures on the payment date.
(e) The foregoing provisions shall survive any termination or
discharge of this Indenture and will apply to any jurisdiction in which any
successor to the Company is organized or is engaged in business for tax purposes
or any political subdivisions or taxing authority or agency thereof or therein.
(f) Whenever in this Indenture or the Debentures there is
mentioned, in any context, the payment of principal, interest, Redemption Price,
Designated Event Purchase Price or any other amount payable under or with
respect to any Debenture, such mention shall be deemed to include the payment of
Additional Amounts to the extent payable in the particular context.
ARTICLE 14
SATISFACTION AND DISCHARGE OF INDENTURE
Section 14.01. Discharge Of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Debentures theretofore authenticated
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(other than any Debentures that have been destroyed, lost or stolen and in lieu
of or in substitution for which other Debentures shall have been authenticated
and delivered) and not theretofore canceled, or (b) all the Debentures not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay at
maturity or upon redemption of all of the Debentures (other than any Debentures
that shall have been mutilated, destroyed, lost or stolen and in lieu of or in
substitution for which other Debentures shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and interest due or to become due to such date
of maturity or Redemption Date, as the case may be, accompanied by a
verification report, as to the sufficiency of the deposited amount, from an
independent certified accountant or other financial professional satisfactory to
the Trustee, and if the Company shall also pay or cause to be paid all other
sums payable hereunder by the Company, including without limitation sums payable
to the Trustee for its costs and expenses, then this Indenture shall cease to be
of further effect (except as to (i) remaining rights of registration of
transfer, substitution and exchange and conversion of Debentures, (ii) rights
hereunder of Debentureholders to receive payments of principal of and interest
on, the Debentures and the other rights, duties and obligations of
Debentureholders, as beneficiaries hereof with respect to the amounts, if any,
so deposited with the Trustee, (iii) rights hereunder of Debentureholders to
convert their Debentures into Common Shares and (iv) the rights, obligations and
immunities of the Trustee hereunder), and the Trustee, on written demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel as
required by Section 9.02 and at the cost and expense of the Company, shall
execute proper instruments acknowledging satisfaction of and discharging this
Indenture; the Company, however, hereby agrees to reimburse the Trustee for any
costs or expenses thereafter reasonably and properly incurred by the Trustee and
to compensate the Trustee for any services thereafter reasonably and properly
rendered by the Trustee in connection with this Indenture or the Debentures.
Section 14.02. Deposited Monies To Be Held In Trust By Trustee. Subject
to Section 14.04 and the subordination provisions in Article 4, all monies
deposited with the Trustee pursuant to Section 14.01, shall be held in trust for
the sole benefit of the Debentureholders, and such monies shall be applied by
the Trustee to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Debentures for the payment or redemption of which such monies have
been deposited with the Trustee, of all sums due and to become due thereon for
principal and interest.
Section 14.03. Paying Agent To Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying
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agent of the Debentures (other than the Trustee) shall, upon written request of
the Company, be repaid to it or paid to the Trustee, and thereupon such paying
agent shall be released from all further liability with respect to such monies.
Section 14.04. Return Of Unclaimed Monies; Repayment To The Company.
Subject to the requirements of applicable law, any monies deposited with or paid
to the Trustee for payment of the principal of or interest on Debentures and not
applied but remaining unclaimed by the holders of Debentures for two years after
the date upon which the principal of or interest on such Debentures, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Debentures shall thereafter
look only to the Company for any payment that such holder may be entitled to
collect unless an applicable abandoned property law designates another Person.
To the extent that the aggregate amount of cash or money deposited by
the Company with the Trustee pursuant to Article 3 exceeds the aggregate price
of the Debentures or portions thereof which the Company is obligated to pay to
the holders, then, unless otherwise agreed in writing with the Company, promptly
after the Business Day following the applicable payment date the Trustee shall
return any such excess to the Company together with interest, if any, thereon.
Section 14.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 14.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or otherwise prohibiting such application, the Company's obligations under this
Indenture and the Debentures shall be revived and reinstated as though no
deposit had occurred pursuant to Section 14.01 until such time as the Trustee or
the paying agent is permitted to apply all such money in accordance with Section
14.02; provided that if the Company makes any payment of interest on or
principal of any Debenture following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Debentures to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 15
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
Section 15.01. Indenture And Debentures Solely Corporate Obligations.
No recourse for the payment of the principal of, or interest on any Debenture,
or for any claim based thereon or otherwise in respect thereof, and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present
76
or future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Debentures.
ARTICLE 16
CONVERSION OF DEBENTURES
Section 16.01. Right To Convert. (a) Subject to and upon compliance
with the provisions of this Indenture, prior to 5:00 p.m., New York City time,
on the Business Day immediately preceding the Maturity Date, the holder of any
Debenture shall have the right, at such holder's option, to convert the
principal amount of the Debenture, or any portion of such principal amount that
is a multiple of $1,000, into fully paid and non-assessable Common Shares (as
such common shares shall then be constituted) at the Conversion Rate in effect
at such time, solely upon the occurrence of one or more events and for the
periods described in Section 16.01(b), Section 16.01(c), Section 16.01(d),
Section 16.01(e) or Section 16.01(f), by surrender of the Debenture to be so
converted in whole or in part, together with any required funds, in the manner
provided in Section 16.02. If a record date for a meeting of shareholders of the
Company to be held after a holder of the Debentures converts his Debentures has
been fixed and falls before the Conversion Date, such holder shall not have any
voting rights at such meeting of shareholders with respect to the Common Shares
into which his Debentures are converted.
Whenever the Debentures shall become convertible pursuant to this
Section 16.01, the Company or, at the Company's request, the Trustee in the name
and at the expense of the Company, shall notify the holders of the event
triggering such convertibility in the manner provided in Section 17.03, and the
Company shall also issue a press release and publish the information on the
Company's website on the World Wide Web. Any notice so given shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice.
A Debenture in respect of which a holder is electing to exercise its
option to require the Company to repurchase such holder's Debentures upon a
Designated Event pursuant to Section 3.05 may be converted only if such holder
withdraws its election in accordance with Section 3.05. A holder of Debentures
is not entitled to any rights of a holder of Common Shares until such holder has
converted its Debentures into Common Shares, and only to the extent such
Debentures are deemed to have been converted into Common Shares under this
Article 16. Debentureholders shall not have any right to receive dividends
declared by the Company on the Common Shares, unless the Record Date for the
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payment of such dividends falls on or after the Conversion Date for such
holder's Debentures.
Notwithstanding any provision herein, no Debentureholder may convert a
number of Debentures if, as a result of such conversion, the Common Shares held
by such holder immediately after conversion, together with all other Common
Shares owned by such holder, would entitle such holder to exercise or direct the
exercise of twenty percent (20%) or more of the voting power in the election of
the Company's directors unless such holder complies with Section 1701.831 of the
Ohio Revised Code or any applicable successor provision.
(b) During any fiscal quarter of the Company after the fiscal
quarter ending March 31, 2004 (and only during such fiscal quarter), the
Debentures may be surrendered for conversion into Common Shares, if, as of the
last day of the immediately preceding fiscal quarter of the Company, the Closing
Sale Price of the Common Shares for at least 20 Trading Days in a period of 30
consecutive Trading Days ending on the last Trading Day of such fiscal quarter
is more than 110% of the Conversion Price as of the last day of such preceding
fiscal quarter. If this condition is not satisfied at the end of any fiscal
quarter of the Company, then conversion pursuant to this Section 16.01(b) will
not be permitted in the following fiscal quarter.
If the Exchange Date occurs during a fiscal quarter in which the Series
A-2 Preferred Stock is convertible into Common Shares pursuant to Section
8(a)(i) of the Subdivision, then the Debentures shall be convertible pursuant to
this Section 16.01(b) for the remainder of such fiscal quarter. If the Exchange
Date occurs during the 30 consecutive Trading Day period ending on the last
Trading Day of any fiscal quarter of the Company, each Trading Day occurring
during such 30 Trading Day period and on or prior to the Exchange Date shall be
considered in determining whether the condition for convertibility set forth in
this Section 16.01(b) has been met.
The Trustee (or other conversion agent appointed by the Company) shall,
on behalf of the Company, determine for each Trading Day during the 30
consecutive Trading Day period specified in this Section 16.01(b) whether the
Closing Sale Price exceeds one-hundred-ten percent (110%) of the Conversion
Price and whether the Debentures shall be convertible as a result of the
occurrence of the event specified in this Section 16.01(b) and, if the
Debentures shall be so convertible, the Trustee (or other conversion agent
appointed by the Company) shall promptly deliver to the Company and the Trustee
(if the Trustee is not the conversion agent) written notice thereof.
The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to this Section 16.01(b) (including
without limitation the calculation or determination of the Conversion Price and
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the Closing Sales Price), and the Company agrees, if requested by the Trustee,
to cooperate with, and provide assistance to, the Trustee in carrying out its
duties under this Section 16.01(b); provided that nothing herein shall be
construed to relieve the Trustee of its duties pursuant to this Section
16.01(b).
(c) Debentures may be converted during the five Business Day
period after any five consecutive Trading Day period (the "MEASUREMENT PERIOD")
in which the Trading Price per $1,000 principal amount of the Debentures for
each day of such Measurement Period was less than ninety-eight percent (98%) of
the product of the Closing Sale Price and the Conversion Rate in effect on each
such Trading Day; provided that no conversion pursuant to this Section 16.01(c)
may be made on or after the Blackout Date if on any Trading Day during the
Measurement Period the Closing Sale Price is more than one-hundred percent
(100%), but less than one-hundred-ten percent (110%) of the Conversion Price on
such Trading Day.
If the Exchange Date occurs during a period in which the Series A-2
Preferred Stock is convertible into Common Shares pursuant to Section 8(a)(iv)
of the Subdivision, then the Debentures shall be convertible pursuant to this
Section 16.01(c) for the remainder of the five Business Day period during which
the Series A-2 Preferred Stock would have been convertible pursuant Section
8(a)(iv) of the Subdivision had it not been exchanged for Debentures on the
Exchange Date. If the Trading Price (as such term is defined in the Subdivision)
per share of the Series A-2 Preferred Stock on the Trading Day prior to the
Exchange Date (the "LAST PREFERRED STOCK MEASUREMENT DAY") was less than
ninety-eight percent (98%) of the product of Closing Sale Price and the
Conversion Rate (as such term is defined in the Subdivision) in effect on such
Trading Day, then the Last Preferred Stock Measurement Day, and any of the four
previous Trading Days on which the Trading Price (as such term is defined in the
Subdivision) per share of the Series A-2 Preferred Stock was less than
ninety-eight percent (98%) of the product of Closing Sale Price and the
Conversion Rate (as such term is defined in the Subdivision) in effect on such
Trading Day, will be deemed to be Trading Days on which the Trading Price per
$1,000 principal amount of the Debentures was less than ninety-eight percent
(98%) of the product of the Closing Sale Price and the then current Conversion
Rate for purposes of determining whether the condition for convertibility set
forth in this Section 16.01(c) has been met.
The Company shall determine whether the Debentures may be converted
pursuant to Section 16.01(c) based on Trading Prices provided by the Trustee.
The Company shall provide the Trustee with the names of three independent
nationally known securities dealers to be used for determining the Trading
Price. The Trustee (or other conversion agent appointed by the Company) shall
have no obligation to determine the Trading Price under this Section 16.01(c)
unless the Company has requested such a determination; and the Company shall
have no obligation to make such request unless a holder of Debentures provides
it with
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reasonable evidence that the Trading Price per $1,000 principal amount of
Debentures would be less than ninety-eight percent (98%) of the product of the
Closing Sale Price and the then current Conversion Rate. If such evidence is
provided, the Company shall instruct the Trustee (or other conversion agent) to
determine the Trading Price of the Debentures beginning on the next Trading Day
and on each successive Trading Day until the Trading Price per $1,000 principal
amount of Debentures is greater than or equal to ninety-eight percent (98%) of
the product of the Closing Sale Price and the then current Conversion Rate;
provided that, except for the determination of the Trading Prices, the Trustee
shall be under no duty or obligation to make the calculations described in this
Section 16.01(c) or to determine whether the Debentures are convertible pursuant
to such section.
The Trustee shall be entitled at its sole discretion to consult with
the Company and to request the assistance of the Company in connection with the
Trustee's duties and obligations pursuant to this Section 16.01(c) (including
without limitation the calculation or determination of the Conversion Rate, the
Closing Sales Price and the Trading Price), and the Company agrees, if requested
by the Trustee, to cooperate with, and provide assistance to, the Trustee in
carrying out its duties under this Section 16.01(c); provided that nothing
herein shall be construed to relieve the Trustee of its duties pursuant to this
Section 16.01(c).
(d) If any Debentures have been called for redemption pursuant to
Section 3.02, such Debentures may be converted, at any time on or after the date
the notice of redemption has been given under Section 3.02 until 5:00 p.m., New
York City time, on the Business Day immediately preceding the Redemption Date,
unless the Company defaults in the payment of the Redemption Price with respect
to such Debentures.
(e) If the Company distributes to all holders of its Common Shares
(1) rights or warrants entitling them to purchase for a period expiring within
45 calendar days of the Record Date for the determination of the stockholders
entitled to receive such distribution, Common Shares, at less than the average
of the Closing Sale Prices for the 10 consecutive Trading Days immediately
preceding the declaration date for such distribution, or (2) cash, assets, debt
securities or rights to purchase its securities, where the Fair Market Value of
such distribution per Common Share exceeds five percent (5%) of the Closing Sale
Price of the Common Shares on the Trading Day immediately preceding the
declaration date for such distribution, then, in either case, the Debentures may
be converted at any time on and after the date (the "DISTRIBUTION NOTICE DATE")
that the Company gives notice to the holders of such right, which shall be not
less than twenty (20) calendar days prior to the Ex-Dividend Date for such
distribution, and the Debentures may be surrendered for conversion at any time
thereafter until the earlier of the close of business on the Business Day
immediately preceding the Ex-Dividend Date or the date the Company publicly
announces that such distribution will not take place (the "FINAL DISTRIBUTION
DATE"). Notwithstanding
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the foregoing, the Debentures may not be converted pursuant to this Section
16.01(e), and no adjustment to the Conversion Rate will be made, if all holders
of the Debentures will otherwise participate, on the same basis as a holder of
Common Shares, in the distribution without first converting its Debentures into
Common Shares.
If the Exchange Date occurs during the period beginning on, and
including, the Distribution Notice Date and ending on, and including, the Final
Distribution Date, the Debentures shall be convertible pursuant to this Section
16.01(e) until the earlier of the close of business on the Business Day
immediately preceding such Ex-Dividend Date or the date that the Company
publicly announces that such distribution will not take place.
(f) If the Company is a party to a consolidation, merger, binding
share exchange or sale of all or substantially all of its assets, in each case,
pursuant to which Common Shares would be converted into cash, securities or
other property, then the Debentures may be surrendered for conversion at any
time during the period (the "MERGER CONVERSION PERIOD") from and after the date
that is 15 days prior to the anticipated effective date of the transaction until
15 days after the actual date of the transaction (or, if such consolidation,
merger or share exchange also constitutes a Designated Event, until the
corresponding Designated Event Purchase Date) and, at the effective time, the
right to convert the Debentures into Common Shares shall be changed into a right
to convert such Debentures into the kind and amount of cash, securities or other
property of the Company or another Person that the holder would have received if
the holder had converted such Debentures immediately prior to the transaction.
If the Exchange Date occurs during the Merger Conversion Period, the
Debentures shall be convertible pursuant to this Section 16.01(f) until the date
fifteen (15) calendar days after the consummation of such transaction (or, if
such merger, consolidation or share exchange also constitutes a Designated
Event, until the corresponding Designated Event Purchase Date).
Section 16.02. Exercise Of Conversion Privilege; Issuance Of Common
Shares On Conversion; No Adjustment For Interest Or Dividends. In order to
exercise the conversion privilege with respect to any Debenture in certificated
form, the Company must receive at the office or agency of the Company maintained
for that purpose or, at the option of such holder, the Corporate Trust Office,
such Debenture with the original or facsimile of the form entitled "CONVERSION
NOTICE" on the reverse thereof, duly completed and manually signed, together
with such Debentures duly endorsed for transfer, accompanied by the funds, if
any, required by this Section 16.02. Such notice shall also state the name or
names (with address or addresses) in which the certificate or certificates for
Common Shares which shall be issuable on such conversion shall be issued, and
shall be accompanied by transfer or similar taxes, if required pursuant to
Section 16.07.
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In order to exercise the conversion privilege with respect to any
interest in a Global Debenture, the beneficial holder must complete, or cause to
be completed, the appropriate instruction form for conversion pursuant to the
Depositary's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Global Debenture, furnish appropriate
endorsements and transfer documents if required by the Company or the Trustee or
conversion agent, and pay the funds, if any, required by this Section 16.02 and
any transfer taxes if required pursuant to Section 16.07.
Promptly (but not later than two Business Days) after satisfaction of
the requirements for conversion set forth above, subject to compliance with any
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Debentureholder (as if such transfer were a transfer
of the Debenture or Debentures (or portion thereof) so converted), the Company
shall issue and shall deliver to such Debentureholder at the office or agency
maintained by the Company for such purpose pursuant to Section 6.02, a
certificate or certificates for the number of full Common Shares issuable upon
the conversion of such Debenture or portion thereof as determined by the Company
in accordance with the provisions of this Article 16 and a check or cash in
respect of any fractional interest in respect of a Common Share arising upon
such conversion, calculated by the Company as provided in Section 16.03. In case
any Debenture of a denomination greater than $1,000 shall be surrendered for
partial conversion, and subject to Section 2.03, the Company shall execute and
the Trustee shall authenticate and deliver to the holder of the Debenture so
surrendered, without charge to him, a new Debenture or Debentures in authorized
denominations in an aggregate principal amount equal to the unconverted portion
of the surrendered Debenture.
Each conversion shall be deemed to have been effected as to any such
Debenture (or portion thereof) on the date (the "CONVERSION DATE") on which the
requirements set forth above in this Section 16.02 have been satisfied as to
such Debenture (or portion thereof), and the Person in whose name any
certificate or certificates for Common Shares shall be issuable upon such
conversion shall be deemed to have become on the Conversion Date the holder of
record of the shares represented thereby; provided that any such surrender on
any date when the stock transfer books of the Company shall be closed shall
constitute the Person in whose name the certificates are to be issued as the
record holder thereof for all purposes on the next succeeding day on which such
stock transfer books are open, but such conversion shall be at the Conversion
Rate in effect on the date upon which such Debenture shall be surrendered.
If any Debenture (or portion thereof) is converted into Common Shares
during the period after a Record Date for the payment of interest to, but
excluding, the next succeeding interest payment date and such Debenture (or
portion thereof) has been called for redemption on a Redemption Date or tendered
for repurchase on a Designated Event Purchase Date which occurs during such
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period, the Company shall pay the full amount of interest on such interest
payment date in respect of any such Debenture (or portion thereof) to the holder
of such Debentures registered as such at the close of business on the applicable
Record Date. Any Debenture or portion thereof surrendered for conversion during
the period from the close of business on the Record Date for any interest
payment date to the close of business on the Business Day preceding the
immediately following interest payment date shall be accompanied by payment, in
immediately available funds or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such interest payment date on
the principal amount being converted; provided that no such payment need be made
(1) if the Company has specified a Redemption Date that is after a Record Date
and on or prior to the next interest payment date, (2) if the Company has
specified a Designated Event Purchase Date following a Designated Event that is
after a Record Date and on or prior to the next interest payment date or (3) to
the extent of any overdue interest, if any overdue interest exists at the time
of conversion with respect to such Debenture. Except as provided above in this
Section 16.02, no payment or other adjustment shall be made for interest accrued
and unpaid on any Debenture converted or for dividends on any shares issued upon
the conversion of such Debenture as provided in this Article 16.
Upon the conversion of an interest in a Global Debenture, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Global Debenture as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Debentures effected through any conversion agent
other than the Trustee.
Upon the conversion of a Debenture, that portion of the accrued but
unpaid interest, and accrued Tax Original Issue Discount attributable to the
period from the issue date of the Debenture to the Conversion Date, with respect
to the converted Debenture shall not be cancelled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the holder thereof through
delivery of the Common Shares (together with the cash payment, if any in lieu of
fractional shares) in exchange for the Debenture being converted pursuant to the
provisions hereof; and the Fair Market Value of such Common Shares (together
with any such cash payment in lieu of fractional shares) shall be treated as
issued, to the extent thereof, first in exchange for and in satisfaction of the
Company's obligation to pay the principal amount of the converted Debenture, the
accrued but unpaid interest, and accrued Tax Original Issue Discount through the
Conversion Date from the issue date, and the balance, if any, of such Fair
Market Value of such Common Shares (and any such cash payment) shall be treated
as issued in exchange for and in satisfaction of the right to convert the
Debenture being converted pursuant to the provisions hereof.
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Section 16.03. Cash Payments in Lieu of Fractional Shares. In
connection with the conversion of the Debentures, no fractional Common Shares
shall be issued upon conversion of Debentures. If more than one Debenture shall
be surrendered for conversion at one time by the same holder, the number of full
shares that shall be issuable upon conversion shall be computed on the basis of
the aggregate principal amount of the Debentures (or specified portions thereof
to the extent permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Debenture or Debentures, the
Company shall make an adjustment and payment therefor in cash at the current
market price thereof to the holder of Debentures. The current market price of a
Common Share shall be the Closing Sale Price on the date the Debentures (or
specified portions thereof) are surrendered for conversion.
Section 16.04. Conversion Rate. Each $1,000 principal amount of the
Debentures shall be convertible into the number of Common Shares specified in
the form of Debenture (herein called the "CONVERSION RATE") attached as Exhibit
A hereto, subject to adjustment as provided in this Article 16.
Section 16.05. Adjustment Of Conversion Rate. The Conversion Rate shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Shares in Common Shares,
the Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction,
(i) the numerator of which shall be the sum of the number
of Common Shares outstanding at the close of business on the date fixed
for the determination of stockholders entitled to receive such dividend
or other distribution plus the total number of Common Shares
constituting such dividend or other distribution; and
(ii) the denominator of which shall be the number of
Common Shares outstanding at the close of business on the date fixed
for such determination,
such increase to become effective immediately after the opening of business on
the day following the date fixed for such determination. If any dividend or
distribution of the type described in this Section 16.05(a) is declared but not
so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate that would then be in effect if such dividend or distribution had not been
declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding Common Shares entitling them (for a period expiring
within forty-
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five (45) calendar days after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe for or purchase Common
Shares at a price per share less than the average of the Closing Sale Prices of
the Common Shares for the ten (10) consecutive Trading Days immediately
preceding the declaration date for such distribution, the Conversion Rate shall
be increased so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the date fixed for determination
of stockholders entitled to receive such rights or warrants by a fraction,
(i) the numerator of which shall be the number of Common
Shares outstanding at the close of business on the date fixed for
determination of stockholders entitled to receive such rights or
warrants plus the total number of additional Common Shares offered for
subscription or purchase, and
(ii) the denominator of which shall be the sum of the
number of Common Shares outstanding at the close of business on the
date fixed for determination of stockholders entitled to receive such
rights or warrants plus the number of shares that the aggregate
offering price of the total number of shares so offered would purchase
at a price equal to the average of the Closing Sale Prices of the
Common Shares for the ten (10) consecutive Trading Days immediately
preceding the declaration date for such distribution.
Such adjustment shall be successively made whenever any such rights or
warrants are issued, and shall become effective immediately after the opening of
business on the day following the date fixed for determination of stockholders
entitled to receive such rights or warrants. To the extent that Common Shares
are not delivered after the expiration of such rights or warrants, the
Conversion Rate shall be readjusted to the Conversion Rate that would then be in
effect had the adjustments made upon the issuance of such rights or warrants
been made on the basis of delivery of only the number of Common Shares actually
delivered. If such rights or warrants are not so issued, the Conversion Rate
shall again be adjusted to be the Conversion Rate that would then be in effect
if such date fixed for the determination of stockholders entitled to receive
such rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase Common Shares at a
price less than the average of the Closing Sale Prices of the Common Shares for
the ten (10) consecutive Trading Days immediately preceding the declaration date
for such distribution, and in determining the aggregate offering price of such
Common Shares, there shall be taken into account any consideration received by
the Company for such rights or warrants and any amount payable on exercise or
conversion thereof, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
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(c) In case outstanding Common Shares shall be subdivided into a
greater number of Common Shares, 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 Common Shares shall be combined into a smaller number of Common
Shares, 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.
(d) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Shares of any class of capital stock of
the Company or evidences of its indebtedness or assets (including securities,
but excluding any rights or warrants referred to in Section 16.05(b), and
excluding any dividend or distribution (x) paid exclusively in cash or (y)
referred to in Section 16.05(a)) (any of the foregoing hereinafter in this
Section 16.05(d), called the "DISTRIBUTED PROPERTY"), then, in each such case
(unless the Company elects to reserve such Distributed Property for distribution
to the Debentureholders upon the conversion of the Debentures so that any such
holder converting Debentures will receive upon such conversion, in addition to
the Common Shares to which such holder is entitled, the amount and kind of such
Distributed Property which such holder would have received if such holder had
converted its Debentures into Common Shares immediately prior to the Record Date
for such distribution of the Distributed Property) the Conversion Rate shall be
increased so that the same shall be equal to the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business on the
Record Date with respect to such distribution by a fraction,
(i) the numerator of which shall be the Current Market
Price on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the Fair Market Value (as determined by
the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date
of the portion of the Distributed Property so distributed applicable to
one Common Share,
such adjustment to become effective immediately prior to the opening of business
on the day following such Record Date; provided that if the then Fair Market
Value (as so determined) of the portion of the Distributed Property so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Debentureholder shall have the
right to receive on the date of such dividend or distribution the amount of
Distributed Property such
86
holder would have received had such holder converted each Debenture on the
Record Date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared. If the
Board of Directors determines the Fair Market Value of any distribution for
purposes of this Section 16.05(d) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in
such market over the same period used in computing the Current Market Price on
the applicable Record Date.
Notwithstanding the foregoing, if the Distributed Property distributed
by the Company to all holders of its Common Shares consist of capital stock of,
or similar equity interests in, a Subsidiary or other business unit (unless such
capital stock or similar equity interests are distributed to the
Debentureholders in such distribution as if such holders had converted their
Debentures into Common Shares), the Conversion Rate shall be increased so that
the same shall be equal to the rate determined by multiplying the Conversion
Rate in effect immediately prior to the close of business on the Record Date
with respect to such distribution by a fraction,
(i) the numerator of which shall be the sum of (A) the
average of the Closing Sale Prices of the Common Shares for the ten
(10) consecutive Trading Days commencing on and including the fifth
Trading Day after the date on which "ex-dividend trading" commences for
such dividend or distribution on the New York Stock Exchange, Nasdaq or
such other national or regional exchange or market on which such
securities are then listed or quoted (the "EX-DIVIDEND DATE") plus (B)
the average of the Closing Sale Prices of the securities distributed in
respect of each Common Share for the ten (10) consecutive Trading Days
commencing on and including the fifth Trading Day after the Ex-Dividend
Date; and
(ii) the denominator of which shall be the average of the
Closing Sale Prices of the Common Shares for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date,
such adjustment to become effective ten (10) Trading Days after the effective
date of such distribution of capital stock of, or similar equity interests in, a
Subsidiary or other business unit; provided that the Company may in lieu of the
foregoing adjustment make adequate provision so that each Debentureholder shall
have the right to receive upon conversion the amount of Distributed Property
such holder would have received had such holder converted each Debenture on the
Record Date with respect to such distribution; and provided further that if (x)
the average of the Closing Sale Prices of the Common Shares for the ten (10)
consecutive Trading Days commencing on and including the fifth Trading Day after
the Ex-Dividend Date minus (y) the average of the Closing Sale Prices of the
securities
87
distributed in respect of each share Common Share for the ten (10) consecutive
Trading Days commencing on and including the fifth Trading Day after the
Ex-Dividend Date is less than $1.00, then the adjustment provided by for by this
paragraph shall not be made and in lieu thereof the provisions of the first
paragraph of this Section 16.05(d) shall apply to such distribution. In any case
in which this paragraph is applicable, Section 16.05(a), Section 16.05(b) and
the first paragraph of this Section 16.05(d) shall not be applicable.
Rights or warrants distributed by the Company to all holders of Common
Shares entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("TRIGGER EVENT"): (i) are deemed to be transferred with such Common Shares;
(ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Shares, shall be deemed not to have been distributed for
purposes of this Section 16.05 (and no adjustment to the Conversion Rate under
this Section 16.05 will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Rate shall be made under this Section 16.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and Record Date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event of the
type described in the preceding sentence with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 16.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Rate shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Shares with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Shares as
of the date of such redemption or repurchase, and (2) in the case of such rights
or warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Rate shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Rate shall be made pursuant to this
Section 16.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually
88
distributed, or reserved by the Company for distribution to holders of
Debentures upon conversion by such holders of Debentures to Common Shares.
For purposes of this Section 16.05(d) and Section 16.05(a) and
16.05(b), any dividend or distribution to which this Section 16.05(d) is
applicable that also includes Common Shares, or rights or warrants to subscribe
for or purchase Common Shares (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such Common Shares or rights or warrants (and any
Conversion Rate adjustment required by this Section 16.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such Common Shares or such rights or warrants (and
any further Conversion Rate adjustment required by Sections 16.05(a) and
16.05(b) with respect to such dividend or distribution shall then be made),
except (A) the Record Date of such dividend or distribution shall be substituted
as "the date fixed for the determination of stockholders entitled to receive
such dividend or other distribution", "the date fixed for the determination of
stockholders entitled to receive such rights or warrants" and "the date fixed
for such determination" within the meaning of Sections 16.05(a) and 16.05(b) and
(B) any Common Shares included in such dividend or distribution shall not be
deemed "outstanding at the close of business on the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution" or "outstanding at the close of business on the date fixed for
such determination" within the meaning of Section 16.05(a).
(e) The reclassification of Common Shares into securities
including securities other than Common Shares (other than any reclassification
upon an event to which Section 16.06 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Shares to all holders of
Common Shares (and the effective date of such reclassification shall be deemed
to be the "Record Date" within the meaning of Section 16.05(d)), and (b) a
subdivision or combination, as the case may be, of the number of Common Shares
outstanding immediately prior to such reclassification into the number of Common
Shares 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 Section 16.05(c)).
(f) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Shares cash (excluding any dividend or
distribution in connection with the liquidation, dissolution or winding up of
the Company, whether voluntary or involuntary), then, in such case, the
Conversion Rate shall be increased so that the same shall equal the rate
determined by multiplying the Conversion Rate in effect immediately prior to the
close of business on such Record Date by a fraction,
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(i) the numerator of which shall be the Current Market
Price on such Record Date; and
(ii) the denominator of which shall be the Current Market
Price on such Record Date less the amount of cash so distributed
applicable to one Common Share,
such adjustment to be effective immediately prior to the opening of business on
the day following the Record Date; provided that if the portion of the cash so
distributed applicable to one Common Share is equal to or greater than the
Current Market Price on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Debentureholder shall have the
right to receive on the date of such dividend or distribution the amount of cash
such holder would have received had such holder converted each Debenture on the
Record Date. If such dividend or distribution is not so paid or made, the
Conversion Rate shall again be adjusted to be the Conversion Rate that would
then be in effect if such dividend or distribution had not been declared.
(g) In case a tender or exchange offer made by the Company or any
Subsidiary for all or any portion of the Common Shares shall expire and such
tender or exchange offer (as amended up to the expiration thereof) shall require
the payment to stockholders of consideration per Common Share having a Fair
Market Value (as determined by the Board of Directors, whose determination shall
be conclusive and described in a resolution of the Board of Directors) that as
of the last time (the "EXPIRATION TIME") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended) exceeds the
Closing Sale Price of a Common Share on the Trading Day next succeeding the
Expiration Time, the Conversion Rate shall be increased so that the same shall
equal the rate determined by multiplying the Conversion Rate in effect
immediately prior to the Expiration Time by a fraction,
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "PURCHASED SHARES") and (y) the product of the
number of Common Share outstanding (less any Purchased Shares) at the
Expiration Time and the Closing Sale Price of a Common Share on the
Trading Day next succeeding the Expiration Time, and
(ii) the denominator of which shall be the number of
Common Shares outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Sale Price of a Common
Share on the Trading Day next succeeding the Expiration Time,
90
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. If the Company is obligated to
purchase shares pursuant to any such tender or exchange offer, but the Company
is permanently prevented by applicable law from effecting any such purchases or
all such purchases are rescinded, the Conversion Rate shall again be adjusted to
be the Conversion Rate that would then be in effect if such tender or exchange
offer had not been made.
(h) In case of a tender or exchange offer made by a Person other
than the Company or any Subsidiary for an amount that increases the offeror's
ownership of Common Shares to more than twenty-five percent (25%) of the Common
Shares outstanding and shall involve the payment by such Person of consideration
per Common Share having a Fair Market Value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the Expiration Time exceeds the
Closing Sale Price of the Common Shares on the Trading Day next succeeding the
Expiration Time, and in which, as of the Expiration Time, the Board of Directors
is not recommending rejection of the offer, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by multiplying the
Conversion Rate in effect immediately prior to the Expiration Time by a
fraction,
(i) the numerator of which shall be the sum of (x) the
Fair Market Value (determined as aforesaid) of the aggregate
consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of
the Purchased Shares and (y) the product of the number of Common Shares
outstanding (less any Purchased Shares) at the Expiration Time and the
Closing Sale Price of a Common Share on the Trading Day next succeeding
the Expiration Time, and
(ii) the denominator of which shall be the number of
Common Share outstanding (including any tendered or exchanged shares)
at the Expiration Time multiplied by the Closing Sale Price of a Common
Share on the Trading Day next succeeding the Expiration Time,
such adjustment to become effective immediately prior to the opening of business
on the day following the Expiration Time. In the event that such Person is
obligated to purchase shares pursuant to any such tender or exchange offer, but
such Person is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate that would then be in effect if such
tender or exchange offer had not been made. Notwithstanding the foregoing, the
adjustment described in this Section 16.05(h) shall not be made if, as of the
Expiration Time, the offering documents with respect to such offer disclose a
plan or intention to cause the Company to engage in a consolidation or merger or
a sale of substantially all of its assets.
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(i) For purposes of this Section 16.05, the following terms shall
have the meaning indicated:
(i) "CURRENT MARKET PRICE" shall mean the average of the
daily Closing Sale Prices per Common Share for the ten (10) consecutive
Trading Days ending on the earlier of the day in question and the day
before the "ex date" with respect to the issuance, distribution,
subdivision or combination requiring such computation. For purposes of
this paragraph, the term "EX DATE" (1) when used with respect to any
issuance or distribution, means the first date on which the Common
Shares trade, regular way, on the relevant exchange or in the relevant
market from which the Closing Sale Price was obtained without the right
to receive such issuance or distribution, and (2) when used with
respect to any subdivision or combination of Common Shares, means the
first date on which the Common Shares trade, regular way, on such
exchange or in such market after the time at which such subdivision or
combination becomes effective.
If another issuance, distribution, subdivision or combination to which
Section 16.05 applies occurs during the period applicable for
calculating "CURRENT MARKET PRICE" pursuant to the definition in the
preceding paragraph, "CURRENT MARKET PRICE" shall be calculated for
such period in a manner determined by the Board of Directors to reflect
the impact of such issuance, distribution, subdivision or combination
on the Closing Sale Price of the Common Shares during such period.
(ii) "FAIR MARKET VALUE" shall mean the amount which a
willing buyer would pay a willing seller in an arm's-length
transaction.
(iii) "RECORD DATE" shall mean, with respect to any
dividend, distribution or other transaction or event in which the
holders of Common Shares have the right to receive any cash, securities
or other property or in which the Common Shares (or other applicable
security) is exchanged for or converted into any combination of cash,
securities or other property, the date fixed for determination of
stockholders entitled to receive such cash, securities or other
property (whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(iv) "TRADING DAY" shall mean a day during which trading
in securities generally occurs on the New York Stock Exchange or, if
the applicable security is not listed on the New York Stock Exchange,
on the principal other national or regional securities exchange on
which the applicable security is then listed or, if the Common stock is
not listed on a national or regional securities exchange, on the Nasdaq
or, if the applicable security is not quoted on Nasdaq, on the
principal other market on which the applicable security is then traded.
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(j) The Company may make such increases in the Conversion Rate, in
addition to those required by Section 16.05(a), (b), (c), (d), (e), (f), (g) or
(h) as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Shares or rights to purchase Common Shares
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount if the Board of Directors
shall have made a determination that such increase would be in the best
interests of the Company, which determination shall be conclusive. Whenever the
Conversion Rate is increased pursuant to the preceding sentence, the Company
shall mail to holders of record of the Debentures and file with the Trustee and
any conversion agents other than the Trustee a notice of the increase, and such
notice shall state the increased Conversion Rate and the period during which it
will be in effect.
(k) All calculations under this Article 16 shall be made by the
Company and shall be made to the nearest cent or to the nearest one-ten
thousandth (1/10,000) of a share (or if there is not a nearest one-ten
thousandth of a share, to the next lower one-ten thousandth of a share), as the
case may be. No adjustment to the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
therein; provided, however, that any adjustments that by reason of this
subparagraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(l) No adjustment need be made:
(1) upon the issuance of Common Shares pursuant to any
present or future plan providing for the reinvestment of dividends or
interest payable on securities of the Company and the investment of
additional optional amounts in Common Shares under any plan;
(2) upon the issuance of Common Shares or options or
rights to purchase those shares pursuant to any present or future
employee, director or consultant benefit plan or program of or assumed
by the Company or any Subsidiary;
(3) upon the issuance of Common Shares pursuant to any
option, warrant, right, or exercisable, exchangeable or convertible
security not described in (2) above and outstanding as of the date the
Debentures were first issued;
(4) for a change in the par value of the Common Shares;
(5) any repurchases by the Company of the Common Shares
not expressly described in this Section 16.05; or
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(6) for accrued and unpaid interest.
To the extent the Debentures become convertible into cash, assets,
property or securities (other than capital stock of the Company or any other
Person), no adjustment need be made thereafter as to the cash, assets, property
or securities. Interest will not accrue on any cash into which the Debentures
are convertible.
(m) Whenever the Conversion Rate is adjusted as herein provided,
the Company shall promptly file with the Trustee and any conversion agent other
than the Trustee an Officers' Certificate setting forth the Conversion Rate
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall
have received such Officers' Certificate, the Trustee shall not be deemed to
have knowledge of any adjustment of the Conversion Rate and may assume that the
last Conversion Rate of which it has knowledge is still in effect. Promptly
after delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Rate setting forth the adjusted Conversion Rate and
the date on which each adjustment becomes effective and shall promptly mail such
notice of such adjustment of the Conversion Rate to each Debentureholder at its
last address appearing on the Debenture Register provided for in Section 2.05 of
this Indenture. Failure to deliver such notice shall not affect the legality or
validity of any such adjustment.
(n) In any case in which this Section 16.05 provides that an
adjustment shall become effective immediately after (1) a Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 16.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 16.05(b), or (4) the Expiration Time for any tender
or exchange offer pursuant to Section 16.05(g), (each a "DETERMINATION DATE"),
the Company may elect to defer until the occurrence of the applicable Adjustment
Event (as hereinafter defined) (x) issuing to the holder of any Debenture
converted after such Determination Date and before the occurrence of such
Adjustment Event the additional Common Shares or other securities issuable upon
such conversion by reason of the adjustment required by such Adjustment Event
over and above the Common Shares issuable upon such conversion before giving
effect to such adjustment and (y) paying to such holder any amount in cash in
lieu of any fraction pursuant to Section 16.03. For purposes of this Section
16.05(n), the term "ADJUSTMENT EVENT" shall mean:
(i) in any case referred to in clause (1) hereof, the
occurrence of such event,
(ii) in any case referred to in clause (2) hereof, the
date any such dividend or distribution is paid or made,
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(iii) in any case referred to in clause (3) hereof, the
date of expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) hereof, the
date a sale or exchange of Common Shares pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(o) For purposes of this Section 16.05, the number of Common
Shares 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 Common Shares. The Company will not pay any
dividend or make any distribution on Common Shares held in the treasury of the
Company.
Section 16.06. Effect Of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding Common Shares (other than a change in par value or as
a result of a subdivision or combination to which Section 16.05(c) applies),
(ii) any consolidation, merger or combination of the Company with another Person
as a result of which holders of Common Shares shall be entitled to receive
stock, other securities or other property or assets (including cash) with
respect to or in exchange for such Common Shares, or (iii) any sale or
conveyance of all or substantially all of the properties and assets of the
Company to any other Person as a result of which holders of Common Shares shall
be entitled to receive stock, other securities or other property or assets
(including cash) with respect to or in exchange for such Common Shares, then the
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Debenture shall be convertible into the kind and
amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of Common Shares
issuable upon conversion of such Debentures (assuming, for such purposes, a
sufficient number of authorized Common Shares are available to convert all such
Debentures) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Shares
did not exercise his rights of election, if any, as to the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance (provided that, if the kind or amount of stock, other securities or
other property or assets (including cash) receivable upon such reclassification,
change, consolidation, merger, combination, sale or conveyance is not the same
for each Common Share in respect of which such rights of election shall not have
been exercised ("NON-ELECTING SHARE"), then for the purposes of this Section
16.06 the kind and amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or
95
conveyance for each Non-Electing Share shall be deemed to be the kind and amount
so receivable per share by a plurality of the Non-Electing Shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
16.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Debentures, at its address appearing on
the Debenture Register provided for in Section 2.05 of this Indenture, within
twenty (20) calendar days after execution thereof. Failure to deliver such
notice shall not affect the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 16.06 applies to any event or occurrence, Section 16.05 shall
not apply.
Section 16.07. Taxes On Shares Issued. The issue of stock certificates
on conversions of Debentures shall be made without charge to the converting
Debentureholder for any documentary, stamp or similar issue or transfer tax in
respect of the issue thereof. The Company shall not, however, be required to pay
any such tax which may be payable in respect of any transfer involved in the
issue and delivery of stock in any name other than that of the holder of any
Debenture converted, and the Company shall not be required to issue or deliver
any such stock certificate unless and until the Person or Persons requesting the
issue thereof shall have paid to the Company the amount of such tax or shall
have established to the satisfaction of the Company that such tax has been paid.
Section 16.08. Reservation of Shares, Shares to Be Fully Paid;
Compliance With Governmental Requirements; Listing of Common Shares. The Company
shall:
(i) at all times reserve and keep available, free from
preemptive rights, for issuance upon the conversion of the Debentures
such number of its authorized but unissued Common Shares as shall from
time to time be sufficient to permit the conversion of all Outstanding
Debentures;
(ii) ensure that all Common Shares delivered upon
conversion of the Debentures, upon delivery, be duly and validly issued
and fully paid and nonassessable, free of all liens and charges and not
subject to any preemptive rights.
Before taking any action which would cause an adjustment increasing the
Conversion Rate to an amount that would cause the Conversion Price to be
96
reduced below the then par value, if any, of the Common Shares issuable upon
conversion of the Debentures, the Company will take all corporate action which
may, in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue shares of such Common Shares at such adjusted
Conversion Rate.
The Company covenants that all Common Shares that may be issued upon
conversion of Debentures will upon issue be fully paid and non-assessable by the
Company and free from all taxes, liens and charges with respect to the issue
thereof.
The Company covenants that, if any Common Shares to be provided for the
purpose of conversion of Debentures hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto), endeavor
to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Shares
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Shares shall be so listed on such exchange or automated
quotation system, all Common Shares issuable upon conversion of the Debentures;
provided that if the rules of such exchange or automated quotation system permit
the Company to defer the listing of such Common Shares until the first
conversion of the Debentures into Common Shares in accordance with the
provisions of this Indenture, the Company covenants to list such Common Shares
issuable upon conversion of the Debentures in accordance with the requirements
of such exchange or automated quotation system at such time.
Section 16.09. Responsibility Of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Debentures to determine the Conversion Rate or whether any facts
exist which may require any adjustment of the Conversion Rate, or with respect
to the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any Common Shares, or of any securities or property,
which may at any time be issued or delivered upon the conversion of any
Debenture; and the Trustee and any other conversion agent make no
representations with respect thereto. Neither the Trustee nor any conversion
agent shall be responsible for any failure of the Company to issue, transfer or
deliver any Common Shares or stock certificates or other securities or property
or cash upon the surrender of any
97
Debenture for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article 16.
Without limiting the generality of the foregoing, neither the Trustee nor any
conversion agent shall be under any responsibility to determine the correctness
of any provisions contained in any supplemental indenture entered into pursuant
to Section 16.06 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Debentureholders upon the
conversion of their Debentures after any event referred to in such Section 16.06
or to any adjustment to be made with respect thereto, but, subject to the
provisions of Section 9.01, may accept as conclusive evidence of the correctness
of any such provisions, and shall be protected in relying upon, any Officers'
Certificate (which the Company shall be obligated to file with the Trustee prior
to the execution of any such supplemental indenture) with respect thereto.
Section 16.10. Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Shares that would require an adjustment in the
Conversion Rate pursuant to Section 16.05; or
(b) the Company shall authorize the granting to the holders of all
or substantially all of its Common Shares of rights or warrants to subscribe for
or purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Shares
of the Company (other than a subdivision or combination of its outstanding
Common Shares, or a change in par value, or from par value to no par value, or
from no par value to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Debentures at his address appearing on the Debenture Register provided
for in Section 2.05 of this Indenture, as promptly as possible but in any event
at least ten (10) calendar days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution or rights or warrants, or, if a
record is not to be taken, the date as of which the holders of Common Shares of
record to be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is expected to
become effective or occur, and the date as of which it is expected that holders
of Common Shares of record shall be entitled to exchange
98
their Common Shares for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up. Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.
Section 16.11. Shareholder Rights Plans. Each Common Share issued upon
conversion of Debentures shall be entitled to receive the appropriate number of
common stock or preferred stock purchase rights, as the case may be, including
without limitation, the rights under the Rights Agreement (collectively, the
"RIGHTS"), if any, that Common Shares are entitled to receive and the
certificates representing the Common Shares issued upon such conversion shall
bear such legends, if any, in each case as may be provided by the terms of any
shareholder rights agreement adopted by the Company, as the same may be amended
from time to time (in each case, a "RIGHTS PLAN"). Provided that such Rights
Plan requires that each Common Share issued upon conversion of Debentures at any
time prior to the distribution of separate certificates representing the Rights
be entitled to receive such Rights, then, notwithstanding anything else to the
contrary in this Subdivision, there shall not be any adjustment to the
conversion privilege or Conversion Rate as a result of the issuance of Rights,
but an adjustment to the Conversion Rate shall be made pursuant to Section
16.05(d) upon the separation of the Rights from the Common Shares.
Section 16.12. Issuer Determination Final. Any determination that the
Company or Board of Directors of the Company must make pursuant to Section
16.01, Section 16.02, Section 16.03, Section 16.04, Section 16.05 or Section
16.06 shall, absent manifest error, be conclusive.
ARTICLE 17
MISCELLANEOUS PROVISIONS
Section 17.01. Provisions Binding On Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 17.02. Official Acts By Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 17.03. Addresses For Notices, Etc. Any notice or demand which
by any provision of this Indenture is required or permitted to be given or
served by the Trustee or by the holders of Debentures on the Company shall be
deemed
99
to have been sufficiently given or made, for all purposes, if given or served by
being deposited postage prepaid by registered or certified mail in a post office
letter box or sent by telecopier transmission addressed as follows: to
Cleveland-Cliffs Inc, 1100 Superior Avenue, Cleveland, Ohio 44114-2589,
Telephone No.: 216-694-5700, Attention: Corporate Secretary. Any notice,
direction, request or demand hereunder to or upon the Trustee shall be deemed to
have been sufficiently given or made, for all purposes, if given or served by
being deposited, postage prepaid, by registered or certified mail in a post
office letter box or sent by telecopier transmission addressed as follows:
[Insert address of Trustee], Facsimile No.: [Insert fax number of Trustee],
Attention: [Insert name of contact at Trustee].
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Debentureholder shall be mailed
to him by first class mail, postage prepaid, at his address as it appears on the
Debenture Register and shall be sufficiently given to him if so mailed within
the time prescribed.
Failure to mail a notice or communication to a Debentureholder or any
defect in it shall not affect its sufficiency with respect to other
Debentureholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.
Section 17.04. Governing Law. This Indenture and each Debenture shall
be deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to conflicts of laws principles thereof.
Section 17.05. Evidence Of Compliance With Conditions Precedent,
Certificates To Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with; provided, that with respect to matters of fact, an Opinion of Counsel may
rely on an Officer's Certificate or certificate of public officials.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include: (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a
100
statement that, in the opinion of such person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to
whether or not such covenant or condition has been complied with; and (4) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Section 17.06. Legal Holidays. In any case in which the date of
maturity of interest on or principal of the Debentures, the Redemption Date of
any Debenture or a Designated Event Purchase Date will not be a Business Day,
then payment of such interest on or principal of the Debentures need not be made
on such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date of maturity or the Redemption Date, and
no interest shall accrue for the period from and after such date.
Section 17.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided that unless otherwise required by law, notwithstanding
the foregoing, this Indenture and the Debentures issued hereunder shall not be
subject to the provisions of subsections (a)(1), (a)(2), and (a)(3) of Section
314 of the Trust Indenture Act as now in effect or as hereafter amended or
modified; and provided further that this Section 17.07 shall not require this
Indenture or the Trustee to be qualified under the Trust Indenture Act prior to
the time such qualification is in fact required under the terms of the Trust
Indenture Act, nor shall it constitute any admission or acknowledgment by any
party to the Indenture that any such qualification is required prior to the time
such qualification is in fact required under the terms of the Trust Indenture
Act. If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required to be included in an indenture qualified
under the Trust Indenture Act, such required provision shall control.
Section 17.08. No Security Interest Created. Nothing in this Indenture
or in the Debentures, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 17.09. Benefits Of Indenture. Nothing in this Indenture or in
the Debentures, express or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Debenture
Registrar and their successors hereunder and the holders of Debentures any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 17.10. Table Of Contents, Headings, Etc. The table of contents
and the titles and headings of the Articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
101
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 17.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Debentures in connection
with the original issuance thereof and transfers and exchanges of Debentures
hereunder, including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as
fully to all intents and purposes as though the authenticating agent had been
expressly authorized by this Indenture and those Sections to authenticate and
deliver Debentures. For all purposes of this Indenture, the authentication and
delivery of Debentures by the authenticating agent shall be deemed to be
authentication and delivery of such Debentures "by the Trustee" and a
certificate of authentication executed on behalf of the Trustee by an
authenticating agent shall be deemed to satisfy any requirement hereunder or in
the Debentures for the Trustee's certificate of authentication. Such
authenticating agent shall at all times be a Person eligible to serve as trustee
hereunder pursuant to Section 9.09.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 17.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination to such authenticating agent and to the Company. Upon receiving
such a notice of resignation or upon such a termination, or in case at any time
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Debentures as the names and
addresses of such holders appear on the Debenture Register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
102
The provisions of Sections 9.02, 9.03, 9.04 and 10.03 and this Section
17.11 shall be applicable to any authenticating agent.
Section 17.12. Execution In Counterparts. This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
Section 17.13. Severability. In case any provision in this Indenture or
in the Debentures shall be invalid, illegal or unenforceable, then (to the
extent permitted by law) the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
[Insert name of Trustee] hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.
[The remainder of this page is intentionally left blank]
103
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
CLEVELAND-CLIFFS INC
By:_____________________________________
Name:
Title:
[Insert name of Trustee], as Trustee
By:_____________________________________
Name:
Title:
104
EXHIBIT A
[Include the following legend only for Global Debentures]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (THE
"DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY FOR THE CERTIFICATES)
TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT,
AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH
OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND
ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH
AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
[Include the following legend only for Debentures that are Restricted
Securities]
[NEITHER THIS SECURITY NOR THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS
SECURITY HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR
THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE ISSUANCE HEREOF
(OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS AN AFFILIATE OF
THE COMPANY AT ANY TIME DURING THE THREE MONTHS PRECEDING THE DATE OF SUCH
TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE COMPANY, (2) SO LONG AS THIS
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE BOX CHECKED
BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF THIS
SECURITY), (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR (4)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A. HEDGING TRANSACTIONS
INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN COMPLIANCE
WITH THE SECURITIES ACT.]
[Include the following legend only for Debentures that are Restricted Securities
that are issued with Tax Original Issue Discount]
[THE DEBENTURES HAVE BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR UNITED
STATES FEDERAL INCOME TAX PURPOSES. UPON WRITTEN REQUEST, A REPRESENTATIVE OF
THE COMPANY WILL PROMPTLY INFORM A HOLDER OF THE AMOUNT OF OID AS WELL AS THE
ISSUE PRICE, THE ISSUE DATE, THE MATURITY DATE FOR THESE PURPOSES AND THE YIELD
TO MATURITY OF THE DEBENTURES. HOLDERS MAY CONTACT [Insert name and title and
either address or telephone number of appropriate person at the Company at the
time of the exchange].]
A-2
CLEVELAND-CLIFFS INC
3.25% CONVERTIBLE SUBORDINATED DEBENTURE DUE ____
CUSIP:
No. __ $_________
Cleveland-Cliffs Inc, a corporation duly organized and validly existing
under the laws of the State of Ohio (herein called the "COMPANY", which term
includes any successor corporation under the Indenture referred to on the
reverse hereof), for value received hereby promises to pay to__________ or its
registered assigns, [the principal sum of _________ DOLLARS](1) [the principal
sum set forth on Schedule I hereto](2) on the Maturity Date at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semiannually on January 15 and July 15 of each year,
commencing [Insert First Interest Payment Date], on said principal sum at said
office or agency, in like coin or currency, at the rate per annum of 3.25%, from
the January 15 or July 15, as the case may be, next preceding the date of this
Debenture to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Debenture, or unless no interest has been paid or
duly provided for on the Debentures, in which case from [Insert Most Recent
Dividend Payment Date On The Preferred Stock], until payment of said principal
sum has been made or duly provided for. Notwithstanding the foregoing, if the
date hereof is after any January 1 or July 1, as the case may be, and before the
following January 15 or July 15, this Debenture shall bear interest from such
January 15 or July 15; provided that if the Company shall default in the payment
of interest due on such January 15 or July 15, then this Debenture shall bear
interest from the next preceding January 15 or July 15 to which interest has
been paid or duly provided for or, if no interest has been paid or duly provided
for on such Debenture, from [Insert Most Recent Dividend Payment Date On The
Preferred Stock]. Except as otherwise provided in the Indenture, the interest
payable on the Debenture pursuant to the Indenture on any January 15 or July 15
will be paid to the Person entitled thereto as it appears in the Debenture
Register at the close of business on the Record Date, which shall be the January
1 or July 1 (whether or not a Business Day) next preceding such January 15 or
July 15, as provided in the Indenture; provided that any such interest not
punctually paid or duly provided for shall be payable as provided in the
Indenture. The Company shall pay interest (i) on any Debentures in certificated
form by check mailed to the address of the
- ---------------
(1) Include for definitive Debentures.
(2) Include for Global Debenture.
A-3
Person entitled thereto as it appears in the Debenture Register (provided that
the holder of Debentures with an aggregate principal amount in excess of
$2,000,000 shall, at the written election of such holder, be paid by wire
transfer of immediately available funds) or (ii) on any Global Debenture by wire
transfer of immediately available funds to the account of the Depositary or its
nominee.
The Company promises to pay interest on overdue principal, and (to the
extent that payment of such interest is enforceable under applicable law)
interest at the rate of 3.25% per annum.
Reference is made to the further provisions of this Debenture set forth
on the reverse hereof, including, without limitation, provisions subordinating
the payment of principal of and interest on the Debentures to the prior payment
in full of all Senior Indebtedness, as defined in the Indenture, provisions
giving the holder of this Debenture the right to convert this Debenture into
Common Shares of the Company or cause the Company to purchase this Debenture
upon the occurrence of a Designated Event and provisions giving the Company the
right to redeem this Debenture for cash, Common Shares or a combination thereof,
each on the terms and subject to the limitations referred to on the reverse
hereof and as more fully specified in the Indenture. Such further provisions
shall for all purposes have the same effect as though fully set forth at this
place.
This Debenture shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
conflicts of laws principles thereof.
This Debenture shall not be valid or become obligatory for any purpose
until the certificate of authentication hereon shall have been manually signed
by the Trustee or a duly authorized authenticating agent under the Indenture.
A-4
IN WITNESS WHEREOF, the Company has caused this Debenture to be duly
executed.
CLEVELAND-CLIFFS INC
By:_____________________________________
Name:
Title:
Dated:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Debentures described in the within-named Indenture.
[Insert name of Trustee]
, as Trustee
By:_____________________________________
Authorized Signatory
, or
By:_____________________________________
As Authenticating Agent
(if different from Trustee)
By:________________________________
Authorized Signatory
A-5
REVERSE OF DEBENTURE
CLEVELAND-CLIFFS INC
3.25% CONVERTIBLE SUBORDINATED DEBENTURE DUE ___
This Debenture is one of a duly authorized issue of Debentures of the
Company, designated as its 3.25% Convertible Subordinated Debentures Due ____
(herein called the "DEBENTURES"), limited in aggregate principal amount to
$172,500,000, issued and to be issued under and pursuant to an Indenture dated
as of ______ __, ____ (herein called the "INDENTURE"), between the Company and
[Insert name of Trustee], as trustee (herein called the "TRUSTEE"), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
description of the rights, limitations of rights, obligations, duties and
immunities thereunder of the Trustee, the Company and the holders of the
Debentures.
In case an Event of Default shall have occurred and be continuing, the
principal of and accrued and unpaid interest on all Debentures may be declared
by either the Trustee or the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Debentures then Outstanding, and upon said
declaration shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of at least a majority in aggregate
principal amount of the Debentures at the time Outstanding, to execute
supplemental indentures adding any provisions to or changing in any manner or
eliminating any of the provisions of the Indenture or any supplemental indenture
or of modifying in any manner the rights of the holders of the Debentures;
provided that no such supplemental indenture shall (i) extend the fixed maturity
of any Debenture, or reduce the rate or extend the time of payment of interest
thereon, or reduce the principal amount thereof or reduce any amount payable on
redemption or repurchase thereof, or change the obligation of the Company to
redeem any Debenture on a Redemption Date in a manner adverse to the holders of
Debentures, or change the obligation of the Company to repurchase any Debenture
upon the happening of a Designated Event in a manner adverse to the holders of
Debentures, or impair the right of any Debentureholder to institute suit for the
payment thereof, or make the principal thereof or interest payable in any coin
or currency other than that provided in the Debentures, or impair the right to
convert the Debentures into Common Shares or reduce the number of Common Shares
or any other property receivable by a Debentureholder upon conversion subject to
the terms set forth therein, including Section 16.06 thereof, in each case,
without the consent of the holder of each Debenture so affected, or modify any
of the provisions of Section 12.02 or Section 8.07 thereof, except to increase
any such percentage or to provide that certain other provisions of the Indenture
A-6
cannot be modified or waived without the consent of the holder of each Debenture
so affected, or change any obligation of the Company to maintain an office or
agency in the places and for the purposes set forth in Section 6.01 thereof, or
reduce the quorum or voting requirements set forth in Article 11 or (ii) reduce
the aforesaid percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of all Debentures then Outstanding. Notwithstanding anything to the contrary
herein, any amendment to, or waiver of, the provisions of the Indenture relating
to subordination that would adversely affect the rights of the Debentureholders
will require the consent of at least seventy-five percent (75%) in aggregate
principal amount of the Debentures then Outstanding. Subject to the provisions
of the Indenture, the holders of a majority in aggregate principal amount of the
Debentures at the time Outstanding may on behalf of the holders of all of the
Debentures waive any past default or Event of Default under the Indenture and
its consequences except (A) a default in the payment of interest of, or the
principal on, the Debentures, (B) a failure by the Company to convert any
Debentures into Common Shares of the Company, (C) a default in the payment of
the Redemption Price pursuant to Article 3 of the Indenture, (D) a default in
the payment of the Designated Event Purchase Price pursuant to Article 3 of the
Indenture, or (E) a default in respect of a covenant or provisions of the
Indenture that under Article 12 of the Indenture cannot be modified or amended
without the consent of the holders of each or all Debentures then Outstanding or
affected thereby. Any such consent or waiver by the holder of this Debenture
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such holder and upon all future holders and owners of this Debenture and
any Debentures which may be issued in exchange or substitution hereof,
irrespective of whether or not any notation thereof is made upon this Debenture
or such other Debentures.
The indebtedness evidenced by the Debentures is, to the extent and in
the manner provided in the Indenture, expressly subordinated and subject in
right of payment to the prior payment in full of all Senior Indebtedness of the
Company, whether outstanding at the date of the Indenture or thereafter
incurred, and this Debenture is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Debenture, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on its behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
Subject to the subordination provisions of the Indenture, no reference
herein to the Indenture and no provision of this Debenture or of the Indenture
shall alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and interest on this Debenture at the
place, at the respective times, at the rate and in the coin or currency herein
prescribed.
A-7
Interest on the Debentures shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Debentures are issuable in fully registered form, without coupons,
in denominations of $1,000 principal amount and any multiple of $1,000. At the
office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Debentures, Debentures may be exchanged for a
like aggregate principal amount of Debentures of any other authorized
denominations.
At any time on or after January 20, 2009 and prior to maturity, the
Debentures may be redeemed at the option of the Company, in whole or in part, in
multiples of $1,000 principal amount, upon mailing a notice of such redemption
not less than thirty (30) calendar days but not more than sixty (60) calendar
days before the Redemption Date to the holders of Debentures at their last
registered addresses, all as provided in the Indenture, at a redemption price
equal to one-hundred percent (100%) of the principal amount of Debentures being
redeemed, together with accrued and unpaid interest and Liquidated Damages, if
any, to, but excluding, the Redemption Date (the "REDEMPTION PRICE"), but only
if the Closing Sale Price of the Common Shares for twenty (20) Trading Days
within a period of thirty (30) consecutive Trading Days ending on the Trading
Day prior to the date the Company gives notice of such redemption exceeds
one-hundred-thirty-five percent (135%) of the Conversion Price in effect on each
such Trading Day; provided that if the Redemption Date falls after a Record Date
and on or prior the corresponding interest payment date, then the full amount of
interest payable on such interest payment date shall be paid to the holders of
record of such Debentures on the applicable Record Date instead of the holders
surrendering such Debentures for redemption on such date.
Subject to certain conditions set forth in the Indenture, the
Redemption Price may be paid, at the option of the Company, in cash, Common
Shares or any combination thereof.
The Company may not give notice of any redemption of the Debentures if
an acceleration in the payment of interest on the Debentures has occurred and is
continuing.
The Debentures are not subject to redemption through the operation of
any sinking fund.
If a Designated Event occurs at any time prior to maturity of the
Debentures, the Company shall become obligated to purchase, at the option of the
holder, all or any portion of the Debentures held by such holder on a date
thirty (30) calendar days after notice thereof at a repurchase price of
one-hundred
A-8
percent (100%) of the principal amount, together with accrued and unpaid
interest and Liquidated Damages, if any, on such Debenture up to, but excluding,
the Designated Event Purchase Date (the "DESIGNATED EVENT PURCHASE PRICE");
provided that if the Designated Event Purchase Date falls after a Record Date
and on or prior the corresponding interest payment date, then the full amount of
interest payable on such interest payment date shall be paid to the holders of
record of such Debentures on the applicable Record Date instead of the holders
surrendering such Debentures for repurchase on such date. The Debentures will be
subject to repurchase in multiples of $1,000 principal amount. The Company shall
mail to all holders of record of the Debentures a notice of the occurrence of a
Designated Event and of the repurchase right arising as a result thereof on or
before the 15th calendar day after the occurrence of such Designated Event. To
exercise such right, a holder shall deliver to the Company such Debenture with
the form entitled "DESIGNATED EVENT PURCHASE NOTICE" on the reverse thereof duly
completed, together with the Debenture, duly endorsed for transfer, at any time
prior to the close of business on the Business Day prior to the Designated Event
Purchase Date, and shall deliver the Debentures to the Trustee (or other paying
agent appointed by the Company) as set forth in the Indenture.
Subject to certain conditions set forth in the Indenture, the
Designated Event Purchase Price may be paid, at the option of the Company, in
cash, Common Shares or any combination thereof.
Holders have the right to withdraw any Designated Event Purchase Notice
by delivering to the Trustee (or other paying agent appointed by the Company) a
written notice of withdrawal any time prior to the close of business on the
Business Day prior to the Designated Event Purchase Date, all as provided in the
Indenture.
If cash (and/or Common Shares if permitted under the Indenture),
sufficient to pay the Designated Event Purchase Price of all Debentures or
portions thereof to be purchased as of the Designated Event Purchase Date is
deposited with the Trustee (or other paying agent appointed by the Company), on
the Designated Event Purchase Date, interest will cease to accrue on such
Debentures (or portions thereof) as of such Designated Event Purchase Date, and
the holder thereof shall have no other rights as such other than the right to
receive the Designated Event Purchase Price upon surrender of such Debenture.
Subject to the occurrence of certain events and in compliance with the
provisions of the Indenture, prior to the final maturity date of the Debentures,
the holder hereof has the right, at its option, to convert each $1,000 principal
amount of the Debentures into ________ of the Company's Common Shares (a
conversion price of approximately $_____ per share), as such shares shall be
constituted on the Conversion Date and subject to adjustment from time to time
as provided in the Indenture, upon surrender of this Debenture, duly endorsed
for transfer, with the form entitled "CONVERSION NOTICE" on the reverse thereof
duly
A-9
completed and manually signed, to the Company at the office or agency of the
Company maintained for that purpose in accordance with the terms of the
Indenture, or at the option of such holder, the Corporate Trust Office, and,
unless the shares issuable on conversion are to be issued in the same name as
this Debenture, duly endorsed by, or accompanied by instruments of transfer in
form satisfactory to the Company duly executed by, the holder or by his duly
authorized attorney. The Company will notify the holder thereof of any event
triggering the right to convert the Debentures as specified above in accordance
with the Indenture.
No adjustment in respect of interest on any Debenture converted or
dividends on any shares issued upon conversion of such Debenture will be made
upon any conversion except as set forth in the next sentence. If this Debenture
(or portion hereof) is surrendered for conversion during the period from the
close of business on any Record Date for the payment of interest to the close of
business on the Business Day preceding the immediately following interest
payment date, this Debenture (or portion hereof being converted) must be
accompanied by payment, in immediately available funds or other funds acceptable
to the Company, of an amount equal to the interest otherwise payable on such
interest payment date on the principal amount being converted; provided that no
such payment shall be required (1) if the Company has specified a Redemption
Date that is after a Record Date and on or prior to the next interest payment
date, (2) if the Company has specified a Designated Event Purchase Date
following a Designated Event that is after a Record Date and on or prior to the
next interest payment date or (3) to the extent of any overdue interest, if any
overdue interest exists at the time of conversion with respect to such
Debenture.
No fractional shares will be issued upon any conversion, but an
adjustment and payment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable upon the
surrender of any Debenture for conversion.
A Debenture in respect of which a holder is exercising its right to
require repurchase upon a Designated Event may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of
the Indenture.
Any Debentures called for redemption, unless surrendered for conversion
by the holders thereof on or before the close of business on the Business Day
preceding the Redemption Date, may be deemed to be redeemed from the holders of
such Debentures for an amount not less than the applicable Redemption Price by
one or more investment banks or other purchasers who may agree with the Company
(i) to purchase such Debentures from the holders thereof and convert them into
shares of the Company's Common Shares and (ii) to make payment for such
Debentures as aforesaid to the Trustee in trust for the holders.
A-10
Upon due presentment for registration of transfer of this Debenture at
the office or agency of the Company maintained for that purpose in accordance
with the terms of the Indenture, a new Debenture or Debentures of authorized
denominations for an equal aggregate principal amount will be issued to the
transferee in exchange thereof, subject to the limitations provided in the
Indenture, without charge except for any tax, assessment or other governmental
charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Debenture Registrar may deem and treat the
registered holder hereof as the absolute owner of this Debenture (whether or not
this Debenture shall be overdue and notwithstanding any notation of ownership or
other writing hereon made by anyone other than the Company or any Debenture
Registrar) for the purpose of receiving payment hereof, or on account hereof,
for the conversion hereof and for all other purposes, and neither the Company
nor the Trustee nor any other authenticating agent nor any paying agent nor
other conversion agent nor any Debenture Registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of such
registered holder shall, to the extent of the sum or sums paid, satisfy and
discharge liability for monies payable on this Debenture.
No recourse for the payment of the principal of or interest on this
Debenture, or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any supplemental indenture or in any Debenture, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
Terms used in this Debenture and defined in the Indenture are used
herein as therein defined.
A-11
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Debenture, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT -___ Custodian ___
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right of under Uniform Gifts to Minors Act
survivorship and not as tenants
in common ____________________________
(State)
Additional abbreviations may also be used though not in the above list.
CONVERSION NOTICE
TO: CLEVELAND-CLIFFS INC
[Insert name of Trustee]
The undersigned registered owner of this Debenture hereby
irrevocably exercises the option to convert this Debenture, or the
portion thereof (which is $1,000 or a multiple thereof) below
designated, into Common Shares of Cleveland-Cliffs Inc in accordance
with the terms of the Indenture referred to in this Debenture, and
directs that the shares issuable and deliverable upon such conversion,
together with any check in payment for fractional shares and any
Debentures representing any unconverted principal amount hereof, be
issued and delivered to the registered holder hereof unless a different
name has been indicated below. Capitalized terms used herein but not
defined shall have the meanings ascribed to such terms in the
Indenture. If shares or any portion of this Debenture not converted are
to be issued in the name of a person other than the undersigned, the
undersigned will provide the appropriate information below and pay all
transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest, accompanies this
Debenture.
Dated: ______________________
____________________________________________
____________________________________________
Signature(s)
Signature(s) must be guaranteed by an
"ELIGIBLE GUARANTOR INSTITUTION" meeting the
requirements of the Debenture Registrar,
which requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"SIGNATURE GUARANTEE PROGRAM" as may be
determined by the Debenture Registrar in
addition to, or in substitution for, STAMP,
all in accordance with the Securities
Exchange Act of 1934, as amended.
____________________________________________
Signature Guarantee
Fill in the registration of Common Shares if to be issued, and
Debentures if to be delivered, other than to and in the name of the registered
holder:
_________________________________
(Name)
____________________________________
(Street Address)
____________________________________
(City, State and Zip Code)
____________________________________
Please print name and address
Principal amount to be converted
(if less than all):
$___________________________________
Social Security or Other Taxpayer
Identification Number:
____________________________________
DESIGNATED EVENT PURCHASE NOTICE
TO: CLEVELAND-CLIFFS INC
[Insert name of Trustee]
The undersigned registered owner of this Debenture hereby irrevocably
acknowledges receipt of a notice from Cleveland-Cliffs Inc (the "COMPANY")
regarding the right of holders to elect to require the Company to repurchase the
Debentures upon the occurrence of a Designated Event with respect to the Company
and requests and instructs the Company to repurchase this Debenture, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms and conditions of the Indenture at the
price of one-hundred percent (100%) of such entire principal amount or portion
thereof, together with accrued and unpaid interest to, by excluding, the
Designated Event Purchase Date, to the registered holder hereof. Capitalized
terms used herein but not defined shall have the meanings ascribed to such terms
in the Indenture.
Dated:
Signature(s):
NOTICE: The above signatures of the holder(s) hereof must correspond
with the name as written upon the face of the Debenture in every particular
without alteration or enlargement or any change whatever.
Debenture Certificate Number (if applicable):
Principal amount to be repurchased (if less than all):
Social Security or Other Taxpayer Identification Number:
If the Company has elected to pay the Designated Event Purchase Price, in whole
or in part, in Common Shares but such portion of the Designated Event Purchase
Price shall ultimately be payable in cash because any of the conditions to the
payment of the Designated Event Purchase Price in Common Shares are not
satisfied I elect [check one]:
__to withdraw such Designated Event Purchase Notice as to the
Debentures to which such Designated Event Purchase Notice relates in the
principal amount of $_____, 000, with certificate numbers ___, or
__ to receive cash in respect of the entire Designated Event Purchase
Price for all Debentures (or portions thereof) to which such Designated Event
Purchase Notice relates.
ASSIGNMENT
For value received ______________________________hereby sell(s)
assign(s) and transfer(s) unto ___________________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Debenture, and hereby irrevocably constitutes and appoints
______________________________________ attorney to transfer said Debenture on
the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Debenture prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Debenture is being
transferred:
[ ] To Cleveland-Cliffs Inc; or
[ ] To a "QUALIFIED INSTITUTIONAL BUYER" in compliance with Rule
144A under the Securities Act of 1933, as amended; or
[ ] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended; or
[ ] Pursuant to a Registration Statement that has been declared
effective under the Securities Act of 1933, as amended, and
that continues to be effective at the time of transfer;
and unless the Debenture has been transferred to Cleveland Cliffs Inc, the
undersigned confirms that such Debenture is not being transferred to an
"AFFILIATE" of the Company as defined in Rule 144 under the Securities Act of
1933, as amended.
Unless one of the boxes is checked, the Trustee will refuse to register
any of the Debentures evidenced by this certificate in the name of any person
other than the registered holder thereof.
Dated: ______________________
__________________________________
__________________________________
Signature(s)
Signature(s) must be guaranteed by
an "ELIGIBLE GUARANTOR INSTITUTION"
meeting the requirements of the
Debenture Registrar, which
requirements include membership or
participation in the Security
Transfer
Agent Medallion Program ("STAMP") or
such other "SIGNATURE GUARANTEE
PROGRAM" as may be determined by the
Debenture Registrar in addition to,
or in substitution for, STAMP, all
in accordance with the Securities
Exchange Act of 1934, as amended.
__________________________________
Signature Guarantee
NOTICE: The signature on the Conversion Notice, the Designated Event Purchase
Notice or the Assignment must correspond with the name as written upon the face
of the Debenture in every particular without alteration or enlargement or any
change whatever.
SCHEDULE I
CLEVELAND-CLIFFS INC
3.25% Convertible Subordinated Debenture Due ____
No. _______
Notation Explaining Principal Authorized Signature of
Date Principal Amount Amount Recorded Trustee or Custodian
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EXHIBIT B
FORM OF 3.25% REDEEMABLE CUMULATIVE CONVERTIBLE
PERPETUAL PREFERRED STOCK, SERIES A-2
Number: ______ ____________ Shares
CUSIP NO.: ______________
3.25% Redeemable Cumulative Convertible Perpetual Preferred Stock, Series A-2
(without par value per share)
(liquidation preference $1,000.00 per share)
OF
CLEVELAND-CLIFFS INC
FACE OF SECURITY
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF 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.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE ARTICLES (AS
DEFINED BELOW).
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE REGISTRAR AND
TRANSFER AGENT SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH REGISTRAR AND
TRANSFER AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
NONE OF THIS SECURITY, THE CONVERTIBLE SUBORDINATED DEBENTURES THAT MAY BE
ISSUED IN EXCHANGE FOR THIS SECURITY AND THE COMMON SHARES ISSUABLE UPON
CONVERSION OF THIS SECURITY OR THE CONVERTIBLE SUBORDINATED DEBENTURES HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR ANY STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE COMPANY THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND
B-1
ANNIVERSARY OF THE ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY
ANY HOLDER THAT WAS AN AFFILIATE OF THE COMPANY AT ANY TIME DURING THE THREE
MONTHS PRECEDING THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE
COMPANY, (2) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN
THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A
(AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF
TRANSFER ON THE REVERSE OF THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER
THE SECURITIES ACT OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES
LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS
SECURITY, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN
COMPLIANCE WITH THE SECURITIES ACT.
CLEVELAND-CLIFFS INC, an Ohio corporation (the "Corporation"), hereby certifies
that Cede & Co. or registered assigns (the "Holder") is the registered owner of
fully paid and non-assessable shares of preferred stock of the Corporation
designated the 3.25% Redeemable Cumulative Convertible Perpetual Preferred
Stock, Series A-2, without par value per share and with a liquidation preference
of $1,000.00 per share (the "Series A-2 Preferred Stock"). The shares of Series
A-2 Preferred Stock are transferable on the books and records of the Registrar,
in person or by a duly authorized attorney, upon surrender of this certificate
duly endorsed and in proper form for transfer. The designation, rights,
privileges, restrictions, preferences and other terms and provisions of the
Series A-2 Preferred Stock represented hereby are issued and shall in all
respects be subject to the provisions of the Amended Articles of Incorporation
of the Corporation, as amended, dated January 20, 2004, as the same may be
amended from time to time in accordance with their terms (the "Articles").
Capitalized terms used herein but not defined shall have the respective meanings
given them in the Articles. The Corporation will provide a copy of the Articles
to a Holder without charge upon written request to the Corporation at its
principal place of business.
Reference is hereby made to select provisions of the Series A-2 Preferred Stock
set forth on the reverse hereof, and to the Articles, which select provisions
and the Articles shall for all purposes have the same effect as if set forth at
this place.
Upon receipt of this certificate, the Holder is bound by the Articles and is
entitled to the benefits thereunder.
Unless the Transfer Agent's Certificate of Authentication hereon has been
properly executed, the shares of Series A-2 Preferred Stock evidenced hereby
shall not be entitled to any benefit under the Articles or be valid or
obligatory for any purpose.
B-2
IN WITNESS WHEREOF, Cleveland-Cliffs Inc has executed this certificate as of the
date set forth below.
CLEVELAND-CLIFFS INC
By:_____________________________________
Name:
Title:
By:_____________________________________
Name:
Title:
Dated: _______________
TRANSFER AGENT'S CERTIFICATE OF AUTHENTICATION
This is one of the certificates representing shares of Preferred Stock referred
to in the within mentioned Articles.
EquiServe Trust Company, N.A.
as Transfer Agent
By:_____________________________________
Name:
Title: Authorized Signatory
Dated: ____________________
B-3
REVERSE OF SECURITY
CLEVELAND-CLIFFS INC
3.25% Redeemable Cumulative Convertible Perpetual Preferred Stock, Series A-2
Dividends on each share of Series A-2 Preferred Stock shall be payable in cash
at a rate per annum set forth on the face hereof or as provided in the Articles.
The shares of Series A-2 Preferred Stock shall be redeemable as provided in the
Articles. The shares of Series A-2 Preferred Stock shall be convertible into the
Corporation's Common Shares in the manner and according to the terms set forth
in the Articles. Upon a Designated Event, holders of shares of Series A-2
Preferred Stock will have the right to require the Corporation to purchase such
shares in the manner and according to the terms set forth in the Articles.
The Corporation shall furnish to any Holder without charge a copy of the express
terms of the shares represented by this certificate and of the other classes and
series of shares that the Corporation is authorized to issue within five days of
receipt of written request thereof.
B-4
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Series A-2 Preferred Stock evidenced hereby to:
________________________________________________________________
________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________
(Insert address and zip code of assignee)
________________________________________________________________
________________________________________________________________
and irrevocably appoints:
________________________________________________________________
agent to transfer the shares of Series A-2 Preferred Stock evidenced hereby on
the books of the Transfer Agent and Registrar. The agent may substitute another
to act for him or her.
Date: __________________
Signature: ______________________
(Sign exactly as your name appears on the other side of this Series A-2
Preferred Stock Certificate)
Signature Guarantee: _____________________(3)
- ------------------------
(3) Signature must be guaranteed by an "eligible guarantor institution"
(i.e., a bank, stockbroker, savings and loan association or credit union)
meeting the requirements of the Registrar, which requirements include membership
or participation in the Securities Transfer Agents Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
B-5
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Series A-2 Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion") _______
shares of 3.25% Redeemable Cumulative Convertible Perpetual Preferred Stock,
Series A-2 (the "Series A-2 Preferred Stock"), represented by stock certificate
No(s). __ (the "Series A-2 Preferred Stock Certificates") into Common Shares,
par value $1.00 per share ("Common Shares"), of Cleveland-Cliffs Inc (the
"Corporation") according to the conditions of the Amended Articles of
Incorporation of the Corporation establishing the terms of the Series A-2
Preferred Stock (the "Articles"), as of the date written below. If shares are to
be issued in the name of a person other than the undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates. No fee will be charged to the holder for any
conversion, except for transfer taxes, if any. A copy of each Series A-2
Preferred Stock Certificate is attached hereto (or evidence of loss, theft or
destruction thereof).
The undersigned represents and warrants that all offers and sales by the
undersigned of the Common Shares issuable to the undersigned upon conversion of
the Series A-2 Preferred Stock shall be made pursuant to registration of the
Common Shares under the Securities Act of 1933, as amended (the "Act"), or
pursuant to an exemption from registration under the Act.
Any holder, upon the exercise of its conversion rights in accordance with the
terms of the Articles and the Series A-2 Preferred Stock, agrees to be bound by
the terms of the Registration Rights Agreement.
The Corporation is not required to issue Common Shares until the original Series
A-2 Preferred Stock Certificate(s) (or evidence of loss, theft or destruction
thereof) to be converted are received by the Corporation or its Transfer Agent.
The Corporation shall issue and shall deliver or cause to be delivered Common
Shares not later than two Business Days following receipt of the original Series
A-2 Preferred Stock Certificate(s) to be converted.
B-6
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Articles.
Date of Conversion: __________________________________________
Applicable Conversion Rate: __________________________________
Number of shares of Convertible
Series A-2 Preferred Stock to be Converted:
_______________________________________
Number of Common
Shares to be Issued: _______________________________
Signature: _________________________________________________
Name: ______________________________________________________
Address:(4)_________________________________________________
Fax No.: ___________________________________________________
- ----------------------
(4) Address where Common Shares and any other payments or certificates
shall be sent by the Corporation.
B-7
SCHEDULE A
SCHEDULE OF EXCHANGES FOR GLOBAL SECURITY
The initial number of shares of Series A-2 Preferred Stock represented
by this Global Preferred Share shall be __________. The following exchanges of a
part of this Global Preferred Share have been made:
Amount of Number of
increase in shares
Amount of number of represented by
decrease in shares this Global
number of shares represented by Preferred
represented by this Share
Date this Global following Signature of
Of Global Preferred Preferred such decrease Authorized officer
Exchange Share Share or increase of Registrar
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B-8
EXHIBIT C
FORM OF CERTIFICATE OF TRANSFER
(Transfers pursuant to Section 17(c)(ii) or Section 17(e)
of the Subdivision)
EquiServe Trust Company, N.A., as Transfer Agent
Mail Suite 4694
525 Washington Blvd.
Jersey City, NJ 07310
Attn: Frederick Meyers
Re: Cleveland-Cliffs Inc
3.25% Redeemable Cumulative Convertible Perpetual Preferred Stock,
Series A-2 (the "Series A-2 Preferred Stock")
Reference is hereby made to the Articles of Incorporation (the "Articles") and
the Subdivision relating to the Series A-2 Preferred Stock dated January 20,
2004, as such may be amended from time to time (the "Subdivision"). Capitalized
terms used but not defined herein shall have the respective meanings given them
in the Articles or the Subdivision.
This Letter relates to _____ shares of the Series A-2 Preferred Stock (the
"Securities") which are held in the form of a Global Preferred Share bearing the
Restricted Shares Legend (CUSIP NO. 185896305) with the Depository in the name
of [Name of Transferor] (the "Transferor") to effect the transfer of the
Securities.
In connection with such request, and in respect of the Series A-2 Preferred
Stock, the Transferor does hereby certify that shares of the Series A-2
Preferred Stock are being transferred (i) in accordance with applicable
securities laws of any state of the United States or any other jurisdiction and
(ii) in accordance with their terms:
CHECK ONE BOX BELOW, AS APPLICABLE:
(1) [ ] to a transferee that the Transferor reasonably believes is a qualified
institutional buyer, within the meaning of Rule 144A under the Securities Act,
purchasing for its own account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A;
(2) [ ] pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available);
(3) [ ] to the Corporation; or
(4) [ ] pursuant to a registration statement that has been declared effective
under the Securities Act.
Unless one of the boxes is checked, the Transfer Agent will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (2) is
checked, the Transfer Agent shall be entitled to
C-1
require, prior to registering any such transfer of the Securities, such legal
opinions, certifications and other information as the Corporation has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as provided by Rule 144 under such Act.
[Name of Transferor]
By:______________________________
Name:
Title:
Dated:
cc: Cleveland-Cliffs Inc
1100 Superior Avenue
Cleveland, Ohio 44114-2589
Attn: Corporate Secretary
C-2
EXHIBIT D
Form of Common Share Legend
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"). THE HOLDER HEREOF, BY PURCHASING THIS SECURITY,
AGREES FOR THE BENEFIT OF THE CORPORATION THAT THIS SECURITY MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED (X) PRIOR TO THE SECOND ANNIVERSARY OF THE
ISSUANCE HEREOF (OR A PREDECESSOR SECURITY HERETO) OR (Y) BY ANY HOLDER THAT WAS
AN AFFILIATE OF THE CORPORATION AT ANY TIME DURING THE THREE MONTHS PRECEDING
THE DATE OF SUCH TRANSFER, IN EITHER CASE OTHER THAN (1) TO THE CORPORATION, (2)
SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT ("RULE 144A"), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS
A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS INDICATED BY THE
BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ON THE REVERSE OF
THIS SECURITY), (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE
SECURITIES ACT PROVIDED BY RULE 144 (IF APPLICABLE) UNDER THE SECURITIES ACT OR
(4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN
EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES. THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, REPRESENTS AND
AGREES FOR THE BENEFIT OF THE CORPORATION THAT IT IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A. HEDGING TRANSACTIONS INVOLVING THESE
SECURITIES MAY NOT BE CONDUCTED UNLESS CONDUCTED IN COMPLIANCE WITH THE
SECURITIES ACT."
D-1
EXHIBIT E
FORM OF CERTIFICATE OF TRANSFER
FOR COMMON SHARES
(Transfers pursuant to Section 17(f) of the
Subdivision)
EquiServe Trust Company, N.A.
Mail Suite 4694
525 Washington Blvd.
Jersey City, NJ 07310
Attn: Frederick Meyers
Re: Cleveland-Cliffs Inc
3.25% Redeemable Cumulative Convertible Perpetual Series A-2
Convertible Preferred Stock
(the "Series A-2 Preferred Stock")
Reference is hereby made to the Articles of Incorporation, as amended, of the
Corporation and Subdivision A-2 thereof relating to the Series A-2 Preferred
Stock dated January 20, 2004, as such may be amended from time to time (the
"Subdivision"). Capitalized terms used but not defined herein shall have the
respective meanings given them in the Subdivision.
This letter relates to ____ Common Shares represented by the accompanying
certificate(s) that were issued upon conversion of the Series A-2 Preferred
Stock and which are held in the name of [Name of Transferor] (the "Transferor")
to effect the transfer of such Common Shares.
In connection with such request and in respect of the Common Shares, the
Transferor does hereby certify that the Common Shares are being transferred (i)
in accordance with applicable securities laws of any state of the United States
or any other jurisdiction and (ii) in accordance with their terms:
CHECK ONE BOX BELOW
(1) [ ] pursuant to an exemption from registration under the Securities Act
provided by Rule 144 thereunder (if available);
(2) [ ] to the Corporation;
(3) [ ] pursuant to a registration statement that has been declared effective
under the Securities Act; or
(4) [ ] to a transferee that the Transferor reasonably believes is a qualified
institutional buyer, within the meaning of Rule 144A under the Securities Act,
purchasing for its own account or for the account of a qualified institutional
buyer in a transaction meeting the requirements of Rule 144A;
E-1
Unless one of the boxes is checked, the Transfer Agent will refuse to register
any of the Securities evidenced by this certificate in the name of any person
other than the registered holder thereof; provided, however, that if box (1) is
checked, the Transfer Agent shall be entitled to require, prior to registering
any such transfer of the Securities, such legal opinions, certifications and
other information as the Corporation has reasonably requested to confirm that
such transfer is being made pursuant to an exemption from, or in a transaction
not subject to, the registration requirements of the Securities Act of 1933,
pursuant to the exemption provided by Rule 144 under such Act.
[Name of Transferor]
By: ________________________________
Name:
Title:
Dated:
cc: Cleveland-Cliffs Inc
1100 Superior Avenue
Cleveland, Ohio 44114-2589
Attn: Corporate Secretary
E-2
EXHIBIT F
FORM OF NOTICE OF ELECTION OF REPURCHASE
UPON A DESIGNATED EVENT
TO: CLEVELAND-CLIFFS INC
The undersigned hereby irrevocably acknowledges receipt of a notice
from Cleveland-Cliffs Inc (the "Corporation") as to the occurrence of a
Designated Event with respect to the Corporation and requests and instructs the
Corporation to purchase _____ shares of Series A-2 Preferred Stock in accordance
with the terms of the Articles of Incorporation, as amended, of the Corporation
and Subdivision A-2 thereof relating to the Series A-2 Preferred Stock dated
January 20, 2004, as such may be amended from time to time (the "SUBDIVISION")
at the Purchase Price. The certificate number(s) of such shares
is/are____________ (include if the Series A-2 Preferred Stock is certificated).
Capitalized terms used but not defined herein shall have the meanings
ascribed thereto pursuant to the Subdivision.
Dated: _____________
____________________
____________________
Signature(s)
NOTICE: The above signatures of the
holder(s) hereof must correspond with the
name as written upon the face of the
Security in every particular without
alteration or enlargement or any change
whatever.
Aggregate Liquidation Preference to be
repurchased (if less than all):
__________________________________
__________________________________
Social Security or Other Taxpayer
Identification Number
F-1
EXHIBIT G
[Form of Opinion of Counsel]
The opinion of legal counsel to be delivered to the Trustee pursuant to
Section 10 of Subdivision A-2 of Article Fourth of the Articles of Incorporation
will be subject to customary assumptions and exceptions and will state
substantially as follows:
1. The Indenture has been authorized, executed and delivered by
the Company and constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
2. The Convertible Subordinated Debentures have been duly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered by the Company upon exchange for the
Series A-2 Preferred Stock in accordance with the terms of the Articles and the
Indenture, the Convertible Subordinated Debentures will constitute legal, valid
and binding obligations of the Company entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms.
3. No authorization, approval or other action by, and no notice
to, consent of, order of, or filing with, any United States Federal, New York or
Ohio governmental authority or regulatory body is required for the consummation
of the exchange of the Convertible Subordinated Debentures for the Series A-2
Preferred Stock in accordance with the terms of the Articles and the Indenture,
except (i) such as may have been obtained or made on or prior to the date
hereof, (ii) such as may be required in connection with the registration under
the Securities Act or the Trust Indenture Act, (iii) such as may be required
under the blue sky laws of any jurisdiction, and (iv) such as may be required in
connection with the conversion of Convertible Subordinated Debentures into
Common Shares of the Company.
4. None of the issue and sale of the Series A-2 Preferred Stock,
the consummation of any other transactions contemplated by the Indenture and the
Convertible Subordinated Debentures (i) will conflict with, result in a breach
of, or constitute a default under (A) Articles of Incorporation, as amended, or
Regulations of the Company, or (B) [Credit Agreements] or (ii) will contravene
any law, rule or regulation of the United States or the State of New York or the
Ohio Revised Code.
None of the performance of the terms of the Convertible Subordinated
Debentures or the Indenture, will conflict with, result in a breach of, or
constitute a default under, the terms of any material agreement or other
material instrument to which the Company or any of its subsidiaries is a party
or bound or will contravene any judgment, order or decree of any governmental
body, agency or court having jurisdiction over the Company or any subsidiary,
other than those which could not be expected to have a material adverse effect
on the condition (financial or otherwise), earnings, business or properties of
the Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business (a "Material Adverse Effect").
G-1
DIVISION B:
Express Terms of the Serial Preferred Stock,
Class B, Without Par Value
The Class B Preferred Stock shall have the following express terms:
SECTION 1. Series. The Class B Preferred Stock may be issued from time
to time in one or more series. All shares of Class B Preferred Stock shall be of
equal rank and shall be identical, except in respect of the matters that may be
fixed by the Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. All shares of Class B Preferred Stock shall
also be of equal rank and shall be identical with shares of Class A Preferred
Stock except in respect of (i) the particulars that may be fixed and determined
by the Directors as hereinafter provided, (ii) the voting rights and provisions
for consent relating to Class B Preferred Stock, as fixed and determined by
Section 5 of this Division B and (iii) any conversion rights which the Directors
may grant any series of Class A Preferred Stock which rights shall not be
granted in respect of any series of Class B Preferred Stock. Subject to the
provisions of Sections 2 to 7, inclusive, of this Division B, which provisions
shall apply to all Class B Preferred Stock, the Directors hereby are authorized
to cause such shares to be issued in one or more series and with respect to each
such series to fix:
(a) The designation of the series, which may be by
distinguishing number, letter and/or title.
(b) The number of shares of the series, which number the
Directors may (except where otherwise provided in the creation of the
series) increase or decrease (but not below the number of shares
thereof then outstanding).
(c) The dividend rights of the series which may be:
cumulative or non-cumulative; at a specified rate, amount or
proportion; or with or without further participation rights.
(d) The dates at which dividends, if declared, shall be
payable, and the dates from which dividends, if cumulative, shall
accumulate.
(e) The redemption rights and price or prices, if any,
for shares of the series.
(f) The terms and amount of any sinking fund provided for
the purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the
event of any voluntary or involuntary liquidation, dissolution or
winding up of the affairs of the Corporation.
(h) Restrictions (in addition to those set forth in
Section 5(c) of this Division) on the issuance of shares of the same
series or of any other class or series.
The Directors are authorized to adopt from time to time amendments to
the Articles of Incorporation fixing, with respect to each such series, the
matters described in clauses (a) to (h), inclusive, of this Section 1.
SECTION 2. Dividends.
(a) The holders of Class B Preferred Stock of each
series, in preference to the holders of Common Shares and of any other
class of shares ranking junior to the Class B Preferred Stock, shall be
entitled to receive out of any funds legally available therefor and
when and as declared by the Directors dividends in cash at the rate for
such series fixed in accordance with the provisions of Section 1 of
this Division B and no more, payable on the dividend payment dates
fixed for such series. Such dividends may be cumulative, in the case of
shares of each particular series, from and after the date or dates
fixed with respect to such series. No dividend may be paid upon or set
apart for any of the Class B Preferred Stock on any dividend payment
date unless (i) all dividends upon all series of Class B Preferred
Stock then outstanding and all classes of stock then outstanding
ranking prior to or on a parity with the Class B Preferred Stock for
all dividend payment dates prior to such date shall have been paid or
funds therefor set apart and (ii) at the same time a like dividend upon
all series of Class B Preferred Stock then outstanding and all classes
of stock then outstanding ranking prior to or on a parity with the
Class B Preferred Stock and having a dividend payment date on such
date, ratably in proportion to the respective dividend rates of each
such series or class, shall be paid or funds therefor set apart.
Accumulations of dividends, if any, shall not bear interest.
(b) For the purpose of this Division B, a dividend shall
be deemed to have been paid or funds therefor set apart on any date if
on or prior to such date the Corporation shall have deposited funds
sufficient therefor with a bank or trust company and shall have caused
checks drawn against such funds in appropriate amounts to be mailed to
each holder of record entitled to receive such dividend at such
holder's address then appearing on the books of the Corporation.
(c) In no event so long as any Class B Preferred Stock
shall be outstanding shall any dividends, except a dividend payable in
Common Shares or other shares ranking junior to the Class B Preferred
Stock, be paid or declared or any distribution be made except as
aforesaid on the Common Shares or any other shares ranking junior to
the Class B Preferred Stock, nor shall any Common Shares or any other
shares ranking junior to the Class B Preferred Stock be purchased,
retired or otherwise acquired by the Corporation (except out of the
proceeds of the sale of Common Shares or other shares ranking junior to
the Class B Preferred Stock received by the Corporation on or
subsequent to the date on which shares of any series of Class B
Preferred Stock are first issued) , unless (i) all accrued and unpaid
dividends upon all Class B Preferred Stock then outstanding for all
dividend payment dates on or prior to the date of such action shall
have been paid or funds therefor set apart and (ii) as of the date of
such action there shall be no arrearages with respect to the redemption
of Class B Preferred Stock of any series from any sinking fund provided
for shares of such series in accordance with the provisions of Section
1 of this Division B.
SECTION 3. Redemption.
(a) Subject to the express terms of each series and to
the provisions of Section 5(c)(iii) of this Division B, the Corporation
(i) may from time to time redeem all or any part of the Class B
Preferred Stock of any series at the time outstanding at the option of
the Directors at the applicable redemption price for such series fixed
in accordance with the provisions of Section 1 of this Division B, and
(ii) shall from time to time make such redemptions of the Class B
Preferred Stock of any series as may be required to fulfill the
requirements of any sinking fund provided for shares of such series at
the applicable sinking fund redemption price, fixed in accordance with
the provisions of Section 1 of this Division B, together in each case
with (A) all then accrued and unpaid dividends upon such shares for all
dividend payment dates on or prior to the redemption date and (B) if
the redemption date is not a dividend payment date for such series, a
proportionate dividend, based on the number of elapsed days, for the
period from the day after the most recent such dividend payment date
through the redemption date.
(b) Notice of every such redemption shall be mailed,
postage prepaid, to the holders of record of the Class B Preferred
Stock to be redeemed at their respective addresses then appearing on
the books of the Corporation, not less than 30 days nor more than 60
days prior to the date fixed for such redemption. At any time before or
after notice has been given as above provided, the Corporation may
deposit the aggregate redemption price of the shares of Class B
Preferred Stock to be redeemed, together with an amount equal to the
aggregate amount of dividends payable upon such redemption, with any
bank or trust company in Cleveland, Ohio, or New York, New York, having
capital and surplus of more than $50,000,000, named in such notice, and
direct that such deposited amount be paid to the respective holders of
the shares of Class B Preferred Stock so to be redeemed upon surrender
of the stock certificate or certificates held by such holders. Upon the
giving of such notice and the making of such deposit such holders shall
cease to be shareholders with respect to such shares and shall have no
interest in or claim against the Corporation with respect to such
shares except only the right to receive such money from such bank or
trust company without interest or to exercise, before the redemption
date, any unexpired privileges of conversion. In case less than all of
the outstanding shares of any series of Class B Preferred Stock are to
be redeemed, the Corporation shall select, pro rata or by lot, the
shares so to be redeemed in such manner as shall be prescribed by the
Directors.
(c) If the holders of shares of Class B Preferred Stock
which shall have been called for redemption shall not, within six years
after such deposit, claim the amount deposited for the redemption
thereof, any such bank or trust company shall, upon demand, pay over to
the Corporation such unclaimed amounts and thereupon such bank or trust
company and the Corporation shall be relieved of all responsibility in
respect thereof to such holders.
(d) Any shares of Class B Preferred Stock which are (i)
redeemed by the Corporation pursuant to the provisions of this Section
3, (ii) purchased and delivered in satisfaction of any sinking fund
requirements provided for shares of any series of Class B Preferred
Stock, (iii) converted in accordance with the express terms of any such
series,
or (iv) otherwise acquired by the Corporation, shall resume the status
of authorized and unissued shares of Class B Preferred Stock without
serial designation; provided, however, that any such shares which are
converted in accordance with the express terms thereof shall not be
reissued as convertible shares.
SECTION 4. Liquidation.
(a) (1) The holders of Class B Preferred Stock of
any series, shall, in case of voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the Corporation, be
entitled to receive in full out of the assets of the Corporation,
including its capital, before any amount shall be paid or distributed
among the holders of the Common Shares or any other shares ranking
junior to the Class B Preferred Stock, the amounts fixed with respect
to shares of such series in accordance with Section 1 of this Division,
plus an amount equal to (i) all then accrued and unpaid dividends upon
such shares for all dividend payment dates on or prior to the date of
payment of the amount due pursuant to such liquidation, dissolution or
winding up, and (ii) if such date is not a dividend payment date for
such series, a proportionate dividend, based on the number of elapsed
days, for the period from the day after the most recent dividend
payment date through the date of payment of the amount due pursuant to
such liquidation, dissolution or winding up. In case the net assets of
the Corporation legally available therefor are insufficient to permit
the payment upon all outstanding shares of Class B Preferred Stock and
all outstanding shares of stock of all classes ranking on a parity with
the Class B Preferred Stock of the full preferential amount to which
they are respectively entitled, then such net assets shall be
distributed ratably upon outstanding shares of Class B Preferred Stock
and all outstanding shares of stock of all classes ranking on a parity
with the Class B Preferred Stock in proportion to the full preferential
amount to which each such share is entitled.
(2) After payment to holders of Class B
Preferred Stock of the full preferential amounts as aforesaid,
holders of Class B Preferred Stock as such shall have no right
or claim to any of the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into
or with any other corporation, or the merger of any other corporation
into it, or the sale, lease or conveyance of all or substantially all
the property or business of the Corporation, shall not be deemed to be
a dissolution, liquidation or winding up for the purposes of this
Division B.
SECTION 5. Voting.
(a) Except as otherwise provided herein or required by
law, the holders of Class B Preferred Stock shall not be entitled to
vote.
(b) (1) If, and so often as, the Corporation shall
be in default in the payment of dividends on any series of Class B
Preferred Stock at the time outstanding, or funds therefor have not
been set apart, in an amount equivalent to six full quarterly dividends
on any such series of Class B Preferred Stock, whether or not
consecutive and whether or
not earned or declared, the holders of Class B Preferred Stock of all
series, voting separately as a class, shall thereafter be entitled to
elect, as herein provided, two Directors of the Corporation; provided,
however, that the special class voting rights provided for in this
paragraph when the same shall have become vested shall remain so vested
(i) in the case of cumulative dividends, until all accrued and unpaid
dividends on the Class B Preferred Stock of all series then outstanding
shall have been paid or funds therefor set apart, or (ii) in the case
of non-cumulative dividends, until full dividends on the Class B
Preferred Stock of all series then outstanding shall have been paid or
funds therefor set apart regularly for a period of one year, whereupon
the holders of Class B Preferred Stock shall be divested of their
special class voting rights in respect of subsequent elections of
Directors, subject to the revesting of such special class voting rights
in the event hereinabove specified in this paragraph.
(2) In the event of default entitling the
holders of Class B Preferred Stock to elect two Directors as specified
in paragraph (1) of this subsection, a special meeting of such holders
for the purpose of electing such Directors shall be called by the
Secretary of the Corporation upon written request of, or may be called
by, the holders of record of at least ten percent (10%) of the shares
of Class B Preferred Stock of all series at the time outstanding, and
notice thereof shall be given in the same manner as that required for
the annual meeting of shareholders; provided, however, that the
Corporation shall not be required to call such special meeting if the
annual meeting of shareholders or any other special meeting of
shareholders called or to be called for a different purpose shall be
held within 120 days after the date of receipt of the foregoing written
request from the holders of Class B Preferred Stock. At any meeting at
which the holders of Class B Preferred Stock shall be entitled to elect
Directors, the holders of thirty-five percent (35%) of the then
outstanding shares of Class B Preferred Stock of all series, present in
person or by proxy, shall be sufficient to constitute a quorum, and the
vote of the holders of a majority of such shares so present at any such
meeting at which there shall be such a quorum shall be sufficient to
elect the Directors which the holders of Class B Preferred Stock are
entitled to elect as hereinabove provided. Notwithstanding any
provision of these Articles of Incorporation or the Regulations of the
Corporation or any action taken by the holders of any class of shares
fixing the number of Directors of the Corporation, the two Directors
who may be elected by the holders of Class B Preferred Stock pursuant
to this subsection shall serve in addition to any other Directors then
in office or proposed to be elected otherwise than pursuant to this
subsection. Nothing in this subsection shall prevent any change
otherwise permitted in the total number of Directors of the Corporation
or require the resignation of any Director elected otherwise than
pursuant to this subsection. Notwithstanding any classification of the
other Directors of the Corporation, the two Directors elected by the
holders of Class B Preferred Stock shall be elected annually for the
terms expiring at the next succeeding annual meeting of shareholders;
provided, however, that whenever the holders of Class B Preferred Stock
shall be divested of the voting power as above provided, the terms of
office of all persons elected as Directors by the holders of the Class
B Preferred Stock as a class shall immediately terminate and the number
of Directors shall be reduced accordingly.
(c) Except as hereinafter provided, the affirmative vote
of the holders of at least two-thirds of the shares of Class B
Preferred Stock at the time outstanding, given in person or by proxy at
a meeting called for the purpose at which the holders of Class B
Preferred Stock shall vote separately as a class, shall be necessary to
effect any one or more of the following (but so far as the holders of
Class B Preferred Stock are concerned, such action may be affected with
such vote):
(i) Any amendment, alteration or repeal
of any of the provisions of the Articles of
Incorporation or of the Regulations of the
Corporation which affects adversely the preferences
or voting or other rights of the holders of Class B
Preferred Stock; provided, however, that for the
purpose of this paragraph 5(c)(i) only, neither the
amendment of the Articles of Incorporation so as to
authorize, create or change the authorized or
outstanding amount of Class B Preferred Stock or of
any shares of any class ranking on a parity with or
junior to the Class B Stock nor the amendment of the
provisions of the Regulations so as to change the
number of Directors of the Corporation shall be
deemed to affect adversely the preferences or voting
or other rights of the holders of Class B Preferred
Stock; and provided further, that if such amendment,
alteration or repeal affects adversely the preference
or voting or other rights of one or more but not all
series of Class B Preferred Stock at the time
outstanding, the affirmative vote or consent of the
holders of at least two-thirds of the number of
shares at the time outstanding of each series so
affected, each such affected series voting separately
as a series, shall also be required;
(ii) The authorization, creation or the
increase in the authorized amount of any shares of
any class or any security convertible into shares of
any class, in either case, ranking prior to the Class
B Preferred Stock; or
(iii) The purchase or redemption (for
sinking fund purposes or otherwise) of less than all
of the Class B Preferred Stock then outstanding
except in accordance with a stock purchase offer made
to all holders of record of Class B Preferred Stock,
unless all dividends on all Class B Preferred Stock
then outstanding for all previous dividend periods
shall have been declared and paid or funds therefor
set apart and all accrued sinking fund obligations
applicable thereto shall have been complied with;
provided, however, that in the came of any authorization, creation or
increase in the authorized amount of any shares of any class or
security convertible into shares of any class, in either case, ranking
prior to the Class B Preferred Stock no such consent of the holders of
Class B Preferred Stock shall be required if the holders of Class B
Preferred Stock have previously received adequate notice of redemption
to occur within 90 days. The foregoing proviso shall not apply and such
consent of the holders of Class B Preferred Stock shall be required if
any such redemption will be effected, in whole or in part, with the
proceeds received from the sale of any such stock or security
convertible into shares of any class, in either case, ranking prior to
the Class B Preferred Stock.
(d) The affirmative vote of the holders of at least a
majority of the shares of Class B Preferred Stock at the time
outstanding, given in person or by proxy at a meeting called for the
purpose at which the holders of Class B Preferred Stock shall vote
separately as a class, shall be necessary to effect any one or more of
the following (but so far as the holders of the Class B Preferred Stock
are concerned, such action may be effected with such vote):
(i) The consolidation or merger of the
Corporation with or into any other corporation to the
extent any such consolidation or merger shall be
required, pursuant to any applicable statute, to be
approved by the holders of the shares of Class B
Preferred Stock voting separately as a clams; or
(ii) The authorization of any shares
ranking on a parity with the Class B Preferred Stock
or an increase in the authorized number of shares of
Class B Preferred Stock.
(e) Neither the vote or consent of the holders of shares
of Class B Preferred Stock shall be required for an increase in the
number of Common Shares authorized or issued or for stock splits of the
Commons Shares or for stock dividends on any class of stock payable
solely in Common Shares, and none of the foregoing actions shall be
deemed to affect adversely the preferences or voting or other rights of
Class B Preferred Stock within the meaning and for the purpose of this
Division B.
SECTION 6. Conversion. There Shall not be created any series of Class B
Preferred Stock which will be convertible into Common Shares or into shares of
any other class or series of the Corporation.
SECTION 7. Definitions. For the purpose of this Division B:
(a) Whenever reference is made to shares "ranking prior
to the Class B Preferred Stock", such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof either as to the payment of dividends or as to
distribution in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation are given preference over
the rights of the holders of Class B Preferred Stock.
(b) Whenever reference is made to shares "on a parity
with the Class B Preferred Stock", such reference shall mean and
include all shares of Class A Preferred Stock and all other shares of
the Corporation in respect of which the rights of the holders thereof
(i) are not given preference over the right of the holders of Class B
Preferred Stock either as to the payment of dividends or as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation and (ii) either as to the
payment of dividends or as to distribution in the event of a voluntary
or involuntary liquidation, dissolution or winding up of the
Corporation, or as to both, rank on an equality (except as to the
amounts fixed therefor) with the rights of the holders of Class B
Preferred Stock.
(c) Whenever reference is made to shares "ranking junior
to the Class B Preferred Stock" such reference shall mean and include
all shares of the Corporation in respect of which the rights of the
holders thereof both as to the payment of dividends and as to
distributions in the event of a voluntary or involuntary liquidation,
dissolution or winding up of the Corporation are junior and subordinate
to the rights of the holders of the Class B Preferred Stock.
DIVISION C:
Express Terms of Common Shares,
Par Value $1.00 Per Share
The Common Shares shall be subject to the express terms of the Class A
Preferred Stock and the Class B Preferred Stock and of any series of such
classes. Each Common Share shall be equal to every other Common Share. The
holders of Common Shares shall have such rights as are provided by law and shall
be entitled to one vote for each share held by them upon all matters presented
to the shareholders.
FIFTH: The amount of stated capital with which the Corporation will
begin business is Five Hundred Dollars ($500.00).
SIXTH: No holders of any class of shares of the Corporation shall have
any preemptive right to purchase or to have offered to them for purchase, any
shares or other securities of the Corporation, whether now or hereafter
authorized.
SEVENTH: The Corporation may from time to time, pursuant to
authorization by the Directors and without action by the shareholders, purchase
or otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Directors shall determine,
subject however, to such limitation or restriction, if any, as is contained in
the express terms of any class of shares of the Corporation outstanding at the
time of the purchase or acquisition in question.
EIGHTH: Any and every statute of the State of Ohio hereafter enacted
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or are in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing of these Articles of
Incorporation of the Corporation in the office of the Secretary of State of
Ohio.
NINTH: The right to amend, alter, change or repeal any clause or
provision of these Articles of Incorporation, in the manner now or hereafter
prescribed by law, is hereby reserved to the Corporation; and all rights
conferred on officers, Directors and shareholders herein are granted subject to
such reservation.