SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported):
July 19, 2005
IAC/INTERACTIVECORP
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 0-20570 59-2712887
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) Number)
152 WEST 57TH STREET, NEW YORK, NEW YORK 10019
(Address of principal executive offices) (zip code)
(212) 314-7300
(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
On July 19, 2005, IAC/InterActiveCorp ("IAC") completed its acquisition of
Ask Jeeves, Inc. ("Ask Jeeves"). Pursuant to the Agreement and Plan of Merger,
dated as of March 21, 2005 (the "Merger Agreement"), by and among IAC, AJI
Acquisition Corp., a Delaware corporation and wholly owned subsidiary of IAC
("Merger Sub"), and Ask Jeeves, Merger Sub merged with and into Ask Jeeves, with
Ask Jeeves surviving as a subsidiary of IAC (the "Merger").
In the Merger, each outstanding share of common stock, par value $0.001 per
share, of Ask Jeeves ("Ask Jeeves Common Stock") (other than Ask Jeeves Common
Stock (i) held by Ask Jeeves as treasury stock or (ii) owned by IAC or any of
its wholly owned subsidiaries immediately prior to completion of the Merger) was
converted into the right to receive (i) 1.2668 (the "Exchange Ratio") of a share
of common stock, par value $0.01 per share, of IAC ("IAC Common Stock") and (ii)
cash instead of any fractional share of IAC Common Stock. Pursuant to the Merger
Agreement, all outstanding stock options granted by Ask Jeeves are no longer
exercisable for shares of Ask Jeeves Common Stock but, instead, are exercisable
for shares of IAC Common Stock based on the Exchange Ratio, as set forth in the
Merger Agreement.
Please see the full text of IAC's press release relating to the Merger,
which is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
IAC filed a registration statement on Form S-4 (File No. 333-124340) (the
"Registration Statement"), as amended, registering under the Securities Act of
1933, as amended, the shares of IAC Common Stock issued or reserved for issuance
in connection with the Merger. The Registration Statement contains additional
information about the Merger.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN
OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
In connection with the Merger, on July 19, 2005, IAC irrevocably and
unconditionally guaranteed Ask Jeeves' outstanding Zero Coupon Subordinated
Convertible Notes due 2008 in the principal amount of $115.0 million by
executing a Supplemental Indenture (the "Supplemental Indenture"), dated as of
July 19, 2005, by and among IAC, Ask Jeeves and The Bank of New York Trust
Company, N.A., as Trustee. In the event of a default in the payment of
principal, interest or premium (if any), the guarantee may be enforced against
IAC without first proceeding against Ask Jeeves. These notes are now convertible
into shares of IAC common stock in accordance with their terms.
The Indenture relating to the Zero Coupon Subordinated Convertible Notes,
dated as of June 4, 2003, by and between Ask Jeeves, Inc. and The Bank of New
York, as Trustee, the Form of Zero Coupon Convertible Subordinated Note and the
Supplemental Indenture are filed herewith and are incorporated by reference
herein. Item 2.01 is also incorporated by reference herein.
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit 4.1 Indenture (relating to the Zero Coupon Subordinated
Convertible Notes of Ask Jeeves, Inc.), dated as of
June 4, 2003, by and between Ask Jeeves, Inc. and The Bank
of New York, as Trustee.
Exhibit 4.2 Form of Zero Coupon Convertible Subordinated Note of Ask
Jeeves, Inc. (included within Exhibit 4.1).
Exhibit 4.3 Supplemental Indenture (relating to the Zero Coupon
Subordinated Convertible Notes of Ask Jeeves, Inc.), dated
as of July 19, 2005, by and among IAC/InterActiveCorp, Ask
Jeeves, Inc., and the Bank of New York Trust Company, N.A.,
as Trustee.
Exhibit 99.1 Press release, dated July 19, 2005.
*****
2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunder duly authorized.
IAC/INTERACTIVECORP
By: /s/ Gregory R. Blatt
------------------------------
Name: Gregory R. Blatt
Title: Executive Vice President,
General Counsel and Secretary
Date: July 22, 2005
3
xxx
EXHIBIT INDEX
Exhibit 4.1 Indenture (relating to the Zero Coupon Subordinated
Convertible Notes of Ask Jeeves, Inc.), dated as of
June 4, 2003, by and between Ask Jeeves, Inc. and The Bank
of New York, as Trustee.
Exhibit 4.2 Form of Zero Coupon Convertible Subordinated Note of Ask
Jeeves, Inc. (included within Exhibit 4.1).
Exhibit 4.3 Supplemental Indenture (relating to the Zero Coupon
Subordinated Convertible Notes of Ask Jeeves, Inc.), dated
as of July 19, 2005, by and among IAC/InterActiveCorp, Ask
Jeeves, Inc., and the Bank of New York Trust Company, N.A.,
as Trustee.
Exhibit 99.1 Press release, dated July 19, 2005.
4
EXHIBIT 4.1
================================================================================
ASK JEEVES, INC.
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 1, 2008
--------------------
INDENTURE
DATED AS OF JUNE 4, 2003
--------------------
THE BANK OF NEW YORK
AS TRUSTEE
================================================================================
TABLE OF CONTENTS
PAGE
----
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS................................................ 1
SECTION 1.02 OTHER DEFINITIONS.......................................... 8
SECTION 1.03 TRUST INDENTURE ACT PROVISIONS............................. 9
SECTION 1.04 RULES OF CONSTRUCTION...................................... 9
ARTICLE II
THE SECURITIES
SECTION 2.01 FORM AND DATING............................................ 10
SECTION 2.02 EXECUTION AND AUTHENTICATION............................... 11
SECTION 2.03 REGISTRAR, PAYING AGENT AND CONVERSION AGENT............... 12
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST........................ 12
SECTION 2.05 SECURITYHOLDER LISTS....................................... 13
SECTION 2.06 TRANSFER AND EXCHANGE...................................... 13
SECTION 2.07 REPLACEMENT SECURITIES..................................... 14
SECTION 2.08 OUTSTANDING SECURITIES..................................... 15
SECTION 2.09 TREASURY SECURITIES........................................ 15
SECTION 2.10 TEMPORARY SECURITIES....................................... 15
SECTION 2.11 CANCELLATION............................................... 16
SECTION 2.12 LEGEND; ADDITIONAL TRANSFER AND EXCHANGE REQUIREMENTS...... 16
SECTION 2.13 CUSIP NUMBERS.............................................. 19
ARTICLE III
REDEMPTION AND PURCHASES
SECTION 3.01 NO REDEMPTION BY THE COMPANY............................... 19
SECTION 3.02 PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON
CHANGE IN CONTROL...................................... 19
SECTION 3.03 EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE................ 22
SECTION 3.04 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT
OF CHANGE IN CONTROL PURCHASE PRICE...................... 22
SECTION 3.05 DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE................ 24
SECTION 3.06 SECURITIES PURCHASED IN PART............................... 25
SECTION 3.07 COMPLIANCE WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES............................................... 25
SECTION 3.08 REPAYMENT TO THE COMPANY................................... 25
i
ARTICLE IV
CONVERSION
SECTION 4.01 CONVERSION PRIVILEGE....................................... 26
SECTION 4.02 CONVERSION PROCEDURE....................................... 26
SECTION 4.03 FRACTIONAL SHARES.......................................... 28
SECTION 4.04 TAXES ON CONVERSION........................................ 28
SECTION 4.05 COMPANY TO PROVIDE STOCK................................... 29
SECTION 4.06 ADJUSTMENT OF CONVERSION PRICE............................. 29
SECTION 4.07 NO ADJUSTMENT.............................................. 34
SECTION 4.08 ADJUSTMENT FOR TAX PURPOSES................................ 34
SECTION 4.09 NOTICE OF ADJUSTMENT....................................... 34
SECTION 4.10 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER
OR SALE ON CONVERSION PRIVILEGE.......................... 35
SECTION 4.11 TRUSTEE'S DISCLAIMER....................................... 36
SECTION 4.12 VOLUNTARY REDUCTION........................................ 36
ARTICLE V
SUBORDINATION
SECTION 5.01 AGREEMENT OF SUBORDINATION................................. 36
SECTION 5.02 PAYMENTS TO HOLDERS........................................ 37
SECTION 5.03 SUBROGATION OF SECURITIES.................................. 39
SECTION 5.04 AUTHORIZATION TO EFFECT SUBORDINATION...................... 40
SECTION 5.05 NOTICE TO TRUSTEE.......................................... 40
SECTION 5.06 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.................. 41
SECTION 5.07 NO IMPAIRMENT OF SUBORDINATION............................. 42
SECTION 5.08 CERTAIN CONVERSIONS DEEMED PAYMENT......................... 42
SECTION 5.09 ARTICLE APPLICABLE TO PAYING AGENTS........................ 42
SECTION 5.10 SENIOR INDEBTEDNESS ENTITLED TO RELY....................... 42
ARTICLE VI
COVENANTS
SECTION 6.01 PAYMENT OF SECURITIES...................................... 43
SECTION 6.02 SEC REPORTS................................................ 43
SECTION 6.03 COMPLIANCE CERTIFICATES; STATEMENT AS TO DEFAULT........... 43
SECTION 6.04 FURTHER INSTRUMENTS AND ACTS............................... 44
SECTION 6.05 MAINTENANCE OF CORPORATE EXISTENCE......................... 44
SECTION 6.06 RULE 144A INFORMATION REQUIREMENT.......................... 44
SECTION 6.07 STAY, EXTENSION AND USURY LAWS............................. 44
SECTION 6.08 PAYMENT OF ADDITIONAL INTEREST............................. 45
ARTICLE VII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
ii
SECTION 7.01 COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS........ 45
SECTION 7.02 SUCCESSOR SUBSTITUTED...................................... 46
ARTICLE VIII
DEFAULT AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT.......................................... 46
SECTION 8.02 ACCELERATION............................................... 48
SECTION 8.03 OTHER REMEDIES............................................. 48
SECTION 8.04 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT................... 49
SECTION 8.05 CONTROL BY MAJORITY........................................ 49
SECTION 8.06 LIMITATIONS ON SUITS....................................... 49
SECTION 8.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT........ 50
SECTION 8.08 COLLECTION SUIT BY TRUSTEE................................. 50
SECTION 8.09 TRUSTEE MAY FILE PROOFS OF CLAIM........................... 50
SECTION 8.10 PRIORITIES................................................. 51
SECTION 8.11 UNDERTAKING FOR COSTS...................................... 51
ARTICLE IX
TRUSTEE
SECTION 9.01 DUTIES OF TRUSTEE.......................................... 51
SECTION 9.02 RIGHTS OF TRUSTEE.......................................... 52
SECTION 9.03 INDIVIDUAL RIGHTS OF TRUSTEE............................... 53
SECTION 9.04 TRUSTEE'S DISCLAIMER....................................... 53
SECTION 9.05 NOTICE OF DEFAULT OR EVENTS OF DEFAULT..................... 54
SECTION 9.06 REPORTS BY TRUSTEE TO HOLDERS.............................. 54
SECTION 9.07 COMPENSATION AND INDEMNITY................................. 54
SECTION 9.08 REPLACEMENT OF TRUSTEE..................................... 55
SECTION 9.09 SUCCESSOR TRUSTEE BY MERGER, ETC........................... 56
SECTION 9.10 ELIGIBILITY; DISQUALIFICATION.............................. 56
SECTION 9.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.......... 56
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 10.01 SATISFACTION AND DISCHARGE OF INDENTURE.................... 56
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01 WITHOUT CONSENT OF HOLDERS................................. 57
SECTION 11.02 WITH CONSENT OF HOLDERS.................................... 57
SECTION 11.03 COMPLIANCE WITH TRUST INDENTURE ACT........................ 58
SECTION 11.04 REVOCATION AND EFFECT OF CONSENTS.......................... 58
iii
SECTION 11.05 NOTATION ON OR EXCHANGE OF SECURITIES...................... 59
SECTION 11.06 TRUSTEE TO SIGN AMENDMENTS, ETC............................ 59
SECTION 11.07 EFFECT OF SUPPLEMENTAL INDENTURES.......................... 59
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS............................... 59
SECTION 12.02 NOTICES.................................................... 59
SECTION 12.03 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS............... 60
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT......... 60
SECTION 12.05 RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS......... 61
SECTION 12.06 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND
CONVERSION AGENT......................................... 61
SECTION 12.07 LEGAL HOLIDAYS............................................. 61
SECTION 12.08 GOVERNING LAW; WAIVER OF JURY TRIAL........................ 62
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.............. 62
SECTION 12.10 NO RECOURSE AGAINST OTHERS................................. 62
SECTION 12.11 SUCCESSORS................................................. 62
SECTION 12.12 MULTIPLE COUNTERPARTS...................................... 62
SECTION 12.13 SEPARABILITY............................................... 62
SECTION 12.14 TABLE OF CONTENTS, HEADINGS, ETC........................... 62
iv
CROSS-REFERENCE TABLE*
TIA INDENTURE
SECTION SECTION
- ------- ---------
Section 310(a)(1)........................................ 9.10
(a)(2)........................................... 9.10
(a)(3)........................................... N.A.**
(a)(4)........................................... N.A.
(a)(5)........................................... 9.10
(b).............................................. 9.08; 9.10
(c).............................................. N.A.
Section 311(a)........................................... 9.11
(b).............................................. 9.11
(c).............................................. N.A.
Section 312(a)........................................... 2.05
(b).............................................. 12.03
(c).............................................. 12.03
Section 313(a)........................................... 9.06
(b)(1)........................................... N.A.
(b)(2)........................................... 9.06
(c).............................................. 9.06 ; 12.02
(d).............................................. 9.06
Section 314(a)........................................... 6.02; 6.04; 12.02
(b).............................................. N.A.
(c)(1)........................................... 12.04(a)
(c)(2)........................................... 12.04(a)
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 12.04(b)
(f).............................................. N.A.
Section 315(a)........................................... 9.01(b)
(b).............................................. 6.05; 12.02
(c).............................................. 9.01(a)
(d).............................................. 9.01(c)
(e).............................................. 8.11
Section 316(a)(last sentence)............................ 2.09
(a)(1)(A)........................................ 8.05
(a)(1)(B)........................................ 8.04
(a)(2)........................................... N.A.
(b).............................................. 8.07
(c).............................................. 12.05
Section 317(a)(1)........................................ 8.08
(a)(2)........................................... 8.09
(b).............................................. 2.04
- -------------------------
* This Cross-Reference Table shall not, for any purpose, be deemed a part
of this Indenture.
** N.A. means Not Applicable.
v
THIS INDENTURE dated as of June 4, 2003 is between Ask Jeeves, Inc., a
corporation duly organized under the laws of the State of Delaware (the
"Company"), and The Bank of New York, a New York banking corporation as Trustee
(the "Trustee").
In consideration of the premises and the purchase of the Securities by
the Holders thereof, both parties agree as follows for the benefit of the other
and for the equal and ratable benefit of the registered Holders of the Company's
Zero Coupon Convertible Subordinated Notes Due June 1, 2008.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01 DEFINITIONS.
"Additional Interest" has the meaning specified in Section 5 of the
Registration Rights Agreement. All references herein to interest accrued or
payable as of any date shall include any Additional Interest accrued or payable
as of such date as provided in the Registration Rights Agreement.
"Affiliate" means, with respect to any specified person, any other
person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified person. For the purposes of this
definition, "control" when used with respect to any 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" means any Registrar, Paying Agent or Conversion Agent.
"Applicable Procedures" means, with respect to any transfer or exchange
of beneficial ownership interests in a Global Security, the rules and procedures
of the Depositary, in each case to the extent applicable to such transfer or
exchange.
"Applicable Stock" means (i) the Common Stock or (ii) in the event of a
merger, consolidation or other similar transaction involving the Company that is
otherwise permitted hereunder in which the Company is not the surviving
corporation, the common stock, common equity interests, ordinary shares or
American Depositary Shares or other certificates representing common equity
interests of such surviving corporation or its direct or indirect parent
corporation.
"Board of Directors" means either the board of directors of the Company
or any committee of the Board of Directors authorized to act for it with respect
to this Indenture.
"Business Day" means each day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, but excluding any debt
securities convertible into such equity.
1
"Cash" or "cash" means such coin or currency of the United States as at
any time of payment is legal tender for the payment of public and private debts.
"Cash Settlement Averaging Period" means the five (5) Trading Day
period beginning on the first Trading Day after the Conversion Retraction
Period, provided that with respect to determining amounts payable in lieu of
fractional shares pursuant to Section 4.03, if there is no Cash Settlement or
Combined Settlement, Cash Settlement Averaging Period means the five (5) Trading
Day period following the Conversion Date.
"Certificated Security" means a Security that is in substantially the
form attached hereto as Exhibit A and that does not include the information or
the schedule called for by footnotes 1 and 3 thereof.
"Change in Control" shall be deemed to have occurred if any of the
following occurs after the date hereof:
(i) any "person" or "group" (as such terms are
defined below) is or becomes the "beneficial owner" (as
defined below), directly or indirectly, of shares of Voting
Stock of the Company representing 50% or more of the total
voting power of all outstanding classes of Voting Stock of the
Company or has the power, directly or indirectly, to elect a
majority of the members of the Board of Directors of the
Company; or
(ii) the Company consolidates with, or merges with or
into, another Person or the Company sells, assigns, conveys,
transfers, leases or otherwise disposes of all or
substantially all of the assets of the Company, or any Person
consolidates with, or merges with or into, the Company, in any
such event other than pursuant to a transaction in which the
Persons that "beneficially owned" (as defined below), directly
or indirectly, shares of Voting Stock of the Company
immediately prior to such transaction "beneficially own" (as
defined below), directly or indirectly, shares of Voting Stock
of the Company representing at least a majority of the total
voting power of all outstanding classes of Voting Stock of the
surviving or transferee Person.
For the purpose of this definition, (i) "person" and "group" have the meanings
given such terms under Section 13(d)(3) of the Exchange Act or any successor
provision, (ii) a "beneficial owner" shall be determined in accordance with Rule
13d-3 under the Exchange Act, as in effect on the date of this Indenture.
Notwithstanding anything to the contrary set forth in this definition
or Section 3.02, a Change in Control shall not be deemed to have occurred if
either:
(iii) the Sale Price of the Common Stock for any five
Trading Days during the ten Trading Days immediately preceding
the Change in Control is at least equal to 105% of the
Conversion Price in effect on such Trading Day; or
(iv) in the case of a merger or consolidation, all of
the consideration (excluding cash payments for fractional
shares and cash payments pursuant to
2
dissenters' appraisal rights) in the merger or consolidation
constituting the Change in Control consists of common stock or
other certificates representing common equity securities
traded on a United States national securities exchange or
quoted on the Nasdaq National Market (or which will be so
traded or quoted when issued or exchanged in connection with
such Change in Control) and as a result of such transaction or
transactions the Securities become convertible solely into
such common stock or other certificates representing common
equity securities.
"Common Stock" means the common stock of the Company, $0.001 par value,
as it exists on the date of this Indenture and any shares of any class or
classes of capital stock of the Company resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of the Company and which are not subject to redemption
by the Company; provided, however, that if at any time there shall be more than
one such resulting class, the shares of each such class then so issuable on
conversion of Securities shall be substantially in the proportion which the
total number of shares of such class resulting from all such reclassifications
bears to the total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the party named as such in the first paragraph of this
Indenture until a successor replaces it pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such successor Company.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered
which office at the date of the execution of this Indenture is located at 101
Barclay Street, 8W, New York, NY 10286 or at any other time at such other
address as the Trustee may designate from time to time by notice to the Company.
"Default" or "default" means, when used with respect to the Securities,
any event which is or, after notice or passage of time or both, would be an
Event of Default.
"Designated Senior Indebtedness" means any particular Senior
Indebtedness of the Company in which the instrument creating or evidencing the
same or the assumption or guarantee thereof (or any 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. If any payment made to any holder of any Designated Senior
Indebtedness or its Representative with respect to such Designated Senior
Indebtedness is rescinded 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.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder, as in effect from
time to time.
3
"Final Maturity Date" means June 1, 2008.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the date of this Indenture, including those
set forth in (1) the opinions and pronouncements of the Accounting Principles
Board of the American Institute of Certified Public Accountants, (2) the
statements and pronouncements of the Financial Accounting Standards Board, (3)
such other statements by such other entity as approved by a significant segment
of the accounting profession and (4) the rules and regulations of the SEC
governing the inclusion of financial statements (including pro forma financial
statements) in registration statements filed under the Securities Act and
periodic reports required to be filed pursuant to Section 13 of the Exchange
Act, including opinions and pronouncements in staff accounting bulletins and
similar written statements from the accounting staff of the SEC.
"Global Security" means a permanent Global Security that is in
substantially the form attached hereto as Exhibit A and that includes the
information and schedule called for by footnotes 1 and 3 thereof and which is
deposited with the Depositary or its custodian and registered in the name of the
Depositary or its nominee.
"Holder" or "Securityholder" means the person in whose name a Security
is registered on the Primary Registrar's books.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness, obligations and other liabilities (contingent or
otherwise) of such Person (i) for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or (ii)
evidenced by credit or loan agreements, bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof) (other than any accounts
payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services), (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances, (c) all obligations and liabilities (contingent or
otherwise) of such Person (i) in respect of leases of such Person required, in
conformity with GAAP, to be accounted for as capitalized lease obligations on
the balance sheet of such Person, or (ii) under any lease or related document
(including a purchase agreement, conditional sale or other title retention
agreement) in connection with the lease of real property or improvements thereon
(or any personal property included as part of any such lease) which provides
that such Person is contractually obligated to purchase or cause a third party
to purchase the leased property or pay an agreed upon residual value of the
leased property to the lessor, including our obligations under such lease or
related document to purchase or cause a third party to purchase such leased
property or pay an agreed upon residual value of the leased property to the
lessor; (d) all obligations (contingent or otherwise) of such Person with
respect to any interest rate or other swap, cap, floor or collar agreement or
hedge agreement, forward contract, or other similar instrument or agreement or
foreign currency hedge, exchange, purchase or similar instrument or agreement;
(e) all direct or indirect guaranties, agreements to be jointly liable or
similar agreements by such Person in respect of, and obligations or liabilities
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of,
4
indebtedness, obligations or liabilities of another Person of the kind described
in clauses (a) through (d) of this definition, and (f) any and all deferrals,
renewals, extensions, refinancings and refundings of, or amendments,
modifications or supplements to, any indebtedness, obligation or liability of
the kind described in clauses (a) through (e) of this definition.
"Indenture" means this Indenture as amended or supplemented from time
to time pursuant to the terms of this Indenture.
"Initial Purchaser" means Credit Suisse First Boston LLC.
"Officer" means the Chairman or any Co-Chairman of the Board, any Vice
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Chief Financial Officer, the Controller, the Secretary or any
Assistant Controller or Assistant Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers;
provided, however, that for purposes of Sections 4.11 and 6.03, "Officers'
Certificate" means a certificate signed by the principal executive officer,
principal financial officer or principal accounting officer of the Company and
by one other Officer.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
Company.
"Person" or "person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Principal" or "principal" of a debt security, including the
Securities, means the principal of the security plus, when appropriate, the
premium, if any, on the security.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of June 4, 2003, between the Company and the Initial Purchaser.
"Representative" means the (a) indenture trustee or other trustee,
agent or representative for any 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.
"Restricted Global Security" means a Global Security that is a
Restricted Security.
"Restricted Security" means a Security required to bear the restricted
legends and information set forth in the form of Security set forth in Exhibit A
of this Indenture.
"Rule 144" means Rule 144 under the Securities Act or any successor to
such Rule.
5
"Rule 144A" means Rule 144A under the Securities Act or any successor
to such Rule.
"Sale Price" of a share of Applicable Stock on any date means the
closing per share sale price (or if no closing sale price is reported, the
average of the average bid and the average ask prices) as reported in composite
transactions for the principal U.S. securities exchange on which the Applicable
Stock is traded or, if the Applicable Stock is not listed on a U.S. national or
regional securities exchange, as reported by the National Association of
Securities Dealers Automated Quotation system or by the National Quotation
Bureau Incorporated. In the absence of such a quotation, the Board of Directors
shall be entitled to make a good faith determination of the sale price on the
basis it reasonably considers appropriate (which shall be evidenced by an
Officers' Certificate delivered to the Trustee).
"SEC" means the Securities and Exchange Commission.
"Securities" means the Zero Coupon Convertible Subordinated Notes Due
June 1, 2008 or any of them (each, a "Security"), as amended or supplemented
from time to time, that are issued under this Indenture.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Securities Custodian" means the Trustee, as custodian with respect to
the Securities in global form, or any successor thereto.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowed as a claim in any such proceeding) and rent payable on or in
connection with, and all fees, costs, expenses and other amounts accrued or due
on or in connection with, Indebtedness of the Company, whether secured or
unsecured, absolute or contingent, due or to become due, outstanding on the date
of this Indenture or thereafter created, incurred, assumed, guaranteed or in
effect guaranteed by the Company (including all deferrals, renewals, extensions
or refundings of, or amendments, modifications or supplements to, the
foregoing), unless in the case of any particular Indebtedness the instrument
creating or evidencing the same or the assumption or guarantee thereof expressly
provides that such Indebtedness shall not be senior in right of payment to the
Securities or expressly provides that such Indebtedness is "pari passu" or
"junior" to the Securities. Notwithstanding the foregoing, the term Senior
Indebtedness shall not include (i) any Indebtedness of the Company to any
wholly-owned Subsidiary of the Company (other than Indebtedness of the Company
to such Subsidiary arising by reason of guarantees by the Company of
Indebtedness of such Subsidiary to a Person that is not a Subsidiary of the
Company) or (ii) the Securities. If any payment made to any holder of any Senior
Indebtedness or its Representative with respect to such Senior Indebtedness is
rescinded 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 Senior Indebtedness effective as of the date of such
rescission or return.
6
"Significant Subsidiary" means, in respect of any Person, a Subsidiary
of such Person that would constitute a "significant subsidiary" as such term is
defined under Rule 1-02 of Regulation S-X under the Securities Act and the
Exchange Act.
"Subsidiary" means, in respect of any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers, general partners or
trustees thereof is at the time owned or controlled, directly or indirectly, by
(i) such Person; (ii) such Person and one or more Subsidiaries of such Person;
or (iii) one or more Subsidiaries of such Person.
"TIA" means the Trust Indenture Act of 1939, as amended, and the rules
and regulations thereunder as in effect on the date of this Indenture, except as
provided in Section 11.03, and except to the extent any amendment to the Trust
Indenture Act expressly provides for application of the Trust Indenture Act as
in effect on another date.
"Trading Day" means a day during which trading in securities generally
occurs on The Nasdaq National Market (or, if the Common Stock is not quoted on
The Nasdaq National Market, on the principal other market on which the Common
Stock is then traded), other than a day on which a material suspension of or
limitation on trading is imposed that affects either The Nasdaq National Market
(or, if applicable, such other market) in its entirety or only the shares of
Common Stock (by reason of movements in price exceeding limits permitted by the
relevant market on which the shares are traded or otherwise) or on which The
Nasdaq National Market (or, if applicable, such other market) cannot clear the
transfer of the Company's shares due to an event beyond the Company's control.
"Trustee" means the party named as such in the first paragraph of this
Indenture until a successor replaces it in accordance with the provisions of
this Indenture, and thereafter means the successor.
"Trust Officer" means, with respect to the Trustee, any officer
assigned to the Corporate Trust Office, and also, with respect to a particular
matter, any other officer to whom such matter is referred because of such
officer's knowledge of and familiarity with the particular subject.
"Unrestricted Certificated Security" means a Certificated Security that
is not a Restricted Security.
"Unrestricted Global Security" means a Global Security that is not a
Restricted Security.
"Vice President" when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president."
"Volume Weighted Average Price" means, with respect to one share of
Common Stock on any Trading Day, the volume weighted average prices as displayed
under the heading "Bloomberg VWAP" on Bloomberg Page ASKJ (equity) AQR in
respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on that
Trading Day (or if such volume weighted
7
average price is not available, the market value of one share of Common Stock on
such Trading Day as the Company determines in good faith using a volume weighted
method).
"Voting Stock" of a Person means all classes of Capital Stock or other
interests (including partnership interests) of such Person then outstanding and
normally entitled (without regard to the occurrence of any contingency) to vote
in the election of directors, managers or trustees thereof.
SECTION 1.02 OTHER DEFINITIONS.
Term Defined in Section
- -----------------------------------
"Agent Members" 2.01(b)
"Bankruptcy Law" 8.01
"Cash Settlement" 4.02(b)
"Change in Control Purchase Date" 3.02(a)
"Change in Control Purchase Notice" 3.02(c)
"Change in Control Purchase Price" 3.02(a)
"Combined Settlement" 4.02(b)
"Company Order" 2.02
"Conversion Agent" 2.03
"Conversion Date" 4.02(a)
"Conversion Obligations 4.02(b)
"Conversion Price" 4.06
"Conversion Retraction Period" 4.02(c)
"Current Market Price" 4.06(d)
"Custodian" 8.01
"DTC" 2.01
"Depositary" 2.01
"Determination Date" 4.06(c)
"Event of Default" 8.01
"Expiration Date" 4.06(c)
"Expiration Time" 4.06(c)
"Legal Holiday" 12.07
"Legend" 2.12
"Partial Cash Amount" 4.02(b)
"Paying Agent" 2.03
"Payment Blockage Notice" 5.02
"Primary Registrar" 2.03
"Purchase Agreement" 2.01
"Purchased Shares" 4.06(c)
"QIB" 2.01
"Registrar" 2.03
"Rights Plan" 4.06(c)
"Settlement Notice Period" 4.02(c)
"Share Settlement" 4.02(b)
"Triggering Distribution" 4.06(c)
"Trigger Event" 4.06(c)
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SECTION 1.03 TRUST INDENTURE ACT PROVISIONS.
Whenever this Indenture refers to a provision of the TIA, that provision is
incorporated by reference in and made a part of this Indenture. The Indenture
shall also include those provisions of the TIA required to be included herein by
the provisions of the Trust Indenture Reform Act of 1990. The following TIA
terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee; and
"obligor" on the indenture securities means the Company or any other obligor on
the Securities.
All other terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by any SEC rule and not
otherwise defined herein have the meanings assigned to them therein.
SECTION 1.04 RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(A) a term has the meaning assigned to it;
(B) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(C) words in the singular include the plural, and words in the
plural include the singular;
(D) provisions apply to successive events and transactions;
(E) the term "merger" includes a statutory share exchange and
the term "merged" has a correlative meaning;
(F) the masculine gender includes the feminine and the neuter;
(G) references to agreements and other instruments include
subsequent amendments thereto; and
(H) "herein," "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision.
9
ARTICLE II
THE SECURITIES
SECTION 2.01 FORM AND DATING.
The Securities and the Trustee's certificate of authentication shall be
substantially in the respective forms set forth in Exhibit A, which Exhibit is
incorporated in and made part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. The Company shall provide any such notations, legends or endorsements to
the Trustee in writing. Each Security shall be dated the date of its
authentication. The Securities are being offered and sold by the Company
pursuant to a Purchase Agreement, dated May 29, 2003 (the "Purchase Agreement"),
between the Company and the Initial Purchaser, in transactions exempt from, or
not subject to, the registration requirements of the Securities Act.
(a) Restricted Global Securities. All of the Securities are initially
being offered and sold to qualified institutional buyers as defined in Rule 144A
(collectively, "QIBs" or individually, each a "QIB") in reliance on Rule 144A
under the Securities Act and shall be issued initially in the form of one or
more Restricted Global Securities, which shall be deposited on behalf of the
purchasers of the Securities represented thereby with the Trustee, at its
Corporate Trust Office, as custodian for the depositary, The Depository Trust
Company ("DTC") (such depositary, or any successor thereto, being hereinafter
referred to as the "Depositary"), and registered in the name of its nominee,
Cede & Co., duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the Restricted Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Securities Custodian as hereinafter provided, subject in
each case to compliance with the Applicable Procedures.
(b) Global Securities In General. Each Global Security shall represent
such of the outstanding Securities as shall be specified therein and each shall
provide that it shall represent the aggregate amount of outstanding Securities
from time to time endorsed thereon and that the aggregate amount of outstanding
Securities represented thereby may from time to time be reduced or increased, as
appropriate, to reflect exchanges, purchases or conversions of such Securities.
Any adjustment of the aggregate principal amount of a Global Security to reflect
the amount of any increase or decrease in the amount of outstanding Securities
represented thereby shall be made by the Trustee in accordance with instructions
given by the Holder thereof as required by Section 2.12 hereof and shall be made
on the records of the Trustee and the Depositary.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary or under the Global Security, and the Depositary
(including, for this purpose, its nominee) may be treated by the Company, the
Trustee and any agent of the Company or the Trustee as the absolute owner and
Holder of such Global Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall (A) prevent the Company, the Trustee or any
agent of the Company or the Trustee from giving effect to any written
certification, proxy or other
10
authorization furnished by the Depositary or (B) impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Security.
(c) Book Entry Provisions. The Company shall execute and the Trustee
shall, in accordance with this Section 2.01(c), authenticate and deliver
initially one or more Global Securities that (i) shall be registered in the name
of the Depositary, (ii) shall be delivered by the Trustee to the Depositary or
pursuant to the Depositary's instructions and (iii) shall bear legends
substantially to the following effect:
"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY TO ASK JEEVES,INC. (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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE
OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. TRANSFERS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS TO NOMINEES OF THE DEPOSITORY
TRUST COMPANY OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE
IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN ARTICLE TWO OF THE INDENTURE
REFERRED TO ON THE REVERSE HEREOF."
SECTION 2.02 EXECUTION AND AUTHENTICATION.
An Officer shall sign the Securities for the Company by manual or
facsimile signature. Typographic and other minor errors or defects in any such
facsimile signature shall not affect the validity or enforceability of any
Security which has been authenticated and delivered by the Trustee.
If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.
A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate and make available for delivery
Securities for original issue in the aggregate principal amount of up to
$115,000,000 upon receipt of a written order or orders of the Company signed by
two Officers of the Company (a "Company Order"). The Company Order shall specify
the amount of Securities to be authenticated, shall provide that all such
Securities will be represented by a Restricted Global Security and the date on
which each
11
original issue of Securities is to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $115,000,000 except
as provided in Section 2.08.
The Trustee shall act as the initial authenticating agent. Thereafter,
the Trustee may appoint an authenticating agent acceptable to the Company to
authenticate Securities. An authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent shall have the same rights as an Agent to deal with the
Company or an Affiliate of the Company.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 principal amount and any integral
multiple thereof.
SECTION 2.03 REGISTRAR, PAYING AGENT AND CONVERSION AGENT.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar"), one or
more offices or agencies where Securities may be presented for payment ("Paying
Agent"), one or more offices or agencies where Securities may be presented for
conversion ("Conversion Agent") and one or more offices or agencies where
notices and demands to or upon the Company in respect of the Securities and this
Indenture may be served. The Company will at all times maintain the Paying
Agent, Conversion Agent, Registrar and an office or agency where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served in the Borough of Manhattan, The City of New York. One of the
Registrars (the "Primary Registrar") shall keep a register of the Securities and
of their transfer and exchange. The Company may have one or more co-registrars,
one or more additional paying agents and one or more additional conversion
agents. The term Paying Agent includes any additional paying agent, and the term
Conversion Agent includes any additional conversion agent.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The Company shall notify
the Trustee of the name and address of any Agent not a party to this Indenture.
If the Company fails to maintain a Registrar, Paying Agent, Conversion Agent or
agent for service of notices and demands in any place required by this
Indenture, or fails to give the foregoing notice, the Trustee shall act as such.
The Company or any Affiliate of the Company may act as Paying Agent (except for
the purposes of Section 6.01 and Article 10).
The Company hereby initially designates the Trustee as Paying Agent,
Registrar and Conversion Agent in connection with the Securities.
SECTION 2.04 PAYING AGENT TO HOLD MONEY IN TRUST.
Prior to 10:00 a.m., New York City time, on each due date of the
principal of or interest, if any, on any Securities, the Company shall deposit
with the Paying Agent a sum sufficient to pay such principal or interest, if
any, so becoming due. Subject to Section 5.02, the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
12
Paying Agent for the payment of principal of or interest, if any, on the
Securities, and shall notify the Trustee of any default by the Company (or any
other obligor on the Securities) in making any such payment. If the Company or
an Affiliate of the Company acts as Paying Agent, it shall, before 10:00 a.m.,
New York City time, on each due date of the principal of or interest on any
Securities, segregate the money and hold it as a separate trust fund. The
Company at any time may require the Paying Agent to pay all money held by it to
the Trustee, and the Trustee may at any time during the continuance of any
default, upon written request to the Paying Agent, require such Paying Agent to
pay forthwith to the Trustee all sums so held in trust by such Paying Agent and
to account for any funds disbursed by it. Upon doing so, the Paying Agent (other
than the Company) shall have no further liability for the money.
SECTION 2.05 SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
Securityholders. If the Trustee is not the Primary Registrar, the Company shall
furnish to the Trustee semiannually on January 1 and July 1, and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of
Securityholders.
SECTION 2.06 TRANSFER AND EXCHANGE.
(a) Subject to compliance with any applicable additional requirements
contained in Section 2.12, when a Security is presented to a Registrar with a
request to register a transfer thereof or to exchange such Security for an equal
principal amount of Securities of other authorized denominations, the Registrar
shall register the transfer or make the exchange as requested; provided,
however, that every Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by an assignment form
and, if applicable, a transfer certificate each in the form included in Exhibit
A, and in form satisfactory to the Registrar duly executed by the Holder thereof
or its attorney duly authorized in writing. To permit registration of transfers
and exchanges, upon surrender of any Security for registration of transfer or
exchange at an office or agency maintained pursuant to Section 2.03, the Company
shall execute and the Trustee shall authenticate Securities of a like aggregate
principal amount at the Registrar's request. Any exchange or transfer shall be
without charge, except that the Company or the Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto, and provided that this sentence shall not apply to
any exchange pursuant to Section 2.10, 2.12(a), 3.06, 4.02 (last paragraph) or
11.05.
Neither the Company, any Registrar nor the Trustee shall be required to
exchange or register a transfer of any Securities or portions thereof in respect
of which a Change in Control Purchase Notice has been delivered and not
withdrawn by the Holder thereof (except, in the case of the purchase of a
Security in part, the portion thereof not to be purchased).
All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Company, evidencing the same Indebtedness and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
13
(b) Any Registrar appointed pursuant to Section 2.03 hereof shall
provide to the Trustee such information as the Trustee may reasonably require in
connection with the delivery by such Registrar of Securities upon transfer or
exchange of Securities.
(c) Each Holder of a Security agrees to indemnify the Company and the
Trustee against any liability that may result from the transfer, exchange or
assignment of such Holder's Security in violation of any provision of this
Indenture and/or applicable United States federal or state securities law.
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 Security (including any transfers between or among Agent Members or other
beneficial owners of interests in any Global Security) 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 substantial compliance
as to form with the express requirements hereof.
SECTION 2.07 REPLACEMENT SECURITIES.
If any mutilated Security is surrendered to the Company, a Registrar or
the Trustee, or the Company, a Registrar and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any Security, and there
is delivered to the Company, the applicable Registrar and the Trustee such
security or indemnity as will be required by them to save each of them harmless,
then, in the absence of notice to the Company, such Registrar or the Trustee
that such Security has been acquired by a bona fide purchaser, the Company shall
execute, and upon its written request the Trustee shall authenticate and
deliver, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, or is about to be purchased by the
Company pursuant to Article III, the Company in its discretion (but subject to
any conversion rights) may, instead of issuing a new Security, pay or purchase
such Security, as the case may be.
Upon the issuance of any new Securities under this Section 2.07, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the reasonable fees and expenses of the Trustee
or the Registrar) in connection therewith.
Every new Security issued pursuant to this Section 2.07 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
14
The provisions of this Section 2.07 are (to the extent lawful)
exclusive and shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities.
SECTION 2.08 OUTSTANDING SECURITIES.
Securities outstanding at any time are all Securities authenticated by
the Trustee, except for those canceled by it, those converted pursuant to
Article IV, those delivered to it for cancellation or surrendered for transfer
or exchange, those paid pursuant to Section 2.07 and those described in this
Section 2.08 as not outstanding.
If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Company receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If the Paying Agent (other than the Company or an Affiliate of the
Company) holds on a Change in Control Purchase Date or the Final Maturity Date
money and/or Applicable Stock, where relevant and as permitted under this
Indenture, sufficient to pay the principal of (including premium, if any) and
accrued interest (if any) on Securities (or portions thereof) payable on that
date, then on and after such Change in Control Purchase Date or the Final
Maturity Date, as the case may be, such Securities (or portions thereof, as the
case may be) shall cease to be outstanding and interest (if any) on them shall
cease to accrue.
Subject to the restrictions contained in Section 2.09, a Security does
not cease to be outstanding because the Company or an Affiliate of the Company
holds the Security.
SECTION 2.09 TREASURY SECURITIES.
In determining whether the Holders of the required principal amount of
Securities have concurred in any notice, direction, waiver or consent,
Securities owned by the Company or any other obligor on the Securities or by any
Affiliate of the Company or of such other obligor shall be disregarded, except
that, for purposes of determining whether the Trustee shall be protected in
relying on any such notice, direction, waiver or consent, only Securities which
a Trust Officer of the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good faith shall not
be disregarded if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to the Securities and that the pledgee is
not the Company or any other obligor on the Securities or any Affiliate of the
Company or of such other obligor.
SECTION 2.10 TEMPORARY SECURITIES.
Until definitive Securities are ready for delivery, the Company may
prepare and execute, and, upon receipt of a Company Order, the Trustee shall
authenticate and deliver, temporary Securities. Temporary Securities shall be
substantially in the form of definitive Securities but may have variations that
the Company with the consent of the Trustee considers appropriate for temporary
Securities. Without unreasonable delay, the Company shall prepare and the
Trustee shall authenticate and deliver definitive Securities in exchange for
temporary Securities.
15
SECTION 2.11 CANCELLATION.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar, the Paying Agent and the Conversion Agent shall
forward to the Trustee or its agent any Securities surrendered to them for
transfer, exchange, payment or conversion. The Trustee and no one else shall
cancel, in accordance with its standard procedures, all Securities surrendered
for transfer, exchange, payment, conversion or cancellation and shall deliver
the canceled Securities to the Company upon the Company's written request. All
Securities which are purchased or otherwise acquired by the Company or any of
its Subsidiaries prior to the Final Maturity Date may, at the option of the
Company, be delivered to the Trustee for cancellation or, to the extent
permitted by law, the Company may hold or resell such Securities or issue any
new Securities to replace any such Securities.
SECTION 2.12 LEGEND; ADDITIONAL TRANSFER AND EXCHANGE
REQUIREMENTS.
(a) If Securities are issued upon the transfer, exchange or replacement
of Securities subject to restrictions on transfer and bearing the legends set
forth on the forms of Securities attached hereto as Exhibit A (collectively, the
"Legend"), or if a request is made to remove the Legend on a Security, the
Securities so issued shall bear the Legend, or the Legend shall not be removed,
as the case may be, unless there is delivered to the Company and the Registrar
such satisfactory evidence, which shall include an opinion of counsel reasonably
satisfactory to the Company if requested by the Company or such Registrar, as
may be reasonably required by the Company and 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 Securities are not "restricted" within the
meaning of Rule 144 under the Securities Act; provided that no such evidence
need be supplied in connection with the sale of such Security pursuant to a
registration statement that is effective at the time of such sale. Upon (i)
provision of such satisfactory evidence if requested, or (ii) notification by
the Company to the Trustee and Registrar of the sale of such Security pursuant
to a registration statement that is effective at the time of such sale, the
Trustee, at the written direction of the Company, shall authenticate and deliver
a Security that does not bear the Legend. If the Legend is removed from the face
of a Security and the Security is subsequently held by an Affiliate of the
Company, the Legend shall be reinstated.
(b) A Global Security may not be transferred, in whole or in part, to
any Person other than the Depositary or a nominee or any successor thereof, and
no such transfer to any such other Person may be registered; provided that the
foregoing shall not prohibit any transfer of a Security that is issued in
exchange for a Global Security but is not itself a Global Security. No transfer
of a Security to any Person shall be effective under this Indenture or the
Securities unless and until such Security has been registered in the name of
such Person. Notwithstanding any other provisions of this Indenture or the
Securities, transfers of a Global Security, in whole or in part, shall be made
only in accordance with this Section 2.12.
(c) Subject to paragraph (d) of this Section 2.12, every Security shall
be subject to the restrictions on transfer provided in the Legend. Whenever any
Restricted Security other than a Restricted Global Security is presented or
surrendered for registration of transfer or for exchange
16
for a Security registered in a name other than that of the Holder, such Security
must be accompanied by a certificate in substantially the form set forth in
Exhibit B, dated the date of such surrender and signed by the Holder of such
Security, as to compliance with such restrictions on transfer. The Registrar
shall not be required to accept for such registration of transfer or exchange
any Security not so accompanied by a properly completed certificate.
(d) The restrictions imposed by the Legend upon the transferability of
any Security shall cease and terminate when such Security has been sold pursuant
to an effective registration statement under the Securities Act or transferred
in compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or, if earlier, upon the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor
provision). Any Security as to which such restrictions on transfer shall have
expired in accordance with their terms or shall have terminated may, upon a
surrender of such Security for exchange to the Registrar in accordance with the
provisions of this Section 2.12 (accompanied, in the event that such
restrictions on transfer have terminated by reason of a transfer in compliance
with Rule 144 or any successor provision, by, if requested, an opinion of
counsel reasonably acceptable to the Company, addressed to the Company and in
form acceptable to the Company, to the effect that the transfer of such Security
has been made in compliance with Rule 144 or such successor provision), be
exchanged for a new Security, of like tenor and aggregate principal amount,
which shall not bear the restrictive Legend. The Company shall inform the
Trustee of the effective date of any registration statement registering the
Securities under the Securities Act. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(e) As used in the preceding two paragraphs of this Section 2.12, the
term "transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(f) The provisions of clauses (i), (ii), (iii) and (iv) below shall
apply only to Global Securities:
(i) Notwithstanding any other provisions of this
Indenture or the Securities, a Global Security shall not be
exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more
nominees thereof, provided that a Global Security may be
exchanged for Securities registered in the names of any person
designated by the Depositary in the event that (A) the
Depositary has notified the Company that it is unwilling or
unable to continue as Depositary for such Global Security or
such Depositary has ceased to be a "clearing agency"
registered under the Exchange Act, and a successor Depositary
is not appointed by the Company within 90 days, (B) the
Company has provided the Depositary with written notice that
it has decided to discontinue use of the system of book-entry
transfer through the Depositary or any successor Depositary or
(C) an Event of Default has occurred and is continuing with
respect to the Securities. Any Global Security exchanged
pursuant to clauses (A) or (B) above shall be so exchanged in
whole and not in part, and any Global Security exchanged
pursuant to clause (C) above may be exchanged in whole or from
time to time in part as directed by the Depositary. Any
Security issued in exchange for a Global Security or any
portion thereof shall
17
be a Global Security; provided that any such Security so
issued that is registered in the name of a Person other than
the Depositary or a nominee thereof shall not be a Global
Security.
(ii) Securities issued in exchange for a Global
Security or any portion thereof shall be issued in definitive,
fully registered form, without interest coupons, shall have an
aggregate principal amount equal to that of such Global
Security or portion thereof to be so exchanged, shall be
registered in such names and be in such authorized
denominations as the Depositary shall designate and shall bear
the applicable legends provided for herein. Any Global
Security to be exchanged in whole shall be surrendered by the
Depositary to the Trustee, as Registrar. With regard to any
Global Security to be exchanged in part, either such Global
Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its
nominee with respect to such Global Security, the principal
amount thereof shall be reduced, by an amount equal to the
portion thereof to be so exchanged, by means of an appropriate
adjustment made on the records of the Trustee. Upon any such
surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the
order of the Depositary or an authorized representative
thereof.
(iii) Subject to the provisions of clause (v) below,
the registered Holder may grant proxies and otherwise
authorize any Person, including Agent Members and persons that
may hold interests through Agent Members, to take any action
which a Holder is entitled to take under this Indenture or the
Securities.
(iv) In the event of the occurrence of any of the
events specified in clause (i) above, the Company will
promptly make available to the Trustee a reasonable supply of
Certificated Securities in definitive, fully registered form,
without interest coupons.
(v) Neither 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 Security registered
in the name of the Depositary or any nominee thereof, or under
any such Global Security, 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 Security 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 Members and any other person
on whose behalf an Agent Member may act, the operation of
customary practices of such Persons governing the exercise of
the rights of a holder of any Security.
18
SECTION 2.13 CUSIP NUMBERS.
The Company in issuing the Securities may use one or more "CUSIP"
numbers (if then generally in use), and, if so, the Trustee and the Company
shall use "CUSIP" numbers in notices of purchase as a convenience to Holders;
provided that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a purchase and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such purchase shall
not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE III
REDEMPTION AND PURCHASES
SECTION 3.01 NO REDEMPTION BY THE COMPANY.
The Securities may not be redeemed by the Company prior to the Final
Maturity Date.
SECTION 3.02 PURCHASE OF SECURITIES AT OPTION OF THE HOLDER UPON CHANGE
IN CONTROL.
(a) If at any time that Securities remain outstanding there shall occur
a Change in Control, Securities shall be purchased by the Company at the option
of the Holders, as of the date that is 30 Business Days after the date of the
Company's notice of the Change in Control pursuant to Section 3.02(b) (the
"Change in Control Purchase Date") at a purchase price equal to 100% of the
principal amount of the Securities, together with any accrued and unpaid
interest to, but excluding, the Change in Control Purchase Date (the "Change in
Control Purchase Price"), subject to satisfaction by or on behalf of any Holder
of the requirements set forth in subsection (c) of this Section 3.02.
(b) Within 30 Business Days after the occurrence of a Change in
Control, the Company shall mail a written notice of the Change in Control to the
Trustee and to each Holder (and to beneficial owners as required by applicable
law). The notice shall include the form of a Change in Control Purchase Notice
to be completed by the Holder and shall state:
(1) the date of such Change in Control and information about the nature
of such Change in Control;
(2) the date by which the Change in Control Purchase Notice pursuant to
this Section 3.02 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the Holder's right to require the Company to purchase the
Securities;
19
(6) whether the change in Control Purchase Price will be paid in cash
or shares of Applicable Stock, or a combination thereof and, in the case of a
combination, the percentage of each;
(7) if the Company elects to pay the Change in Control Purchase Price
in shares of Applicable Stock or a combination of cash and shares of Applicable
Stock, that the number of shares of Applicable Stock each Holder will receive
will equal the quotient obtained by dividing the amount of the Change in Control
Purchase Price to be paid in shares of Applicable Stock by 97% of the average of
the Sale Price of the Applicable Stock for the five (5) Trading Days immediately
preceding the second Business Day immediately preceding the Change in Control
Purchase Date;
(8) if the Company elects to pay the Change in Control Purchase Price
in shares of Applicable Stock or a combination of cash and shares of Applicable
Stock, the method of calculating the Sale Price of the shares of Applicable
Stock;
(9) that because the Sale Price of the shares of Applicable Stock will
be determined prior to the Change in Control Purchase Date, Holders of the
Securities will bear the market risk that the shares of Applicable Stock to be
received will decline in value between the date such Sale Price is determined
and the Change in Control Purchase Date;
(10) briefly, the conversion rights of the Securities;
(11) the name and address of each Paying Agent and Conversion Agent;
(12) the Conversion Price and any adjustments thereto;
(13) the CUSIP number of the Securities;
(14) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Common Stock pursuant to Article IV of this
Indenture only to the extent that the Change in Control Purchase Notice has been
withdrawn in accordance with the terms of this Indenture;
(15) the procedures that the Holder must follow to exercise rights
under this Section 3.02;
(16) the procedures for withdrawing a Change in Control Purchase
Notice, including a form of notice of withdrawal; and
(17) that the Holder must satisfy the requirements set forth in the
Securities in order to convert the Securities.
If any of the Securities is in the form of a Global Security, then the
Company shall modify such notice to the extent necessary to accord with the
procedures of the Depositary applicable to the repurchase of Global Securities.
20
(c) A Holder may exercise its rights specified in subsection (a) of
this Section 3.02 upon delivery of a written notice (which shall be in
substantially the form included in Exhibit A 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 Securities, may be delivered
electronically or by other means in accordance with the Depositary's customary
procedures) of the exercise of such rights (a "Change in Control Purchase
Notice") to any Paying Agent at any time prior to the close of business on the
Business Day immediately preceding the Change in Control Purchase Date.
The delivery of such Security to any Paying Agent (together with all
necessary endorsements) at the office of such Paying Agent shall be a condition
to the receipt by the Holder of the Change in Control Purchase Price therefor.
The Company shall purchase from the Holder thereof, pursuant to this
Section 3.02, a portion of a Security if the principal amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of the Indenture that apply
to the purchase of all of a Security pursuant to Sections 3.02 through 3.08 also
apply to the purchase of such portion of such Security.
Notwithstanding anything herein to the contrary, any Holder delivering
to the Paying Agent the Change in Control Purchase Notice contemplated by this
subsection (c) shall have the right to withdraw such Change in Control Purchase
Notice in whole or in a portion thereof that is a principal amount of $1,000 or
in an integral multiple thereof at any time prior to the close of business on
the Business Day immediately preceding the Change in Control Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance
with Section 3.03.
A Change in Control Purchase Notice shall be deemed to be withdrawn as
to some or all of the Securities that a Holder has notified the Paying Agent
that it has elected that the Company purchase if (1) the Company has elected
pursuant to Section 3.04 to pay the Change in Control Purchase Price in part or
in whole in Applicable Stock, (2) the Company has failed to satisfy the
conditions in Section 3.04(d) and (3) such Holder has made the election in its
Change in Control Purchase Notice to withdraw its Change in Control Purchase
Notice in the event that (1) and (2) above occur.
If a Holder fails to indicate such Holder's election in such Holder's
Change in Control Purchase Notice and the Company has elected in whole or in
part to pay the Change in Control Purchase Price in Applicable Stock but fails
to satisfy the conditions in Section 3.04(d), such Holder shall be deemed to
have elected to receive cash in respect of the Change in Control Purchase Price
otherwise payable in Applicable Stock.
The Paying Agent shall promptly notify the Company of the receipt by it
of any Change in Control Purchase Notice or written withdrawal thereof.
Anything herein to the contrary notwithstanding, in the case of Global
Securities, any Change in Control Purchase Notice may be delivered or withdrawn
and such Securities may be surrendered or delivered for purchase in accordance
with the Applicable Procedures as in effect from time to time.
21
SECTION 3.03 EFFECT OF CHANGE IN CONTROL PURCHASE NOTICE.
Upon receipt by any Paying Agent of the Change in Control Purchase
Notice specified in Section 3.02(c), the Holder of the Security in respect of
which such Change in Control Purchase Notice was given shall (unless such Change
in Control Purchase Notice is withdrawn as specified below) thereafter be
entitled to receive the Change in Control Purchase Price with respect to such
Security. Such Change in Control Purchase Price shall be paid to such Holder
promptly following the later of (a) the Change in Control Purchase Date with
respect to such Security (provided the conditions in Section 3.02(c) have been
satisfied) and (b) the time of delivery of such Security to the Paying Agent by
the Holder thereof in the manner required by Section 3.02(c). Securities in
respect of which a Change in Control Purchase Notice has been given by the
Holder thereof may not be converted into shares of Common Stock pursuant to
Article IV on or after the date of the delivery of such Change in Control
Purchase Notice unless such Change in Control Purchase Notice has first been
validly withdrawn.
A Change in Control Purchase Notice may be withdrawn by means of a
written notice (which may be delivered by mail, overnight courier, hand
delivery, facsimile transmission or in any other written form and, in the case
of Global Securities, may be delivered electronically or by other means in
accordance with the Depositary's customary procedures) of withdrawal delivered
by the Holder to the Paying Agent at any time prior to the close of business on
the Business Day immediately preceding the Change in Control Purchase Date,
specifying the principal amount of the Security or portion thereof (which must
be a principal amount of $1,000 or an integral multiple of $1,000 in excess
thereof) with respect to which such notice of withdrawal is being submitted.
SECTION 3.04 THE COMPANY'S RIGHT TO ELECT MANNER OF PAYMENT OF
CHANGE IN CONTROL PURCHASE PRICE.
(a) The Securities to be repurchased with respect to any Change in
Control Purchase Date pursuant to Section 3.02(a) may be paid for at the
election of the Company in cash or shares of Applicable Stock, or in any
combination of cash and shares of Applicable Stock, subject to the conditions
set forth in Section 3.04(b). The Company shall designate, in the notice of
Change of Control delivered pursuant to Section 3.02, whether the Company will
repurchase the Securities for cash or shares of Applicable Stock, or, if a
combination thereof, the percentages of the Change in Control Purchase Price in
respect of which it will pay in cash or shares of Applicable Stock; provided,
however, that the Company will pay cash for fractional interests in shares of
Applicable Stock. For purposes of determining the existence of potential
fractional interests, all Securities subject to repurchase by the Company held
by a Holder shall be considered together (no matter how many separate
certificates are to be presented). Each Holder whose Securities are repurchased
pursuant to Section 3.02 shall receive the same percentage of cash or shares of
Applicable Stock in payment of the Change in Control Purchase Price for such
Securities, except (i) as provided in this Section 3.04(a) with regard to the
payment of cash in lieu of fractional shares of Applicable Stock and (ii) in the
event that the Company is unable to purchase the Securities of a Holder or
Holders for shares of Applicable Stock because any necessary qualifications or
registrations of the shares of Applicable Stock under applicable securities laws
cannot be obtained, the Company may purchase the Securities of such Holder or
Holders for
22
cash. The Company may not change its election with respect to the consideration
(or components or percentages of components thereof) to be paid once the Company
has given its notice of Change of Control to Holders except in the event of a
failure to satisfy, prior to 5:00 p.m. (New York City time), on the Business Day
immediately preceding the Change in Control Purchase Date, any condition to the
payment of the Change in Control Purchase Price, in whole or in part, in shares
of Applicable Stock.
At least five (5) Business Days before the date of the Company's notice
of the Change in Control, the Company shall deliver, unless otherwise agreed by
the Trustee, an Officers' Certificate to the Trustee specifying:
(1) the manner of payment selected by the Company;
(2) the information required by Section 3.02(b); and
(3) whether the Company desires the Trustee to give the notice required
by Section 3.02(b).
(b) If the Company elects to pay the Change in Control Purchase Price
by delivering shares of Applicable Stock in lieu of cash or by delivering a
combination of Applicable Stock and cash, the number of shares of Applicable
Stock to be issued shall be equal to the relevant amount of the Change in
Control Purchase Price to be paid divided by 97% of the average of the Sale
Prices of the Applicable Stock for the five (5) consecutive Trading Days
immediately preceding the second day immediately preceding the Change in Control
Purchase Date.
(c) The Company will not issue any fraction of a share of Applicable
Stock in payment of the Change in Control Purchase Price. Instead, the Company
will make a cash payment (calculated to the nearest cent) equal to such fraction
multiplied by the average of the Sale Prices of the Applicable Stock for the
five (5) consecutive Trading Days immediately preceding the second day
immediately preceding the Change in Control Purchase Date. If a Holder elects to
have more than one Security purchased, the number of shares of Applicable Stock
shall be based on the aggregate amount of Securities to be purchased.
(d) The Company's right to exercise its election to repurchase
Securities through the issuance of shares of Applicable Stock shall be
conditioned upon satisfaction of the following conditions prior to 5:00 p.m.
(New York City time), on the Business Day immediately preceding the Change in
Control Purchase Date:
(1) the registration of such shares of Applicable Stock to be issued
upon repurchase under the Securities Act and the Exchange Act, in each case, if
required;
(2) the qualification or registration of such shares of Applicable
Stock to be issued upon repurchase under applicable state securities laws, if
necessary, or the availability of an exemption from such qualification and
registration;
(3) the listing of such shares of Applicable Stock on a United States
national securities exchange or the quotation of such shares of Applicable Stock
on an inter-dealer quotation system of any registered United States national
securities association; and
23
(4) the receipt by the Trustee of an Officers' Certificate stating (i):
that the terms of the issuance of the shares of Applicable Stock are in
conformity with this Indenture; (ii) that the shares of Applicable Stock to be
issued in payment of the Change in Control Purchase Price in respect of
Securities have been duly authorized and, when issued and delivered pursuant to
the terms of this Indenture in payment of the Change in Control Purchase Price
in respect of Securities, will be validly issued, fully paid, non assessable and
free from preemptive rights; (iii) that the conditions above and the condition
set forth in the second succeeding sentence have been satisfied in all material
respects; and (iv) the number of shares of Applicable Stock to be issued for
each $1,000 Principal Amount of Securities and the Sale Price of a share of
Applicable Stock on each Trading Day during the period commencing on the first
Trading Day of the period during which the Sale Price is calculated and ending
on the Trading Day immediately preceding the Change in Control Purchase Date;
and
(5) the receipt by the Trustee of an Opinion of Counsel stating that:
(i) the shares of Applicable Stock to be issued by the Company in payment of the
Change in Control Purchase Price in respect of Securities have been duly
authorized, and when issued and delivered pursuant to the terms of this
Indenture in payment of the Change in Control Purchase Price in respect of
Securities, will be validly issued, fully paid and non assessable and, to the
best of such counsel's knowledge, free from preemptive rights under the
Company's certificate of incorporation, bylaws or any material contract; and
(ii) the conditions in clause (1) above have been satisfied in all material
respects.
(e) If the conditions in paragraph (d) of this Section 3.04 are not
satisfied with respect to a Holder or Holders prior to 5:00 p.m. (New York City
time) on the Business Day immediately preceding the Change in Control Purchase
Date, and the Company has elected to repurchase the Securities pursuant to this
Section 3.04, in whole or in part, through the issuance of shares of Applicable
Stock, the Company shall pay the entire Change in Control Purchase Price of the
Securities of such Holder or Holders in cash, except for the Securities of those
Holders who have elected to withdraw their Change of Control Notice in these
circumstances. Upon determination of the actual number of shares of Applicable
Stock to be issued upon repurchase of Securities, the Company shall be required
to disseminate a press release through a public medium as is customary for such
a press release.
SECTION 3.05 DEPOSIT OF CHANGE IN CONTROL PURCHASE PRICE.
On or before 10:00 a.m. New York City time on the Change in Control
Purchase Date, the Company shall deposit with the Trustee or with the Paying
Agent (other than the Company or an Affiliate of the Company) an amount of cash
(in immediately available funds if deposited on such Change in Control Purchase
Date) and/or Applicable Stock, if permitted hereunder, sufficient to pay the
aggregate Change in Control Purchase Price of all the Securities or portions
thereof that are to be purchased as of such Change in Control Purchase Date,
such cash and/or Applicable Stock in percentages of the aggregate Change in
Control Price as elected by the Company pursuant to Section 3.04.
If the Paying Agent holds, in accordance with the terms hereof, money
and/or Applicable Stock, as permitted hereunder, sufficient to pay the Change in
Control Purchase Price of any Security for which a Change in Control Purchase
Notice has been tendered and not withdrawn in
24
accordance with this Indenture then, on the Change in Control Purchase Date,
such Security will cease to be outstanding and the rights of the Holder in
respect thereof shall terminate (other than the right to receive the Change in
Control Purchase Price as aforesaid).
As soon as practicable on and after the Change in Control Purchase
Date, the Company shall deliver to each Holder entitled to receive shares of
Applicable Stock through the Paying Agent, a certificate (other than in the case
of Holders of Securities in book-entry form with the Depositary, which shares
shall be delivered in accordance with the Depositary Applicable Procedures) for
the number of full shares of Applicable Stock issuable in payment of the Change
in Control Purchase Price and cash in lieu of any fractional interests. The
person in whose name the certificate for the shares of Applicable Stock is
registered shall be treated as a holder of record of Applicable Stock on the
Change in Control Purchase Date. No payment or adjustment will be made for
dividends on the shares of Applicable Stock the record date for which occurred
on or prior to the Change in Control Purchase Date.
SECTION 3.06 SECURITIES PURCHASED IN PART.
Any Security that is to be purchased only in part shall be surrendered
at the office of the Paying Agent, and promptly after the Change in Control
Purchase Date the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, a new Security
or Securities, of such authorized denomination or denominations as may be
requested by such Holder, in aggregate principal amount equal to, and in
exchange for, the portion of the principal amount of the Security so surrendered
that is not purchased.
SECTION 3.07 COMPLIANCE WITH SECURITIES LAWS UPON PURCHASE OF
SECURITIES.
In connection with any offer to purchase or purchase of Securities
under Section 3.02, the Company shall (a) comply with Rule 13e-4 and Rule 14e-1
(or any successor to either such Rule), if applicable, under the Exchange Act,
(b) file the related Schedule TO (or any successor or similar schedule, form or
report) if required under the Exchange Act, and (c) otherwise comply with all
federal and state securities laws in connection with such offer to purchase or
purchase of Securities, all so as to permit the rights of the Holders and
obligations of the Company under Sections 3.02 through 3.06 to be exercised in
the time and in the manner specified therein.
SECTION 3.08 REPAYMENT TO THE COMPANY.
To the extent that the aggregate amount of cash and/or Applicable Stock
deposited by the Company pursuant to Section 3.05 exceeds the aggregate Change
in Control Purchase Price together with interest, if any, thereon of the
Securities or portions thereof that the Company is obligated to purchase, then
promptly after the Change in Control Purchase Date the Trustee or the Paying
Agent, as the case may be, shall return any such excess cash or Applicable Stock
to the Company.
To the extent that the provisions of any applicable securities laws or
regulations conflict with the provisions of this Article III, including the
extension of the payment or notice periods
25
contemplated by this Article III, the Company's compliance with such laws or
regulations shall not in and of itself constitute a breach of its obligations
under this Article III.
ARTICLE IV
CONVERSION
SECTION 4.01 CONVERSION PRIVILEGE.
(a) Subject to the further provisions of this Article IV and paragraph
6 of the Securities, a Holder of a Security may convert the principal amount of
such Security (or any portion thereof equal to $1,000 or any integral multiple
of $1,000 in excess thereof) into Common Stock at any time prior to the close of
business on the Final Maturity Date, at the Conversion Price then in effect.
(b) If a Security is submitted or presented for purchase pursuant to a
Change of Control Purchase Notice in accordance with Article III, such
conversion right shall terminate at the close of business on the Business Day
immediately preceding the Change in Control Purchase Date for such Security or
such earlier date as the Holder presents such Security for purchase (unless the
Holder withdraws its election pursuant to Section 4.01(e)).
(c) If the Company elects Share Settlement the number of shares of
Common Stock issuable upon conversion of a Security shall be determined by
dividing the aggregate principal amount of the Security or portion thereof
surrendered for conversion by the Conversion Price in effect on the Conversion
Date. The initial Conversion Price is set forth in paragraph 6 of the Securities
and is subject to adjustment as provided in this Article IV.
(d) Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
(e) A Security in respect of which a Holder has delivered a Change in
Control Purchase Notice pursuant to Section 3.02(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only (1) if such Change in Control Purchase Notice is withdrawn by a written
notice of withdrawal delivered to the Paying Agent prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date in accordance with Section 3.03 or (2) pursuant to the deemed
withdrawal of such notice under Section 3.02(c).
(f) A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities to Common Stock, and
only to the extent such Securities are deemed to have been converted into Common
Stock pursuant to this Article IV.
SECTION 4.02 CONVERSION PROCEDURE.
(a) To convert a Security, a Holder must (a) complete and manually sign
the conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by a
Registrar or the Conversion Agent, and (d) pay any transfer or similar
26
tax, if required. The date on which the Holder satisfies all of those
requirements is the "Conversion Date."
(b) As soon as practicable after the Conversion Date, and subject to
paragraph (c), the Company shall satisfy all of its obligations ("Conversion
Obligations") upon conversion of the Securities by delivering to the Holder, at
the Company's option, either shares of Common Stock, cash, or a combination of
cash and shares of Common Stock, in the following manner:
(1) If the Company elects to satisfy the entire Conversion Obligation
in shares of Common Stock ("Share Settlement"), then the Company will deliver to
the Holder shares of Common Stock equal to the quotient of (A) the aggregate
principal amount of Securities to be converted by the Holder divided by (B) the
Conversion Price in effect on the Conversion Date;
(2) If the Company elects to satisfy the entire Conversion Obligation
in cash ("Cash Settlement"), then the Company will deliver to the Holder cash in
an amount equal to the product of (A) a number equal to the aggregate principal
amount of Securities to be converted by such Holder divided by the Conversion
Price in effect on the Conversion Date, and (B) the arithmetic mean of the
Volume Weighted Average Prices of the Common Stock on each Trading Day during
the Cash Settlement Averaging Period; or
(3) If the Company elects to satisfy a portion of the Conversion
Obligation in cash (the "Partial Cash Amount") and a portion in shares of Common
Stock (together with the Partial Cash Amount, a "Combined Settlement"), then the
Company will deliver to the Holder such Partial Cash Amount plus a number of
shares of Common Stock equal to the quotient of (A) the amount of the Cash
Settlement as set forth in clause (2) above minus such Partial Cash Amount
divided by (B) the arithmetic mean of the Volume Weighted Average Prices of the
Common Stock on each Trading Day during the applicable Cash Settlement Averaging
Period.
(c) Upon receipt of the conversion notice from a Holder by the Company
or the Conversion Agent:
(1) If the Company elects to satisfy the Conversion Obligation by Share
Settlement, then settlement in Common Stock will be made on or prior to the
fifth (5th) Trading Day following the receipt of such conversion notice.
(2) If the Company elects to satisfy the Conversion Obligation by Cash
Settlement or Combined Settlement, then the Company will notify the Holder,
through the Trustee, of the dollar amount to be satisfied in cash at any time on
or before the date that is two Business Days following receipt of the notice of
conversion (the "Settlement Notice Period"). Share Settlement will apply
automatically if the Company does not notify the Holder that the Company has
chosen another settlement method.
(3) If the Company timely elects Cash Settlement or Combined
Settlement, then the Holder may retract the conversion notice at any time during
the two (2) Business Day period beginning on the day after the Settlement Notice
Period (the "Conversion Retraction Period") by notice to the Trustee. The Holder
cannot retract the conversion notice (and the conversion notice therefore will
be irrevocable) if the Company elects Share Settlement. If the Holder has not
retracted the conversion notice during the Conversion Retraction Period, then
Cash Settlement or
27
Combined Settlement will occur on the first Trading Day following the Cash
Settlement Averaging Period.
(d) If an Event of Default (other than an Event of Default in a cash
payment upon conversion of the Securities) has occurred and is continuing, the
Company may not pay cash upon conversion of any Security or portion of a
Security (other than cash for fractional shares).
(e) The person in whose name the Common Stock certificate is registered
shall be deemed to be a stockholder of record on the Conversion Date; provided,
however, that no surrender of a Security on any date when the stock transfer
books of the Company shall be closed shall be effective to constitute the person
or persons entitled to receive the shares of Common Stock upon such conversion
as the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the person or persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; provided, further, that such conversion
shall be at the Conversion Price in effect on the Conversion Date as if the
stock transfer books of the Company had not been closed. Upon conversion of a
Security, such person shall no longer be a Holder of such Security. No payment
or adjustment will be made for dividends or distributions on shares of Common
Stock issued upon conversion of a Security.
(f) Anything herein to the contrary notwithstanding, in the case of
Global Securities, conversion notices may be delivered and such Securities may
be surrendered for conversion in accordance with the Applicable Procedures as in
effect from time to time.
(g) Upon surrender of a Security that is converted in part, the Company
shall execute, and the Trustee shall authenticate and deliver to the Holder, a
new Security equal in principal amount to the unconverted portion of the
Security surrendered.
SECTION 4.03 FRACTIONAL SHARES.
The Company will not issue fractional shares of Common Stock upon
conversion of Securities. In lieu thereof, the Company will pay an amount in
cash for the fractional shares equal to the Volume Weighted Average Price of the
Common Stock determined during the Cash Settlement Averaging Period multiplied
by the fractional share and rounding the product to the nearest whole cent.
SECTION 4.04 TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than the
Holder's name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by law
or regulation.
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SECTION 4.05 COMPANY TO PROVIDE STOCK.
The Company shall, prior to issuance of any Securities hereunder, and
from time to time as may be necessary, reserve, out of its authorized but
unissued Common Stock, a sufficient number of shares of Common Stock to permit
the conversion of all outstanding Securities into shares of Common Stock.
All shares of Common Stock delivered upon conversion of the Securities
shall be newly issued shares, shall be duly authorized, validly issued, fully
paid and nonassessable and shall be free from preemptive rights and free of any
lien or adverse claim.
The Company will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or on the Nasdaq
National Market or other over-the-counter market or such other market on which
the Common Stock is then listed or quoted; provided, however, that if rules of
such automated quotation system or exchange permit the Company to defer the
listing of such Common Stock until the first conversion of the Securities into
Common Stock in accordance with the provisions of this Indenture, the Company
covenants to list such Common Stock issuable upon conversion of the Securities
in accordance with the requirements of such automated quotation system or
exchange at such time. Any Common Stock issued upon conversion of a Security
hereunder which at the time of conversion was a Restricted Security will also be
a Restricted Security.
SECTION 4.06 ADJUSTMENT OF CONVERSION PRICE.
The conversion price as stated in paragraph 6 of the Securities (the
"Conversion Price") shall be adjusted from time to time by the Company as
follows:
(a) In case the Company shall (i) pay a dividend on its Common Stock in
shares of Common Stock, (ii) make a distribution on its Common Stock in shares
of Common Stock, (iii) subdivide its outstanding Common Stock into a greater
number of shares, or (iv) combine its outstanding Common Stock into a smaller
number of shares, the Conversion Price in effect immediately prior thereto shall
be adjusted so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive that number of shares of Common Stock
which it would have owned had such Security been converted immediately prior to
the happening of such event. An adjustment made pursuant to this subsection (a)
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of subdivision or combination.
(b) In case the Company shall issue rights or warrants to all or
substantially all holders of its Common Stock entitling them (for a period
commencing no earlier than the record date described below and expiring not more
than 60 days after such record date) to subscribe for or purchase shares of
Common Stock (or securities convertible into Common Stock) at a price per share
(or having a conversion price per share) less than the Current Market Price per
share of Common Stock on the record date for the determination of stockholders
entitled to receive such rights or warrants, the Conversion Price in effect
immediately prior thereto shall be adjusted so
29
that the same shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to such record date by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares which the aggregate offering price of the
total number of shares of Common Stock so offered (or the aggregate conversion
price of the convertible securities so offered, which shall be determined by
multiplying the number of shares of Common Stock issuable upon conversion of
such convertible securities by the conversion price per share of Common Stock
pursuant to the terms of such convertible securities) would purchase at the
Current Market Price per share of Common Stock on such record date, and of which
the denominator shall be the number of shares of Common Stock outstanding on
such record date plus the number of additional shares of Common Stock offered
(or into which the convertible securities so offered are convertible). Such
adjustment shall be made successively whenever any such rights or warrants are
issued, and shall become effective immediately after such record date. If at the
end of the period during which such rights or warrants are exercisable not all
rights or warrants shall have been exercised, the adjusted Conversion Price
shall be immediately readjusted to what it would have been based upon the number
of additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued).
(c) In case the Company shall distribute to all or substantially all
holders of its Common Stock any shares of capital stock of the Company (other
than Common Stock), evidences of indebtedness or other non-cash assets
(including securities of any person other than the Company but excluding (1)
dividends or distributions paid exclusively in cash or (2) dividends or
distributions referred to in subsection (a) of this Section 4.06), or shall
distribute to all or substantially all holders of its Common Stock rights or
warrants to subscribe for or purchase any of its securities (excluding those
rights and warrants referred to in subsection (b) of this Section 4.06 and also
excluding the distribution of rights to all holders of Common Stock pursuant to
the adoption of a stockholders rights plan or the detachment of such rights
under the terms of such stockholder rights plan), then in each such case the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the current Conversion Price by a fraction of which
the numerator shall be the Current Market Price per share of the Common Stock on
the record date mentioned below less the fair market value on such record date
(as determined by the Board of Directors, whose determination shall be
conclusive evidence of such fair market value and which shall be evidenced by an
Officers' Certificate delivered to the Trustee) of the portion of the capital
stock, evidences of indebtedness or other non-cash assets so distributed or of
such rights or warrants applicable to one share of Common Stock (determined on
the basis of the number of shares of Common Stock outstanding on the record
date), and of which the denominator shall be the Current Market Price per share
of the Common Stock on such record date. Such adjustment shall be made
successively whenever any such distribution is made and shall become effective
immediately after the record date for the determination of shareholders entitled
to receive such distribution.
In the event the then fair market value (as so determined) of the
portion of the capital stock, evidences of indebtedness or other non-cash assets
so distributed or of such rights or warrants applicable to one share of Common
Stock is equal to or greater than the Current Market Price per share of the
Common Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of capital stock, evidences of
indebtedness or other non-cash assets
30
so distributed or of such rights or warrants such holder would have received had
such holder converted each Security on such record date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price which would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 4.06(c) 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 of the Common Stock.
In the event that the Company continues to have a preferred shares
rights plan or implements a new rights plan ("Rights Plan"), upon conversion of
the Securities into Common Stock, to the extent that any such Rights Plan is
still in effect upon such conversion, the holders of Securities will receive, in
addition to the Common Stock, the rights described therein (whether or not the
rights have separated from the Common Stock at the time of conversion), subject
to the limitations set forth in the Rights Plan. Any distribution of rights or
warrants pursuant to a Rights Plan complying with the requirements set forth in
the immediately preceding sentence of this paragraph shall not constitute a
distribution of rights or warrants pursuant to this Section 4.06(c).
Rights or warrants distributed by the Company to all holders of Common
Stock 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 shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 4.06 (and no adjustment to the Conversion Price under
this Section 4.06 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
Price shall be made under this Section 4.06(c). 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 Price under this Section 4.06 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price 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 Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants which shall have expired or been terminated
31
without exercise by any holders thereof, the Conversion Price shall be
readjusted as if such rights and warrants had not been issued.
(1) In case the Company shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of (A) any cash and the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive evidence thereof and which
shall be evidenced by an Officers' Certificate delivered to the Trustee) of any
other consideration payable in respect of any tender offer by the Company or a
Subsidiary of the Company for Common Stock consummated within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.06 has been made
and (B) all other cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.06 has been made, exceeds an amount equal to 10.0% of
the product of the Current Market Price per share of Common Stock on the
Business Day (the "Determination Date") immediately preceding the day on which
such Triggering Distribution is declared by the Company multiplied by the number
of shares of Common Stock outstanding on the Determination Date (excluding
shares held in the treasury of the Company), the Conversion Price shall be
reduced so that the same shall equal the price determined by multiplying such
Conversion Price in effect immediately prior to the Determination Date by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on the Determination Date less the sum of the aggregate amount
of cash and the aggregate fair market value (determined as aforesaid in this
Section 4.06(c)(1)) of any such other consideration so distributed, paid or
payable within such 12 months (including, without limitation, the Triggering
Distribution) applicable to one share of Common Stock (determined on the basis
of the number of shares of Common Stock outstanding on the Determination Date)
and the denominator shall be such Current Market Price per share of the Common
Stock on the Determination Date, such reduction to become effective immediately
prior to the opening of business on the day following the date on which the
Triggering Distribution is paid.
(2) In case any tender offer made by the Company or any of its
Subsidiaries for Common Stock shall expire and such tender offer (as amended
upon the expiration thereof) shall involve the payment of aggregate
consideration in an amount (determined as the sum of the aggregate amount of
cash consideration and the aggregate fair market value (as determined by the
Board of Directors, whose determination shall be conclusive evidence thereof and
which shall be evidenced by an Officers' Certificate delivered to the Trustee
thereof) of any other consideration) that, together with the aggregate amount of
(A) any cash and the fair market value (as determined by the Board of Directors,
whose determination shall be conclusive evidence thereof and which shall be
evidenced by an Officers' Certificate delivered to the Trustee) of any other
consideration payable in respect of any other tender offers by the Company or
any Subsidiary of the Company for Common Stock consummated within the 12 months
preceding the date of the Expiration Date (as defined below) and in respect of
which no Conversion Price adjustment pursuant to this Section 4.06 has been made
and (B) all cash distributions to all or substantially all holders of its Common
Stock made within the 12 months preceding the Expiration Date and in respect of
which no Conversion Price adjustment pursuant to this Section 4.06 has been
made, exceeds an amount equal to 10.0% of the product of the Current Market
32
Price per share of Common Stock as of the last date (the "Expiration Date")
tenders could have been made pursuant to such tender offer (as it may be
amended) (the last time at which such tenders could have been made on the
Expiration Date is hereinafter sometimes called the "Expiration Time")
multiplied by the number of shares of Common Stock outstanding (including
tendered shares but excluding any shares held in the treasury of the Company) at
the Expiration Time, then, immediately prior to the opening of business on the
day after the Expiration Date, the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on the Expiration Date by a
fraction of which the numerator shall be the product of the number of shares of
Common Stock outstanding (including tendered shares but excluding any shares
held in the treasury of the Company) at the Expiration Time multiplied by the
Current Market Price per share of the Common Stock on the Trading Day next
succeeding the Expiration Date and the denominator shall be the sum of (x) the
aggregate consideration (determined as aforesaid) payable to stockholders based
on the acceptance (up to any maximum specified in the terms of the tender offer)
of all shares validly tendered and not withdrawn as of the Expiration Time (the
shares deemed so accepted, up to any such maximum, being referred to as the
"Purchased Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares and excluding any shares held in the
treasury of the Company) at the Expiration Time and the Current Market Price per
share of Common Stock on the Trading Day next succeeding the Expiration Date,
such reduction to become effective immediately prior to the opening of business
on the day following the Expiration Date. In the event that the Company is
obligated to purchase shares pursuant to any such tender offer, but the Company
is permanently prevented by applicable law from effecting any or all such
purchases or any or all such purchases are rescinded, the Conversion Price shall
again be adjusted to be the Conversion Price which would have been in effect
based upon the number of shares actually purchased. If the application of this
Section 4.06(c)(2) to any tender offer would result in an increase in the
Conversion Price, no adjustment shall be made for such tender offer under this
Section 4.06(c)(2).
(3) For purposes of this Section 4.06(c), the term "tender offer" shall
mean and include both tender offers and exchange offers, all references to
"purchases" of shares in tender offers (and all similar references) shall mean
and include both the purchase of shares in tender offers and the acquisition of
shares pursuant to exchange offers, and all references to "tendered shares" (and
all similar references) shall mean and include shares tendered in both tender
offers and exchange offers.
(d) For the purpose of any computation under subsections (b) and (c) of
this Section 4.06, the current market price (the "Current Market Price") per
share of Common Stock on any date shall be deemed to be the average of the Sales
Prices for the 30 consecutive Trading Days commencing 45 Trading Days before (i)
the Determination Date or the Expiration Date, as the case may be, with respect
to distributions or tender offers under subsection (c) of this Section 4.06 or
(ii) the record date with respect to distributions, issuances or other events
requiring such computation under subsection (b) or (c) of this Section 4.06.
(e) In any case in which this Section 4.06 shall require that an
adjustment be made following a record date or a Determination Date or Expiration
Date, as the case may be, established for purposes of this Section 4.06, the
Company may elect to defer (but only until five
33
Business Days following the filing by the Company with the Trustee of the
certificate described in Section 4.09) issuing to the Holder of any Security
converted after such record date or Determination Date or Expiration Date the
shares of Common Stock and other capital stock of the Company issuable upon such
conversion over and above the shares of Common Stock and other capital stock of
the Company issuable upon such conversion only on the basis of the Conversion
Price prior to adjustment; and, in lieu of the shares the issuance of which is
so deferred, the Company shall issue or cause its transfer agents to issue due
bills or other appropriate evidence prepared by the Company of the right to
receive such shares. If any distribution in respect of which an adjustment to
the Conversion Price is required to be made as of the record date or
Determination Date or Expiration Date therefor is not thereafter made or paid by
the Company for any reason, the Conversion Price shall be readjusted to the
Conversion Price which would then be in effect if such record date had not been
fixed or such effective date or Determination Date or Expiration Date had not
occurred.
SECTION 4.07 NO ADJUSTMENT.
(a) No adjustment in the Conversion Price shall be required:
(1) unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price as last adjusted; provided, however, that any
adjustments which by reason of this Section 4.07 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
(2) for issuances of Common Stock pursuant to a Company plan for
reinvestment of dividends or interest or for a change in the par value or a
change to no par value of the Common Stock; or
(3) if the Holders participate in the transactions that would otherwise
lead to an adjustment in the Conversion Price pursuant to Section 4.06.
To the extent that the Securities become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash. All calculations under this Article IV shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the case
may be.
SECTION 4.08 ADJUSTMENT FOR TAX PURPOSES.
The Company shall be entitled to make such reductions in the Conversion
Price, in addition to those required by Section 4.06, as it in its discretion
shall determine to be advisable in order that any stock dividends, subdivisions
of shares, distributions of rights to purchase stock or securities or
distributions of securities convertible into or exchangeable for stock hereafter
made by the Company to its stockholders shall not be taxable.
SECTION 4.09 NOTICE OF ADJUSTMENT.
Whenever the Conversion Price or conversion privilege is adjusted, the
Company shall promptly mail to Securityholders a notice of the adjustment and
file with the Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it.
34
Unless and until the Trustee shall receive an Officers' Certificate setting
forth an adjustment of the Conversion Price, the Trustee may assume without
inquiry that the Conversion Price has not been adjusted and that the last
Conversion Price of which it has knowledge remains in effect.
SECTION 4.10 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (a) any reclassification
or change of shares of Common Stock issuable upon conversion of the Securities
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination, or any
other change for which an adjustment is provided in Section 4.06); (b) any
consolidation or merger or combination to which the Company is a party other
than a merger in which the Company is the continuing corporation and which does
not result in any reclassification of, or change (other than in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination) in, outstanding shares of Common Stock;
or (c) any sale or conveyance as an entirety or substantially as an entirety of
the property and assets of the Company, directly or indirectly, to any person as
a result of which holders of Common Stock shall be entitled to receive stock,
securities or other property or assets (including cash) with respect to or in
exchange for Common Stock, then the Company, or such successor, purchasing or
transferee corporation, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security then
outstanding shall have the right to convert such Security into the kind and
amount of shares of stock and other securities and property (including cash)
receivable upon such reclassification, change, combination, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, combination, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article IV. If, in
the case of any such consolidation, merger, combination, sale or conveyance, the
stock or other securities and property (including cash) receivable thereupon by
a holder of Common Stock include shares of stock or other securities and
property of a person other than the successor, purchasing or transferee
corporation, as the case may be, in such consolidation, merger, combination,
sale or conveyance, then such supplemental indenture shall also be executed by
such other person and shall contain such additional provisions to protect the
interests of the Holders of the Securities as the Board of Directors and the
Trustee shall reasonably consider necessary by reason of the foregoing. The
provisions of this Section 4.11 shall similarly apply to successive
reclassifications, changes, combinations, consolidations, mergers, sales or
conveyances.
In the event the Company shall execute a supplemental indenture
pursuant to this Section 4.11, the Company shall promptly file with the Trustee
(x) an Officers' Certificate briefly stating the reasons therefor, the kind or
amount of shares of stock or other securities or property (including cash)
receivable by Holders of the Securities upon the conversion of their Securities
after any such reclassification, change, combination, consolidation, merger,
sale or conveyance, any adjustment to be made with respect thereto and that all
conditions precedent have been complied with and (y) an Opinion of Counsel that
all conditions precedent have been complied with, and shall promptly mail notice
thereof to all Holders.
35
SECTION 4.11 TRUSTEE'S DISCLAIMER.
The Trustee shall have no duty to determine when an adjustment under
this Article IV should be made, how it should be made or what such adjustment
should be, but may accept as conclusive evidence of that fact or the correctness
of any such adjustment, and shall be protected in conclusively relying upon, an
Officers' Certificate including the Officers' Certificate with respect thereto
which the Company is obligated to file with the Trustee pursuant to Section
4.09. The Trustee makes no representation as to the validity or value of any
securities or assets issued upon conversion of Securities, and the Trustee shall
not be responsible for the Company's failure to comply with any provisions of
this Article IV.
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.11, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in conclusively relying upon,
the Officers' Certificate with respect thereto which the Company is obligated to
file with the Trustee pursuant to Section 4.11.
SECTION 4.12 VOLUNTARY REDUCTION.
The Company from time to time may reduce the Conversion Price by any
amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period if our Board of Directors determines
that such reduction would be in the best interest of the Company or to avoid or
diminish income tax to holders of shares of our Common Stock in connection with
a dividend or distribution of stock or similar event, and the Company provides
15 days prior notice of any reduction in the Conversion Price; provided,
however, that in no event may the Company reduce the Conversion Price to be less
than the par value of a share of Common Stock.
ARTICLE V
SUBORDINATION
SECTION 5.01 AGREEMENT OF SUBORDINATION.
The Company covenants and agrees, and each Holder of Securities issued
hereunder by its acceptance thereof likewise covenants and agrees, that all
Securities shall be issued subject to the provisions of this Article V; and each
Person holding any Security, whether upon original issue or upon transfer,
assignment or exchange thereof, accepts and agrees to be bound by such
provisions.
The payment of the principal of and interest (including Additional
Interest,) if any, on all Securities (including, but not limited to, the Change
in Control Purchase Price with respect to the Securities subject to purchase in
accordance with Article III as provided in 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 in cash or payment
satisfactory to the holders of Senior Indebtedness of all Senior Indebtedness,
whether outstanding at the date of this Indenture or thereafter incurred.
36
No provision of this Article V shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 5.02 PAYMENTS TO HOLDERS.
No payment shall be made with respect to the principal of, or premium,
if any, or interest (including Additional Interest) if any, on the Securities
(including, but not limited to, the Change in Control Purchase Price with
respect to the Securities subject to purchase in accordance with Article III as
provided in this Indenture), except payments and distributions made by the
Trustee as permitted by the first or second paragraph of Section 5.05, if:
(i) a default in the payment of principal, premium, interest, rent or
other obligations due on any Designated Senior Indebtedness occurs and is
continuing (or, in the case of Designated 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
Designated Senior Indebtedness), unless and until such default shall have been
cured or waived or shall have ceased to exist; or
(ii) a default, other than a payment default, on a Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a
Representative or holder of Designated Senior Indebtedness or the Company.
Subject to the provisions of Section 5.05, 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 unless and until
at least 365 days shall have elapsed since the initial effectiveness of the
immediately prior Payment Blockage Notice and all scheduled payments on the
Securities that have become due have been paid in full in cash. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee (unless such default was waived, cured or
otherwise ceased to exist and thereafter subsequently reoccurred) shall be, or
be made, the basis for a subsequent Payment Blockage Notice.
The Company shall resume payments on and distributions in respect of
the Securities upon the earlier of:
(a) in the case of a default referred to in clause (i) above, the date
upon which the default is cured or waived or ceases to exist, or
(b) in the case of a default referred to in clause (ii) above, the
earlier of the date on which such default is cured or waived or ceases to exist
or 179 days pass after the date on which the applicable Payment Blockage Notice
is received, if the maturity of such Designated Senior Indebtedness has not been
accelerated, unless this Article V otherwise prohibits the payment or
distribution at the time of such payment or distribution.
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)
37
or in bankruptcy, insolvency, receivership or similar proceedings, all amounts
due or to become due upon all Senior Indebtedness shall first be paid in full in
cash, or other payments satisfactory to the holders of Senior Indebtedness
before any payment is made on account of the principal of, premium, if any, or
interest (including Additional Interest, if any) on the Securities; and upon any
such dissolution or winding-up or liquidation or reorganization of the Company
or bankruptcy, insolvency, receivership or other 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 Securities
or the Trustee would be entitled, except for the provision of this Article V,
shall 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 Securities 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, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full in cash, or other payment
satisfactory to the holders of 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 Securities or
to the Trustee.
For purposes of this Article V, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article V with respect
to the Securities to the payment of all Senior Indebtedness which may at the
time be outstanding; provided that (i) the Senior Indebtedness is assumed by the
new corporation, if any, resulting from any reorganization or readjustment, and
(ii) the rights of the holders of Senior Indebtedness (other than leases which
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, transfer or lease of its property as an
entirety, or substantially as an entirety, to another corporation upon the terms
and conditions provided for in Article VII shall not be deemed a dissolution,
winding-up, liquidation or reorganization for the purposes of this Section 5.02
if such other corporation shall, as a part of such consolidation, merger,
conveyance, transfer or lease, comply with the conditions stated in Article VII.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
Holder of Securities in respect of the principal of, premium, if any, or
interest (including Additional Interest), if any, on the Securities by the
Company (including, but not limited to, the Change in Control Purchase Price
with respect to the Securities subject to purchase in accordance with Article
III as provided in this Indenture), 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 Securities is accelerated because of an Event
38
of Default, the Company shall promptly notify holders of Senior Indebtedness of
such 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, shall be received by the
Trustee or the Holders of the Securities before all Senior Indebtedness is paid
in full, in cash or other payment satisfactory to the holders of 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, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of all
Senior Indebtedness remaining unpaid to the extent necessary to pay all Senior
Indebtedness in full, in cash or other payment satisfactory to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 5.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 9.07. This Section 5.02 shall be
subject to the further provisions of Section 5.05.
SECTION 5.03 SUBROGATION OF SECURITIES.
Subject to the payment in full, in cash or other payment satisfactory
to the holders of Senior Indebtedness, of all Senior Indebtedness, the rights of
the Holders of the Securities 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 V (equally and ratably with the holders of all
indebtedness of the Company which by its express terms is subordinated to other
indebtedness of the Company to substantially the same extent as the Securities
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, premium, if any, and interest (including Additional
Interest, if any) on the Securities shall be paid in full in cash or other
payment satisfactory to the holders of Senior Indebtedness; and, for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article V, and no payment over pursuant to the provisions of this Article
V, to or for the benefit of the holders of Senior Indebtedness by Holders of the
Securities or the Trustee, shall, as between the Company, its creditors other
than holders of Senior Indebtedness, and the Holders of the Securities, be
deemed to be a payment by the Company to or on account of the Senior
Indebtedness; and no payments or distributions of cash, property or securities
to or for the benefit of the Holders of the Securities pursuant to the
subrogation provisions of this Article V, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment by the
Company to or for the account of the Securities. It is understood that the
provisions of this Article V are and are intended solely for the purposes of
defining the relative rights of the Holders of the Securities, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
39
Nothing contained in this Article V or elsewhere in this Indenture or
in the Securities is intended to or shall impair, as among the Company, its
creditors other than the holders of Senior Indebtedness, and the Holders of the
Securities, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Securities the principal of (and premium, if any)
and interest on the Securities as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Securities and creditors of the Company other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article V of the holders of Senior
Indebtedness in respect of cash, property or securities of the Company received
upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article V, the Trustee, subject to the provisions of Section 9.01, and
the Holders of the Securities shall be entitled to rely upon any order or decree
made by any court of competent jurisdiction in which such bankruptcy,
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidating trustee,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Securities, for the purpose of ascertaining the
persons entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article V.
SECTION 5.04 AUTHORIZATION TO EFFECT SUBORDINATION.
Each Holder of a Security 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 V and 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 Section
5.3 hereof at least 30 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 Securities.
SECTION 5.05 NOTICE TO TRUSTEE.
The Company shall give prompt written notice in the form of an
Officers' Certificate to a Trust Officer of the Trustee and to any Paying Agent
of any fact known to the Company which would prohibit the making of any payment
of monies to or by the Trustee or any Paying Agent in respect of the Securities
pursuant to the provisions of this Article V. Notwithstanding the provisions of
this Article V or any other provision of this Indenture, the Trustee shall not
be charged with knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article V, unless and until a
Trust 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
or from any trustee thereof; 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
40
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 premium, if any, or
interest on any Security) the Trustee shall not have received, with respect to
such monies, the notice provided for in this Section 5.05, then, anything herein
contained to the contrary notwithstanding, the Trustee shall have full power and
authority to receive such monies and to apply the same to the purpose for which
they were received, and shall not be affected by any notice to the contrary
which may be received by it on or after such prior date.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to conclusively 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. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article V, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article V, and if such
evidence is not furnished the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to conclusively 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
Holders of Securities, 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 V.
SECTION 5.06 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article V 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 9.11 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 V, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 9.01, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or
41
deliver to Holders of Securities, the Company or any other person money or
assets to which any holder of Senior Indebtedness shall be entitled by virtue of
this Article V or otherwise.
SECTION 5.07 NO IMPAIRMENT OF SUBORDINATION.
No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
noncompliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof which any such holder may have or
otherwise be charged with.
SECTION 5.08 CERTAIN CONVERSIONS DEEMED PAYMENT.
For the purposes of this Article V only, (1) the issuance and delivery
of junior securities upon conversion of Securities in accordance with Article IV
shall not be deemed to constitute a payment or distribution on account of the
principal of (or premium, if any) or interest on Securities or on account of the
purchase or other acquisition of Securities, and (2) the payment, issuance or
delivery of cash, property or securities (other than junior securities) upon
conversion of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section 5.08, the term
"junior securities" means (a) shares of any stock of any class of the Company,
or (b) securities of the Company which are subordinated in right of payment to
all Senior Indebtedness which may be outstanding at the time of issuance or
delivery of such securities to substantially the same extent as, or to a greater
extent than, the Securities are so subordinated as provided in this Article.
Nothing contained in this Article V or elsewhere in this Indenture or in the
Securities is intended to or shall impair, as among the Company, its creditors
other than holders of Senior Indebtedness and the Holders, the right, which is
absolute and unconditional, of the Holder of any Security to convert such
Security in accordance with Article IV.
SECTION 5.09 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 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 in
addition to or in place of the Trustee; provided, however, that the first
paragraph of Section 5.05 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
SECTION 5.10 SENIOR INDEBTEDNESS ENTITLED TO RELY.
The holders of Senior Indebtedness (including, without limitation,
Designated Senior Indebtedness) shall have the right to rely upon this Article
V, 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.
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ARTICLE VI
COVENANTS
SECTION 6.01 PAYMENT OF SECURITIES.
The Company shall promptly make all payments in respect of the
Securities on the dates and in the manner provided in the Securities and this
Indenture. An installment of principal or interest or Additional Interest, if
any, shall be considered paid on the date it is due if the Paying Agent (other
than the Company) holds by 10:00 a.m., New York City time, on that date money,
deposited by the Company or an Affiliate thereof, sufficient to pay the
installment. The Company shall, (in immediately available funds) to the fullest
extent permitted by law, pay interest on overdue principal (including premium,
if any) and overdue installments of interest, if any, at the rate of 2% per
annum.
Payment of the principal of (and premium, if any) and any interest on
the Securities shall be made at the office or agency of the Company maintained
for that purpose in the Borough of Manhattan, The City of New York (which shall
initially be 101 Barclay Street, 8W, New York, NY 10286) or at the Corporate
Trust Office of the Trustee in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address appears in the Register; provided further that a Holder
with an aggregate principal amount in excess of $2,000,000 will be paid by wire
transfer in immediately available funds at the election of such Holder if such
Holder has provided, in writing, wire transfer instructions to the Company and
the Paying Agent at least 10 Business Days prior to the payment date.
SECTION 6.02 SEC REPORTS.
The Company shall file all reports and other information and documents
which it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, the Company
shall file copies of all such reports, information and other documents with the
Trustee.
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 Officers' Certificates).
SECTION 6.03 COMPLIANCE CERTIFICATES; STATEMENT AS TO DEFAULT.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company (beginning with the fiscal year ending
December 31, 2003), an Officers' Certificate as to the signer's knowledge of the
Company's compliance with all conditions and covenants on its part contained in
this Indenture and stating whether or not the signer knows of
43
any default or Event of Default. If such signer knows of such a default or Event
of Default, the Officers' Certificate shall describe the default or Event of
Default and the efforts to remedy the same. For the purposes of this Section
6.03, compliance shall be determined without regard to any grace period or
requirement of notice provided pursuant to the terms of this Indenture.
The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or default and the action which the
Company proposes to take with respect thereto.
SECTION 6.04 FURTHER INSTRUMENTS AND ACTS.
Upon request of the Trustee, the Company will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purposes of this Indenture.
SECTION 6.05 MAINTENANCE OF CORPORATE EXISTENCE.
Subject to Article VII, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 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 the request of any Holder or beneficial holder of the Securities make
available to such Holder or beneficial holder of Securities or any Common Stock
issued upon conversion thereof which continue to be Restricted Securities in
connection with any sale thereof and any prospective purchaser of Securities or
such Common Stock designated by such Holder or beneficial holder, the
information required pursuant to Rule 144A(d)(4) under the Securities Act or
such Common Stock and it will take such further action as any Holder or
beneficial holder of such Securities or such Common Stock may reasonably
request, all to the extent required from time to time to enable such Holder or
beneficial holder to sell its Securities or Common Stock without registration
under the Securities Act within the limitation of the exemption provided by Rule
144A, as such Rule may be amended from time to time. Upon the request of any
Holder or any beneficial holder of the Securities or such Common Stock, 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, premium, if any, or interest (including Additional
Interest, if any) on the Securities 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
44
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 PAYMENT OF ADDITIONAL INTEREST.
If Additional Interest is payable by the Company pursuant to the
Registration Rights Agreement, the Company shall deliver to the Trustee a
certificate to that effect stating (i) the amount of such Additional Interest
that is payable and (ii) the date on which such Additional Interest is payable.
Unless and until a Trust Officer of the Trustee receives such a certificate, the
Trustee may assume without inquiry that no such Additional Interest is payable.
If the Company has paid Additional Interest directly to the Persons entitled to
it, the Company shall deliver to the Trustee a certificate setting forth the
particulars of such payment.
If Additional Interest is payable by the Company, the payment of such
Additional Interest will be paid to the Holders notwithstanding the conversion
of the Securities pursuant to Article IV. Additional Interest will be payable to
Holders who have converted as if such conversion had not occurred.
ARTICLE VII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.01 COMPANY MAY CONSOLIDATE, ETC, ONLY ON CERTAIN TERMS.
The Company shall not consolidate with or merge into any other Person
(in a transaction in which the Company is not the surviving corporation) or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(1) in case the Company shall consolidate with or merge into another
Person (in a transaction in which the Company is not the surviving corporation)
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, the Person formed by such consolidation or into which
the Company is merged or the Person which acquires by conveyance or transfer, or
which leases, the properties and assets of the Company substantially as an
entirety shall be a corporation organized and validly existing under the laws of
the United States of America, any State thereof or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all the
Securities and the performance or observance of every covenant of this Indenture
on the part of the Company to be performed or observed and the conversion rights
shall be provided for in accordance with Article IV, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee, by
the Person (if other than the Company) formed by such consolidation or into
which the Company shall have been merged or by the Person which shall have
acquired the Company's assets;
45
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 7.02 SUCCESSOR SUBSTITUTED.
Upon any consolidation of the Company with, or merger of the Company
into, any other Person or any conveyance, transfer or lease of the properties
and assets of the Company substantially as an entirety in accordance with
Section 7.01, the successor Person formed by such consolidation or into which
the Company is merged or to which such conveyance, transfer or lease is made
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE VIII
DEFAULT AND REMEDIES
SECTION 8.01 EVENTS OF DEFAULT.
An "Event of Default" shall occur if:
(1) the Company defaults in the payment of any interest (or Additional
Interest), if any, payable to all holders of Registrable Securities (as defined
in the Registration Rights Agreement) when the same becomes due and payable and
the default continues for a period of 30 days, whether or not such payment shall
be prohibited by the provisions of Article V hereof;
(2) the Company defaults in the payment of any principal of any
Security when the same becomes due and payable (whether at maturity, on a Change
of Control Purchase Date or otherwise), whether or not such payment shall be
prohibited by the provisions of Article V hereof;
(3) the Company fails to comply with any of its other agreements
contained in the Securities or this Indenture and the default continues for the
period and after the notice specified below;
(4) the Company defaults in the payment of the purchase price of any
Security when the same becomes due and payable, whether or not such payment
shall be prohibited by the provisions of Article V hereof; or
46
(5) the Company fails to provide notice of a Change in Control when
required by Section 3.02(b); or
(6) any indebtedness under any bond, debenture, note or other evidence
of indebtedness for money borrowed by the Company or any Significant Subsidiary
(all or substantially all of the outstanding voting securities of which are
owned, directly or indirectly, by the Company) or under any mortgage, indenture
or instrument under which there may be issued or by which there may be secured
or evidenced any indebtedness for money borrowed by the Company or any
Significant Subsidiary (all or substantially all of the outstanding voting
securities of which are owned, directly or indirectly, by the Company) (an
"Instrument") with a principal amount then outstanding in excess of U.S.
$15,000,000, whether such indebtedness now exists or shall hereafter be created,
is not paid at final maturity of the Instrument (either at its stated maturity
or upon acceleration thereof), and such indebtedness is not discharged, or such
acceleration is not rescinded or annulled, within a period of 30 days after
there shall have been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
aggregate principal amount of the Outstanding Securities a written notice
specifying such default and requiring the Company to cause such indebtedness to
be discharged or cause such default to be cured or waived or such acceleration
to be rescinded or annulled and stating that such notice is a "Notice of
Default" hereunder; or
(7) the Company or any Significant Subsidiary, pursuant to or within
the meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding;
(B) consents to the entry of an order for relief against
it in an involuntary case or proceeding;
(C) consents to the appointment of a Custodian of it or
for all or substantially all of its property; or
(D) makes a general assignment for the benefit of its
creditors; or
(8) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company or any Significant
Subsidiary in an involuntary case or proceeding;
(B) appoints a Custodian of the Company or any
Significant Subsidiary or for all or substantially
all of the property of the Company or any Significant
Subsidiary; or
(C) orders the liquidation of the Company or any
Significant Subsidiary;
and in each case the order or decree remains unstayed and in effect for
60 consecutive days.
47
The term "Bankruptcy Law" means Title 11 of the United States Code (or
any successor thereto) or any similar federal or state law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
A default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
principal amount of the Securities then outstanding notify the Company and the
Trustee in writing of the default, and the Company does not cure the default
within 60 days after receipt of such notice. The notice given pursuant to this
Section 8.01 must specify the default, demand that it be remedied and state that
the notice is a "Notice of Default." When any default under this Section 8.01 is
cured, it ceases.
The Trustee shall not be charged with knowledge of any Event of Default
unless written notice thereof shall have been given to a Trust Officer at the
Corporate Trust Office of the Trustee by the Company, the Paying Agent, any
Holder or any agent of any Holder.
SECTION 8.02 ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (7) or (8) of Section 8.01) occurs and is continuing, the Trustee may, by
notice to the Company, or the Holders of at least 25% in aggregate principal
amount of the Securities then outstanding may, by notice to the Company and the
Trustee, declare all unpaid principal to the date of acceleration on the
Securities then outstanding (if not then due and payable) to be due and payable
upon any such declaration, and the same shall become and be immediately due and
payable. If an Event of Default specified in clause (7) or (8) of Section 8.01
occurs, all unpaid principal of the Securities then outstanding shall ipso facto
become and be immediately due and payable without any declaration or other act
on the part of the Trustee or any Holder. The Holders of a majority in aggregate
principal amount of the Securities then outstanding by notice to the Trustee may
rescind an acceleration and its consequences if (a) all existing Events of
Default, other than the nonpayment of the principal of the Securities which has
become due solely by such declaration of acceleration, have been cured or
waived; (b) to the extent the payment of such interest is lawful, interest
(calculated at the rate per annum borne by the Securities) on overdue
installments of interest and overdue principal, which has become due otherwise
than by such declaration of acceleration, has been paid; (c) the rescission
would not conflict with any judgment or decree of a court of competent
jurisdiction; and (d) all payments due to the Trustee and any predecessor
Trustee under Section 9.07 have been made. No such rescission shall affect any
subsequent default or impair any right consequent thereto.
SECTION 8.03 OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee may, but
shall not be obligated to, pursue any available remedy by proceeding at law or
in equity to collect the payment of the principal of or interest on the
Securities or to enforce the performance of any provision of the Securities or
this Indenture.
The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any
48
Securityholder in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative to the extent permitted by law.
SECTION 8.04 WAIVER OF DEFAULTS AND EVENTS OF DEFAULT.
Subject to Sections 8.07 and 11.02, the Holders of a majority in
aggregate principal amount of the Securities then outstanding by notice to the
Trustee may waive an existing default or Event of Default and its consequence,
except a default or Event of Default in the payment of the principal of,
premium, if any, or interest (including Additional Interest), if any, on any
Security, a failure by the Company to convert any Securities into Common Stock
or any default or Event of Default in respect of any provision of this Indenture
or the Securities which, under Section 11.02, cannot be modified or amended
without the consent of the Holder of each Security affected. When a default or
Event of Default is waived, it is cured and ceases.
SECTION 8.05 CONTROL BY MAJORITY.
The Holders of a majority in aggregate principal amount of the
Securities then outstanding may 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 it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture, that the Trustee determines
may be unduly prejudicial to the rights of another Holder or the Trustee, or
that may involve the Trustee in personal liability unless the Trustee is offered
indemnity satisfactory to it; provided, however, that the Trustee may take any
other action deemed proper by the Trustee which is not inconsistent with such
direction.
SECTION 8.06 LIMITATIONS ON SUITS.
A Holder may not pursue any remedy with respect to this Indenture or
the Securities (except actions for payment of overdue principal or interest or
for the conversion of the Securities pursuant to Article IV) unless:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default;
(2) the Holders of at least 25% in aggregate principal amount of the
then outstanding Securities make a written request to the Trustee to pursue the
remedy;
(3) such Holder or Holders offer to the Trustee indemnity satisfactory
to the Trustee against any loss, liability or expense;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Securities then outstanding.
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A Securityholder may not use this Indenture to prejudice the rights of
another Securityholder or to obtain a preference or priority over such other
Securityholder.
SECTION 8.07 RIGHTS OF HOLDERS TO RECEIVE PAYMENT AND TO CONVERT.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of the principal of and interest on the
Security, on or after the respective due dates expressed in the Security and
this Indenture, to convert such Security in accordance with Article IV and to
bring suit for the enforcement of any such payment on or after such respective
dates or the right to convert, is absolute and unconditional and shall not be
impaired or affected without the consent of the Holder.
SECTION 8.08 COLLECTION SUIT BY TRUSTEE.
If an Event of Default in the payment of principal or interest
specified in clause (1) or (2) of Section 8.01 occurs and is continuing, the
Trustee may recover judgment in its own name and as trustee of an express trust
against the Company or another obligor on the Securities for the whole amount of
principal and accrued interest remaining unpaid, together with, to the extent
that payment of such interest is lawful, interest on overdue principal and on
overdue installments of interest, in each case at the rate per annum borne by
the Securities and such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 8.09 TRUSTEE MAY FILE PROOFS OF CLAIM.
The Trustee may 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
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel) and the Holders allowed in
any judicial proceedings relative to the Company (or any other obligor on the
Securities), its creditors or its property and shall be entitled and empowered
to collect and receive any money or other property payable or deliverable on any
such claims and to distribute the same, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee and, in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 9.07, and to the extent that such payment of the reasonable
compensation, expenses, disbursements and advances in any such proceedings shall
be denied for any reason, payment of the same shall be secured by a lien on, and
shall be paid out of, any and all distributions, dividends, money, securities
and other property which the Holders may be entitled to receive in such
proceedings, whether in liquidation or under any plan of reorganization or
arrangement or otherwise. Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to, or, on behalf of any Holder, to
authorize, accept or adopt any plan of reorganization, arrangement, adjustment
or composition affecting the Securities or the rights of any Holder thereof, or
to authorize the Trustee to vote in respect of the claim of any Holder in any
such proceeding.
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SECTION 8.10 PRIORITIES.
If the Trustee collects any money pursuant to this Article 8, it shall
pay out the money in the following order:
First, to the Trustee for amounts due under Section 9.07;
Second, to the holders of Senior Indebtedness to the extent required by
Article V;
Third, to Holders for amounts due and unpaid on the Securities for
principal and interest (including Additional Interest) if any, ratably, without
preference or priority of any kind, according to the amounts due and payable on
the Securities for principal and interest (including Additional Interest) if
any, respectively; and
Fourth, the balance, if any, to the Company.
The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 8.10.
SECTION 8.11 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 8.11 does not apply to a suit made by the Trustee, a suit
by a Holder pursuant to Section 8.07, or a suit by Holders of more than 10% in
aggregate principal amount of the Securities then outstanding.
ARTICLE IX
TRUSTEE
SECTION 9.01 DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture and
use the same degree of care and skill in its exercise as a prudent person would
exercise or use under the circumstances in the conduct of his or her own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties as are specifically set
forth in this Indenture and no others; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or
51
opinions furnished to the Trustee and conforming to the requirements of this
Indenture. The Trustee, however, shall examine any certificates and opinions
which by any provision hereof are specifically required to be delivered to the
Trustee to determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this paragraph does not limit the effect of subsection (b) of this
Section 9.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received by it
pursuant to Section 8.05.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers unless the Trustee shall have received adequate indemnity in
its opinion against potential costs and liabilities incurred by it relating
thereto.
(e) Every provision of this Indenture that in any way relates to the
Trustee is subject to subsections (a), (b), (c) and (d) of this Section 9.01.
(f) The Trustee shall not be liable for interest on any money received
by it except as the Trustee may agree in writing with the Company. Money held in
trust by the Trustee need not be segregated from other funds except to the
extent required by law.
SECTION 9.02 RIGHTS OF TRUSTEE.
Subject to Section 9.01:
(a) The Trustee may rely conclusively on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, which shall conform to Section
12.04(b). The Trustee shall not be liable for any action it takes or omits to
take in good faith in reliance on such Officers' Certificate or Opinion.
(c) The Trustee may act through its agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
52
(e) The Trustee may consult with counsel of its selection, and the
advice or opinion of such counsel as to matters of law shall be full and
complete authorization and protection in respect of any such action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.
(g) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney
at the sole cost of the Company and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
(h) The Trustee shall not be deemed to have notice of any Default or
Event of Default unless a Trust Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office, and such notice
references the Securities and this Indenture.
(i) 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 to each agent, custodian and other Person employed to act
hereunder.
(j) 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.
SECTION 9.03 INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Company or an
Affiliate of the Company with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights. However, the Trustee is
subject to Sections 9.10 and 9.11.
SECTION 9.04 TRUSTEE'S DISCLAIMER.
The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the
53
Securities, and it shall not be responsible for any statement in the Securities
other than its certificate of authentication.
SECTION 9.05 NOTICE OF DEFAULT OR EVENTS OF DEFAULT.
If a default or an Event of Default occurs and is continuing and if it
is known to the Trustee, the Trustee shall mail to each Securityholder notice of
the default or Event of Default within 90 days after it occurs. However, the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers in good faith determines that withholding notice is in the interests of
Securityholders, except in the case of a default or an Event of Default in
payment of the principal of or interest on any Security.
SECTION 9.06 REPORTS BY TRUSTEE TO HOLDERS.
If such report is required by TIA Section 313, within 60 days after
each March 15, beginning with the March 15 following the date of this Indenture,
the Trustee shall mail to each Securityholder a brief report dated as of such
March 15 that complies with TIA Section 313(a). The Trustee also shall comply
with TIA Section 313(b)(2) and (c).
A copy of each report at the time of its mailing to Securityholders
shall be mailed to the Company and filed with the SEC and each stock exchange,
if any, on which the Securities are listed. The Company shall notify the Trustee
whenever the Securities become listed on any stock exchange or listed or
admitted to trading on any quotation system and any changes in the stock
exchanges or quotation systems on which the Securities are listed or admitted to
trading and of any delisting thereof.
SECTION 9.07 COMPENSATION AND INDEMNITY.
The Company shall pay to the Trustee from time to time such
compensation (as agreed to from time to time by the Company and the Trustee in
writing) for its services (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust). The Company shall reimburse the Trustee upon request for all reasonable
disbursements, expenses and advances incurred or made by it. Such expenses may
include the reasonable compensation, disbursements and expenses of the Trustee's
agents and counsel.
The Company shall indemnify the Trustee or any predecessor Trustee
(which for purposes of this Section 9.07 shall include its officers, directors,
employees and agents) for, and hold it harmless against, any and all loss,
liability or expense including taxes (other than taxes based upon, measured by
or determined by the income of the Trustee), (including reasonable legal fees
and expenses) incurred by it in connection with the acceptance or administration
of its duties under this Indenture or any action or failure to act as authorized
or within the discretion or rights or powers conferred upon the Trustee
hereunder including the reasonable costs and expenses of the Trustee and its
counsel in defending itself against any claim (whether asserted by the Company,
a Holder, or any other person) or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company promptly of any claim asserted against the Trustee for which it may
seek indemnity. The
54
The Company need not pay for any settlement without its written consent, which
shall not be unreasonably withheld.
The Company need not reimburse the Trustee for any expense or indemnify
it against any loss or liability incurred by it resulting from its gross
negligence or bad faith.
To secure the Company's payment obligations in this Section 9.07, the
Trustee shall have a senior claim to which the Securities are hereby made
subordinate on all money or property held or collected by the Trustee, except
such money or property held in trust to pay the principal of and interest on the
Securities. The obligations of the Company under this Section 9.07 shall survive
the satisfaction and discharge of this Indenture or the resignation or removal
of the Trustee.
When the Trustee incurs expenses or renders services after an Event of
Default specified in clause (7) or (8) of Section 8.01 occurs, the expenses and
the compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law. The provisions of this Section shall
survive the termination of this Indenture.
SECTION 9.08 REPLACEMENT OF TRUSTEE.
The Trustee may resign by so notifying the Company. The Holders of a
majority in aggregate principal amount of the Securities then outstanding may
remove the Trustee by so notifying the Trustee and may, with the Company's
written consent, appoint a successor Trustee. The Company may remove the Trustee
if:
(1) the Trustee fails to comply with Section 9.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or other public officer takes charge of the Trustee or
its property; or
(4) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. The resignation or removal of a Trustee shall not be effective until a
successor Trustee shall have delivered the written acceptance of its appointment
as described below.
If a successor Trustee does not take office within 45 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of 10% in principal amount of the Securities then outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Trustee at the expense of the Company.
If the Trustee fails to comply with Section 9.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all
55
property held by it as Trustee to the successor Trustee and be released from its
obligations (exclusive of any liabilities that the retiring Trustee may have
incurred while acting as Trustee) hereunder, the resignation or removal of the
retiring Trustee shall become effective, and the successor Trustee shall have
all the rights, powers and duties of the Trustee under this Indenture. A
successor Trustee shall mail notice of its succession to each Holder.
A retiring Trustee shall not be liable for the acts or omissions of any
successor Trustee after its succession.
Notwithstanding replacement of the Trustee pursuant to this Section
9.08, the Company's obligations under Section 9.07 shall continue for the
benefit of the retiring Trustee.
SECTION 9.09 SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust assets (including the
administration of this Indenture) to, another corporation, the resulting,
surviving or transferee corporation, without any further act, shall be the
successor Trustee, provided such transferee corporation shall qualify and be
eligible under Section 9.10. Such successor Trustee shall promptly mail notice
of its succession to the Company and each Holder.
SECTION 9.10 ELIGIBILITY; DISQUALIFICATION.
The Trustee shall always satisfy the requirements of paragraphs (1),
(2) and (5) of TIA Section 310(a). The Trustee (or its parent holding company)
shall have a combined capital and surplus of at least $50,000,000. If at any
time the Trustee shall cease to satisfy any such requirements, it shall resign
immediately in the manner and with the effect specified in this Article 9. The
Trustee shall be subject to the provisions of TIA Section 310(b). Nothing herein
shall prevent the Trustee from filing with the SEC the application referred to
in the penultimate paragraph of TIA Section 310(b).
SECTION 9.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
ARTICLE X
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 10.01 SATISFACTION AND DISCHARGE OF INDENTURE.
This Indenture shall cease to be of further effect, and the Trustee, on
demand of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when all Securities
theretofore authenticated and delivered (other than Securities which have been
destroyed, lost or stolen and which have been replaced or paid
56
as provided in Section 2.07) have been delivered to the Trustee for cancellation
and the Company has paid all sums payable by it under this Indenture.
ARTICLE XI
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 11.01 WITHOUT CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities without notice to or consent of any Securityholder:
(a) to comply with Sections 4.11 and 7.01;
(b) to cure any ambiguity, defect or inconsistency;
(c) to make any other change that does not adversely affect the rights
of any Securityholder;
(d) to comply with the provisions of the TIA;
(e) to add to the covenants of the Company for the equal and ratable
benefit of the Securityholders or to surrender any right, power or option
conferred upon the Company; or
(f) to appoint a successor Trustee.
SECTION 11.02 WITH CONSENT OF HOLDERS.
The Company and the Trustee may amend or supplement this Indenture or
the Securities with the written consent of the Holders of at least a majority in
aggregate principal amount of the Securities then outstanding. The Holders of at
least a majority in aggregate principal amount of the Securities then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Securities without notice to any
Securityholder. However, notwithstanding the foregoing but subject to Section
11.04, without the written consent of each Securityholder affected, an
amendment, supplement or waiver, including a waiver pursuant to Section 8.04,
may not:
(a) change the stated maturity of the principal of, or interest on, any
Security;
(b) reduce the principal amount of, or interest on, any Security;
(c) reduce the amount of principal payable upon acceleration of the
maturity of any Security;
(d) change the place or currency of payment of principal of, or
interest on, any Security;
(e) impair the right to institute suit for the enforcement of any
payment on, or with respect to, any Security;
57
(f) modify the provisions with respect to the purchase right of Holders
pursuant to Article III upon a Change in Control in a manner adverse to Holders;
(g) modify the subordination provisions of Article V in a manner
materially adverse to the Holders of Securities;
(h) adversely affect the right of Holders to convert Securities other
than as provided in or under Article IV of this Indenture;
(i) reduce the percentage of the aggregate principal amount of the
outstanding Securities whose Holders must consent to a modification or
amendment;
(j) reduce the percentage of the aggregate principal amount of the
outstanding Securities necessary for the waiver of compliance with certain
provisions of this Indenture or the waiver of certain defaults under this
Indenture; and
(k) modify any of the provisions of this Section or Section 8.04,
except to increase any such percentage or to provide that certain provisions of
this Indenture cannot be modified or waived without the consent of the Holder of
each outstanding Security affected thereby.
It shall not be necessary for the consent of the Holders under this
Section 11.02 to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.
After an amendment, supplement or waiver under this Section 11.02
becomes effective, the Company shall mail to the Holders affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Company to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amendment, supplement or
waiver. An amendment or supplement under this Section 11.02 or under Section
11.01 may not make any change that adversely affects the rights under Article V
of any holder of an issue of Senior Indebtedness unless the holders of that
issue, pursuant to its terms, consent to the change.
SECTION 11.03 COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment to or supplement of this Indenture or the Securities
shall comply with the TIA as in effect at the date of such amendment or
supplement.
SECTION 11.04 REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to its Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment, supplement or waiver becomes
effective.
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After an amendment, supplement or waiver becomes effective, it shall
bind every Securityholder, unless it makes a change described in any of clauses
(a) through (k) of Section 11.02. In that case the amendment, supplement or
waiver shall bind each Holder of a Security who has consented to it and every
subsequent Holder of a Security or portion of a Security that evidences the same
debt as the consenting Holder's Security.
SECTION 11.05 NOTATION ON OR EXCHANGE OF SECURITIES.
If an amendment, supplement or waiver changes the terms of a Security,
the Trustee may require the Holder of the Security to deliver it to the Trustee.
The Trustee may place an appropriate notation on the Security about the changed
terms and return it to the Holder. Alternatively, if the Company or the Trustee
so determines, the Company in exchange for the Security shall issue and the
Trustee shall authenticate a new Security that reflects the changed terms.
SECTION 11.06 TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment or supplemental indenture
authorized pursuant to this Article 11 if the amendment or supplemental
indenture does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, in its sole discretion,
but need not sign it. In signing or refusing to sign such amendment or
supplemental indenture, the Trustee shall receive and, subject to Section 9.01,
shall be fully protected in relying upon, an Opinion of Counsel and an Officers'
Certificate stating that such amendment or supplemental indenture is authorized
or permitted by this Indenture.
SECTION 11.07 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts with
the duties imposed by any of Sections 310 to 317, inclusive, of the TIA through
operation of Section 318(c) thereof, such imposed duties shall control.
SECTION 12.02 NOTICES.
Any demand, authorization notice, request, consent or communication
shall be given in writing and delivered in person, by guaranteed overnight
courier or mailed by first-class mail, postage prepaid, addressed as follows or
transmitted by facsimile transmission (confirmed by
59
delivery in person or mail by first-class mail, postage prepaid, or by
guaranteed overnight courier) to the following facsimile numbers:
If to the Company, to:
Ask Jeeves, Inc.
5858 Horton Street, Suite 350
Emeryville, CA 94608
Attn: General Counsel
Facsimile No.: (510) 985 7412
if to the Trustee, to:
The Bank of New York
101 Barclay Street, 8W
New York, NY 10286
Attn: Corporate Trust Administration
Facsimile No.: (212) 815 5704
Such notices or communications shall be effective when received.
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
Any notice or communication mailed to a Securityholder shall be mailed
by first-class mail or delivered by an overnight delivery service to it at its
address shown on the register kept by the Primary Registrar.
Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication to a Securityholder is mailed in
the manner provided above, it is duly given, whether or not the addressee
receives it.
SECTION 12.03 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b) with
other Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and any other person shall
have the protection of TIA Section 312(c).
SECTION 12.04 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
(a) Upon any request or application by the Company to the Trustee to
take any action under this Indenture, the Company shall furnish to the Trustee
at the request of the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent (including any covenants, compliance with
which constitutes a condition precedent), if any, provided for in this Indenture
relating to the proposed action have been complied with; and
60
(2) an Opinion of Counsel stating that, in the opinion of such counsel,
all such conditions precedent (including any covenants, compliance with which
constitutes a condition precedent) have been complied with.
(b) Each Officers' Certificate and Opinion of Counsel 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 statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her 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;
provided, however, that with respect to matters of fact an Opinion of Counsel
may rely on an Officers' Certificate or certificates of public officials.
SECTION 12.05 RECORD DATE FOR VOTE OR CONSENT OF SECURITYHOLDERS.
The Company (or, in the event deposits have been made pursuant to
Section 10.01, the Trustee) may set a record date for purposes of determining
the identity of Holders entitled to vote or consent to any action by vote or
consent authorized or permitted under this Indenture, which record date shall
not be more than thirty (30) days prior to the date of the commencement of
solicitation of such action. Notwithstanding the provisions of Section 11.04, if
a record date is fixed, those persons who were Holders of Securities at the
close of business on such record date (or their duly designated proxies), and
only those persons, shall be entitled to take such action by vote or consent or
to revoke any vote or consent previously given, whether or not such persons
continue to be Holders after such record date.
SECTION 12.06 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR AND
CONVERSION AGENT.
The Trustee may make reasonable rules (not inconsistent with the terms
of this Indenture) for action by or at a meeting of Holders. Any Registrar,
Paying Agent or Conversion Agent may make reasonable rules for its functions.
SECTION 12.07 LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, Sunday or a day on which state or
federally chartered banking institutions in New York, New York and the state in
which the Corporate Trust Office is located are not required to be open. If a
payment date is a Legal Holiday, payment shall be made
61
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a regular record date is a Legal Holiday,
the record date shall not be affected.
SECTION 12.08 GOVERNING LAW; WAIVER OF JURY TRIAL.
This Indenture and the Securities shall be governed by, and construed
in accordance with, the laws of the State of New York, without regard to
principles of conflicts of laws.
EACH OF THE COMPANY AND THE TRUSTEE HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE NOTES
OR THE TRANSACTION CONTEMPLATED HEREBY.
SECTION 12.09 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or a Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
SECTION 12.10 NO RECOURSE AGAINST OTHERS.
All liability described in paragraph 18 of the Securities of any
director, officer, employee or shareholder, as such, of the Company is waived
and released.
SECTION 12.11 SUCCESSORS.
All agreements of the Company in this Indenture and the Securities
shall bind its successor. All agreements of the Trustee in this Indenture shall
bind its successor.
SECTION 12.12 MULTIPLE COUNTERPARTS.
The parties may sign multiple counterparts of this Indenture. Each
signed counterpart shall be deemed an original, but all of them together
represent the same agreement.
SECTION 12.13 SEPARABILITY.
In case any provisions in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.14 TABLE OF CONTENTS, HEADINGS, ETC.
The table of contents, cross-reference sheet and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
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[SIGNATURE PAGE FOLLOWS]
63
IN WITNESS WHEREOF, the parties hereto have hereunto set their hands as
of the date and year first above written.
ASK JEEVES, INC.
By: /s/ Steve Sordello
-----------------------------------
Name: Steve Sordello
Title: Chief Financial Officer
THE BANK OF NEW YORK, AS TRUSTEE
By: /s/ Michael Pitfick
-----------------------------------
Name: Michael Pitfick
Title: Assistant Vice President
EXHIBIT A
[FORM OF FACE OF SECURITY]
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY 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 THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THIS SECURITY IS A
GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND
IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE
DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE
DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH
SUCCESSOR DEPOSITARY.](1)
[THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF
1933 (THE "SECURITIES ACT"), AND THIS SECURITY AND THE SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.](2)
[THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY THAT
(A) THIS SECURITY AND THE SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION HEREOF
MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED
STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION COMPLYING WITH THE PROVISIONS OF RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT, (III) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (IV) PURSUANT TO
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AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
(I) THROUGH (IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY AND THE SHARES OF COMMON
STOCK ISSUABLE UPON CONVERSION HEREOF FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO THIS SECURITY,
EXCEPT AS PERMITTED UNDER THE SECURITIES ACT](2)
[BY ITS ACQUISITION HEREOF, THE HOLDER REPRESENTS AND WARRANTS (1) IT
IS (A) (I) A QUALIFIED INSTITUTIONAL BUYER, (II) IS AWARE THAT THE SALE TO IT IS
BEING MADE IN RELIANCE ON RULE 144A AND (III) IS ACQUIRING THIS SECURITY FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER OR (B) IS NOT
A U.S. PERSON AND IS PURCHASING THIS SECURITY IN AN OFFSHORE TRANSACTION
PURSUANT TO REGULATION S; (2) THE HOLDER UNDERSTANDS THAT THIS SECURITY IS BEING
OFFERED IN A TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING IN THE UNITED STATES
WITHIN THE MEANING OF THE SECURITIES ACT, THAT THIS SECURITY AND COMMON STOCK
ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT AND THAT (A) IF IN THE FUTURE IT DECIDES TO OFFER, RESELL, PLEDGE OR
OTHERWISE TRANSFER THIS SECURITY OR COMMON STOCK ISSUED UPON CONVERSION HEREOF,
THIS SECURITY OR COMMON STOCK MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY (I) IN THE UNITED STATES, TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (II) OUTSIDE THE UNITED STATES IN A TRANSACTION
COMPLYING WITH THE PROVISIONS OF RULE 904 OF REGULATION S UNDER THE SECURITIES
ACT, (III) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
PROVIDED BY RULE 144 (IF AVAILABLE) OR (IV) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH
(IV) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE
UNITED STATES, AND THAT (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS
REQUIRED TO, NOTIFY ANY SUBSEQUENT PRIVATE HOLDER OF THIS SECURITY OR COMMON
STOCK ISSUED UPON CONVERSION HEREOF FROM IT OF THE RESALE RESTRICTIONS REFERRED
TO IN THE ABOVE CLAUSE (A) OF THIS PARAGRAPH (2); THE HOLDER ALSO UNDERSTANDS
AND AGREES NOT TO ENGAGE IN HEDGING TRANSACTIONS WITH REGARD TO THIS SECURITY
UNLESS IN COMPLIANCE WITH THE SECURITIES ACT; (3) THE HOLDER UNDERSTANDS THAT
THIS SECURITY WILL, UNTIL THE EXPIRATION OF THE APPLICABLE HOLDING PERIOD SET
FORTH IN RULE 144(K) OF THE SECURITIES ACT, UNLESS OTHERWISE AGREED TO BY ASK
JEEVES, INC. AND THE HOLDER HEREOF, BEAR THE TWO (2) LEGENDS IMMEDIATELY ABOVE
THIS LEGEND; (4) (A) EITHER: (A) THE HOLDER IS NOT A PLAN (WHICH TERM INCLUDES
(I) EMPLOYEE BENEFIT PLANS THAT ARE SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), (II) PLANS, INDIVIDUAL RETIREMENT
A-2
ACCOUNTS AND OTHER ARRANGEMENTS THAT ARE SUBJECT TO SECTION 4975 OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR TO PROVISIONS UNDER APPLICABLE
FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO
SUCH PROVISIONS OF ERISA OR THE CODE ("SIMILAR LAWS") AND (III) ENTITIES THE
UNDERLYING ASSETS OF WHICH ARE CONSIDERED TO INCLUDE "PLAN ASSETS" OF SUCH
PLANS, ACCOUNTS AND ARRANGEMENTS) AND IT IS NOT PURCHASING THIS SECURITY ON
BEHALF OF, OR WITH THE "PLAN ASSETS" OF, ANY PLAN; OR (B) THE HOLDER'S PURCHASE,
HOLDING AND SUBSEQUENT DISPOSITION OF THIS SECURITY EITHER (I) ARE NOT A
PROHIBITED TRANSACTION UNDER ERISA OR THE CODE AND ARE OTHERWISE PERMISSIBLE
UNDER ALL APPLICABLE SIMILAR LAWS OR (II) ARE ENTITLED TO EXEMPTIVE RELIEF FROM
THE PROHIBITED TRANSACTION PROVISIONS OF ERISA AND THE CODE IN ACCORDANCE WITH
ONE OR MORE AVAILABLE STATUTORY, CLASS OR INDIVIDUAL PROHIBITED TRANSACTION
EXEMPTIONS AND ARE OTHERWISE PERMISSIBLE UNDER ALL APPLICABLE SIMILAR LAWS; AND
(B) THE HOLDER WILL NOT TRANSFER THIS SECURITY TO ANY PERSON OR ENTITY, UNLESS
SUCH PERSON OR ENTITY COULD ITSELF TRUTHFULLY MAKE THE FOREGOING REPRESENTATIONS
AND THIS COVENANT.](2)
[THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A
REGISTRATION RIGHTS AGREEMENT (AS SUCH TERM IS DEFINED IN THE INDENTURE REFERRED
TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE HEREOF, AGREES TO BE BOUND BY
AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS AGREEMENT.](2)
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ASK JEEVES, INC.
CUSIP: __________ R-______
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 1, 2008
Ask Jeeves, Inc., a Delaware corporation (the "Company", which term
shall include any successor corporation under the Indenture referred to on the
reverse hereof), promises to pay to___________ _________________, or registered
assigns, the principal sum of _____________________________ Dollars
($__________) on June 1, 2008 [or such greater or lesser amount as is indicated
on the Schedule of Exchanges of Notes on the other side of this Note].(3)
This Note shall not bear interest other than Additional Interest, if
any. This Note is convertible as specified on the other side of this Note.
Additional provisions of this Note are set forth on the other side of this Note.
SIGNATURE PAGE FOLLOWS
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
ASK JEEVES, INC.
By: _________________________________
Name:
Title:
Attest:
Name: _______________________________
Title:
Dated: ___________________
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Trustee's Certificate of Authentication: This is one of the
Securities referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By: _________________________________
Authorized Signatory
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[FORM OF REVERSE SIDE OF SECURITY]
ASK JEEVES, INC.
ZERO COUPON CONVERTIBLE SUBORDINATED NOTES DUE JUNE 1, 2008
1. INTEREST
This Security shall not bear interest, except as specified in this
paragraph. If the principal amount hereof or any portion of such principal
amount is not paid when due (whether upon acceleration pursuant to Section 8.02
of the Indenture, upon the date set for payment of the Change in Control
Purchase Price pursuant to paragraph 5 hereof or upon the Final Maturity Date)
or if Additional Interest, if any, due hereon or any portion of such interest is
not paid when due, then in each such case the overdue amount shall, to the
extent permitted by law, bear interest at the sum of the rate of 2% per annum,
which interest shall accrue from the date such overdue amount was originally due
to the date payment of such amount, including interest thereon, has been made or
duly provided for. All such interest shall be payable on demand. Interest will
be computed on the basis of a 360-day year of twelve 30-day months.
2. METHOD OF PAYMENT
The Holder must surrender this Note to the Paying Agent to collect
payment of principal. The Company will pay principal and interest in money of
the United States that at the time of payment is legal tender for payment of
public and private debts. The Company may, however, pay principal and interest
(including Additional Interest), if any, in respect of any Certificated Security
by check or wire payable in such money; provided, however, that a Holder with an
aggregate principal amount in excess of $2,000,000 will be paid by wire transfer
in immediately available funds at the election of such Holder if such Holder has
provided wire transfer instructions, in writing, to the Company and the Paying
Agent. The Company may mail an interest check to the Holder's registered
address. Notwithstanding the foregoing, so long as this Security is registered
in the name of a Depositary or its nominee, all payments hereon shall be made by
wire transfer of immediately available funds to the account of the Depositary or
its nominee.
3. PAYING AGENT, REGISTRAR AND CONVERSION AGENT
Initially, The Bank of New York (the "Trustee", which term shall
include any successor trustee under the Indenture hereinafter referred to) will
act as Paying Agent, Registrar and Conversion Agent. The Company may change any
Paying Agent, Registrar or Conversion Agent without notice to the Holder. The
Company or any of its Subsidiaries may, subject to certain limitations set forth
in the Indenture, act as Paying Agent or Registrar.
4. INDENTURE, LIMITATIONS
This Note is one of a duly authorized issue of Securities of the
Company designated as its Zero Coupon Convertible Subordinated Notes Due June 1,
2008 (the "Notes"), issued under an Indenture dated as of June 4, 2003 (together
with any supplemental indentures thereto, the "Indenture"), between the Company
and the Trustee. All capitalized terms used herein without definition have the
meanings given such terms in the Indenture. The terms of this Note include
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those stated in the Indenture and those required by or made part of the
Indenture by reference to the Trust Indenture Act of 1939, as amended, as in
effect on the date of the Indenture. This Note is subject to all such terms, and
the Holder of this Note is referred to the Indenture and said Act for a
statement of them.
The Notes are subordinated unsecured obligations of the Company limited
to $115,000,000 aggregate principal amount. The Indenture does not limit other
debt of the Company, secured or unsecured, including Senior Indebtedness.
5. PURCHASE OF NOTES AT OPTION OF HOLDER UPON A CHANGE IN CONTROL
At the option of the Holder and subject to the terms and conditions of
the Indenture, the Company shall become obligated to purchase all or any part
specified by the Holder (so long as the principal amount of such part is $1,000
or an integral multiple of $1,000 in excess thereof) of the Notes held by such
Holder on the date that is 30 Business Days after the date of the notice from
the Company of a Change in Control, at a purchase price equal to 100% of the
principal amount thereof together with accrued interest up to, but excluding,
the Change in Control Purchase Date. The purchase price shall be paid in cash,
shares of Applicable Stock, or a combination of cash and shares of Applicable
Stock. The Holder shall have the right to withdraw any Change in Control
Purchase Notice (in whole or in a portion thereof that is $1,000 or an integral
multiple of $1,000 in excess thereof) at any time prior to the close of business
on the Business Day next preceding the Change in Control Purchase Date by
delivering a written notice of withdrawal to the Paying Agent in accordance with
the terms of the Indenture. If the Company elects to pay in Applicable Stock, no
fractional shares will be issued in payment of the Change in Control Purchase
Price; in lieu thereof, an amount will be paid in cash based upon the Sale
Prices of the Applicable Stock for the five (5) Trading Days immediately
preceding the second day immediately preceding the Change in Control Purchase
Date.
6. CONVERSION
A Holder of a Note may convert the principal amount of such Note (or
any portion thereof equal to $1,000 or any integral multiple of $1,000 in excess
thereof) into shares of Common Stock at any time prior to the close of business
on June 1, 2008; provided, however, that if the Note is submitted or presented
for purchase pursuant to a Change in Control Notice, the conversion right will
terminate at the close of business on the Business Day immediately preceding the
Change in Control Purchase Date for such Note or such earlier date as the Holder
presents such Note for purchase (unless the Holder withdraws its election
pursuant to the Indenture).
The initial Conversion Price is $16.90 per share, subject to adjustment
under certain circumstances as provided in the Indenture. The number of shares
of Common Stock issuable upon conversion of a Note is determined by dividing the
principal amount of the Note or portion thereof converted by the Conversion
Price in effect on the Conversion Date.
To convert a Note, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Note to the
A-8
Conversion Agent, (c) furnish appropriate endorsements and transfer documents if
required by a Registrar or the Conversion Agent, and (d) pay any transfer or
similar tax, if required. A Holder may convert a portion of a Note equal to
$1,000 or any integral multiple thereof.
A Note in respect of which a Holder had delivered a Change in Control
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Note may be converted only if the Change in Control Purchase
Notice is withdrawn in accordance with the terms of the Indenture.
As soon as practicable after the Conversion Date, the Company shall
satisfy all of its Conversion Obligations by delivering to the Holder, at the
Company's option, either shares of Common Stock, cash, or a combination of cash
and shares of Common Stock. If the Company elects to satisfy the entire
Conversion Obligation by Share Settlement, then the Company will deliver to the
Holder shares of Common Stock equal to the quotient of (A) the aggregate
principal amount of Notes to be converted by the Holder divided by (B) the
Conversion Price in effect on the Conversion Date. If the Company elects to
satisfy the entire Conversion Obligation by Cash Settlement, then the Company
will deliver to the Holder cash in an amount equal to the product of (A) a
number equal to the aggregate principal amount of Notes to be converted by such
Holder divided by the Conversion Price in effect on the Conversion Date, and (B)
the arithmetic mean of the Volume Weighted Average Prices of the Common Stock on
each Trading Day during the Cash Settlement Averaging Period. If the Company
elects to satisfy the Conversion Obligation in a Combined Settlement, then the
Company will deliver to the Holder a Partial Cash Amount plus a number of shares
of Common Stock equal to the quotient of (A) the amount of the Cash Settlement
minus such Partial Cash Amount divided by (B) the arithmetic mean of the Volume
Weighted Average Prices of the Common Stock on each Trading Day during the
applicable Cash Settlement Averaging Period.
Upon receipt of the conversion notice from a Holder by the Company or
the Conversion Agent, (1) if the Company elects to satisfy the Conversion
Obligation by Share Settlement, then settlement in Common Stock will be made on
or prior to the fifth (5th) Trading Day following receipt of such conversion
notice; or (2) if the Company elects to satisfy the Conversion Obligation by
Cash Settlement or Combined Settlement, then the Company will notify the Holder,
through the Conversion Agent, of the dollar amount to be satisfied in cash at
any time during the Settlement Notice Period. Share Settlement will apply
automatically if the Company does not notify the Holder that the Company has
chosen another settlement method.
If the Company timely elects Cash Settlement or Combined Settlement,
then the Holder may retract the conversion notice at any time during the
Conversion Retraction Period by notice to the Conversion Agent. The Holder
cannot retract the conversion notice (and the conversion notice therefore will
be irrevocable) if the Company elects Share Settlement. If the Holder has not
retracted the conversion notice during the Conversion Retraction Period, then
Cash Settlement or Combined Settlement will occur on the first Trading Day
following the Cash Settlement Averaging Period.
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7. SUBORDINATION
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, subordinate and junior in right of payment to
the prior payment in full of all Senior Indebtedness of the Company. Any Holder
by accepting this Note agrees to and shall be bound by such subordination
provisions and authorizes the Trustee to give them effect. In addition to all
other rights of Senior Indebtedness described in the Indenture, the Senior
Indebtedness shall continue to be Senior Indebtedness and entitled to the
benefits of the subordination provisions irrespective of any amendment,
modification or waiver of any terms of any instrument relating to the Senior
Indebtedness or any extension or renewal of the Senior Indebtedness.
8. DENOMINATIONS, TRANSFER, EXCHANGE
The Notes are in registered form, without coupons, in denominations of
$1,000 and integral multiples of $1,000. A Holder may register the transfer of
or exchange Notes in accordance with the Indenture. The Registrar may require a
Holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes or other governmental charges that may be imposed
in relation thereto by law or permitted by the Indenture.
9. PERSONS DEEMED OWNERS
The Holder of a Note may be treated as the owner of it for all
purposes.
10. UNCLAIMED MONEY
If money for the payment of principal or interest remains unclaimed for
two years, the Trustee or Paying Agent will pay the money back to the Company at
its written request, subject to applicable unclaimed property law. After that,
Holders entitled to money must look to the Company for payment as general
creditors unless an applicable abandoned property law designates another person.
11. AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Notes may be
amended or supplemented with the consent of the Holders of at least a majority
in aggregate principal amount of the Notes then outstanding, and an existing
default or Event of Default and its consequence or compliance with any provision
of the Indenture or the Notes may be waived in a particular instance with the
consent of the Holders of a majority in aggregate principal amount of the Notes
then outstanding. Without the consent of or notice to any Holder, the Company
and the Trustee may amend or supplement the Indenture or the Notes to, among
other things, cure any ambiguity, defect or inconsistency or make any other
change that does not adversely affect the rights of any Holder.
12. SUCCESSOR ENTITY
When a successor corporation assumes all the obligations of its
predecessor under the Notes and the Indenture in accordance with the terms and
conditions of the Indenture, the predecessor corporation (except in certain
circumstances specified in the Indenture) be released from those obligations.
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13. DEFAULTS AND REMEDIES
Under the Indenture, an Event of Default includes: (i) default for 30
days in payment of any interest or Additional Interest on any Notes; (ii)
default in payment of any principal (including, without limitation, any premium,
if any) on the Notes when due; (iii) failure by the Company for 60 days after
notice to it to comply with any of its other agreements contained in the
Indenture or the Notes; (iv) default in the payment of certain indebtedness of
the Company or a Significant Subsidiary and (v) certain events of bankruptcy,
insolvency or reorganization of the Company or any Significant Subsidiary. If an
Event of Default (other than as a result of certain events of bankruptcy,
insolvency or reorganization of the Company) occurs and is continuing, the
Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding may declare all unpaid principal to the date of
acceleration on the Notes then outstanding to be due and payable immediately,
all as and to the extent provided in the Indenture. If an Event of Default
occurs as a result of certain events of bankruptcy, insolvency or reorganization
of the Company, unpaid principal of the Notes then outstanding shall become due
and payable immediately without any declaration or other act on the part of the
Trustee or any Holder, all as and to the extent provided in the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the
Indenture. The Trustee may require indemnity satisfactory to it before it
enforces the Indenture or the Notes. Subject to certain limitations, Holders of
a majority in aggregate principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is in
their interests. The Company is required to file periodic reports with the
Trustee as to the absence of default.
14. TRUSTEE DEALINGS WITH THE COMPANY
The Bank of New York, the Trustee under the Indenture, in its
individual or any other capacity, may make loans to, accept deposits from and
perform services for the Company or an Affiliate of the Company, and may
otherwise deal with the Company or an Affiliate of the Company, as if it were
not the Trustee.
15. NO RECOURSE AGAINST OTHERS
A director, officer, employee or shareholder, as such, of the Company
shall not have any liability for any obligations of the Company under the Notes
or the Indenture nor for any claim based on, in respect of or by reason of such
obligations or their creation. The Holder of this Note by accepting this Note
waives and releases all such liability. The waiver and release are part of the
consideration for the issuance of this Note.
16. AUTHENTICATION
This Note shall not be valid until the Trustee or an authenticating
agent manually signs the certificate of authentication on the other side of this
Note.
A-11
17. ABBREVIATIONS AND DEFINITIONS
Customary abbreviations may be used in the name of the Holder or an
assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the
entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian) and UGMA (= Uniform Gifts to Minors Act).
All terms defined in the Indenture and used in this Note but not
specifically defined herein are defined in the Indenture and are used herein as
so defined.
18. INDENTURE TO CONTROL; GOVERNING LAW
In the case of any conflict between the provisions of this Note and the
Indenture, the provisions of the Indenture shall control. This Note shall be
governed by, and construed in accordance with, the laws of the State of New
York, without regard to principals of conflicts of law.
The Company will furnish to any Holder, upon written request and
without charge, a copy of the Indenture. Requests may be made to: Ask Jeeves,
Inc., 5858 Horton Street, Suite 350, Emeryville, CA 94608, (510) 985-7400,
Attention: General Counsel.
A-12
ASSIGNMENT FORM
To assign this Note, fill in the form below:
I or we assign and transfer this Note to
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(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-----------------------------------------------------------------------
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him or her.
Your Signature:
Date: __________________________ _________________________________________
(Sign exactly as your name appears on the
other side of this Note)
*Signature guaranteed by:
By: ____________________________
* The signature must be guaranteed by an institution which is a member of
one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York
Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
A-13
CONVERSION NOTICE
To convert this Note into Common Stock of the Company, check the box:
[ ]
To convert only part of this Note, state the principal amount to be
converted (must be $1,000 or a integral multiple of $1,000): $____________.
If you want the stock certificate made out in another person's name,
fill in the form below:
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(Insert assignee's soc. sec. or tax I.D. no.)
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
-----------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
Your Signature:
Date: __________________________ _________________________________________
(Sign exactly as your name appears on the
other side of this Note)
*Signature guaranteed by:
By: ____________________________
* The signature must be guaranteed by an institution which is a member of
one of the following recognized signature guaranty programs: (i) the
Securities Transfer Agent Medallion Program (STAMP); (ii) the New York
Stock Exchange Medallion Program (MSP); (iii) the Stock Exchange
Medallion Program (SEMP); or (iv) such other guaranty program
acceptable to the Trustee.
A-14
OPTION TO ELECT REPURCHASE
UPON A CHANGE OF CONTROL
To: Ask Jeeves, Inc.
The undersigned registered owner of this Security hereby irrevocably
acknowledges receipt of a notice from Ask Jeeves, Inc. (the "Company") as to the
occurrence of a Change in Control with respect to the Company and requests and
instructs the Company to redeem the entire principal amount of this Security, or
the portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in accordance with the terms of the Indenture referred to in this
Security at the Change in Control Purchase Price, together with accrued interest
to, but excluding, such date, to the registered Holder hereof.
In the event that the Company elects to pay the Change in Control
Purchase Price in part or in whole in Applicable Stock and is not able to
satisfy the conditions within the Indenture relating to payment in Applicable
Stock, the undersigned elects to (check applicable box):
[ ] receive payment in cash in lieu of Applicable Stock with respect
to $___________ aggregate principal amount of the Notes.
[ ] withdraw this notice with respect to $___________ aggregate
principal amount of the Notes.
Dated:
--------------- ------------------------------------
------------------------------------
Signature(s) must be guaranteed by a
qualified guarantor institution with
membership in an approved signature
guarantee program pursuant to Rule
17Ad-15 under the Securities
Exchange Act of 1934.
------------------------------------
Signature Guaranty
Principal amount to be redeemed
(in an integral multiple of $1,000, if less than all):
- -----------------------
NOTICE: The signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
A-15
SCHEDULE OF EXCHANGES OF NOTES(3)
The following exchanges, repurchases or conversions of a part of this global
Note have been made:
PRINCIPAL AMOUNT
OF THIS GLOBAL NOTE
FOLLOWING SUCH AUTHORIZED AMOUNT OF
DECREASE DATE SIGNATORY OF AMOUNT OF DECREASE IN INCREASE IN
OF EXCHANGE SECURITIES PRINCIPAL AMOUNT PRINCIPAL AMOUNT
(OR INCREASE) CUSTODIAN OF THIS GLOBAL NOTE OF THIS GLOBAL NOTE
- -------------------- ------------ --------------------- -------------------
- -----------------------
(3) This schedule should be included only if the Security is a Global
Security.
A-16
EXHIBIT B
CERTIFICATE TO BE DELIVERED UPON EXCHANGE OR
REGISTRATION OF TRANSFER RESTRICTED SECURITIES(4)
Re: Zero Coupon Convertible Subordinated Notes due June 1, 2008
(the "Notes") of Ask Jeeves, Inc.
This certificate relates to $_______ principal amount of Notes owned in
(check applicable box):
[ ] book-entry or [ ] definitive form by ___________________
(the "Transferor").
The Transferor has requested a Registrar or the Trustee to exchange or
register the transfer of such Notes.
In connection with such request and in respect of each such Note, the
Transferor does hereby certify that the Transferor is familiar with transfer
restrictions relating to the Notes as provided in Section 2.12 of the Indenture
dated as of June 4, 2003 between Ask Jeeves, Inc. and The Bank of New York, as
trustee (the "Indenture"), and the transfer of such Note is being made pursuant
to an effective registration statement under the Securities Act of 1933, as
amended (the "Securities Act") (check applicable box) or the transfer or
exchange, as the case may be, of such Note does not require registration under
the Securities Act because (check applicable box):
[ ] Such Note is being transferred pursuant to an effective
registration statement under the Securities Act.
[ ] Such Note is being acquired for the Transferor's own account,
without transfer.
[ ] Such Note is being transferred to the Company or a Subsidiary
(as defined in the Indenture) of the Company.
[ ] Such Note is being transferred to a person the Transferor
reasonably believes is a "qualified institutional buyer" (as
defined in Rule 144A or any successor provision thereto ("Rule
144A") under the Securities Act) that is purchasing for its
own account or for the account of a "qualified institutional
buyer", in each case to whom notice has been given that the
transfer is being made in reliance on such Rule 144A, and in
each case in reliance on Rule 144A.
[ ] Such Note is being transferred pursuant to and in compliance
with an exemption from the registration requirements under the
Securities Act in accordance with Rule 144 (or any successor
thereto) ("Rule 144") under the Securities Act.
[ ] Such Note is being transferred pursuant to and in compliance
with an exemption from the registration requirements of the
Securities Act (other than an exemption referred to above) and
as a result of which such Note will, upon such transfer, cease
to be a "restricted security" within the meaning of Rule 144
under the Securities Act.
The Transferor acknowledges and agrees that, if the transferee will hold any
such Notes in the form of beneficial interests in a global Note which is a
"restricted security" within the meaning of Rule 144 under the Securities Act,
then such transfer can only be made pursuant to Rule 144A under the Securities
Act and such transferee must be a "qualified institutional buyer" (as defined in
Rule 144A).
Date: ____________________________ _______________________________
(Insert Name of Transferor)
B-1
(1) These paragraphs should be included only if the Security is a Global
Security.
(2) These paragraphs to be included only if the Security is a Restricted
Security.
(2) These paragraphs to be included only if the Security is a Restricted
Security.
(3) This schedule should be included only if the Security is a Global
Security.
(4) This certificate should only be included if this Security is a
Restricted Security
B-2
EXHIBIT 4.3
EXECUTION VERSION
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of July 19, 2005 (this
"First Supplemental Indenture"), is by and among ASK JEEVES, INC., a corporation
organized and existing under the laws of the State of Delaware (the "Company"),
IAC/INTERACTIVECORP, a corporation organized and existing under the laws of the
State of Delaware ("IAC") and The Bank of New York, a New York banking
corporation, as Trustee (the "Trustee").
PRELIMINARY STATEMENT
The Company and the Trustee have entered into an Indenture, dated as
of June 4, 2003 (the "Indenture"). Capitalized terms used herein have the
meanings assigned to them in the Indenture unless otherwise indicated. In
Section 11.01 of Article XI of the Indenture it is provided that, among other
things, the Company and the Trustee, subject to the conditions and restrictions
in the Indenture contained, may from time to time and at any time enter into an
indenture or indentures supplemental thereto, and may amend or supplement the
Indenture and/or the Securities, for the following purposes, among others: (i)
to comply with Section 4.10 of the Indenture, (ii) to cure any ambiguity, defect
or inconsistency, or (iii) to make any other change that does not adverse affect
the rights of any Securityholder.
The Company created and issued under and in accordance with the
provisions of the Indenture, certain Zero Coupon Convertible Subordinated
Securities Due June 1, 2008.
The Company, IAC and AJI Acquisition Corp. ("AJI"), a wholly owned
subsidiary of IAC, are party to an Agreement and Plan of Merger and
Reorganization, dated as of March 21, 2005, pursuant to which AJI will be merged
with and into the Company, with the Company surviving the merger and becoming a
wholly-owned subsidiary of IAC (the "Merger").
The Company, the Trustee and IAC now desire to supplement the
Indenture to correct certain immaterial defects in the Indenture, to comply with
the requirements of Section 4.10 of the Indenture and to provide for the
unconditional guarantee by IAC of the obligations of the Company under the
Indenture.
NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE WITNESSETH:
THE FOLLOWING SHALL BE ADDED AS ADDITIONAL DEFINITIONS IN SECTION 1.01 OF
ARTICLE I OF THE INDENTURE IN APPROPRIATE ALPHABETICAL SEQUENCE:
"First Supplemental Indenture" means the First Supplemental
Indenture, dated July 19, 2005, by and among the Company, IAC and the Trustee.
"IAC" means IAC/InterActiveCorp, a corporation organized and existing
under the laws of the State of Delaware.
THE DEFINITION OF THE TERM "COMMON STOCK" SHALL BE AMENDED AND RESTATED IN FULL,
AS FOLLOWS:
"Common Stock" means the common stock of IAC, $0.01 par value, as it
exists on the date of the First Supplemental Indenture and any shares of any
class or classes of capital stock of IAC resulting from any reclassification or
reclassifications thereof and which have no preference in respect of dividends
or of amounts payable in the event of any voluntary or involuntary liquidation,
dissolution or winding-up of IAC and which are not subject to redemption by IAC;
provided, however, that if at any time there shall be more than one such
resulting class, the shares of each such class then so issuable on conversion of
Securities shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
THE FOLLOWING SHALL BE ADDED AS AN ADDITIONAL REFERENCE IN SECTION 1.02 OF
ARTICLE I OF THE INDENTURE IN APPROPRIATE ALPHABETICAL SEQUENCE:
Term Defined in Section
----------- ------------------
"Guarantee" 12.15
THE PHRASE "WILL NOT ISSUE" CONTAINED IN SECTION 3.04(c) OF THE INDENTURE SHALL
BE AMENDED AND REPLACED BY THE FOLLOWING:
will not deliver
THE PHRASE "THROUGH THE ISSUANCE" CONTAINED IN SECTION 3.04(d) OF THE INDENTURE
SHALL BE AMENDED AND REPLACED BY THE FOLLOWING:
through the delivery
ARTICLE IV OF THE INDENTURE SHALL BE AMENDED AND RESTATED IN ITS ENTIRETY AS SET
FORTH IN ANNEX A HERETO.
SECTION 6.02 OF THE INDENTURE SHALL BE AMENDED AND RESTATED IN FULL, AS FOLLOWS:
IAC shall file all reports and other information and documents which
it is required to file with the SEC pursuant to Section 13 or 15(d) of the
Exchange Act, and within 15 days after it files them with the SEC, IAC shall
file copies of all such reports, information and other documents with the
Trustee.
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 Officers' Certificates).
SECTION 6.06 OF THE INDENTURE SHALL BE AMENDED AND RESTATED IN FULL, AS FOLLOWS:
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), IAC 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
the request of any Holder or beneficial holder of the Securities make available
to such Holder or beneficial holder of Securities or any Common Stock issued
upon conversion thereof which continue to be Restricted Securities in connection
with any sale thereof and any prospective purchaser of Securities or such Common
Stock designated by such Holder of beneficial holder, the information required
pursuant to Rule 144A(d)(4) under the Securities Act and it will take such
further action as any Holder or beneficial holder of such Securities or such
Common Stock may reasonably request, all to the extent required from time to
time to enable such Holder or beneficial holder to sell its Securities or Common
Stock without registration under the Securities Act within the limitation of the
exemption provided by Rule 144A, as such Rule may be amended from time to time.
Upon the request of any Holder or any beneficial holder of the Securities or
such Common Stock, IAC will deliver to such Holder a written statement as to
whether it has complied with such requirements.
THE PHRASE "SECTION 4.11" CONTAINED IN SECTION 11.01 OF THE INDENTURE SHALL BE
AMENDED AND REPLACED BY THE FOLLOWING:
Section 4.10
THE FOLLOWING SHALL BE ADDED AS NEW SECTION 12.15 OF ARTICLE XII OF THE
INDENTURE:
Section 12.15. GUARANTEE. Subject to the provisions of this Indenture
and any supplemental indenture hereto, IAC hereby irrevocably and
unconditionally guarantees (the "Guarantee") to each Holder of a Security
outstanding on the date of the First Supplemental Indenture or any Security
thereafter authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, that: (i) the principal of (and premium, if any) and
interest on the Securities shall be paid in full when due, whether at maturity,
by acceleration or otherwise; (ii) in case of any extension of time in payment
or renewal of any Securities or pursuant to any cure period provisions of the
Securities or the Indenture, they shall be paid in full when due in accordance
with the terms of the extension or renewal or cure period; and (iii) all other
obligations of the Company under the Securities and the Indenture shall be paid
in full when due, whether at maturity, by acceleration or otherwise. Failing
payment when due by the Company of any amount so guaranteed, IAC shall be
obligated to pay the same. IAC agrees that this is a guarantee of payment and
not a guarantee of collection. For the avoidance of doubt, the Guarantee does
not extend to nor shall it benefit the Holder of any Security issued under the
Indenture other than the Securities, including any Security authorized and
issued after the date hereof, unless the terms of such Security specifically
make this Guarantee applicable thereto and IAC consents to such application.
IAC hereby agrees that its obligations with regard to the Guarantee
shall be unconditional, irrespective of any circumstances which might otherwise
constitute a legal or equitable defense of a guarantor. In the event of a
default in the payment of principal, interest or
premium (if any) the Trustee or any Holder of Securities may seek to enforce the
Guarantee against IAC without first proceeding against the Company.
If any Holder or the Trustee is required by any court or otherwise to
return to either the Company or IAC, or any custodian acting in relation to
either the Company or IAC, any amount paid by the Company or IAC to the Trustee
or such Holder, the Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. IAC agrees that it shall not be entitled to
any right of subrogation in relation to the Holders or the Trustee in respect of
any obligations guaranteed hereby until payment in full of all obligations
guaranteed hereby.
The Guarantee is a continuing guarantee and shall remain in full
force and effect and shall be binding upon IAC and its successors and assigns
until full and final payment of all of principal, interest and premium (if any)
under the Securities and shall inure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
herein conferred upon that party shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions hereof.
In the event the Indenture is satisfied and discharged as provided in
Article X thereof, the Trustee will execute any documents reasonably required in
order to evidence the release of IAC from its obligations under this guarantee.
PARAGRAPH 6 OF EXHIBIT A TO THE INDENTURE AND OF EACH SECURITY SHALL BE AMENDED
AND RESTATED IN ITS ENTIRETY AS SET FORTH IN ANNEX B HERETO.
EFFECT OF FIRST SUPPLEMENTAL INDENTURE
The Company, IAC and the Trustee hereby agree that by virtue of their
execution and delivery of this First Supplemental Indenture, the Securities
shall be deemed to be amended in accordance with the provisions of paragraphs 1
through 11 above and the Guarantee shall, pursuant to paragraph 4 of the
Securities, be deemed to be a part of each Security.
The provisions of paragraphs 7 and 8 of this First Supplemental
Indenture are intended to, and shall have the effect of, terminating any
obligation of the Company arising under the Indenture to prepare and/or file
with the Trustee and the SEC, in accordance with the rules and regulations
prescribed from time to time by the SEC, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
or 15(d) of the Exchange Act.
This First Supplemental Indenture shall become effective, and the
provisions provided for in this First Supplemental Indenture shall become
operative, immediately upon consummation of the Merger. In the event the Merger
is not consummated, then this First Amendment shall be null and void and of no
force and effect.
RATIFICATION OF INDENTURE; FIRST SUPPLEMENTAL INDENTURE; PART OF INDENTURE.
Except as expressly amended hereby, the Indenture is in all respects
ratified and confirmed and all the terms, conditions and provisions thereof
shall remain in full force and effect. This First Supplemental Indenture shall
form a part of the Indenture for all purposes, and every Holder of a Security
heretofore or hereafter authenticated and delivered shall be bound hereby.
MISCELLANEOUS
GOVERNING LAW. This First Supplemental Indenture shall be governed in
accordance with the internal laws of the State of New York.
TRUSTEE MAKES NO REPRESENTATIONS. The Trustee makes no representation as to the
validity or sufficiency of this First Supplemental Indenture. The recitals and
statements herein are deemed to be those of the Company and IAC and not of the
Trustee.
COUNTERPARTS. This First Supplemental Indenture may be simultaneously executed
by facsimile or electronic mail and in any number of counterparts, each of which
when so executed and delivered shall be an original; but such counterparts shall
together constitute but one and the same instrument.
EFFECT OF HEADINGS. All descriptive headings of this First Supplemental
Indenture are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
[Remainder of Page Intentionally Blank]
IN WITNESS HEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed as of the day and year first above
written.
ASK JEEVES, INC.
By: /s/ Steve Sordello
--------------------------
Name: Steve Sordello
Title: Chief Financial Officer
IAC/INTERACTIVECORP
By: /s/ Gregory R. Blatt
--------------------------
Name: Gregory R. Blatt, Esq.
Title: Executive Vice President,
General Counsel and Secretary
THE BANK OF NEW YORK,
As Trustee
By: /s/ Sandee Sparks
--------------------------
Name: Sandee Sparks
Title: Vice President
ANNEX A
ARTICLE IV
CONVERSION
SECTION 4.01 CONVERSION PRIVILEGE.
(a) Subject to the further provisions of this Article IV and paragraph 6
of the Securities, a Holder of a Security may convert the principal amount of
such Security (or any portion thereof equal to $1,000 or any integral multiple
of $1,000 in excess thereof) into Common Stock at any time prior to the close
of business on the Final Maturity Date, at the Conversion Price then in effect.
(b) If a Security is submitted or presented for purchase pursuant to a
Change of Control Purchase Notice in accordance with Article III, such
conversion right shall terminate at the close of business on the Business Day
immediately preceding the Change in Control Purchase Date for such Security or
such earlier date as the Holder presents such Security for purchase (unless the
Holder withdraws its election pursuant to Section 4.01(e)).
(c) If IAC elects Share Settlement the number of shares of Common Stock
issuable upon conversion of a Security shall be determined by dividing the
aggregate principal amount of the Security or portion thereof surrendered for
conversion by the Conversion Price in effect on the Conversion Date. The
initial Conversion Price is set forth in paragraph 6 of the Securities and is
subject to adjustment as provided in this Article IV.
(d) Provisions of this Indenture that apply to conversion of all of a
Security also apply to conversion of a portion of a Security.
(e) A Security in respect of which a Holder has delivered a Change in
Control Purchase Notice pursuant to Section 3.02(c) exercising the option of
such Holder to require the Company to purchase such Security may be converted
only (1) if such Change in Control Purchase Notice is withdrawn by a written
notice of withdrawal delivered to the Paying Agent prior to the close of
business on the Business Day immediately preceding the Change in Control
Purchase Date in accordance with Section 3.03 or (2) pursuant to the deemed
withdrawal of such notice under Section 3.02(c).
(f) A Holder of Securities is not entitled to any rights of a holder of
Common Stock until such Holder has converted its Securities to Common Stock,
and only to the extent such Securities are deemed to have been converted into
Common Stock pursuant to this Article IV.
SECTION 4.02 CONVERSION PROCEDURE.
(a) To convert a Security, a Holder must (a) complete and manually sign
he conversion notice on the back of the Security and deliver such notice to the
Conversion Agent, (b) surrender the Security to the Conversion Agent, (c)
furnish appropriate endorsements and transfer documents if required by a
Registrar or the Conversion Agent, and (d) pay any transfer or similar tax, if
required. The date on which the Holder satisfies all of those requirements is
the "Conversion Date."
(b) As soon as practicable after the Conversion Date, and subject to
paragraph (c), the Company or IAC shall satisfy all of the obligations of the
Company and IAC upon conversion of the Securities ("Conversion Obligations") by
delivering to the Holder, at IAC's option, either shares of Common Stock, cash,
or a combination of cash and shares of Common Stock, in the following manner:
(1) If IAC elects to satisfy the entire Conversion Obligation in
shares of Common Stock ("Share Settlement"), then IAC or the Company will
deliver to the Holder shares of Common Stock equal to the quotient of (A) the
aggregate principal amount of Securities to be converted by the Holder divided
by (B) the Conversion Price in effect on the Conversion Date;
(2) If IAC elects to satisfy the entire Conversion Obligation in cash
("Cash Settlement"), then IAC or the Company will deliver to the Holder cash in
an amount equal to the product of (A) a number equal to the aggregate principal
amount of Securities to be converted by such Holder divided by the Conversion
Price in effect on the Conversion Date, and (B) the arithmetic mean of the
Volume Weighted Average Prices of Common Stock on each Trading Day during the
Cash Settlement Averaging Period; or
(3) If IAC elects to satisfy a portion of the Conversion Obligation
in cash (the "Partial Cash Amount") and a portion in shares of Common Stock
(together with the Partial Cash Amount, a "Combined Settlement"), then IAC or
the Company will deliver to the Holder such Partial Cash Amount plus a number
of shares of Common Stock equal to the quotient of (A) the amount of the Cash
Settlement as set forth in clause (2) above minus such Partial Cash Amount
divided by (B) the arithmetic mean of the Volume Weighted Average Prices of
the Common Stock on each Trading Day during the applicable Cash Settlement
Averaging Period.
(c) Upon receipt of the conversion notice from a Holder by the Company,
IAC or the Conversion Agent:
(1) If IAC elects to satisfy the Conversion Obligation by Share
Settlement, then settlement in Common Stock will be made on or prior to the
fifth (5th) Trading Day following the receipt of such conversion notice.
(2) If IAC elects to satisfy the Conversion Obligation by Cash
Settlement or Combined Settlement, then IAC or the Company will notify the
Holder, through the Trustee, of the dollar amount to be satisfied in cash at
any time on or before the date that is two Business Days following receipt of
the notice of conversion (the "Settlement Notice Period"). Share Settlement
will apply automatically if neither IAC nor the Company notifies the Holder
that IAC has chosen another settlement method.
(3) If IAC timely elects Cash Settlement or Combined Settlement, then
the Holder may retract the conversion notice at any time during the two (2)
Business Day period beginning on the day after the Settlement Notice Period
(the "Conversion Retraction Period") by notice to the Trustee. The Holder
cannot retract the conversion notice (and the conversion notice therefore will
be irrevocable) if IAC elects Share Settlement. If the Holder has not retracted
the conversion notice during the Conversion Retraction Period, then Cash
Settlement or Combined Settlement will occur on the first Trading Day following
the Cash Settlement Averaging Period.
2
(d) If an Event of Default (other than an Event of Default in a cash
payment upon conversion of the Securities) has occurred and is continuing, IAC
and/or the Company may not pay cash upon conversion of any Security or portion
of a Security (other than cash for fractional shares).
(e) The person in whose name the Common Stock certificate is registered
shall be deemed to be a stockholder of record on the Conversion Date; provided,
however, that no surrender of a Security on any date when the stock transfer
books of IAC shall be closed shall be effective to constitute the person or
persons entitled to receive the shares of Common Stock upon such conversion as
the record holder or holders of such shares of Common Stock on such date, but
such surrender shall be effective to constitute the person or persons entitled
to receive such shares of Common Stock as the record holder or holders thereof
for all purposes at the close of business on the next succeeding day on which
such stock transfer books are open; provided, further, that such conversion
shall be at the Conversion Price in effect on the Conversion Date as if the
stock transfer books of IAC had not been closed. Upon conversion of a Security,
such person shall no longer be a Holder of such Security. No payment or
adjustment will be made for dividends or distributions on shares of Common
Stock issued upon conversion of a Security.
(f) Anything herein to the contrary notwithstanding, in the case of Global
Securities, conversion notices may be delivered and such Securities may be
surrendered for conversion in accordance with the Applicable Procedures as in
effect from time to time.
(g) Upon surrender of a Security that is converted in part, IAC and the
Company shall execute, and the Trustee shall authenticate and deliver to the
Holder, a new Security equal in principal amount to the unconverted portion of
the Security surrendered.
SECTION 4.03 FRACTIONAL SHARES.
The Company and/or IAC will not deliver fractional shares of Common Stock
upon conversion of Securities. In lieu thereof, IAC or the Company will pay an
amount in cash for the fractional shares equal to the Volume Weighted Average
Price of the Common Stock determined during the Cash Settlement Averaging
Period multiplied by the fractional share and rounding the product to the
nearest whole cent.
SECTION 4.04 TAXES ON CONVERSION.
If a Holder converts a Security, the Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon such conversion. However, the Holder shall pay any such tax which is
due because the Holder requests the shares to be issued in a name other than
the Holder's name. The Conversion Agent may refuse to deliver the certificate
representing the Common Stock being issued in a name other than the Holder's
name until the Conversion Agent receives a sum sufficient to pay any tax which
will be due because the shares are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any tax withholding required by
law or regulation.
3
SECTION 4.05 IAC TO PROVIDE STOCK.
IAC shall, from time to time as may be necessary, reserve, out of its
authorized but unissued Common Stock, a sufficient number of shares of Common
Stock to permit the conversion of all outstanding Securities into shares of
Common Stock. All shares of Common Stock delivered upon conversion of the
Securities shall be newly issued shares, shall be duly authorized, validly
issued, fully paid and nonassessable and shall be free from preemptive rights
and free of any lien or adverse claim.
IAC will endeavor promptly to comply with all federal and state securities
laws regulating the offer and delivery of shares of Common Stock upon
conversion of Securities, if any, and will list or cause to have quoted such
shares of Common Stock on each national securities exchange or on the Nasdaq
National Market or other over-the-counter market or such other market on which
the Common Stock is then listed or quoted; provided, however, that if rules of
such automated quotation system or exchange permit IAC to defer the listing of
such Common Stock until the first conversion of the Securities into Common
Stock in accordance with the provisions of this Indenture, IAC covenants to
list such Common Stock issuable upon conversion of the Securities in accordance
with the requirements of such automated quotation system or exchange at such
time. Any Common Stock issued upon conversion of a Security hereunder which at
the time of conversion was a Restricted Security will also be a Restricted
Security.
SECTION 4.06 ADJUSTMENT OF CONVERSION PRICE.
The conversion price as stated in paragraph 6 of the Securities (the
"Conversion Price") shall be adjusted from time to time by IAC and the Company
as follows:
(a) In case IAC shall (i) pay a dividend on its Common Stock in shares of
Common Stock, (ii) make a distribution on its Common Stock in shares of Common
Stock, (iii) subdivide its outstanding Common Stock into a greater number of
shares, or (iv) combine its outstanding Common Stock into a smaller number of
shares, the Conversion Price in effect immediately prior thereto shall be
adjusted so that the Holder of any Security thereafter surrendered for
conversion shall be entitled to receive that number of shares of Common Stock
which it would have owned had such Security been converted immediately prior to
the happening of such event. An adjustment made pursuant to this subsection (a)
shall become effective immediately after the record date in the case of a
dividend or distribution and shall become effective immediately after the
effective date in the case of subdivision or combination.
(b) In case IAC shall issue rights or warrants to all or substantially all
holders of its Common Stock entitling them (for a period commencing no earlier
than the record date described below and expiring not more than 60 days after
such record date) to subscribe for or purchase shares of Common Stock (or
securities convertible into Common Stock) at a price per share (or having a
conversion price per share) less than the Current Market Price per share of
Common Stock on the record date for the determination of stockholders entitled
to receive such rights or warrants, the Conversion Price in effect immediately
prior thereto shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
such record date by a fraction of which the numerator shall be the number
4
of shares of Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of shares of
Common Stock so offered (or the aggregate conversion price of the convertible
securities so offered, which shall be determined by multiplying the number of
shares of Common Stock issuable upon conversion of such convertible securities
by the conversion price per share of Common Stock pursuant to the terms of such
convertible securities) would purchase at the Current Market Price per share of
Common Stock on such record date, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date plus the
number of additional shares of Common Stock offered (or into which the
convertible securities so offered are convertible). Such adjustment shall be
made successively whenever any such rights or warrants are issued, and shall
become effective immediately after such record date. If at the end of the
period during which such rights or warrants are exercisable not all rights or
warrants shall have been exercised, the adjusted Conversion Price shall be
immediately readjusted to what it would have been based upon the number of
additional shares of Common Stock actually issued (or the number of shares of
Common Stock issuable upon conversion of convertible securities actually
issued).
(c) In case IAC shall distribute to all or substantially all holders of
its Common Stock any shares of capital stock of IAC (other than Common Stock),
evidences of indebtedness or other non-cash assets (including securities of any
person other than IAC but excluding (1) dividends or distributions paid
exclusively in cash or (2) dividends or distributions referred to in subsection
(a) of this Section 4.06), or shall distribute to all or substantially all
holders of its Common Stock rights or warrants to subscribe for or purchase any
of its securities (excluding those rights and warrants referred to in
subsection (b) of this Section 4.06 and also excluding the distribution of
rights to all holders of Common Stock pursuant to the adoption of a stockholders
rights plan or the detachment of such rights under the terms of such stockholder
rights plan), then in each such case the Conversion Price shall be adjusted so
that the same shall equal the price determined by multiplying the current
Conversion Price by a fraction of which the numerator shall be the Current
Market Price per share of the Common Stock on the record date mentioned below
less the fair market value on such record date (as determined by the Board of
Directors, whose determination shall be conclusive evidence of such fair
market value and which shall be evidenced by an Officers' Certificate delivered
to the Trustee) of the portion of the capital stock, evidences of indebtedness
or other non-cash assets so distributed or of such rights or warrants
applicable to one share of Common Stock (determined on the basis of the number
of shares of Common Stock outstanding on the record date), and of which the
denominator shall be the Current Market Price per share of the Common Stock on
such record date. Such adjustment shall be made successively whenever any such
distribution is made and shall become effective immediately after the record
date for the determination of shareholders entitled to receive such
distribution.
In the event the then fair market value (as so determined) of the portion
of the capital stock, evidences of indebtedness or other non-cash assets so
distributed or of such rights or warrants applicable to one share of Common
Stock is equal to or greater than the Current Market Price per share of the
Common Stock on such record date, in lieu of the foregoing adjustment, adequate
provision shall be made so that each holder of a Security shall have the right
to receive upon conversion the amount of capital stock, evidences of
indebtedness or other non-cash assets so distributed or of such rights or
warrants such holder would have received had such holder converted each
Security on such record date. In the event that such dividend or distribution
is not
5
so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 4.06(c) 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 of the Common Stock. In the event that IAC has or
implements a preferred shares rights plan ("Rights Plan"), upon conversion of
the Securities into Common Stock, to the extent that any such Rights Plan is
still in effect upon such conversion, the holders of Securities will receive,
in addition to the Common Stock, the rights described therein (whether or not
the rights have separated from the Common Stock at the time of conversion),
subject to the limitations set forth in the Rights Plan. Any distribution of
rights or warrants pursuant to a Rights Plan complying with the requirements
set forth in the immediately preceding sentence of this paragraph shall not
constitute a distribution of rights or warrants pursuant to this Section
4.06(c). Rights or warrants distributed by IAC to all holders of Common Stock
entitling the holders thereof to subscribe for or purchase shares of IAC'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 shares of Common Stock; (ii) are not
exercisable; and (iii) are also issued in respect of future issuances of Common
Stock, shall be deemed not to have been distributed for purposes of this Section
4.06 (and no adjustment to the Conversion Price under this Section 4.06 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 Price shall be made under this
Section 4.06(c). 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 Price under this
Section 4.06 was made, (1) in the case of any such rights or warrants which
shall all have been redeemed or repurchased without exercise by any holders
thereof, the Conversion Price 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 Stock with respect to
such rights or warrants (assuming such holder had retained such rights or
warrants), made to all holders of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants which shall have
expired or been terminated without exercise by any holders thereof, the
Conversion Price shall be readjusted as if such rights and warrants had not been
issued.
(1) In case IAC shall, by dividend or otherwise, at any time
distribute (a "Triggering Distribution") to all or substantially all holders of
its Common Stock cash in an aggregate amount that, together with the aggregate
amount of (A) any cash and the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive evidence thereof and which
shall be evidenced by an Officers' Certificate delivered to the
6
Trustee) of any other consideration payable in respect of any tender offer by
IAC or a Subsidiary of IAC for Common Stock consummated within the 12 months
preceding the date of payment of the Triggering Distribution and in respect of
which no Conversion Price adjustment pursuant to this Section 4.06 has been made
and (B) all other cash distributions to all or substantially all holders of its
Common Stock made within the 12 months preceding the date of payment of the
Triggering Distribution and in respect of which no Conversion Price adjustment
pursuant to this Section 4.06 has been made, exceeds an amount equal to 10.0%
of the product of the Current Market Price per share of Common Stock on the
Business Day (the "Determination Date") immediately preceding the day on which
such Triggering Distribution is declared by IAC multiplied by the number of
shares of Common Stock outstanding on the Determination Date (excluding shares
held in the treasury of IAC), the Conversion Price shall be reduced so that the
same shall equal the price determined by multiplying such Conversion Price in
effect immediately prior to the Determination Date by a fraction of which the
numerator shall be the Current Market Price per share of the Common Stock on
the Determination Date less the sum of the aggregate amount of cash and the
aggregate fair market value (determined as aforesaid in this Section 4.06(c)(1))
of any such other consideration so distributed, paid or payable within such 12
months (including, without limitation, the Triggering Distribution) applicable
to one share of Common Stock (determined on the basis of the number of shares
of Common Stock outstanding on the Determination Date) and the denominator
shall be such Current Market Price per share of the Common Stock on the
Determination Date, such reduction to become effective immediately prior to
the opening of business on the day following the date on which the Triggering
Distribution is paid.
(2) In case any tender offer made by IAC or any of its Subsidiaries
for Common Stock shall expire and such tender offer (as amended upon the
expiration thereof) shall involve the payment of aggregate consideration in an
amount (determined as the sum of the aggregate amount of cash consideration and
the aggregate fair market value (as determined by the Board of Directors, whose
determination shall be conclusive evidence thereof and which shall be evidenced
by an Officers' Certificate delivered to the Trustee thereof) of any other
consideration) that, together with the aggregate amount of (A) any cash and the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive evidence thereof and which shall be evidenced by an
Officers' Certificate delivered to the Trustee) of any other consideration
payable in respect of any other tender offers by IAC or any Subsidiary of IAC
for Common Stock consummated within the 12 months preceding the date of the
Expiration Date (as defined below) and in respect of which no Conversion Price
adjustment pursuant to this Section 4.06 has been made and (B) all cash
distributions to all or substantially all holders of its Common Stock made
within the 12 months preceding the Expiration Date and in respect of which no
Conversion Price adjustment pursuant to this Section 4.06 has been made,
exceeds an amount equal to 10.0% of the product of the Current Market Price per
share of Common Stock as of the last date (the "Expiration Date") tenders could
have been made pursuant to such tender offer (as it may be amended) (the last
time at which such tenders could have been made on the Expiration Date is
hereinafter sometimes called the "Expiration Time") multiplied by the number of
shares of Common Stock outstanding (including tendered shares but excluding any
shares held in the treasury of IAC) at the Expiration Time, then, immediately
prior to the opening of business on the day after the Expiration Date, the
Conversion Price shall be reduced so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior to
the close of business on the Expiration Date by a fraction of which the
numerator shall
7
be the product of the number of shares of Common Stock outstanding (including
tendered shares but excluding any shares held in the treasury of IAC) at the
Expiration Time multiplied by the Current Market Price per share of the Common
Stock on the Trading Day next succeeding the Expiration Date and the denominator
shall be the sum of (x) the aggregate consideration (determined as aforesaid)
payable to stockholders based on the acceptance (up to any maximum specified in
the terms of the tender offer) of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted, up to any such
maximum, being referred to as the "Purchased Shares") and (y) the product of
the number of shares of Common Stock outstanding (less any Purchased Shares and
excluding any shares held in the treasury of IAC) at the Expiration Time and
the Current Market Price per share of Common Stock on the Trading Day next
succeeding the Expiration Date, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Date. In
the event that IAC is obligated to purchase shares pursuant to any such tender
offer, but IAC is permanently prevented by applicable law from effecting any or
all such purchases or any or all such purchases are rescinded, the Conversion
Price shall again be adjusted to be the Conversion Price which would have been
in effect based upon the number of shares actually purchased. If the
application of this Section 4.06(c)(2) to any tender offer would result in an
increase in the Conversion Price, no adjustment shall be made for such tender
offer under this Section 4.06(c)(2).
(3) For purposes of this Section 4.06(c), the term "tender offer"
shall mean and include both tender offers and exchange offers, all references
to "purchases" of shares in tender offers (and all similar references) shall
mean and include both the purchase of shares in tender offers and the
acquisition of shares pursuant to exchange offers, and all references to
"tendered shares" (and all similar references) shall mean and include shares
tendered in both tender offers and exchange offers.
(d) For the purpose of any computation under subsections (b) and (c) of
this Section 4.06, the current market price (the "Current Market Price") per
share of Common Stock on any date shall be deemed to be the average of the
Sales Prices for the 30 consecutive Trading Days commencing 45 Trading Days
before (i) the Determination Date or the Expiration Date, as the case may be,
with respect to distributions or tender offers under subsection (c) of this
Section 4.06 or (ii) the record date with respect to distributions, issuances
or other events requiring such computation under subsection (b) or (c) of this
Section 4.06.
(e) In any case in which this Section 4.06 shall require that an adjustment
be made following a record date or a Determination Date or Expiration Date, as
the case may be, established for purposes of this Section 4.06, IAC and the
Company may elect to defer (but only until five Business Days following the
filing by IAC with the Trustee of the certificate described in Section 4.09)
delivery to the Holder of any Security converted after such record date or
Determination Date or Expiration Date the shares of Common Stock and other
capital stock of IAC issuable upon such conversion over and above the shares of
Common Stock and other capital stock of IAC issuable upon such conversion only
on the basis of the Conversion Price prior to adjustment; and, in lieu of the
shares the issuance of which is so deferred, IAC and/or the Company shall issue
or cause its transfer agents to issue due bills or other appropriate evidence
prepared by IAC and/or the Company of the right to receive such shares. If any
distribution in respect of which an adjustment to the Conversion Price is
required to be made as of the record date or Determination Date or Expiration
Date therefor is not thereafter made or paid by IAC
8
and/or the Company for any reason, the Conversion Price shall be readjusted to
the Conversion Price which would then be in effect if such record date had not
been fixed or such effective date or Determination Date or Expiration Date had
not occurred.
SECTION 4.07 NO ADJUSTMENT.
(a) No adjustment in the Conversion Price shall be required:
(1) unless the adjustment would require an increase or decrease of at
least 1% in the Conversion Price as last adjusted; provided, however, that any
adjustments which by reason of this Section 4.07 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment;
(2) for issuances of Common Stock pursuant to a plan for reinvestment
of dividends or interest or for a change in the par value or a change to no par
value of the Common Stock; or
(3) if the Holders participate in the transactions that would
otherwise lead to an adjustment in the Conversion Price pursuant to Section
4.06. To the extent that the Securities become convertible into the right to
receive cash, no adjustment need be made thereafter as to the cash. Interest
will not accrue on the cash. All calculations under this Article IV shall be
made to the nearest cent or to the nearest one-hundredth of a share, as the
case may be.
SECTION 4.08 ADJUSTMENT FOR TAX PURPOSES.
IAC shall be entitled to make such reductions in the Conversion Price, in
addition to those required by Section 4.06, as it in its discretion shall
determine to be advisable in order that any stock dividends, subdivisions of
shares, distributions of rights to purchase stock or securities or
distributions of securities convertible into or exchangeable for stock
hereafter made by IAC to its stockholders shall not be taxable.
SECTION 4.09 NOTICE OF ADJUSTMENT.
Whenever the Conversion Price or conversion privilege is adjusted, IAC or
the Company shall promptly mail to Securityholders a notice of the adjustment
and file with the Trustee an Officers' Certificate briefly stating the facts
requiring the adjustment and the manner of computing it. Unless and until the
Trustee shall receive an Officers' Certificate setting forth an adjustment of
the Conversion Price, the Trustee may assume without inquiry that the
Conversion Price has not been adjusted and that the last Conversion Price of
which it has knowledge remains in effect.
SECTION 4.10 EFFECT OF RECLASSIFICATION, CONSOLIDATION, MERGER OR SALE
ON CONVERSION PRIVILEGE.
If any of the following shall occur, namely: (a) any reclassification or
change of shares of Common Stock issuable upon conversion of the Securities
(other than a change in par value, or from par value to no par value, or from
no par value to par value, or as a result of a subdivision or combination, or
any other change for which an adjustment is provided in Section 4.06); (b)
9
any consolidation or merger or combination to which IAC is a party other than a
merger in which IAC is the continuing corporation and which does not result in
any reclassification of, or change (other than in par value, or from par value
to no par value, or from no par value to par value, or as a result of a
subdivision or combination) in, outstanding shares of Common Stock; or (c) any
sale or conveyance as an entirety or substantially as an entirety of the
property and assets of IAC, directly or indirectly, to any person as a result
of which holders of Common Stock shall be entitled to receive stock, securities
or other property or assets (including cash) with respect to or in exchange for
Common Stock, then the Company and IAC, or such successor, purchasing or
transferee corporation, as the case may be, shall execute and deliver to the
Trustee a supplemental indenture providing that the Holder of each Security
then outstanding shall have the right to convert such Security into the kind
and amount of shares of stock and other securities and property (including
cash) receivable upon such reclassification, change, combination, consolidation,
merger, sale or conveyance by a holder of the number of shares of Common Stock
deliverable upon conversion of such Security immediately prior to such
reclassification, change, combination, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for adjustments of the
Conversion Price which shall be as nearly equivalent as may be practicable to
the adjustments of the Conversion Price provided for in this Article IV. If, in
the case of any such consolidation, merger, combination, sale or conveyance,
the stock or other securities and property (including cash) receivable
thereupon by a holder of Common Stock include shares of stock or other
securities and property of a person other than the successor, purchasing or
transferee corporation, as the case may be, in such consolidation, merger,
combination, sale or conveyance, then such supplemental indenture shall also be
executed by such other person and shall contain such additional provisions to
protect the interests of the Holders of the Securities as the Board of
Directors and the Trustee shall reasonably consider necessary by reason of the
foregoing. The provisions of this Section 4.10 shall similarly apply to
successive reclassifications, changes, combinations, consolidations, mergers,
sales or conveyances.
In the event the Company and IAC shall execute a supplemental indenture
pursuant to this Section 4.10, IAC or the Company shall promptly file with the
Trustee (x) an Officers' Certificate briefly stating the reasons therefor, the
kind or amount of shares of stock or other securities or property (including
cash) receivable by Holders of the Securities upon the conversion of their
Securities after any such reclassification, change, combination, consolidation,
merger, sale or conveyance, any adjustment to be made with respect thereto and
that all conditions precedent have been complied with and (y) an Opinion of
Counsel that all conditions precedent have been complied with, and shall
promptly mail notice thereof to all Holders.
SECTION 4.11 TRUSTEE'S DISCLAIMER.
The Trustee shall have no duty to determine when an adjustment under this
Article IV should be made, how it should be made or what such adjustment should
be, but may accept as conclusive evidence of that fact or the correctness of
any such adjustment, and shall be protected in conclusively relying upon, an
Officers' Certificate including the Officers' Certificate with respect thereto
which IAC or the Company is obligated to file with the Trustee pursuant to
Section 4.09. The Trustee makes no representation as to the validity or value
of any securities or assets issued upon conversion of Securities, and the
Trustee shall not be responsible for the failure of IAC or the Company to
comply with any provisions of this Article IV.
10
The Trustee shall not be under any responsibility to determine the
correctness of any provisions contained in any supplemental indenture executed
pursuant to Section 4.10, but may accept as conclusive evidence of the
correctness thereof, and shall be fully protected in conclusively relying upon,
the Officers' Certificate with respect thereto which IAC or the Company is
obligated to file with the Trustee pursuant to Section 4.10.
SECTION 4.12 VOLUNTARY REDUCTION.
The Company and IAC from time to time may reduce the Conversion Price by
any amount for any period of time if the period is at least 20 days and if the
reduction is irrevocable during the period if the Board of Directors of IAC
determines that such reduction would be in the best interest of IAC or to avoid
or diminish income tax to holders of shares of Common Stock in connection with
a dividend or distribution of stock or similar event, and IAC or the Company
provides 15 days prior notice of any reduction in the Conversion Price;
provided, however, that in no event may the Conversion Price be reduced to be
less than the par value of a share of Common Stock.
ANNEX B
6. CONVERSION
A Holder of a Note may convert the principal amount of such Note (or any
portion thereof equal to $1,000 or any integral multiple of $1,000 in excess
thereof) into shares of Common Stock at any time prior to the close of business
on June 1, 2008; provided, however, that if the Note is submitted or presented
for purchase pursuant to a Change in Control Notice, the conversion right will
terminate at the close of business on the Business Day immediately preceding the
Change in Control Purchase Date for such Note or such earlier date as the Holder
presents such Note for purchase (unless the Holder withdraws its election
pursuant to the Indenture).
The initial Conversion Price is $13.34 per share, subject to adjustment
under certain circumstances as provided in the Indenture. The number of shares
of Common Stock issuable upon conversion of a Note is determined by dividing the
principal amount of the Note or portion thereof converted by the Conversion
Price in effect on the Conversion Date.
To convert a Note, a Holder must (a) complete and manually sign the
conversion notice set forth below and deliver such notice to the Conversion
Agent, (b) surrender the Note to the Conversion Agent, (c) furnish appropriate
endorsements and transfer documents if required by a Registrar or the Conversion
Agent, and (d) pay any transfer or similar tax, if required. A Holder may
convert a portion of a Note equal to $1,000 or any integral multiple thereof.
A Note in respect of which a Holder had delivered a Change in Control
Purchase Notice exercising the option of such Holder to require the Company to
purchase such Note may be converted only if the Change in Control Purchase
Notice is withdrawn in accordance with the terms of the Indenture.
As soon as practicable after the Conversion Date, the Company and IAC
shall satisfy all of their Conversion Obligations by delivering to the Holder,
at IAC's option, either shares of Common Stock, cash, or a combination of cash
and shares of Common Stock. If IAC elects to satisfy the entire Conversion
Obligation by Share Settlement, then IAC or the Company will deliver to the
Holder shares of Common Stock equal to the quotient of (A) the aggregate
principal amount of Notes to be converted by the Holder divided by (B) the
Conversion Price in effect on the Conversion Date. If IAC elects to satisfy the
entire Conversion Obligation by Cash Settlement, then the Company or IAC will
deliver to the Holder cash in an amount equal to the product of (A) a number
equal to the aggregate principal amount of Notes to be converted by such Holder
divided by the Conversion Price in effect on the Conversion Date, and (B) the
arithmetic mean of the Volume Weighted Average Prices of the Common Stock on
each Trading Day during the Cash Settlement Averaging Period. If IAC elects to
satisfy the Conversion Obligation in a Combined Settlement, then the Company or
IAC will deliver to the Holder a Partial Cash Amount plus a number of shares of
Common Stock equal to the quotient of (A) the amount of the Cash Settlement
minus such Partial Cash Amount divided by (B) the arithmetic mean of the Volume
Weighted Average Prices of the Common Stock on each Trading Day during the
applicable Cash Settlement Averaging Period.
Upon receipt of the conversion notice from a Holder by the Company, IAC or
the Conversion Agent, (1) if IAC elects to satisfy the Conversion Obligation by
Share Settlement, then settlement in Common Stock will be made on or prior to
the fifth (5th) Trading Day following receipt of such conversion notice; or (2)
if IAC elects to satisfy the Conversion Obligation by Cash Settlement or
Combined Settlement, then the Company or IAC will notify the Holder, through the
Conversion Agent, of the dollar amount to be satisfied in cash at any time
during the Settlement Notice Period. Share Settlement will apply automatically
if the Company or IAC does not notify the Holder that IAC has chosen another
settlement method.
If IAC timely elects Cash Settlement or Combined Settlement, then the
Holder may retract the conversion notice at any time during the Conversion
Retraction Period by notice to the Conversion Agent. The Holder cannot retract
the conversion notice (and the conversion notice therefore will be irrevocable)
if IAC elects Share Settlement. If the Holder has not retracted the conversion
notice during the Conversion Retraction Period, then Cash Settlement or Combined
Settlement will occur on the first Trading Day following the Cash Settlement
Averaging Period.
-2-
Exhibit 99.1
IAC COMPLETES ACQUISITION OF ASK JEEVES
NEW YORK, NEW YORK AND OAKLAND, CALIFORNIA - JULY 19, 2005 - IAC/InterActiveCorp
(Nasdaq: IACI) today announced the successful completion of its acquisition of
Ask Jeeves, a leading provider of information retrieval technologies, brands and
Internet advertising services.
Under the terms of the merger agreement each share of Ask Jeeves common stock
was converted into the right to receive 1.2668 shares of IAC common stock, and
options to purchase Ask Jeeves common stock were converted into options to
acquire IAC common stock. In addition, in connection with the transaction, IAC
has irrevocably and unconditionally guaranteed Ask Jeeves' outstanding
convertible subordinated notes due 2008; these notes are now convertible into
shares of IAC common stock in accordance with their terms.
In the transaction, IAC has issued approximately 74.8 million shares of IAC
common stock in respect of Ask Jeeves' outstanding stock, and expects to issue
approximately 13.2 million additional shares in respect of Ask Jeeves'
outstanding convertible notes and in-the-money stock options. As previously
announced, IAC has offset a substantial portion of the dilution resulting from
the transaction through its repurchase of 52.8 millions shares of its common
stock.
Shares of Ask Jeeves common stock, which prior to the merger traded on the
Nasdaq National Market under the symbol "ASKJ", were delisted from trading as of
the close of the market on Tuesday, July 19.
Ask Jeeves will continue as an operating business of IAC, residing in the 'Media
& Advertising' sector of IAC, pursuant to IAC's recently announced new reporting
configuration.
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ABOUT IAC/INTERACTIVECORP
IAC operates leading and diversified businesses in sectors being transformed by
the internet, online and offline...our mission is to harness the power of
interactivity to make daily life easier and more productive for people all over
the world. To view a full list of the companies of IAC please visit our website
at http://iac.com.
CONTACTS:
IAC CORPORATE COMMUNICATIONS
Deborah Roth
(212) 314-7254
IAC INVESTOR RELATIONS
Roger Clark / Eoin Ryan
(212) 314-7400
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PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
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STATEMENTS INCLUDE STATEMENTS RELATING TO IAC'S ANTICIPATED FINANCIAL
PERFORMANCE, BUSINESS PROSPECTS, NEW DEVELOPMENTS AND SIMILAR MATTERS, AND/OR
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