Exhibit 1.1
$500,000,000 AGGREGATE PRINCIPAL AMOUNT
OLD REPUBLIC INTERNATIONAL CORPORATION
3.75% CONVERTIBLE SENIOR NOTES
DUE 2018
UNDERWRITING AGREEMENT
dated March 2, 2011
Morgan Stanley & Co. Incorporated
UBS Securities LLC
Underwriting Agreement
March 2, 2011
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
UBS SECURITIES LLC
677 Washington Boulevard
Stamford, CT 06901
As Representatives of the several Underwriters
Ladies and Gentlemen:
Introductory
. Old Republic International Corporation, a Delaware corporation (the Company),
proposes to issue and sell to the several underwriters named in
Schedule A
(the
Underwriters) $500,000,000 in aggregate principal amount of its 3.75% Convertible Senior Notes
due 2018 (the Firm Notes). In addition, the Company has granted to the Underwriters an option to
purchase up to an additional $50,000,000 in aggregate principal amount of its 3.75% Convertible
Senior Notes due 2018 (the Optional Notes and, together with the Firm Notes, the Notes), as
provided in Section 2. Morgan Stanley & Co. Incorporated (Morgan Stanley) and UBS Securities LLC
have agreed to act as the representatives of the several Underwriters (each a Representative and
together, the Representatives) in connection with the offering and sale of the Notes. To the
extent there are no additional Underwriters listed on
Schedule A
other than you, the term
Underwriters as used herein shall mean you, as the sole Underwriter. The term Underwriters shall
mean either the singular or plural as the context requires.
The Notes will be convertible on the terms, and subject to the conditions, set forth in the
Indenture, dated as of August 15, 1992, between the Company and Wilmington Trust Company, as
trustee (the Trustee), as supplemented by the Supplemental Indenture thereto, dated as of the
Closing Date (as defined herein) (collectively, the Indenture). As used herein, Conversion
Shares means the fully paid, nonassessable shares of common stock, par value $1.00 per share, of
the Company (the Common Stock) and accompanying rights (the Rights) to be received by the
holders of the Notes upon conversion of the Notes pursuant to the terms of the Notes and the
Indenture. The Notes will be convertible initially at a conversion rate of 64.3407 shares per
$1,000 principal amount of the Notes, on the terms, and subject to the conditions, set forth in the
Notes and the Indenture. The term Securities means the Notes and/or the Conversion Shares.
The Company hereby confirms its agreements with the Underwriters as follows:
Section 1. Representations and Warranties of the Company.
The Company hereby represents and warrants to, and covenants with, each Underwriter, as of
the date hereof, as of the Applicable Time (as defined herein), as of the Closing Date and as of
each Subsequent Closing Date (as defined herein) as follows:
(a)
Preparation and Filing of Registration Statement and Prospectus.
The Company has
prepared and filed with the Securities and Exchange Commission (the Commission) an automatic
shelf registration statement on Form S-3 (File No. 333-172558) covering the public offering and
sale of certain securities from time to time, including the Securities, under the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder
(collectively, the Securities Act), which automatic shelf registration statement became
effective under Rule 462(e) under the Securities Act (Rule 462(e)). Such registration
statement, as of any time, means such registration statement as amended by any post-effective
amendments thereto to such time, including the exhibits and any schedules thereto at such time,
the documents incorporated or deemed to be incorporated by reference therein at such time
pursuant to Item 12 of Form S-3 under the Securities Act and the documents otherwise deemed to
be a part thereof as of such time pursuant to Rule 430B under the Securities Act (Rule 430B),
is referred to herein as the Registration Statement; provided, however, that the Registration
Statement without reference to a time means such registration statement as amended by any
post-effective amendments thereto as of the time of the first contract of sale for the Notes,
which time shall be considered the new effective date of such registration statement with
respect to the Notes within the meaning of Rule 430B(f)(2), including the exhibits and schedules
thereto as of such time, the documents incorporated or deemed incorporated by reference therein
at such time pursuant to Item 12 of Form S-3 under the Securities Act and the documents
otherwise deemed to be a part thereof as of such time pursuant to the Rule 430B. Each
preliminary prospectus and prospectus supplement used in connection with the offering of the
Notes, including the documents incorporated or deemed to be incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, are collectively referred to herein as
the Preliminary Prospectus. Promptly after execution and delivery of this Agreement (the
Execution Time), the Company will prepare and file a prospectus supplement relating to the
Securities in accordance with the provisions of Rule 424(b) under the Securities Act (Rule
424(b)). The final prospectus and the prospectus supplement, in the form first furnished or
made available to the Underwriters for use in connection with the offering of the Notes,
including the documents incorporated or deemed to be incorporated by reference therein pursuant
to Item 12 of Form S-3 under the Securities Act, are collectively referred to herein as the
Prospectus. Any reference in this Agreement to the Registration Statement, the Preliminary
Prospectus or the Prospectus, or any amendments or supplements to any of the foregoing, shall
include any copy thereof filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval System (EDGAR).
All references in this Agreement to financial statements and schedules and other
information which is contained, included or stated (or other references of like import) in
the Registration Statement, the Preliminary Prospectus or the Prospectus shall be deemed to
include all such financial statements and schedules and other information incorporated or deemed
incorporated by reference in the Registration Statement, the Preliminary Prospectus or the
Prospectus, as the case may be, prior to the Execution Time; and all references in this
Agreement to amendments or supplements to the Registration Statement, the Preliminary Prospectus
or the Prospectus shall be deemed to include the filing of any document under the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated hereunder
(collectively, the Exchange Act), incorporated or deemed to be incorporated by reference in
the Registration Statement, the Preliminary Prospectus or the Prospectus, as the case may be, at
or after the Execution Time.
(b)
Compliance with Registration Requirements.
The Company meets the requirements for use
of Form S-3 under the Securities Act. The Registration Statement has become effective under the
Securities Act. The Registration Statement is an automatic shelf registration statement, as
defined in Rule 405 under the Securities Act (Rule 405), and the Securities have been and
remain eligible for registration by the Company on a Rule 405 automatic shelf registration
statement. The Company has complied to the Commissions satisfaction with all requests of the
Commission for additional or supplemental information. No stop order suspending the
effectiveness of the Registration Statement, or notice objecting to its use pursuant to Rule
401(g)(2) under the Securities Act (Rule 401(g)(2)), has been issued by the Commission and no
order or notice from any court, arbitrator, regulatory body, administrative agency, governmental
body or other authority or
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agency (collectively, Governmental Entity) preventing or suspending the use of the
Registration Statement, the Preliminary Prospectus or the Prospectus or any proceeding for such
purpose has been instituted or is pending or, to the Companys knowledge, is contemplated or
threatened by a Governmental Entity.
Each of the Registration Statement and any post-effective amendment thereto, at the time of
their respective effectiveness, at each deemed effective date with respect to the Underwriters
pursuant to Rule 430B(f)(2), at the date hereof, at the Closing Date and at any Subsequent
Closing Date, complied, complies and will comply in all material respects with the Securities
Act and did not, does not and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to make the statements
therein not misleading.
The Preliminary Prospectus and the Prospectus, when filed with the Commission, complied and
will comply in all material respects with the Securities Act. The Prospectus and any supplement
or amendment thereto, as of their respective dates, at the time of any filing pursuant to Rule
424(b), at the Closing Date and at any Subsequent Closing Date, did not, does not and will not
include an untrue statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under which they were
made, not misleading.
The representations and warranties set forth in the immediately preceding two paragraphs do
not apply to (i) the Statement of Eligibility (Form T-1) of the Trustee under the Trust
Indenture Act of 1939, as amended (the Trust Indenture Act), (ii) statements in or omissions
from the Registration Statement or any post-effective amendment thereto, or the Prospectus, or
any amendment or supplement thereto, based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 7 hereof, or (iii) any
statement that does not constitute part of the Registration Statement or the Prospectus pursuant
to Rule 412 under the Securities Act.
There is no contract or other document required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that has
not been described or filed as required.
(c)
Incorporated Documents
. The documents incorporated by reference in the Registration
Statement, the Disclosure Package and the Prospectus, when the Registration Statement became
effective or when the documents incorporated by reference were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the Securities Act or the
Exchange Act, as applicable, and when read together with the other information contained in the
Registration Statement, the Disclosure Package or the Prospectus, as the case may be, none of
such documents included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the circumstances under
which they were made, not misleading. Any further documents so filed and incorporated by
reference in the Registration Statement, the Disclosure Package and the Prospectus or any
further amendment or supplement thereto, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and when read together with the other
information contained in the Registration Statement, the Disclosure Package or the Prospectus,
as the case may be, will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
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(d)
Disclosure Package; Issuer Free Writing Prospectuses.
The term Disclosure Package
shall mean, collectively, (i) the base prospectus, dated March 2, 2011, (ii) the preliminary
prospectus supplement, dated March 2, 2011, and (iii) each free writing prospectus (as defined
in Rule 405 of the Securities Act) listed on Schedule C hereto. As of 8:30 a.m., New York City
time, on March 3, 2011 (the Applicable Time), the Disclosure Package did not include any
untrue statement of a material fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading. The immediately preceding sentence does not apply to (i) the Statement of
Eligibility (Form T-1) of the Trustee under the Trust Indenture Act, (ii) statements in or
omissions from the Disclosure Package based upon and in conformity with written information
furnished to the Company by any Underwriter through the Representatives expressly for use
therein, it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 7 hereof, or (iii) any
statement that does not constitute part of the Registration Statement or the Prospectus pursuant
to Rule 412 under the Securities Act. As of the Applicable Time, no Issuer Free Writing
Prospectus (as defined herein), when considered together with the Disclosure Package, included
any untrue statement of a material fact or omitted to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which they were made,
not misleading.
(e)
Company is a Well-Known Seasoned Issuer
. (A) At the original effectiveness of the
Registration Statement, (B) at the time of the most recent amendment thereto for the purposes of
complying with Section 10(a)(3) of the Securities Act (whether such amendment was by
post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of the
Exchange Act or form of prospectus), (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) under the Securities Act) made
any offer relating to the Securities in reliance on the exemption of Rule 163 under the
Securities Act, and (D) as of the Execution Time, the Company was and is a well-known seasoned
issuer, as defined in Rule 405.
(f)
Company Not Ineligible Issuer.
(i) At the original effectiveness of the Registration
Statement, (ii) at the earliest time after the original effectiveness of the Registration
Statement that the Company or another offering participant made a bona fide offer (within the
meaning of Rule 164(h)(2) under the Securities Act) of the Securities and (iii) as of the
Execution Time (with such Execution Time being used as the determination date for purposes of
this clause (iii)), the Company was not and is not an ineligible issuer, as defined in Rule
405, without taking account of any determination by the Commission pursuant to Rule 405 that it
is not necessary that the Company be considered an ineligible issuer.
(g)
Issuer Free Writing Prospectuses.
Each Issuer Free Writing Prospectus, as of its issue
date and at all subsequent times through the completion of the offering of Securities under this
Agreement or until any earlier date that the Company notified or notifies each Representative as
described in the next sentence, did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the Registration
Statement, the Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto), including any document incorporated or deemed incorporated by reference therein that
has not been superseded or modified. If at any time following issuance of an Issuer Free
Writing Prospectus there occurred or occurs an event or development as a result of which such
Issuer Free Writing Prospectus conflicted or would conflict with the information contained in
the Registration Statement, the Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto), the Company has promptly notified or will promptly notify each
Representative and has promptly amended or supplemented or will promptly amend or supplement, at
its own
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expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict. The
immediately preceding two sentences do not apply to statements in or omissions from any Issuer
Free Writing Prospectus based upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use therein, it being
understood and agreed that the only such information furnished by any Underwriter consists of
the information described as such in Section 7 hereof.
(h)
Accuracy of Statements.
The statements in the Registration Statement, the Preliminary
Prospectus and the Prospectus under the headings Description of Notes, Certain U.S. Federal
Income Tax Considerations, Description of Securities, and incorporated by reference from the
Companys Annual Report on Form 10-K for the year ended December 31, 2010 under the heading
Business-Government Regulation, insofar as such statements summarize legal matters,
agreements, documents or proceedings discussed therein, are accurate and fair summaries of such
legal matters, agreements, documents or proceedings in all material respects.
(i)
Distribution of Offering Material By the Company.
The Company has not distributed and
will not distribute, prior to the later of the last Subsequent Closing Date and the completion
of the Underwriters distribution of the Notes, any offering material in connection with the
offering and sale of the Securities other than the Registration Statement, the Preliminary
Prospectus, any Permitted Free Writing Prospectus (as defined herein), the Final Term Sheet or
the Prospectus.
(j)
The Underwriting Agreement
. This Agreement has been duly authorized, executed and
delivered by the Company.
(k)
Authorization of the Indenture
. The Indenture has been duly qualified under the Trust
Indenture Act. The Indenture has been duly authorized by the Company and, on the Closing Date,
will have been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery thereof by the Trustee, will constitute a valid and legally binding
agreement of the Company enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by general
equitable principles. The Indenture conforms in all material respects to the description
thereof contained in the Registration Statement, the Disclosure Package and the Prospectus.
(l)
Authorization of the Notes
. The Notes have been duly authorized by the Company and,
when the Notes are executed, authenticated and issued in accordance with the terms of the
Indenture and delivered to and paid for by the Underwriters pursuant to this Agreement on the
Closing Date or any Subsequent Closing Date, as the case may be, the Notes (i) will constitute
valid and legally binding obligations of the Company, entitled to the benefits of the Indenture
and enforceable against the Company in accordance with their terms, except as enforcement
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights and remedies of creditors or by general equitable
principles, and (ii) will conform in all material respects to the description thereof contained
in the Registration Statement, the Disclosure Package and the Prospectus.
(m)
Authorization of the Conversion Shares
. The Conversion Shares have been duly authorized
and reserved by the Company and, when issued upon conversion of the Notes in accordance with the
terms of the Notes and the Indenture, will be validly issued, fully paid and nonassessable, and
the issuance of the Conversion Shares will not be subject to any preemptive rights, rights of
first offer or refusal or other similar rights to subscribe for or purchase securities of the
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Company or any subsidiary of the Company. The Common Stock (including the Conversion
Shares) conforms in all material respects to the description thereof contained in the
Registration Statement, the Disclosure Package and the Prospectus.
(n)
No Stamp or Transfer Taxes
. There are no stamp or other issuance or transfer taxes or
duties or other similar fees or charges under U.S. federal law, the laws of any state, or any
political subdivisions thereof, or any other U.S. or non-U.S. governmental authority required to
be paid in connection with the execution and delivery of this Agreement, the issuance or sale by
the Company of the Notes or the issuance of Common Shares upon the conversion of the Notes.
(o)
No Applicable Registration or Other Similar Rights
. There are no persons with
registration or other similar rights to have any equity or debt securities registered for sale
under the Registration Statement or included in the offering contemplated by this Agreement.
(p)
No Material Adverse Change
. Except as otherwise disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, subsequent to the respective dates as of
which information is given therein: (i) there has been no material adverse change, or any
development that could reasonably be expected to result in a material adverse change, in the
condition, financial or otherwise, or in the earnings, business, properties, operations or
prospects, whether or not arising from transactions in the ordinary course of business, of the
Company and its subsidiaries considered as one entity (any such change or development is called
a Material Adverse Change); (ii) the Company and its subsidiaries, considered as one entity,
have not incurred any material liability or obligation, indirect, direct or contingent, or
entered into any material transaction or agreement; and (iii) there has been no dividend or
distribution of any kind declared, paid or made by the Company or, except for dividends paid to
the Company or other subsidiaries of the Company, any of its subsidiaries on any class of
capital stock or repurchase or redemption by the Company or any of its subsidiaries of any class
of capital stock.
(q)
Independent Accountants
. Each of KPMG LLP and PricewaterhouseCoopers LLP, who have
expressed their opinion with respect to the financial statements (which term as used in this
Agreement includes the related notes thereto) and supporting schedules filed with the Commission
and incorporated by reference in the Registration Statement, the Disclosure Package and the
Prospectus, was at all relevant times and KPMG LLP is an independent registered public
accounting firm with respect to the Company as required by the Securities Act and the Exchange
Act.
(r)
Preparation of the Financial Statements
. The financial statements filed with the
Commission and incorporated by reference in the Registration Statement, the Disclosure Package
and the Prospectus present fairly the financial position of the Company and its consolidated
subsidiaries as of and at the dates indicated and the results of their operations and cash flows
for the periods specified. Any supporting schedules incorporated by reference in the
Registration Statement, the Disclosure Package and the Prospectus present fairly the information
required to be stated therein. Such financial statements and supporting schedules comply as to
form with the applicable accounting requirements of the Securities Act and have been prepared in
conformity with generally accepted accounting principles as applied in the United States
(GAAP) applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto. No other financial statements or supporting
schedules are required to be included or incorporated by reference in the Registration
Statement, the Disclosure Package or the Prospectus under the Securities Act or the Exchange
Act. The financial data incorporated by reference in the Registration Statement, the
Preliminary Prospectus and the Prospectus from the Companys Annual Report on Form 10-K for the
year ended December 31, 2010 under the caption Selected Financial Data fairly present the
6
information set forth therein on a basis consistent with that of the audited financial
statements included or incorporated by reference in the Registration Statement, the Disclosure
Package and the Prospectus. The Companys ratios of earnings to fixed charges included or
incorporated by reference in the Registration Statement, the Disclosure Package and the
Prospectus have been calculated in compliance with Item 503(d) of Regulation S-K under the
Securities Act.
(s)
Incorporation and Good Standing of the Company and its Subsidiaries
. Each of the
Company and its subsidiaries has been duly incorporated and is validly existing as a corporation
in good standing under the laws of the jurisdiction of its incorporation and has corporate power
and authority to own or lease, as the case may be, and operate its properties and to conduct its
business as described in the Registration Statement, the Disclosure Package and the Prospectus
and, in the case of the Company, to enter into and perform its obligations under this Agreement,
the Indenture and the Notes. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or leasing of property or the
conduct of business, except for such jurisdictions where the failure to so qualify or to be in
good standing would not, individually or in the aggregate, result in a material adverse effect
on the condition, financial or otherwise, or on the earnings, business, properties, operations
or prospects, whether or not arising from transactions in the ordinary course of business, of
the Company and its subsidiaries considered as one entity (a Material Adverse Effect). All of
the issued and outstanding shares of capital stock of each subsidiary of the Company have been
duly authorized and validly issued, are fully paid and nonassessable and are owned by the
Company, directly or through subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim.
The Company does not own or control, directly or indirectly, any corporation, association
or other entity other than the subsidiaries listed in Exhibit 21 to the Companys Annual Report
on Form 10-K for the fiscal year ended December 31, 2010. The subsidiaries listed on
Annex
A
attached hereto are the only significant subsidiaries of the Company as defined by Rule
1-02 of Regulation S-X.
(t)
Capitalization and Other Capital Stock Matters
. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Registration Statement, the Disclosure
Package and the Prospectus under the caption Capitalization (other than for subsequent
issuances, if any, pursuant to employee benefit plans described in the Registration Statement,
the Disclosure Package and the Prospectus or upon exercise of any outstanding options or
warrants described in the Registration Statement, the Disclosure Package and the Prospectus, as
the case may be). All of the issued and outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable and have been issued
in compliance with U.S. federal and state securities laws. None of the outstanding shares of
capital stock of the Company were issued in violation of any preemptive rights, rights of first
offer or refusal or other similar rights to subscribe for or purchase securities of the Company
or any subsidiary of the Company. There are no authorized or outstanding options, warrants,
preemptive rights, rights of first offer or refusal or other similar rights to purchase, or
equity or debt securities convertible into or exchangeable or exercisable for, any capital stock
of the Company or any of its subsidiaries other than those accurately described in the
Registration Statement, the Disclosure Package and the Prospectus. The description of the
Companys stock option, stock bonus and other stock plans or arrangements, and the options or
other rights granted thereunder, in the Registration Statement, the Disclosure Package and the
Prospectus accurately and fairly presents in all material respects the information required to
be shown with respect to such plans, arrangements, options and rights.
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(u)
Listing
. The Common Stock is listed on the New York Stock Exchange (the NYSE).
(v)
Non-Contravention of Existing Instruments; No Further Authorizations or Approvals
Required
. Neither the Company nor any of its subsidiaries is (i) in violation or in default
(or, with the giving of notice or lapse of time, would be in default) (Default) under its
charter, by-laws or other organizational documents, (ii) in Default under any indenture,
mortgage, loan or credit agreement, deed of trust, note, contract, franchise, lease or other
agreement, obligation, condition, covenant or instrument to which the Company or such subsidiary
is a party or by which it may be bound, or to which any of the property or assets of the Company
or any of its subsidiaries is subject (each, an Existing Instrument) or (iii) in violation of
any statute, law, rule, regulation, judgment, order or decree of any Governmental Entity having
jurisdiction over the Company or such subsidiary or any of their respective property or assets,
as applicable, except with respect to clause (ii) only, for such Defaults as would not,
individually or in the aggregate, have a Material Adverse Effect.
The Companys execution, delivery and performance of this Agreement, the Indenture and the
Notes and consummation of the transactions contemplated hereby or thereby, by the Disclosure
Package or by the Prospectus (i) have been duly authorized by all necessary corporate action and
will not result in any Default under the charter, by-laws or other organizational documents of
the Company or any of its subsidiaries, (ii) will not conflict with or constitute a breach of,
or Default or a Debt Repayment Triggering Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property or assets of the
Company or any of its subsidiaries pursuant to, or require the consent of any other party to,
any Existing Instrument and (iii) will not result in any violation of any statute, law, rule,
regulation, judgment, order or decree applicable to the Company or any of its subsidiaries of
any Governmental Entity having jurisdiction over the Company or any of its subsidiaries or any
of their respective property or assets, except with respect to clause (ii) only, for such
Defaults or Debt Repayment Triggering Events as would not, individually or in the aggregate,
have a Material Adverse Effect. No consent, approval, authorization or other order of, or
registration or filing with, any Governmental Entity is required for the Companys execution,
delivery and performance of this Agreement, the Indenture or the Notes or consummation of the
transactions contemplated hereby or thereby, by the Disclosure Package or by the Prospectus,
except such as have been obtained or made by the Company and are in full force and effect or as
may be required under applicable state securities laws and from the Financial Industry
Regulatory Authority (FINRA). As used herein, a Debt Repayment Triggering Event means any
event or condition which gives, or with the giving of notice or lapse of time would give, the
holder of any note, debenture or other evidence of indebtedness (or any person acting on such
holders behalf) the right to require the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any of its subsidiaries.
(w)
No Material Actions or Proceedings
. Except as otherwise disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, there are no legal or governmental
actions, suits or proceedings pending or, to the Companys knowledge, threatened against or
affecting the Company or any of its subsidiaries or any of their respective property or assets
which (i) are required to be described in the Registration Statement, the Disclosure Package or
the Prospectus under the Securities Act or the Exchange Act and are not so described or (ii)
could have a Material Adverse Effect or materially affect the power or ability of the Company to
perform its obligations under this Agreement, the Indenture or the Notes or to consummate any of
the transactions contemplated hereby or thereby, by the Disclosure Package or by the Prospectus.
(x)
Labor Matters
. No labor problem or dispute with the employees of the Company or any of
its subsidiaries exists or is threatened or imminent, and the Company is not aware
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of any existing, threatened or imminent labor disturbance by the employees of any of its or
its subsidiaries principal suppliers, contractors or customers, that could have a Material
Adverse Effect.
(y)
Intellectual Property Rights
. The Company and its subsidiaries own, possess, license or
have other rights to use, on reasonable terms, all patents, patent applications, trade and
service marks, trade and service mark registrations, trade names, copyrights, licenses,
inventions, trade secrets, technology, know-how and other intellectual property (collectively,
the Intellectual Property) necessary for the conduct of the Companys consolidated business as
now conducted or as proposed in the Registration Statement, the Disclosure Package and the
Prospectus to be conducted. Except as set forth in the Registration Statement, the Disclosure
Package and the Prospectus: (a) no party has been granted an exclusive license to use any
portion of such Intellectual Property owned by the Company or any of its subsidiaries; (b) to
the Companys knowledge, there is no material infringement by third parties of any such
Intellectual Property owned by or exclusively licensed to the Company or any of its
subsidiaries; (c) there is no pending or, to the Companys knowledge, threatened action, suit,
proceeding or claim by others challenging the rights of the Company or any of its subsidiaries
in or to any material Intellectual Property, and the Company is unaware of any facts that would
form a reasonable basis for any such claim; (d) to the Companys knowledge, there is no pending
or threatened action, suit, proceeding or claim by others challenging the validity or scope of
any such Intellectual Property, and the Company is unaware of any facts that would form a
reasonable basis for any such claim; and (e) there is no pending or, to the Companys knowledge,
threatened action, suit, proceeding or claim by others that the Companys consolidated business
as now conducted infringes or otherwise violates any patent, trademark, copyright, trade secret
or other proprietary rights of others, and the Company is unaware of any other fact that would
form a reasonable basis for any such claim.
(z)
All Necessary Permits, etc.
Except as otherwise disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, the Company and its subsidiaries possess
such valid and current licenses, certificates, authorizations or permits issued by the
appropriate U.S. federal or state or foreign Governmental Entities necessary to conduct the
Companys consolidated business, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of, or non-compliance with,
any such license, certificate, authorization or permit which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would have a Material Adverse Effect.
(aa)
Title to Properties.
Except as otherwise disclosed in the Registration Statement, the
Disclosure Package and the Prospectus, the Company and its subsidiaries have good and marketable
title to all the property and assets reflected as owned in the financial statements referred to
in Section 1(r) above or elsewhere in the Registration Statement, the Disclosure Package or the
Prospectus, in each case free and clear of any security interests, mortgages, liens,
encumbrances, equities, claims and other defects, except such as do not materially and adversely
affect the value of such property and do not materially interfere with the use made or proposed
to be made of such property by the Company or such subsidiary. The real property, improvements,
equipment and personal property held under lease by the Company or any of its subsidiaries are
held under valid and enforceable leases, with such exceptions as are not material and do not
materially interfere with the use made or proposed to be made of such real property,
improvements, equipment or personal property by the Company or such subsidiary.
(bb)
Tax Law Compliance.
The Company and its subsidiaries have filed all necessary U.S.
federal, state and local and foreign income and franchise tax returns in a timely manner and
have paid all taxes required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them, except for any taxes,
assessments,
9
fines or penalties (i) as may be being contested in good faith and by appropriate
proceedings and (ii) the failure of which to have been paid would not result in a Material
Adverse Effect. The Company has made appropriate provisions in the applicable financial
statements referred to in Section 1(r) above in respect of all U.S. federal, state and local and
foreign income and franchise taxes for all current or prior periods as to which the tax
liability of the Company or any of its subsidiaries has not been finally determined.
(cc)
Environmental Laws.
Except as otherwise disclosed in the Registration Statement, the
Disclosure Package and the Prospectus and except as would not, singly or in the aggregate,
result in a Material Adverse Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative interpretation thereof,
including any judicial or administrative order, consent, decree or judgment, relating to
pollution or protection of human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened release of
chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products, asbestos-containing materials or mold (collectively, Hazardous
Materials) or to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials (collectively, Environmental Laws), (B) the
Company and its subsidiaries have all permits, authorizations and approvals required under any
applicable Environmental Laws and are each in compliance with their requirements, (C) there are
no pending or, to the knowledge of the Company, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental Law against the Company or
any of its subsidiaries and (D) there are no events or circumstances that would reasonably be
expected to form the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or affecting the Company
or any of its subsidiaries relating to Hazardous Materials or any Environmental Laws.
(dd)
Company Not an Investment Company
. The Company is not, and after receipt of payment
for the Notes and the application of the net proceeds thereof as contemplated under the caption
Use of Proceeds in the Preliminary Prospectus and the Prospectus will not be, an investment
company within the meaning of the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder (the Investment Company Act).
(ee)
Compliance with Reporting Requirements.
The Company is subject to, and in full
compliance with, the reporting requirements of Section 13 or Section 15(d) of the Exchange Act.
(ff)
No Restrictions on Dividends or Other Distributions
. Except as described in the
Registration Statement, the Disclosure Package and the Prospectus, neither the Company or any
subsidiary of the Company is prohibited or otherwise restricted, by applicable law or
regulation, order of any Governmental Entity, contract or otherwise, directly or indirectly,
from paying any dividends or making other distributions, from, repaying to the Company, in the
case of any subsidiary of the Company, any loans or advances to such subsidiary from the Company
or from transferring, in the case of any subsidiary of the Company, any of such subsidiarys
property or assets to the Company or any other subsidiary of the Company.
(gg)
No Price Stabilization or Manipulation
. The Company has not taken and will not take,
directly or indirectly, any action designed to or that might be reasonably expected to
10
cause or result in stabilization or manipulation of the price of any security of the
Company or any of its subsidiaries to facilitate the sale or resale of the Securities.
(hh)
Related Party Transactions
. There are no business relationships or related-party
transactions involving the Company or any of its subsidiaries or any other person required to be
described in the Registration Statement, the Preliminary Prospectus or the Prospectus under the
Securities Act or the Exchange Act that have not been described as required.
(ii)
Internal Controls and Procedures
. The Company maintains (i) effective internal
control over financial reporting (as defined in Rule 13a-15 and 15d-15 under the Exchange Act),
and (ii) a system of internal accounting controls sufficient to provide reasonable assurance
that (A) transactions are executed in accordance with managements general or specific
authorizations; (B) transactions are recorded as necessary to permit preparation of financial
statements in conformity with GAAP and to maintain asset accountability; (C) access to assets is
permitted only in accordance with managements general or specific authorization; and (D) the
recorded accountability for assets is compared with the existing assets at reasonable intervals
and appropriate action is taken with respect to any differences.
(jj)
No Material Weakness in Internal Controls
. Except as disclosed in the Registration
Statement, the Disclosure Package and the Prospectus, since the end of the Companys most recent
audited fiscal year, there has been (i) no material weakness in the Companys internal control
over financial reporting (whether or not remediated) and (ii) no change in the Companys
internal control over financial reporting that has materially affected, or is reasonably likely
to materially affect, the Companys internal control over financial reporting.
(kk)
Disclosure Controls
. The Company and its subsidiaries maintain an effective system of
disclosure controls and procedures (as defined in Rule 13a-15 and Rule 15d-15 under the
Exchange Act) that is designed to ensure that information required to be disclosed by the
Company in reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Commissions rules and forms,
including controls and procedures designed to ensure that such information is accumulated and
communicated to the Companys management as appropriate to allow timely decisions regarding
required disclosure. The Company and its subsidiaries have carried out evaluations of the
effectiveness of their disclosure controls and procedures as required by Rule 13a-15 and Rule
15d-15 under the Exchange Act.
(ll)
Stock Options
. Except as disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, with respect to the stock options (the Stock Options) granted
pursuant to the stock-based compensation plans of the Company and its subsidiaries (the Company
Stock Plans), (i) each Stock Option designated by the Company or the relevant subsidiary of the
Company at the time of grant as an incentive stock option under Section 422 of the Internal
Revenue Code of 1986, as amended (the Code), so qualifies, (ii) each grant of a Stock Option
was duly authorized no later than the date on which the grant of such Stock Option was by its
terms to be effective (the Grant Date) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company or the relevant subsidiary of the
Company (or a duly constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, and the award agreement governing
such grant (if any) was duly executed and delivered by each party thereto, (iii) each such grant
was made in accordance with the terms of the Company Stock Plans, the Exchange Act and all other
applicable laws and regulatory rules or requirements, including the rules of the NYSE and any
other exchange on which the securities of the Company or the relevant subsidiary of the Company
are traded and (iv)
11
the per share exercise price of each Stock Option was equal to or greater than the fair
market value of a share of Common Stock on the applicable Grant Date. Neither the Company nor
any of its subsidiaries has knowingly granted, and there is no, and has been no, policy or
practice of the Company or any of its subsidiaries of granting, Stock Options prior to, or
otherwise coordinating the grant of Stock Options with, the release or other public announcement
of material information regarding the Company or its subsidiaries or their financial condition,
liquidity, results of operations or prospects.
(mm)
Insurance Regulatory Matters
. Each of the Company and each of its subsidiaries that
is engaged in the business of insurance or reinsurance (each such subsidiary, an Insurance
Subsidiary) is duly licensed or registered as a holding company, as an insurer or as a
reinsurer, as the case may be, under the insurance laws (including, without limitation, laws
that relate to companies that control insurance companies) and the rules, regulations and
interpretations of the insurance regulatory authorities thereunder (collectively, the Insurance
Laws) of each jurisdiction in which the conduct of its business as described in the
Registration Statement, the Disclosure Package and the Prospectus requires such licensing or
registration (each such license or registration, an Insurance License). Each of the Company
and its Insurance Subsidiaries has made all required material filings under applicable holding
company statutes or other Insurance Laws in each jurisdiction where such filings are required.
Each of the Insurance Subsidiaries has all other necessary authorizations, approvals, orders,
consents, certificates, permits, registrations and qualifications of and from all insurance
regulatory authorities (together with the Insurance Licenses, the Insurance Licenses and
Authorizations) necessary to conduct its business as described in the Registration Statement,
the Disclosure Package and the Prospectus and all of the foregoing are in full force and effect
except where the failure to have such Insurance Licenses and Authorizations in full force and
effect would not, individually or in the aggregate, have a Material Adverse Effect. Each of the
Insurance Subsidiaries has fulfilled and performed in all material respects all obligations
necessary to maintain the Insurance Licenses and Authorizations. There is no pending or, to the
Companys knowledge, threatened action, suit, proceeding or investigation that would,
individually or in the aggregate, result in the revocation, termination or suspension of any of
the Insurance Licenses and Authorizations or have a Material Adverse Effect. Except as
disclosed in the Registration Statement, the Disclosure Package and the Prospectus, none of the
Company or any of its Insurance Subsidiaries has received any notification from any insurance
regulatory authority or other Governmental Entity to the effect that any additional Insurance
Licenses and Authorizations are needed to be obtained by either the Company or any of its
Insurance Subsidiaries.
(nn)
Statutory Financial Statements
. The (i) statutory financial statements of the
Insurance Subsidiaries for the year ended December 31, 2010 (the Annual Statutory Financial
Statements) that have been filed with the insurance regulator of the relevant jurisdiction for
each Insurance Subsidiary have been prepared and fairly present the admitted assets,
liabilities, surplus, results of operations and cash flows of each of the Insurance Subsidiaries
at the dates and for the periods (as the case may be) indicated, in accordance with statutory
accounting practices prescribed or permitted by the insurance regulator of the relevant
jurisdiction for such Insurance Subsidiary consistently applied throughout such period (excepted
as specified therein), and (ii) quarterly statutory financial statements of each of the
Insurance Subsidiaries for the periods ended March 31, 2010, June 30, 2010 and September 30,
2010, each as filed with the insurance regulator of the relevant jurisdiction for such Insurance
Subsidiary (together with the Annual Statutory Financial Statements, the Statutory Financial
Statements), have been prepared and filed with the appropriate insurance regulators using the
same statutory accounting practices applied on a basis consistent with each of the Insurance
Subsidiaries statutory financial statements referenced in clause (i) above.
12
(oo)
Insurance Reserving Practices
. Except as disclosed in the Registration Statement, the
Disclosure Package and the Prospectus, the Company and its Insurance Subsidiaries have made no
material change in their insurance reserving practices since December 31, 2010. All insurance
reserves reflected in the Statutory Financial Statements were calculated in accordance with
applicable statutory accounting practices prescribed or permitted by the insurance regulator of
the relevant jurisdiction and generally accepted actuarial methodologies.
(pp)
Reinsurance
. All reinsurance treaties, contracts and arrangements to which any
Insurance Subsidiary is a party are in full force and effect and no Insurance Subsidiary is
(nor, to the knowledge of the Company, is any counterparty) in violation of, or in default in
the performance, observance or fulfillment of, any obligation, agreement, covenant or condition
contained therein, except for any such violations or defaults that, individually or in the
aggregate, would not result in a Material Adverse Effect. To the knowledge of the Company, no
Insurance Subsidiary has received any notice that any of the other parties to such treaties,
contracts or arrangements intends not to, or will be unable to, perform such treaty, contract or
arrangement in any material respect.
(qq)
Rating
. Since the respective dates of the Registration Statement, the Disclosure
Package and the Prospectus, no nationally recognized statistical rating organization (as such
term is defined for purposes of Rule 436(g)(2) under the Securities Act), has (i) imposed (or
has informed the Company or any of its subsidiaries, that it has considered imposing) any
condition (financial or otherwise) on the Companys retaining any rating assigned to the Company
or any significant subsidiary of the Company (as such term is defined by Rule 1-02 of
Regulation S-X) (each, a Subsidiary) or to any securities of the Company or any of its
Subsidiaries, (ii) indicated to the Company or any of its Subsidiaries that it is considering
any downgrading in or withdrawal of the rating of any debt securities or preferred stock of the
Company or any of its Subsidiaries or the ratings assigned to any of its Subsidiaries financial
strength or claims-paying (or equivalent) ability, or (iii) made any public announcement that
any such organization has under surveillance or review its rating of any debt securities or
preferred stock of the Company or any of its Subsidiaries or its rating of the financial
strength or claims-paying (or equivalent) ability of any of its Subsidiaries (other than an
announcement with positive implications of a possible upgrading, and no implication of a
possible downgrading or withdrawal, of such rating).
(rr)
No Unlawful Contributions or Other Payments
. Neither the Company nor any of its
subsidiaries nor any directors or officers thereof nor, to the Companys knowledge, any, agent,
employee or affiliate of the Company or any of its subsidiaries has taken any action, directly
or indirectly, that would result in a violation by such persons of the Foreign Corrupt Practices
Act of 1977, as amended, and the rules and regulations thereunder (the FCPA), including,
without limitation, making use of the mails or any means or instrumentality of interstate
commerce corruptly in furtherance of an offer, payment, promise to pay or authorization of the
payment of any money, or other property, gift, promise to give, or authorization of the giving
of anything of value to any foreign official (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign political office, in
contravention of the FCPA, and the Company, its subsidiaries and, to the knowledge of the
Company, its affiliates have conducted their businesses in compliance with the FCPA and have
instituted and maintain policies and procedures designed to ensure, and which are reasonably
expected to continue to ensure, continued compliance therewith.
(ss)
Compliance with Money Laundering Laws
. The operations of the Company and its
subsidiaries are and have been conducted at all times in compliance in all material respects
with applicable financial recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of all
13
applicable jurisdictions, the rules and regulations thereunder and any related or similar
rules, regulations or guidelines issued, administered or enforced by any Governmental Entity
(collectively, the Money Laundering Laws). No action, suit or proceeding by or before any
Governmental Entity involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the Companys knowledge, threatened.
(tt)
Compliance with OFAC Laws
. Neither the Company nor any of its subsidiaries nor any
directors or officers thereof nor, to the Companys knowledge, any, agent, employee or affiliate
of the Company or any of its subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury Department (OFAC).
The Company will not directly or indirectly use the proceeds from the sale of the Notes, or
lend, contribute or otherwise make available such proceeds, to any subsidiary, joint venture
partner or other person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
(uu)
ERISA Compliance
. Except for events that would not result in a Material Adverse
Effect, none of the following events has occurred or exists: (i) a failure to fulfill the
obligations, if any, under the minimum funding standards of Section 302 of the United States
Employee Retirement Income Security Act of 1974, as amended (ERISA), and the regulations and
published interpretations thereunder with respect to a Plan, determined without regard to any
waiver of such obligations or extension of any amortization period; (ii) an audit or
investigation by the Internal Revenue Service, the U.S. Department of Labor, the Pension Benefit
Guaranty Corporation or any other federal or state governmental agency or any foreign regulatory
agency with respect to the employment or compensation of employees by the Company or any of its
subsidiaries; or (iii) any breach of any contractual obligation, or any violation of law or
applicable qualification standards, with respect to the employment or compensation of employees
by the Company or any of its subsidiaries. Except for events that would not result in a Material
Adverse Effect, none of the following events has occurred or is reasonably likely to occur: (1)
a material increase in the aggregate amount of contributions required to be made to all Plans in
the current fiscal year of the Company and its subsidiaries compared to the amount of such
contributions made in the Company and its subsidiaries most recently completed fiscal year; (2)
a material increase in the Company and its subsidiaries accumulated post-retirement benefit
obligations (within the meaning of Statement of Financial Accounting Standards 106) compared to
the amount of such obligations in the Company and its subsidiaries most recently completed
fiscal year; (3) any event or condition giving rise to a liability under Title IV of ERISA; or
(4) the filing of a claim by one or more employees or former employees of the Company or any of
its subsidiaries related to its or their employment. For purposes of this paragraph, the term
Plan means a plan (within the meaning of Section 3(3) of ERISA) subject to Title IV of ERISA
with respect to which the Company or any of its subsidiaries may have any liability.
(vv)
Brokers
. Except as otherwise disclosed in the Registration Statement, the Disclosure
Package and the Prospectus, there is no broker, finder or other party that is entitled to
receive from the Company any brokerage or finders fee or other fee or commission as a result of
any transactions contemplated by this Agreement.
(ww)
Sarbanes-Oxley Compliance
. There is and has been no failure on the part of the
Company and any of the Companys directors or officers, in their capacities as such, to comply
in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and
regulations promulgated in connection therewith (the Sarbanes-Oxley Act), including Section
402 related to loans and Sections 302 and 906 related to certifications.
14
(xx)
Statistical and Market Related Data
. Nothing has come to the attention of the Company
or any of its subsidiaries that has caused it or them to believe that any of the statistical and
market-related data included in the Registration Statement, the Disclosure Package and the
Prospectus is not based on or derived from sources that are reliable or is not accurate in all
material respects.
Any certificate signed by an officer of the Company and delivered to the Representatives or
to counsel for the Underwriters shall be deemed to be a representation and warranty by the
Company to each Underwriter as to the matters set forth therein.
Section 2. Purchase, Sale and Delivery of the Notes.
(a)
The Firm Notes
. The Company agrees to issue and sell to the several Underwriters the
Firm Notes upon the terms herein set forth. On the basis of the representations, warranties and
agreements herein contained, and upon the terms but subject to the conditions herein set forth,
the Underwriters agree, severally and not jointly, to purchase from the Company the respective
aggregate principal amount of Firm Notes set forth opposite their names on
Schedule A
.
The purchase price per Firm Note to be paid by the several Underwriters to the Company shall be
98.00% of the aggregate principal amount thereof.
(b)
The Closing Date
. Delivery of the Firm Notes to be purchased by the Underwriters and
payment therefor shall be made at the offices of Sidley Austin
llp
, 787 Seventh Avenue,
New York, New York 10019 (or such other place as may be agreed to by the Company and the
Representatives) at 9:00 a.m., New York time, on March 8, 2011 or such other time and date not
later than 1:30 p.m., New York time, on March 15, 2011 as the Representatives shall designate by
notice to the Company (the time and date of such closing are called the Closing Date).
(c)
The Optional Notes; any Subsequent Closing Date
. In addition, on the basis of the
representations, warranties and agreements herein contained, and upon the terms but subject to
the conditions herein set forth, the Company hereby grants an option to the several Underwriters
to purchase, severally and not jointly, the Optional Notes from the Company at the same price as
the purchase price per Firm Note to be paid by the Underwriters for the Firm Notes. The option
granted hereunder may be exercised at any time and from time to time upon notice by the
Representatives to the Company, which notice may be given at any time within 30 days from the
date of this Agreement. Such notice shall set forth (i) the aggregate principal amount (which
shall be an integral multiple of $1,000) of Optional Notes as to which the Underwriters are
exercising the option, (ii) the names and denominations in which the Optional Notes are to be
registered and (iii) the time, date and place at which such Optional Notes will be delivered
(which time and date may be simultaneous with, but not earlier than, the Closing Date; and in
such case the term Closing Date shall refer to the time and date of delivery of the Firm Notes
and the Optional Notes). Each time and date of delivery, if subsequent to the Closing Date, is
called a Subsequent Closing Date and shall be determined by the Representatives and shall not
be earlier than three nor later than five full business days after delivery of such notice of
exercise. If any Optional Notes are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the aggregate principal amount of Optional Notes (subject to such
adjustments to eliminate fractional amounts as the Representatives may determine) that bears the
same proportion to the total aggregate principal amount of Optional Notes to be purchased as the
aggregate principal amount of Firm Notes set forth on
Schedule A
opposite the name of
such Underwriter bears to the total aggregate principal amount of Firm Notes.
15
(d)
Payment for the Notes
. Payment for the Notes shall be made at the Closing Date (and,
if applicable, at any Subsequent Closing Date) by wire transfer of immediately available funds
to the order of the Company.
It is understood that each Representative has been authorized, for its own account and the
accounts of the several Underwriters, to accept delivery of and receipt for, and make payment of
the purchase price for, the Firm Notes and any Optional Notes that the Underwriters have agreed
to purchase. Morgan Stanley & Co. Incorporated, individually and not as a Representative of the
Underwriters, may (but shall not be obligated to) make payment for any Notes to be purchased by
any Underwriter whose funds shall not have been received by the Representatives by the Closing
Date or any Subsequent Closing Date, as the case may be, for the account of such Underwriter,
but any such payment shall not relieve such Underwriter from any of its obligations under this
Agreement.
(e)
Delivery of the Notes
. The Company shall deliver, or cause to be delivered, to the
Representatives for the accounts of the several Underwriters the Firm Notes at the Closing Date
against the irrevocable release of a wire transfer of immediately available funds for the amount
of the purchase price therefor specified in this Agreement. The Company shall also deliver, or
cause to be delivered, to the Representatives for the accounts of the several Underwriters the
Optional Notes that the Underwriters have agreed to purchase at the Closing Date or any
Subsequent Closing Date, as the case may be, against the irrevocable release of a wire transfer
of immediately available funds for the amount of the purchase price therefor specified in this
Agreement. Delivery of the Notes shall be made in book-entry only form through the facilities of
The Depository Trust Company unless the Representatives shall otherwise instruct. Time shall be
of the essence, and delivery at the time and place specified in this Agreement is a further
condition to the obligations of the Underwriters.
(f)
Delivery of Prospectus to the Underwriters
. Not later than 3:00 p.m. (New York City
time) on the first business day in New York City following the date of this Agreement or as soon
thereafter as is practicable on such business day, the Company shall deliver or cause to be
delivered, copies of the Prospectus, in form and substance satisfactory to the Underwriters, in
such quantities and at such places as the Representatives shall request.
Section 3. Covenants of the Company.
The Company covenants and agrees with each Underwriter as follows:
(a)
The Representatives Review of Proposed Amendments and Supplements
. During the period
beginning on the Applicable Time and ending on the later of the Closing Date or the first date
when, in the opinion of counsel for the Underwriters, a prospectus is no longer required by law
to be delivered in connection with sales by an Underwriter or dealer, including in circumstances
where such requirement may be satisfied pursuant to Rule 172 under the Securities Act (the
Prospectus Delivery Period), prior to amending or supplementing the Registration Statement,
the Disclosure Package or the Prospectus or filing a new registration statement relating to the
Securities, the Company shall furnish to the Representatives for review a copy of each such
proposed amendment or supplement or such new registration statement, and the Company shall not
file or use any such proposed amendment or supplement or such new registration statement to
which the Representatives reasonably object; provided, however, that the foregoing shall not
apply to filings required to be made with the Commission in order to comply with the Exchange
Act so long as any such filing is provided to the Representatives a reasonable amount of time in
advance of filing.
16
(b)
Securities Act Compliance.
After the Execution Time, the Company shall promptly advise
the Representatives in writing (i) when the Registration Statement, if not effective at the
Execution Time, shall have become effective, (ii) of the receipt of any comments of, or requests
for additional or supplemental information from, the Commission, (iii) of the time and date of
any filing of any post-effective amendment to the Registration Statement, any new registration
statement relating to the Securities or any amendment or supplement to the Preliminary
Prospectus or the Prospectus, (iv) of the time and date that any post-effective amendment to the
Registration Statement or such new registration statement becomes effective and (v) of the
issuance by the Commission of any stop order suspending the effectiveness of the Registration
Statement, or notice objecting to its use pursuant to Rule 401(g)(2), or of any order or notice
from any Governmental Entity preventing or suspending the use of the Registration Statement or
such new registration statement, the Preliminary Prospectus or the Prospectus, or of any
proceedings to remove, suspend or terminate from listing or quotation the Common Stock from any
securities exchange upon which it is listed for trading or included or designated for quotation,
or of the threatening or initiation of any proceedings for any of such purposes. The Company
shall use its reasonable best efforts to prevent the issuance of any such stop order or such
order or notice of prevention or suspension of such use. If any such stop order or prevention
or suspension order or notice is issued at any time, the Company will use its reasonable best
efforts to obtain the lifting or reversal thereof at the earliest possible moment, or, subject
to Section 3(a) hereof, will file an amendment to the Registration Statement or will file a new
registration statement and use its reasonable best efforts to have such amendment or new
registration statement become effective as soon as practicable. Additionally, the Company
agrees that it shall comply with the provisions of Rules 424(b), including with respect to the
timely filing of documents thereunder, and will use its reasonable best efforts to confirm that
any filings made by the Company under Rule 424(b) under the Securities Act were received in a
timely manner by the Commission. The Company shall pay the required Commission filing fees
relating to the Securities within the time required by Rule 456(b)(1)(i) under the Securities
Act and otherwise in accordance with Rules 456(b) and 457(r) under the Securities Act
(including, if applicable, by updating the Calculation of Registration Fee table in accordance
with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on
the cover page of a prospectus filed pursuant to Rule 424(b)).
(c)
Amendments and Supplements to the Registration Statement, Disclosure Package and
Prospectus and Other Securities Act Matters
. If, during the Prospectus Delivery Period, any
event or development shall occur or condition exist as a result of which the Registration
Statement, the Disclosure Package or the Prospectus as then amended or supplemented would
contain or include, as applicable, an untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary in order to make the statements
therein, (in the case of the Disclosure Package and the Prospectus) in the light of the
circumstances under which they were made or then prevailing, as the case may be, not misleading,
or if it shall be necessary to amend or supplement the Registration Statement, the Disclosure
Package or the Prospectus, including the filing under the Exchange Act of any document
incorporated by reference in the Registration Statement, the Disclosure Package or the
Prospectus, in order to make the statements therein, (in the case of the Disclosure Package and
the Prospectus) in the light of the circumstances under which they were made or then prevailing,
as the case may be, not misleading, or if in the opinion of the Representatives it is otherwise
necessary or advisable to amend or supplement the Registration Statement, the Disclosure Package
or the Prospectus, including the filing under the Exchange Act of any document incorporated by
reference in the Registration Statement, the Disclosure Package or the Prospectus, or to file a
new registration statement relating to the Securities, in order to comply with law, including in
connection with the delivery of the Prospectus, the Company agrees to (i) notify each
Representative of any such event or condition and (ii) subject to Section 3(a) hereof, promptly
prepare, file with the Commission (and use its reasonable best efforts to have any amendment to
the Registration Statement or any new registration statement become effective) and furnish at
its own expense to the Underwriters and to
17
dealers, amendments or supplements to the Registration Statement, the Disclosure Package or
the Prospectus, or any new registration statement, necessary in order to make the statements in
the Registration Statement, the Disclosure Package and the Prospectus as then amended or
supplemented, (in the case of the Disclosure Package and the Prospectus) in the light of the
circumstances under which they were made or then prevailing, as the case may be, not misleading
or so that the Registration Statement, the Disclosure Package and the Prospectus as then amended
or supplemented will comply with law.
(d)
Final Term Sheet
. The Company will prepare a final term sheet, containing solely a
description of final terms of the Notes and the offering thereof, in the form approved by the
Representatives and attached as
Schedule B
hereto (the Final Term Sheet) and will file
such Final Term Sheet pursuant to Rule 433(d) under the Securities Act within the time required
by such rule.
(e)
Permitted Free Writing Prospectuses
. The Company represents that it has not made, and
agrees that, unless it obtains the prior written consent of the Representatives, it will not
make, any offer relating to the Securities that constitutes or would constitute an issuer free
writing prospectus as defined in Rule 433 under the Securities Act (each, an Issuer Free
Writing Prospectus) or that would otherwise constitute a free writing prospectus as defined
in Rule 405 under the Securities Act or a portion thereof required to be filed by the Company
with the Commission or retained by the Company under Rule 433 under the Securities Act; provided
that the prior written consent of the Representatives hereto shall be deemed to have been given
in respect of the Free Writing Prospectuses identified in
Schedule C
hereto. Any such
free writing prospectus consented to, or deemed consented to, by the Representatives is herein
referred to as a Permitted Free Writing Prospectus. The Company agrees that (i) it has treated
and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free
Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the
requirements of Rules 164 and 433 under the Securities Act applicable to any Permitted Free
Writing Prospectus, including in respect of timely filing with the Commission, legending and
record keeping. Each Underwriter, severally and not jointly, represents and agrees that, without
the prior consent of the Company and the Representatives it has not made and will not make any
offer relating to the Securities that would constitute a free writing prospectus as defined in
Rule 405 under the Securities Act, other than a Permitted Free Writing Prospectus or a free
writing prospectus that is not required to be filed with the SEC. Notwithstanding anything to
the contrary contained herein (including the preceding sentence), the Company consents to the
use by the Underwriters of a free writing prospectus that contains only (a) (i) information
describing the preliminary terms of the Securities or their offering, (ii) information meeting
the requirements of Rule 134 under the Securities Act or (iii) information that describes the
final terms of the Securities or their offering and that is or is to be included in the Final
Term Sheet or (b) other customary information that is neither issuer information, as defined
in Rule 433 under the Securities Act, nor otherwise an Issuer Free Writing Prospectus.
(f)
Copies of any Amendments and Supplements to the Prospectus
. The Company agrees to
furnish the Representatives, without charge, during the Prospectus Delivery Period, as many
copies of the Prospectus and any amendments and supplements thereto (including any documents
incorporated or deemed incorporated by reference therein) and the Disclosure Package as the
Representatives may reasonably request.
(g)
Copies of the Registration Statement and the Prospectus
. The Company will furnish to
each Representative and counsel for the Underwriters a signed copy of the Registration Statement
(including exhibits thereto) and any amendments thereto, as well as any new registration
statement relating to the Securities, for each Underwriter.
18
(h)
Blue Sky Compliance
. The Company shall cooperate with the Representatives and counsel
for the Underwriters to qualify or register the Securities for sale under (or obtain exemptions
from the application of) the state securities or blue sky laws or Canadian provincial securities
laws or other foreign laws of those jurisdictions designated by the Representatives, shall
comply with such laws and shall continue such qualifications, registrations and exemptions in
effect so long as required for the distribution of the Securities;
provided, however
, that the
Company shall not be obligated to file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so
qualified or so subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. The Company will advise the Representatives promptly of
the suspension of the qualification or registration of (or any such exemption relating to) the
Securities for offering, sale or trading in any jurisdiction or any initiation or threat of any
proceeding for any such purpose, and in the event of the issuance of any order suspending such
qualification, registration or exemption, the Company shall use its reasonable best efforts to
obtain the withdrawal thereof at the earliest possible moment.
(i)
Use of Proceeds
. The Company shall apply the net proceeds from the sale of the Notes
sold by it in the manner described under the caption Use of Proceeds in the Disclosure Package
and the Prospectus.
(j)
Transfer Agent
. The Company shall maintain, at its expense, a registrar and transfer
agent for the Common Stock.
(k)
Earnings Statement
. As soon as practicable, the Company will make generally available
to its security holders and to the Representatives an earnings statement (which need not be
audited) that satisfies the provisions of, and that provides the benefits contemplated by,
Section 11(a) of the Securities Act and Rule 158 under the Securities Act.
(l)
Periodic Reporting Obligations
. During the Prospectus Delivery Period, the Company
shall file, on a timely basis, with the Commission and the NYSE, all reports and documents
required to be filed under the Exchange Act.
(m)
Agreement Not to Offer or Sell Additional Securities
. During the period commencing on
the date hereof and ending on the 90th day following the date of the Prospectus, the Company
will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any
option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares
of Common Stock or any securities convertible into or exercisable or exchangeable for Common
Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of
the economic consequences of ownership of Common Stock, whether any such transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, without the prior written consent of the Representatives,
other than (A) the Securities to be sold hereunder, (B) any shares of Common Stock of the
Company issued upon (x) conversion of convertible debt securities of the Company outstanding on
the date hereof or (y) the exercise of options granted under existing employee stock option
plans and (C) options for the purchase of shares of Common Stock issued pursuant to existing
stock based compensation plans. Notwithstanding the foregoing, if (1) during the last 17 days
of the 90-day restricted period, the Company issues an earnings release or material news or a
material event relating to the Company occurs; or (2) prior to the expiration of the 90-day
restricted period, the Company announces that it will release earnings results during the 16-day
period beginning on the last day of the 90-day period, the restrictions imposed by this
Agreement shall continue to apply until the expiration of the 18-day period beginning on the
issuance of the earnings release or the occurrence of the material news or material event. The
Company will provide
19
the Representatives and any co-managers and each individual subject to the restricted
period pursuant to the lockup letters described in Section 5(i) with prior notice of any such
announcement that gives rise to an extension of the restricted period.
(n)
Future Reports to Stockholders
. The Company will furnish to its stockholders as soon as
practicable after the end of each fiscal year an annual report (including a balance sheet and
statements of income, stockholders equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as practicable after the
end of each of the first three quarters of each fiscal year (beginning with the fiscal quarter
ending after the effective date of the Registration Statement), to make available to its
stockholders consolidated summary financial information of the Company and its subsidiaries for
such quarter in reasonable detail; provided, however, that the Company will not be required to
furnish reports or other communications or information that is available on EDGAR or through
other publicly available electronic means.
(o)
Future Reports to the Representatives
. During the period of five years hereafter, the
Company will furnish to the Representatives c/o Morgan Stanley at 1585 Broadway, New York, New
York 10036: (i) as soon as practicable after the end of each fiscal year, copies of the Annual
Report of the Company containing the balance sheet of the Company as of the close of such fiscal
year and statements of income, stockholders equity and cash flows for the year then ended and
the opinion thereon of the Companys independent public or certified public accountants; (ii) as
soon as practicable after the filing thereof, copies of each proxy statement, Annual Report on
Form 10-K, Quarterly Report on Form 10-Q, Current Report on Form 8-K or other report filed by
the Company with the Commission, FINRA or any securities exchange; and (iii) as soon as
available, copies of any report or communication of the Company mailed generally to holders of
its capital stock; provided, however, that the Company will not be required to furnish reports
or other communications or information that is available on EDGAR or through other publicly
available electronic means.
(p)
Listing of Conversion Shares
. Prior to the Closing Date, the Company will use its
reasonable best efforts to have the Conversion Shares approved for listing by the NYSE, subject
to official notice of issuance.
(q)
Available Conversion Shares
. The Company will reserve and keep available at all times,
free of preemptive rights, the full number of Conversion Shares into which the Notes are
convertible.
(r)
Conversion Price
. Between the date hereof and the last day on which the Underwriters
over-allotment option may be settled, the Company will not do or authorize any act or thing that
would result in an adjustment of the conversion price.
(s)
DTC
. The Company will cooperate with the Representatives and use its reasonable best
efforts to permit the Notes to be eligible for clearance and settlement through The Depository
Trust Company and its indirect participants, Euroclear Bank S.A./N.V. and Clearstream Banking,
société anonyme.
(t)
Registration Statement Renewal Deadline.
If immediately prior to the third anniversary
(the Renewal Deadline) of the original effectiveness of the Registration Statement, any of the
Notes remain unsold by the Underwriters, the Company will, prior to the Renewal Deadline, file,
if it has not already done so and is eligible to do so, a new automatic shelf registration
statement relating to the Securities, in a form and substance satisfactory to the
Representatives. If the Company is no longer eligible to file an automatic shelf registration
statement,
20
the Company will, prior to the Renewal Deadline, if it has not already done so, file a new
shelf registration statement relating to the Securities, in a form and substance satisfactory to
the Representatives, and will use its reasonable best efforts to cause such registration
statement to be declared effective within 180 days after the Renewal Deadline. The Company will
take all other action necessary or appropriate to permit the public offering and sale of the
Securities to continue as contemplated in the expired Registration Statement. References herein
to the Registration Statement shall include such new automatic shelf registration statement or
such new shelf registration statement, as the case may be.
(u)
Notice of Inability to Use Automatic Shelf Registration Statement.
If at any time when
Notes remain unsold by the Underwriters the Company receives from the Commission a notice
pursuant to Rule 401(g)(2) or otherwise ceases to be eligible to use the automatic shelf
registration statement form, the Company will (i) promptly notify the Representatives, (ii)
promptly file a new registration statement or post-effective amendment on the proper form
relating to the Securities, in a form and substance satisfactory to the Representatives, (iii)
use its reasonable best efforts to cause such registration statement or post-effective amendment
to be declared effective as soon as practicable and (iv) promptly notify the Representatives of
such effectiveness. The Company will take all other action necessary or appropriate to permit
the public offering and sale of the Securities to continue as contemplated in the registration
statement that was the subject of the Rule 401(g)(2) notice or for which the Company has
otherwise become ineligible. References herein to the Registration Statement shall include
such new registration statement or post-effective amendment, as the case may be.
Section 4. Payment of Expenses.
The Company agrees to pay all costs, fees and expenses incurred in connection with the
performance of its obligations hereunder and in connection with the transactions contemplated
hereby, including without limitation (i) all expenses incident to the issuance and delivery of
the Securities (including all printing and engraving costs), (ii) all fees and expenses of the
Trustee under the Indenture, (iii) all necessary issue, transfer and other stamp taxes in
connection with the issuance and sale of the Securities to the Underwriters, (iv) all fees and
expenses of the Companys counsel, independent public or certified public accountants and other
advisors, (v) all costs and expenses incurred in connection with the preparation, printing,
filing, shipping and distribution of the Registration Statement (including financial statements,
exhibits, schedules, consents and certificates of experts), each Issuer Free Writing Prospectus,
the Preliminary Prospectus and the Prospectus, and all amendments and supplements thereto, and
this Agreement, (vi) all filing fees, attorneys fees and expenses incurred by the Company or
the Underwriters in connection with qualifying or registering (or obtaining exemptions from the
qualification or registration of) all or any part of the Securities for offer and sale under the
state securities or blue sky laws or the provincial securities laws of Canada or the securities
laws of any other foreign jurisdiction, and, if requested by the Representatives, preparing and
printing a Blue Sky Survey or memorandum, and any supplements thereto, advising the
Underwriters of such qualifications, registrations and exemptions, (vii) any fees charged by any
nationally recognized statistical rating organization for rating the Notes, (viii) all fees and
expenses in connection with making the Notes eligible for clearance and settlement through The
Depository Trust Company, (ix) the filing fees incident to, and the reasonable fees and expenses
of counsel for the Underwriters in connection with, FINRAs review and approval, if required, of
the Underwriters participation in the offering and distribution of the Securities, (x) the fees
and expenses associated with the listing of the Conversion Shares on the NYSE, (xi) the costs
and expenses of the Company relating to investor presentations on any road show undertaken in
connection with the marketing of the Securities, including without limitation, expenses
associated with the production of road show slides and graphics, fees and expenses of any
consultants engaged
21
in connection with the road show presentations, travel and lodging expenses of the
representatives and officers of the Company and any such consultants, and the cost of aircraft
and other transportation chartered in connection with the road show, and (xii) all other fees,
costs and expenses referred to in Item 14 of Part II of the Registration Statement. Except as
provided in this Section 4, Section 6, Section 7 and Section 8 hereof, the Underwriters shall
pay their own expenses, including the fees and disbursements of their counsel.
Section 5. Conditions of the Obligations of the Underwriters.
The obligations of the several Underwriters to purchase and pay for the Notes as provided
herein on the Closing Date and, with respect to the Optional Notes, any Subsequent Closing Date,
shall be subject to the accuracy of the representations and warranties on the part of the
Company set forth herein as of the date hereof and as of the Closing Date as though then made
and, with respect to the Optional Notes, as of any Subsequent Closing Date as though then made,
to the accuracy of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the timely performance by the Company of its covenants and other
obligations hereunder, and to each of the following additional conditions:
(a)
Accountants Comfort Letters
. On the date hereof, the Representatives shall have
received from each of PricewaterhouseCoopers LLP and KPMG LLP a letter dated the date hereof
addressed to the Underwriters, the respective forms of which are attached as
Exhibit A-1
and
Exhibit A-2
.
(b)
Compliance with Registration Requirements; No Stop Order; No Objection from FINRA
. For
the period from and after effectiveness of this Agreement and prior to the Closing Date and,
with respect to the Optional Notes, any Subsequent Closing Date:
(i) the Company shall have filed the Preliminary Prospectus and the Prospectus and any
amendments or supplements thereto with the Commission in the manner and within the time
period required by Rule 424(b);
(ii) all material required to be filed by the Company pursuant to Rule 433(d) under the
Securities Act, including the Final Term Sheet, shall have been filed with the Commission
within the applicable time periods prescribed for such filings under such Rule 433 under the
Securities Act;
(iii) the Registration Statement shall have become effective under the Securities Act
and no stop order suspending the effectiveness of the Registration Statement, or any
post-effective amendment to the Registration Statement, or notice objecting to its use
pursuant to Rule 401(g)(2), shall have been issued by the Commission and no order or notice
from any Governmental Entity preventing or suspending the use of the Registration Statement,
the Preliminary Prospectus or the Prospectus or any proceeding for such purpose shall have
been instituted or be pending or, to the Companys knowledge, be threatened by any
Governmental Entity; and
(iv) FINRA shall have raised no objection to the fairness and reasonableness of the
underwriting terms and arrangements.
(c)
No Material Adverse Change or Ratings Agency Change
. For the period from and after the
date of this Agreement and prior to the Closing Date and, with respect to the Optional Notes,
any Subsequent Closing Date:
22
(i) in the judgment of the Representatives, there shall not have occurred any Material
Adverse Change;
(ii) there shall not have been any change or decrease specified in the letter or
letters referred to in Section 5(a) hereof which is, in the sole judgment of the
Representatives, so material and adverse as to make it impractical or inadvisable to proceed
with the offering or delivery of the Securities as contemplated by the Registration
Statement, the Disclosure Package and the Prospectus; and
(iii) except as contemplated in the Registration Statement, the Disclosure Package and
the Prospectus, there shall not have occurred any downgrading in or withdrawal of the rating
or financial strength or claims paying ability (or its equivalent) of, or of any securities
of, the Company or any of its Subsidiaries by any nationally recognized statistical rating
organization, and the Company shall not have received any notice of any intended or
potential downgrading in or withdrawal of any such rating or financial strength or claims
paying ability (or its equivalent) or of any review of any such rating or financial strength
or claims paying ability (or its equivalent) other than with respect to a potential positive
change.
(d)
Opinion of Counsel for the Company
. On the Closing Date and any Subsequent Closing
Date, the Representatives shall have received the favorable opinion of (i) the General Counsel
of the Company, dated as of such Closing Date or Subsequent Closing Date, the form of which is
attached as
Exhibit B
and (ii) Locke Lord Bissel & Liddell LLP, counsel for the Company,
dated as of such Closing Date or Subsequent Closing Date, the form of which is attached as
Exhibit C
.
(e)
Opinion of Counsel for the Underwriters
. On the Closing Date and any Subsequent Closing
Date, the Representatives shall have received the favorable opinion of Sidley Austin
llp
, counsel for the Underwriters, dated as of such Closing Date or Subsequent Closing
Date, in form and substance satisfactory to the Representatives, and addressed to the
Underwriters, with respect to the issuance and sale of the Notes, the disclosure in the
Registration Statement, the Disclosure Package and the Prospectus and any amendments or
supplements thereto and other related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as they request for the purpose
of enabling them to pass upon such matters.
(f)
Officers Certificate
. On the Closing Date and any Subsequent Closing Date, the
Representatives shall have received a written certificate executed by the Chairman of the Board,
Chief Executive Officer or President of the Company and the Chief Financial Officer or Chief
Accounting Officer of the Company, dated as of such Closing Date or Subsequent Closing Date, to
the effect set forth in Section 5(b) and 5(c)(iii) hereof, and further to the effect that:
(i) for the period from and after the date of this Agreement and prior to such Closing
Date or Subsequent Closing Date, there has not occurred any Material Adverse Change;
(ii) the representations and warranties of the Company set forth in this Agreement are
true and correct on and as of such Closing Date or Subsequent Closing Date with the same
force and effect as though expressly made on and as of such Closing Date or Subsequent
Closing Date; and
(iii) the Company has complied with all the agreements hereunder and satisfied all the
conditions on its part to be performed or satisfied hereunder at or prior to such Closing
Date or Subsequent Closing Date.
23
(g)
Bring-down Comfort Letters
. On the Closing Date and any Subsequent Closing Date, the
Representatives shall have received from each of PricewaterhouseCoopers LLP and KPMG LLP a
letter dated such date, in form and substance satisfactory to the Representatives, to the effect
that they reaffirm the statements made in the letter furnished by them pursuant to Section 5(a)
hereof, except that the specified date referred to therein for the carrying out of procedures
shall be no more than three business days prior to such Closing Date or Subsequent Closing Date.
(h)
CFO Certificate
. On the Closing Date, the Representatives shall have received a
certificate, dated as of the Closing Date, Karl W. Mueller, Senior Vice President and Chief
Financial Officer of the Company, in form and substance satisfactory to the Underwriters
(i)
Lock-Up Agreement from Certain Securityholders of the Company
. On or prior to the date
hereof, the Company shall have furnished to the Representatives an agreement in the form of
Exhibit D
hereto from each director and executive officer of the Company, and such
agreement shall be in full force and effect on the Closing Date and any Subsequent Closing Date.
(j) The Company shall have caused the Conversion Shares to be approved for listing, subject
to official notice of issuance, on the NYSE, and satisfactory evidence of such action shall have
been provided to the Representatives.
(k)
Additional Documents
. On or before the Closing Date and any Subsequent Closing Date,
the Representatives and counsel for the Underwriters shall have received such information,
documents and opinions as they may reasonably require for the purposes of enabling them to pass
upon the issuance and sale of the Securities as contemplated herein, or in order to evidence the
accuracy of any of the representations and warranties, or the satisfaction of any of the
conditions or agreements, herein contained.
If any condition specified in this Section 5 is not satisfied when and as required to be
satisfied, this Agreement may be terminated by the Representatives by notice to the Company at
any time on or prior to the Closing Date and, with respect to the Optional Notes, at any time
prior to the applicable Subsequent Closing Date, which termination shall be without liability on
the part of any party to any other party, except that Section 4, Section 6, Section 7, Section 8
and Section 12 shall at all times be effective and shall survive such termination.
Section 6. Reimbursement of Underwriters Expenses.
If this Agreement is terminated pursuant to Section 5, Section 9 (only in the case of
non-defaulting Underwriters) or clause (ii) of Section 10 or if the sale to the Underwriters of
the Notes on the Closing Date or any Subsequent Closing Date is not consummated because of any
refusal, inability or failure on the part of the Company to perform any agreement herein or to
comply with any provision hereof, the Company agrees to reimburse the Representatives and the
Underwriters (other than a defaulting Underwriter, if any), severally, upon demand for all
out-of-pocket expenses that shall have been reasonably incurred by the Representatives and the
Underwriters in connection with the proposed purchase and the offering and sale of the
Securities, including, but not limited to, fees and disbursements of counsel, printing expenses,
travel expenses, postage, facsimile and telephone charges.
Section 7. Indemnification.
(a)
Indemnification of the Underwriters
. The Company agrees to indemnify and hold harmless
each Underwriter, its directors, officers, employees and agents, and each person, if
24
any, who controls any Underwriter within the meaning of the Securities Act or the Exchange
Act and each affiliate of any Underwriter within the meaning of Rule 405 under the Securities
Act against any loss, claim, damage, liability or expense, as incurred, to which such
Underwriter, director, officer, employee, agent, controlling person or affiliate may become
subject, insofar as such loss, claim, damage, liability or expense (or actions in respect
thereof as contemplated below) arises out of or is based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in the Registration Statement (or any
amendment thereto), including any information deemed to be a part thereof pursuant to Rule 430B
under the Securities Act, or the omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the statements therein not misleading; or
(ii) any untrue statement or alleged untrue statement of a material fact included in any Issuer
Free Writing Prospectus (including the Final Term Sheet), the Preliminary Prospectus or the
Prospectus (or any amendment or supplement thereto) or any prospectus wrapper material
distributed in connection with foreign sales or the omission or alleged omission therefrom of a
material fact, in each case, necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and to reimburse each Underwriter
and its officers, directors, employees, agents, controlling persons and affiliates for any and
all expenses (including the reasonable fees and disbursements of counsel chosen by the
Representatives) as such expenses are reasonably incurred by such Underwriter, or its officers,
directors, employees, agents, controlling persons or affiliates in connection with
investigating, defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the foregoing indemnity agreement shall
not apply to any loss, claim, damage, liability or expense to the extent, but only to the
extent, arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission based upon and in conformity with written information furnished to
the Company by any Underwriter through the Representatives expressly for use in the Registration
Statement (or any amendment thereto) or any Issuer Free Writing Prospectus (including the Final
Term Sheet), the Preliminary Prospectus or the Prospectus (or any amendment or supplement
thereto), it being understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in Section 7(b) hereof. The indemnity
agreement set forth in this Section 7(a) shall be in addition to any liabilities that the
Company may otherwise have.
(b)
Indemnification of the Company, its Directors and Officers
. Each Underwriter agrees,
severally and not jointly, to indemnify and hold harmless the Company, each of its directors,
each of its officers who signed the Registration Statement and each person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act against any loss,
claim, damage, liability or expense, as incurred, to which the Company, or any such director,
officer or controlling person may become subject, insofar as such loss, claim, damage, liability
or expense (or actions in respect thereof as contemplated below) arises out of or is based upon
any untrue or alleged untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) or the Disclosure Package or the Prospectus (or any
amendment or supplement thereto), or arises out of or is based upon the omission or alleged
omission to state therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, and only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission was made in the
Registration Statement (or any amendment thereto) or the Disclosure Package or the Prospectus
(or any amendment or supplement thereto), in reliance upon and in conformity with written
information furnished to the Company by the Underwriter through the Representatives expressly
for use therein, and to reimburse the Company or any such director, officer or controlling
person for any legal and other expense reasonably incurred by the Company or any such director,
officer or controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or action. The Company
hereby acknowledges that the only information that any Underwriter has furnished to the Company
25
through the Representatives expressly for use in the Registration Statement (or any
amendment thereto) or the Disclosure Package or the Prospectus (or any amendment or supplement
thereto) are the statements set forth in (i) the second paragraph under the subsection Price
Stabilization, Short Positions under the caption Underwriting in the Prospectus and (ii) the
first sentence under the subsection Commissions and Discounts under the caption Underwriting
in the Prospectus. The indemnity agreement set forth in this Section 7(b) shall be in addition
to any liabilities that each Underwriter may otherwise have.
(c)
Notifications and Other Indemnification Procedures
. Promptly after receipt by an
indemnified party under this Section 7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section 7, notify the indemnifying party in writing of the commencement
thereof, but the failure to so notify the indemnifying party (i) will not relieve it from
liability under Section 7(a) or (b) above unless and to the extent it did not otherwise learn of
such action and such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses as determined by a final nonappealable judgment and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in Section 7(a) or (b) above. In case any such action is
brought against any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to participate in,
and, to the extent that it shall elect, jointly with all other indemnifying parties similarly
notified, by written notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party, to assume the defense thereof with counsel
reasonably satisfactory to such indemnified party; provided, however, if the defendants in any
such action include both the indemnified party and the indemnifying party and the indemnified
party shall have reasonably concluded that a conflict may arise between the positions of the
indemnifying party and the indemnified party in conducting the defense of any such action or
that there may be legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal defenses and to
otherwise participate in the defense of such action on behalf of such indemnified party or
parties. Upon receipt of notice from the indemnifying party to such indemnified party of such
indemnifying partys election so to assume the defense of such action and approval by the
indemnified party of counsel, the indemnifying party will not be liable to such indemnified
party under this Section 7 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof unless (i) the indemnified party shall
have employed separate counsel in accordance with the proviso to the preceding sentence (it
being understood, however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel (other than local counsel), reasonably approved by the
indemnifying party (or by the Representatives in the case of Section 7(b)), representing the
indemnified parties who are parties to such action) or (ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of commencement of the action, in each
of which cases the fees and expenses of counsel shall be at the expense of the indemnifying
party.
(d)
Settlements
. The indemnifying party under this Section 7 shall not be liable for any
settlement of any proceeding effected without its written consent, which shall not be withheld
unreasonably, but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel as contemplated by
Section 7(c) hereof, the indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without
26
its written consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request and (ii) such indemnifying party shall not
have reimbursed the indemnified party in accordance with such request prior to the date of such
settlement. No indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement, compromise or consent to the entry of judgment in any pending or
threatened action, suit or proceeding in respect of which any indemnified party is or could have
been a party and indemnity was or could have been sought hereunder by such indemnified party,
unless such settlement, compromise or consent (x) includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of such action, suit
or proceeding and (y) does not include a statement as to or an admission of fault, culpability
or a failure to act by or on behalf of any indemnified party.
Section 8. Contribution.
If the indemnification provided for in Section 7 is for any reason unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any losses, claims,
damages, liabilities or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount paid or payable by such indemnified party, as incurred, as a
result of any losses, claims, damages, liabilities or expenses referred to therein (i) in such
proportion as is appropriate to reflect the relative benefits received by the Company, on the
one hand, and the Underwriters, on the other hand, from the offering of the Notes pursuant to
this Agreement or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company, on the one hand, and
the Underwriters, on the other hand, in connection with the untrue statements or omissions or
alleged untrue statements or alleged omissions which resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company, on the one hand, and the Underwriters, on the other hand, in
connection with the offering of the Notes pursuant to this Agreement shall be deemed to be in
the same respective proportions as the total net proceeds from the offering of the Notes
pursuant to this Agreement (before deducting expenses) received by the Company, and the
underwriting discount received by the Underwriters, in each case as set forth on the front cover
page of the Prospectus bear to the aggregate initial public offering price of the Notes as set
forth on such front cover page. The relative fault of the Company, on the one hand, and the
Underwriters, on the other hand, shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company, on the one
hand, or the Underwriters, on the other hand, and the parties relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims, damages,
liabilities and expenses referred to above shall be deemed to include, subject to the
limitations set forth in Section 7(c), any legal or other fees or expenses reasonably incurred
by such party in connection with investigating or defending any action or claim.
The Company and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro rata allocation (even if the
Underwriters were treated as one entity for such purpose) or by any other method of allocation
that does not take account of the equitable considerations referred to in this Section 8.
Notwithstanding the provisions of this Section 8, no Underwriter shall be required to
contribute any amount in excess of the underwriting discount received by such Underwriter in
27
connection with the Notes underwritten by it and distributed to the public. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters obligations to contribute pursuant to this Section 8 are
several, and not joint, in proportion to their respective underwriting commitments as set forth
opposite their names in
Schedule A
. For purposes of this Section 8, each director,
officer, employee, agent and affiliate of an Underwriter and each person, if any, who controls
an Underwriter within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such Underwriter, and each director of the Company, each officer of
the Company who signed the Registration Statement and each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act shall have the same rights
to contribution as the Company.
Section 9. Default of One or More of the Several Underwriters.
If, on the Closing Date or a Subsequent Closing Date, as the case may be, any one or more
of the several Underwriters shall fail or refuse to purchase Notes that it or they have agreed
to purchase hereunder on such date, and the aggregate principal amount of Notes which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase does not exceed
10% of the aggregate principal amount of the Notes to be purchased on such date, the other
Underwriters shall be obligated, severally, in the proportions that the aggregate principal
amount of Firm Notes set forth opposite their respective names on
Schedule A
bears to
the aggregate principal amount of Firm Notes set forth opposite the names of all such
non-defaulting Underwriters, or in such other proportions as may be specified by the
Representatives with the consent of the non-defaulting Underwriters, to purchase the Notes which
such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such
date. If, on the Closing Date or a Subsequent Closing Date, as the case may be, any one or more
of the Underwriters shall fail or refuse to purchase Notes and the aggregate principal amount of
Notes with respect to which such default occurs exceeds 10% of the aggregate principal amount of
Notes to be purchased on such date, and arrangements satisfactory to the Representatives and the
Company for the purchase of such Notes are not made within 48 hours after such default, this
Agreement shall terminate without liability of any non-defaulting party to any other party
except that the provisions of Section 4, Section 6, Section 7 and Section 8 shall at all times
be effective and shall survive such termination with respect to any non-defaulting Underwriter.
In any such case, either the Representatives or the Company shall have the right to postpone the
Closing Date or a Subsequent Closing Date, as the case may be, but in no event for longer than
seven days in order that the required changes, if any, to the Registration Statement, the
Disclosure Package and the Prospectus or any other documents or arrangements may be effected.
As used in this Agreement, the term Underwriter shall be deemed to include any person
substituted for a defaulting Underwriter under this Section 9. Any action taken under this
Section 9 shall not relieve any defaulting Underwriter from liability in respect of any default
of such Underwriter under this Agreement.
Section 10. Termination of this Agreement.
Prior to the Closing Date and, with respect to the Optional Notes, any Subsequent Closing
Date, this Agreement may be terminated by the Representatives by notice given to the Company if
at any time (i) trading or quotation in any of the Companys securities shall have been
suspended or limited by the Commission or by the NYSE; (ii) there shall have occurred a material
adverse change, or any development that could reasonably be expected to result in a material
adverse change, in the condition, financial or otherwise, or in the earnings, business,
properties, operations or prospects, whether or not arising from transactions in the ordinary
course of business, of the
28
Company and its subsidiaries considered as one entity; (iii) trading in securities
generally on the NYSE shall have been suspended or limited, or minimum or maximum prices shall
have been generally established by the Commission, FINRA or the NYSE; (iv) a general banking
moratorium shall have been declared by federal or New York authorities or a material disruption
in commercial banking or securities settlement or clearance services in the United States has
occurred; or (v) there shall have occurred any outbreak or escalation of national or
international hostilities or declaration of a national emergency or war by the United States or
any crisis or calamity, or any change in the United States or international financial markets,
or any substantial change or development involving a prospective substantial change in United
States or international political, financial or economic conditions, as in the judgment of the
Representatives is material and adverse and makes it impracticable or inadvisable to market the
Notes in the manner and on the terms described in the Disclosure Package or the Prospectus or to
enforce contracts for the sale of securities. Any termination pursuant to this Section 10 shall
be without liability on the part of (a) the Company to any Underwriter, except that the Company
shall be obligated to reimburse the expenses of the Representatives and the Underwriters
pursuant to Sections 4 and 6 hereof for any termination pursuant to clause (ii) above or (b) any
Underwriter to the Company.
Section 11. No Advisory or Fiduciary Responsibility.
The Company acknowledges and agrees that: (i) the purchase and sale of the Notes pursuant
to this Agreement, including the determination of the initial public offering price of the Notes
and any related discounts and commissions, is an arms-length commercial transaction between the
Company, on the one hand, and the several Underwriters, on the other hand, and the Company is
capable of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (ii) in connection with each
transaction contemplated hereby and the process leading to such transaction, each Underwriter is
and has been acting solely as a principal and is not the financial advisor, agent or fiduciary
of the Company or its affiliates, stockholders, creditors or employees or any other party; (iii)
no Underwriter has assumed or will assume an advisory, agency or fiduciary responsibility in
favor of the Company with respect to any of the transactions contemplated hereby or the process
leading thereto (irrespective of whether such Underwriter has advised or is currently advising
the Company on other matters) and no Underwriter has any obligation to the Company with respect
to the offering contemplated hereby except the obligations expressly set forth in this
Agreement; (iv) the several Underwriters and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of the Company and
that the several Underwriters have no obligation to disclose any of such interests by virtue of
any advisory, agency or fiduciary relationship; and (v) the Underwriters have not provided any
legal, accounting, regulatory or tax advice with respect to the offering contemplated hereby and
the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent
it deemed appropriate.
This Agreement supersedes all prior agreements and understandings (whether written or oral)
between the Company and the several Underwriters, or any of them, with respect to the subject
matter hereof. The Company hereby waives and releases, to the fullest extent permitted by law,
any claims that the Company may have against the several Underwriters with respect to any breach
or alleged breach of agency or fiduciary duty.
Section 12. Representations and Indemnities to Survive Delivery.
The respective indemnities, agreements, representations, warranties and other statements of
the Company, of its officers and of the several Underwriters set forth in or made pursuant to
this Agreement (i) will remain operative and in full force and effect, regardless of any
29
(A) investigation, or statement as to the results thereof, made by or on behalf of any
Underwriter, the directors, officers, employees, agents or affiliates of any Underwriter, or any
person controlling any Underwriter, the Company, the directors, officers or employees of the
Company or any person controlling the Company, as the case may be, or (B) acceptance of the
Notes and payment for them hereunder and (ii) will survive delivery of and payment for the Notes
sold hereunder and any termination of this Agreement.
Section 13. Notices.
All communications hereunder shall be in writing and shall be mailed, hand delivered or
telecopied and confirmed to the parties hereto as follows:
If to the Representatives:
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Attention: Equity Syndicate Desk
and
UBS Securities LLC
299 Park Avenue
New York, NY 10171-0026
Attention: Syndicate Department
If to the Company:
Old Republic International Corporation
307 North Michigan Avenue
Chicago, Illinois 60601
Facsimile: (312) 726-0309
Attention: General Counsel
Any party hereto may change the address for receipt of communications by giving written notice
to the others.
Section 14. Successors and Assigns.
This Agreement will inure to the benefit of and be binding upon the parties hereto,
including any substitute Underwriters pursuant to Section 9 hereof, and to the benefit of (i)
the Company, its directors, any officer of the Company who signs the Registration Statement and
any person who controls the Company within the meaning of the Securities Act or the Exchange
Act, (ii) the Underwriters, the officers, directors, employees, agents and affiliates of the
Underwriters, and each person, if any, who controls any Underwriter within the meaning of the
Securities Act or the Exchange Act and (iii) the respective successors and assigns of any of the
above, all as and to the extent provided in this Agreement, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term successors and assigns shall
not include any purchaser of Notes from any of the several Underwriters merely because of such
purchase.
30
Section 15. Partial Unenforceability.
The invalidity or unenforceability of any Section, paragraph or provision of this Agreement
shall not affect the validity or enforceability of any other Section, paragraph or provision
hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to
be invalid or unenforceable, there shall be deemed to be made such minor changes (and only such
minor changes) as are necessary to make it valid and enforceable.
Section 16. Governing Law Provisions.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK.
Section 17. General Provisions.
This Agreement constitutes the entire agreement of the parties to this Agreement and
supersedes all prior written or oral and all contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof. This Agreement may be executed in two
or more counterparts, each one of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument. This Agreement may not be amended
or modified unless in writing by all of the parties hereto, and no condition herein (express or
implied) may be waived unless waived in writing by each party whom the condition is meant to
benefit. The Section headings herein are for the convenience of the parties only and shall not
affect the construction or interpretation of this Agreement.
Each of the parties hereto acknowledges that it is a sophisticated business person who was
adequately represented by counsel during negotiations regarding the provisions hereof,
including, without limitation, the indemnification provisions of Section 7 and the contribution
provisions of Section 8, and is fully informed regarding said provisions. Each of the parties
hereto further acknowledges that the provisions of Sections 7 and 8 hereto fairly allocate the
risks in light of the ability of the parties to investigate the Company, its affairs and its
business in order to assure that adequate disclosure has been made in the Registration
Statement, the Disclosure Package and the Prospectus (and any amendments and supplements
thereto), as required by the Securities Act, the Exchange Act or otherwise.
31
If the foregoing is in accordance with your understanding of our agreement, kindly sign and
return to the Company the enclosed copies hereof, whereupon this instrument, along with all
counterparts hereof, shall become a binding agreement in accordance with its terms.
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|
|
|
|
|
Very truly yours,
OLD REPUBLIC INTERNATIONAL
CORPORATION
|
|
By:
|
/s/ Aldo C. Zucaro
|
|
|
|
Name:
|
Aldo C. Zucaro
|
|
|
|
Title:
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Chairman and Chief Executive
Officer
|
|
The foregoing Underwriting Agreement is hereby confirmed and accepted by the
Representatives as of the date first above written.
MORGAN STANLEY & CO. INCORPORATED
UBS SECURITIES LLC
Acting as Representatives of the
several Underwriters named in
the attached Schedule A.
By: Morgan Stanley & Co. Incorporated
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By:
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/s/ Jonathan Ross
|
|
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Executive Director
|
|
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By:
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UBS Securities LLC
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By:
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/s/ Mike Harris
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|
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Executive Director
|
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By:
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/s/ Eric Coghlin
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Director
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32
ANNEX A
LIST OF SIGNIFICANT SUBSIDIARIES
Great West Casualty Company
Old Republic Insurance Company
Republic Mortgage Insurance Company
SCHEDULE A
|
|
|
|
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|
|
Aggregate
|
|
|
|
Principal
|
|
|
|
Amount of Firm
|
|
|
|
Notes to be
|
|
Underwriters
|
|
Purchased
|
|
Morgan Stanley & Co. Incorporated
|
|
$
|
300,000,000
|
|
UBS Securities LLC
|
|
$
|
150,000,000
|
|
Dowling and Partners Securities LLC
|
|
$
|
10,000,000
|
|
Keefe, Bruyette & Woods, Inc.
|
|
$
|
10,000,000
|
|
Macquarie Capital (USA) Inc.
|
|
$
|
10,000,000
|
|
Raymond James & Associates, Inc.
|
|
$
|
10,000,000
|
|
Wunderlich Securities, Inc.
|
|
$
|
10,000,000
|
|
|
|
|
|
Total:
|
|
$
|
500,000,000
|
|
SCHEDULE B
FORM OF FINAL TERM SHEET
SCHEDULE C
FREE WRITING PROSPECTUSES
1. Final Term Sheet
EXHIBIT A-1
[Form of Comfort Letter PricewaterhouseCoopers LLP]
A-1-1
EXHIBIT A-2
[Form of Comfort Letter KPMG LLP]
A-2-1
EXHIBIT B
Form of Opinion of General Counsel
(i) The Company has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the State of Delaware.
(ii) The Company is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect.
(iii) Each significant subsidiary of the Company (as defined in Rule 405 under the
Securities Act) has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the jurisdiction of its incorporation, has corporate power and
authority to own or lease, as the case may be, and to operate its properties and to conduct
its business as described in the Registration Statement, the Disclosure Package and the
Prospectus and is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing would not,
individually or in the aggregate, have a Material Adverse Effect.
(iv) All of the issued and outstanding capital stock of each significant subsidiary of
the Company has been duly authorized and validly issued, is fully paid and nonassessable and
is owned by the Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or, to such counsels knowledge, any pending
or threatened claim.
(v) The Companys authorized capitalization is as set forth in the Registration
Statement, the Disclosure Package and the Prospectus. The authorized, issued and outstanding
shares of capital stock of the Company (including the Common Stock) conform to the
descriptions thereof included in the Registration Statement, the Disclosure Package and the
Prospectus. All of the outstanding shares of Common Stock have been duly authorized and
validly issued, are fully paid and nonassessable.
(vi) To such counsels knowledge, there are no legal or governmental actions, suits or
proceedings pending or threatened which are required under the Securities Act or the
Exchange Act to be disclosed in the Registration Statement, the Disclosure Package or the
Prospectus, other than those disclosed therein.
(vii) The performance by the Company of its obligations under the Underwriting
Agreement, the Indenture and the Notes will not: (i) result in any violation of the
provisions of the charter or bylaws of the Company or any subsidiary; (ii) constitute a
breach of, or Default or a Debt Repayment Triggering Event under, or result in the creation
or imposition of any lien, charge or encumbrance upon any property or assets of the Company
or any of its subsidiaries pursuant to, any Existing Instrument; or (iii) result in any
violation of any statute, law, rule, judgment, regulation, order or decree applicable to the
Company or any of its subsidiaries of any Governmental Entity having jurisdiction over the
Company or any of its subsidiaries or any of their respective property or assets, except
with respect to clause (ii), for such defaults or violations as would not, individually or
in the aggregate, have a Material Adverse Effect.
B-1
(viii) Except as disclosed in the Registration Statement, the Disclosure Package and
the Prospectus, to such counsels knowledge, there are no persons with registration or other
similar rights to have any equity or debt securities registered for sale under the
Registration Statement or included in the offering contemplated by the Underwriting
Agreement.
(ix) To such counsels knowledge, neither the Company nor any subsidiary of the Company
is in (A) violation of (i) its charter or by-laws or (ii) any statute, law, rule, judgment,
regulation, order or decree applicable to the Company or any of its subsidiaries of any
Governmental Entity having jurisdiction over the Company or any of its subsidiaries or any
of their respective property or assets or (B) Default in the performance or observance of
any obligation, agreement, covenant or condition contained in any Existing Instrument,
except with respect to clauses A(ii) and (B) only, for such violations or Defaults as would
not, individually or in the aggregate, have a Material Adverse Effect.
(x) The Company and each subsidiary of the Company possess such valid and current
licenses, certificates, authorizations or permits issued by the appropriate state, federal
or foreign regulatory agencies or bodies necessary to conduct the Companys consolidated
business, except for such licenses, certificates, authorizations or permits that the failure
to possess would not result in a Material Adverse Effect and neither the Company nor any
subsidiary of the Company has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such license, certificate, authorization or
permit which, singly or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a Material Adverse Effect.
B-2
EXHIBIT C
Form of Opinion of Counsel for the Company
(i) The Company has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Registration Statement, the
Disclosure Package and the Prospectus and to enter into and perform its obligations under
the Underwriting Agreement, the Indenture and the Notes.
(ii) The Indenture has been duly qualified under the Trust Indenture Act. The
Indenture has been duly authorized, executed and delivered by the Company and, assuming due
authorization, execution and delivery of the Indenture by the Trustee, will constitute a
valid and legally binding agreement of the Company enforceable against the Company in
accordance with its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to or affecting the
rights and remedies of creditors or by general equitable principles. The Indenture
conforms in all material respects to the description thereof contained in the Registration
Statement, the Disclosure Package and the Prospectus.
(iii) The Notes have been duly authorized by the Company and, when the Notes are
executed, authenticated and issued in accordance with the terms of the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting Agreement on the
Closing Date or any Subsequent Closing Date, as the case may be, the Notes will constitute
valid and legally binding obligations of the Company, entitled to the benefits of the
Indenture and enforceable against the Company in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or
other similar laws relating to or affecting the rights and remedies of creditors or by
general equitable principles. The Notes conform in all material respects to the description
thereof contained in the Registration Statement, the Disclosure Package and the Prospectus.
(iv) (i) The Conversion Shares initially issuable upon conversion of the Notes have
been duly authorized and reserved by the Company and, when issued upon conversion of the
Notes in accordance with the terms of the Notes and the Indenture, will be validly issued,
fully paid and nonassessable, and (ii) the Rights, if any, issuable upon conversion of the
Notes have been duly authorized by the Company and, when and if issued upon conversion in
accordance with the terms of the Notes, the Indenture and the Rights Agreement, will have
been validly issued.
(v) No stockholder of the Company or any other person has any preemptive right, right
of first offer or refusal or other similar right to subscribe for or purchase securities of
the Company or any subsidiary of the Company arising (i) by operation of the charter or
by-laws of the Company or the General Corporation Law of the State of Delaware or (ii) to
such counsels knowledge, otherwise.
(vi) The Underwriting Agreement has been duly authorized, executed and delivered by the
Company.
(vii) The Registration Statement became effective under the Securities Act. The filing
of the Preliminary Prospectus and the Prospectus has been made in the manner and within the
time period required by Rule 424(b). To such counsels knowledge, based solely on a
telephonic
C-1
confirmation from the Secretarys Office of the SEC received at ________ a.m. on the
date hereof, no stop order suspending the effectiveness of the Registration Statement, or
notice objecting to its use pursuant to Rule 401(g)(2) has been issued by the Commission.
(viii) The Registration Statement and the Prospectus, as of their most recent
respective effective or issue dates (other than the financial statements, related notes and
schedules and other financial or statistical data derived therefrom or assessments of or
reports on the effectiveness of internal control over financial reporting included or
incorporated by reference therein or omitted therefrom, as to which no opinion need be
rendered) comply as to form in all material respects with the applicable requirements of the
Securities Act and the Trust Indenture Act.
(ix) Each document filed pursuant to the Exchange Act (other than the financial
statements, related notes and schedules and other financial or statistical data derived
therefrom or assessments of or reports on the effectiveness of internal control over
financial reporting included or incorporated by reference therein or omitted therefrom, as
to which no opinion need be rendered) that is incorporated by reference in the Disclosure
Package and the Prospectus complied, when so filed, or if amended or revised, when so
amended or revised, as to form in all material respects with the Exchange Act.
(x) The statements in the Preliminary Prospectus and the Prospectus under the caption
Certain United States Income Tax Considerations, insofar as such statements constitute a
summary of the legal matters referred to therein, constitute fair summaries thereof, in all
material respects.
(xi) No consent, approval, authorization or other order of, or registration or filing
with, any Governmental Entity is required for the Companys execution, delivery and
performance of the Underwriting Agreement, the Indenture and the Notes, except (A) as have
been obtained under the Securities Act, and (B) as required under applicable state
securities or blue sky laws and from FINRA.
(xii) The Company is not, and after receipt of payment for the Notes and the
application of the proceeds thereof as contemplated under the caption Use of Proceeds in
the Preliminary Prospectus and the Prospectus will not be, an investment company within
the meaning of Investment Company Act.
In connection with the preparation of the Registration Statement, we participated in
conferences with officers and other representatives of the Company, representatives of the
independent registered public accountants of the Company, the Representatives and counsel to the
Underwriters at which the contents of the Registration Statement, the Disclosure Package and the
Prospectus and related matters were discussed (we did not participate in the preparation of the
documents incorporated by reference in the Prospectus) and, although we have not independently
verified and are not passing upon and assume no responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement, the Disclosure Package or the
Prospectus (other than to the extent specified in paragraphs (ii), (iii) and (x) above), no facts
have come to our attention that lead us to believe that (i) the Registration Statement, insofar as
it relates to the offering of the Securities, as of the most recent effective date pursuant to Rule
430B(f)(2) of the 1933 Act Regulations, contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to make the statements therein
not misleading; (ii) the Disclosure Package, at the Applicable Time, included an untrue statement
of a material fact or omitted to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading; or (iii) the
Prospectus, as of its date or at the Closing Date, included or includes an untrue statement of a
material fact or omitted or omits
C-2
to state a material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (in each case, other than the
financial statements, related notes and schedules and other financial or statistical data derived
therefrom or assessments of or reports on the effectiveness of internal control over financial
reporting included or incorporated by reference therein or omitted therefrom, as to which we
express no view).
C-3
EXHIBIT D
March 2, 2011
MORGAN STANLEY & CO. INCORPORATED
1585 Broadway
New York, New York 10036
UBS Securities LLC
677 Washington Boulevard
Stamford, CT 06901
As Representatives of the several Underwriters
Re: Old Republic International Corporation (the Company)
Ladies and Gentlemen:
The undersigned is an owner of record or beneficially of certain shares of Common Stock of
the Company or securities convertible into or exchangeable or exercisable for Common Stock. The
Company proposes to carry out a public offering of 3.75% Convertible Senior Notes due 2018,
which will be convertible into common stock, $1.00 par value (the Common Stock), of the
Company (the Offering) for which you will act as the representatives of the underwriters. The
undersigned recognizes that the Offering will be of benefit to the undersigned and will benefit
the Company. The undersigned acknowledges that you and the other underwriters are relying on the
representations and agreements of the undersigned contained in this letter in carrying out the
Offering and in entering into an underwriting agreement with the Company with respect to the
Offering (the Underwriting Agreement).
In consideration of the foregoing, the undersigned hereby agrees that the undersigned will
not (and will cause any spouse or immediate family member of the spouse or the undersigned
living in the undersigneds household not to), without the prior written consent of Morgan
Stanley & Co. Incorporated (Morgan Stanley) and UBS Securities LLC (UBS) (which consent may
be withheld in their sole discretion), directly or indirectly, (i) offer, pledge, announce the
intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences of ownership of
Common Stock, whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or otherwise, for a period
commencing on the date hereof and continuing through the close of trading on the date 90 days
after the public offering date set forth on the final prospectus used to sell the Common Stock
(the Lock-Up Period). The foregoing sentence shall not apply to (i) the transfer of any or
all of the shares of Common Stock owned by the undersigned, either during his or her lifetime or
on death, by gift, will or intestate succession to the immediate family of the undersigned or to
a trust the beneficiaries of which are exclusively the undersigned and/or a member or members of
his or her immediate family (for purposes of this agreement, immediate family shall mean any
relationship by blood, marriage or adoption, not more remote than first cousin), or (ii) any
bona fide gifts to any charitable organization; provided, however, that in any such case it
shall be a pre-condition to such transfer that (a) the transferee or donee executes and delivers
to the Representatives a lock-up agreement in form and substance satisfactory
D-1
to the Representatives, (b) no filing by any party (transferor, transferee, donor or donee)
under the Securities Exchange Act of 1934, as amended (the Exchange Act), shall be required or
shall be voluntarily made in connection with such transfer or distribution (other than a filing
on a Form 5, Schedule 13D or Schedule 13G (or 13D/A or 13G/A) made after the expiration of the
Lock-Up Period), (c) each party (transferor, transferee, donor or donee) shall not be required
by law (including without limitation the disclosure requirements of the Securities Act of 1933,
as amended (the Securities Act), and the Exchange Act) to make, and shall agree to not
voluntarily make, any public announcement of the transfer or disposition and (d) the undersigned
notifies the Representatives at least three business days prior to the proposed transfer or
disposition.
In addition, the undersigned agrees that, without the prior written consent of Morgan
Stanley and UBS, it will not, during the Lock-Up Period, make any demand for or exercise any
right with respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.
If (i) the Company issues an earnings release or material news, or a material event
relating to the Company occurs, during the last 17 days of the Lock-Up Period, or (ii) prior to
the expiration of the Lock-Up Period, the Company announces that it will release earnings
results during the 16-day period beginning on the last day of the lock-up period, the
restrictions imposed by this agreement shall continue to apply until the expiration of the
18-day period beginning on the date of the issuance of the earnings release or the occurrence of
the material news or material event, unless Morgan Stanley and UBS waive, in writing, such
extension.
The undersigned hereby acknowledges that the Company has agreed in the Underwriting
Agreement to provide written notice of any event that would result in an extension of the
Lock-Up Period pursuant to the previous paragraph to the undersigned (in accordance with Section
13 of the Underwriting Agreement) and agrees that any such notice properly delivered will be
deemed to have given to, and received by, the undersigned. The undersigned hereby further agrees
that, prior to engaging in any transaction or taking any other action that is subject to the
terms of this agreement during the period from the date of this agreement to and including the
34th day following the expiration of the initial Lock-Up Period, it will give notice thereof to
the Company and will not consummate such transaction or take any such action unless it has
received written confirmation from the Company that the Lock-Up Period (as such may have been
extended pursuant to the previous paragraph) has expired.
The undersigned also agrees and consents to the entry of stop transfer instructions with
the Companys transfer agent and registrar against the transfer of shares of Common Stock or
securities convertible into or exchangeable or exercisable for Common Stock held by the
undersigned except in compliance with the foregoing restrictions.
With respect to the Offering only, the undersigned waives any registration rights relating
to registration under the Securities Act of any Common Stock owned either of record or
beneficially by the undersigned, including any rights to receive notice of the Offering.
D-2
This agreement is irrevocable and will be binding on the undersigned and the respective
successors, heirs, personal representatives, and assigns of the undersigned.
Printed Name of Holder
By: ____________________
Signature
Printed Name of Person Signing
(and indicate capacity of person signing if
signing as custodian, trustee, or on behalf
of an entity)
D-3
Exhibit 4.1
OLD REPUBLIC INTERNATIONAL CORPORATION
as Issuer
WILMINGTON TRUST COMPANY
as Trustee
Fourth Supplemental Indenture
Dated as of March 8, 2011
Supplemental to Indenture
Dated as of August 15, 1992
3.75% Convertible Senior Notes due 2018
TABLE OF CONTENTS
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Page
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ARTICLE 1
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DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
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SECTION 1.01.
Scope of Supplemental Indenture
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2
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SECTION 1.02.
Definitions
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2
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ARTICLE 2
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THE SECURITIES
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SECTION 2.01.
Title and Terms; Payments
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7
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SECTION 2.02.
Book-Entry Provisions for Global Notes
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8
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SECTION 2.03.
CUSIP Numbers
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9
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SECTION 2.04.
Reporting Requirement
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9
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ARTICLE 3
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FUNDAMENTAL CHANGES AND PURCHASES THEREUPON
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SECTION 3.01.
Purchase at Option of Holders Upon a Fundamental Change
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9
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SECTION 3.02.
Effect of Fundamental Change Purchase Notice
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12
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SECTION 3.03.
Withdrawal of Fundamental Change Purchase Notice
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12
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SECTION 3.04.
Deposit of Fundamental Change Purchase Price
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12
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SECTION 3.05.
Notes Purchased in Whole or in Part
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13
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SECTION 3.06.
Covenant to Comply With Applicable Laws Upon Purchase of Notes
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13
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SECTION 3.07.
Repayment to the Company
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13
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ARTICLE 4
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CONVERSION
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SECTION 4.01.
Right to Convert
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13
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SECTION 4.02.
Conversion Procedures
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14
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SECTION 4.03.
Payments Upon Conversion
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15
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SECTION 4.04.
Adjustment of Conversion Rate
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16
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SECTION 4.05.
Certain Other Adjustments
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24
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SECTION 4.06.
Adjustments Upon Certain Fundamental Changes
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24
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SECTION 4.07.
Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale
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26
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SECTION 4.08.
Taxes on Shares Issued
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28
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SECTION 4.09.
Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental Requirements;
Listing of Common Stock
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28
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SECTION 4.10.
Responsibility of Trustee
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29
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SECTION 4.11.
Notice to Holders Prior to Certain Actions
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29
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SECTION 4.12.
Stockholder Rights Plan
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30
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i
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Page
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ARTICLE 5
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REMEDIES
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SECTION 5.01.
Events of Default
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30
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SECTION 5.02.
Additional Interest
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31
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SECTION 5.03.
Acceleration of Maturity; Rescission and Annulment
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32
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ARTICLE 6
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SATISFACTION AND DISCHARGE
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SECTION 6.01.
Satisfaction and Discharge of the Supplemental Indenture
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33
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SECTION 6.02.
Deposited Monies to Be Held in Trust by Trustee
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33
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SECTION 6.03.
Paying Agent to Repay Monies Held
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34
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SECTION 6.04.
Return of Unclaimed Monies
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34
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SECTION 6.05.
Reinstatement
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34
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ARTICLE 7
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SUPPLEMENTAL INDENTURES
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SECTION 7.01.
Amendments or Supplements Without Consent of Holders
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34
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SECTION 7.02.
Amendments or Supplements With Consent of Holders
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34
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SECTION 7.03.
Notice of Amendments and Supplements
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35
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ARTICLE 8
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INAPPLICABLE PROVISIONS OF THE ORIGINAL INDENTURE
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SECTION 8.01.
Limitations on Liens on Stock of Principal Insurance Subsidiaries
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35
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SECTION
8.02.
Limitations on Issue or Disposition of Stock of Principal Insurance Subsidiaries
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35
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SECTION 8.03.
Prior Indentures Supplemental to Original Indenture Excluded
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35
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SECTION 8.04.
Articles Thirteen and Fourteen of Original Indenture
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35
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ARTICLE 9
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MISCELLANEOUS
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SECTION 9.01.
Governing Law
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36
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SECTION 9.02.
Payments on Business Days
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36
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SECTION 9.03.
No Security Interest Created
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36
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SECTION 9.04.
Trust Indenture Act
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36
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SECTION 9.05.
Benefits of Indenture
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36
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SECTION 9.06.
Calculations
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37
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SECTION 9.07.
Table of Contents, Headings, Etc
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37
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SECTION 9.08.
Execution in Counterparts
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37
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SECTION 9.09.
Severability
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37
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ii
EXHIBITS
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Page
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Exhibit A Form of Note
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A-1
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Exhibit B Form of Notice of Conversion
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B-1
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Exhibit C Form of Fundamental Change Purchase Notice
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C-1
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Exhibit D Form of Assignment and Transfer
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D-1
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iii
FOURTH SUPPLEMENTAL INDENTURE, dated as of March 8, 2011, between Old Republic International
Corporation, a Delaware corporation (the
Company,
which term includes any successor Person under
the Indenture hereinafter referred to), and Wilmington Trust Company, a Delaware banking
corporation, as trustee (the
Trustee
) under the Indenture dated as of August 15, 1992, between
the Company and the Trustee (as amended or supplemented from time to time in accordance with the
terms thereof, the
Original Indenture
).
RECITALS OF THE COMPANY
WHEREAS, the Company executed and delivered the Original Indenture to the Trustee to provide,
among other things, for the issuance, from time to time, of the Companys unsecured Debt
Securities, in an unlimited aggregate principal amount, in one or more series to be established by
the Company under, and authenticated and delivered as provided in, the Original Indenture;
WHEREAS, Section 901(5) of the Original Indenture provides for the Company and the Trustee to
enter into an indenture supplemental to the Original Indenture to establish the form and terms of
Debt Securities of any series as contemplated by Sections 201 and 301 of the Original Indenture;
WHEREAS, the Board of Directors has duly adopted resolutions authorizing the Company to
execute and deliver this Supplemental Indenture;
WHEREAS, pursuant to the terms of the Original Indenture, the Company desires to establish a
new series of its Debt Securities to be known as its 3.75% Convertible Senior Notes due 2018 (the
Notes
), the form and substance of such Notes and the terms, provisions and conditions thereof to
be set forth as provided in the Original Indenture and this Supplemental Indenture;
WHEREAS, the Form of Note, the certificate of authentication to be borne by each Note and the
Form of Notice of Conversion, Form of Fundamental Change Purchase Notice and Form of Assignment and
Transfer contemplated under the terms of the Notes are to be substantially in the forms hereinafter
provided; and
WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental
Indenture, and all requirements necessary to make (i) this Supplemental Indenture a valid
instrument in accordance with its terms, and (ii) the Notes, when executed by the Company and
authenticated and delivered by the Trustee, the valid obligations of the Company, have been
performed, and the execution and delivery of this Supplemental Indenture have been duly authorized
in all respects.
NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH, for and in consideration of the
premises and the purchases of the Notes by the Holders thereof, it is mutually agreed, for the
benefit of the Company and the equal and proportionate benefit of all Holders of the Notes, as
follows:
1
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.01.
Scope of Supplemental Indenture
. The changes, modifications and supplements to
the Original Indenture effected by this Supplemental Indenture shall be applicable only with
respect to, and shall only govern the terms of, the Notes, which may be issued from time to time,
and shall not apply to any other Debt Securities that may be issued under the Original Indenture
unless a supplemental indenture with respect to such other Debt Securities specifically
incorporates such changes, modifications and supplements. The provisions of this Supplemental
Indenture shall supersede any corresponding provisions in the Original Indenture.
SECTION 1.02.
Definitions
. For all purposes of the Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(i) the terms defined in this Article 1 shall have the meanings assigned to them in
this Article and include the plural as well as the singular;
(ii) all words, terms and phrases defined in the Original Indenture (but not
otherwise defined herein) shall have the same meanings as in the Original Indenture;
(iii) all other terms used herein that are defined in the Trust Indenture Act,
either directly or by reference therein, shall have the meanings assigned to them in the
Trust Indenture Act;
(iv) all accounting terms not otherwise defined herein shall have the meanings
assigned to them in accordance with generally accepted accounting principles, and, except as
otherwise herein expressly provided, the term generally accepted accounting principles
with respect to any computation required or permitted hereunder shall mean such accounting
principles as are generally accepted at the date of this instrument; and
(v) the words herein, hereof and hereunder and other words of similar import
refer to this Supplemental Indenture as a whole and not to any particular Article, Section
or other subdivision.
Additional Interest
has the meaning specified in Section 5.02.
Additional Notes
has the meaning specified in Section 2.01.
Additional Shares
has the meaning specified in Section 4.06(a).
Agent Members
has the meaning specified in Section 2.02.
Business Day
means, with respect to any Note, any day other than a Saturday, a Sunday or any
other day on which banks or trust companies in The City of New York are authorized or required by
law or executive order to be closed.
Clause A Distribution
has the meaning specified in Section 4.04(c).
2
Clause B Distribution
has the meaning specified in Section 4.04(c).
Clause C Distribution
has the meaning specified in Section 4.04(c).
close of business
means 5:00 p.m. (New York City time).
Common Stock
means the shares of common stock, par value $1.00 per share, of the Company as
such shares of common stock exist on the date of this Supplemental Indenture, subject to Section
4.07.
Conversion Agent
means the Trustee or such other office or agency designated by the Company
where Notes may be presented for conversion. The Conversion Agent shall initially be the Trustee.
Conversion Date
has the meaning specified in Section 4.02(b).
Conversion Notice
has the meaning specified in Section 4.02(b).
Conversion Price
means, in respect of each Note, as of any date, $1,000, divided by the
Conversion Rate as of such date.
Conversion Rate
means, initially, 64.3407 shares of Common Stock per $1,000 principal amount
of Notes, subject to adjustment as set forth herein.
Custodian
means the Trustee, as custodian with respect to the Notes (so long as the Notes
constitute Global Notes), or any successor entity.
Depositary
means The Depository Trust Company until a successor Depositary shall have become
such pursuant to the applicable provisions of the Indenture, and thereafter Depositary shall mean
such successor Depositary.
Effective Date
has the meaning specified in Section 4.06(c).
Exchange Act
means the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
Ex-Dividend Date
means, in respect of any dividend or distribution, the first date upon
which the shares of Common Stock trade on the applicable exchange or in the applicable market (used
to determine the Last Reported Sale Price), regular way, without the right to receive such dividend
or distribution.
Fundamental Change
will be deemed to have occurred at the time after the Notes are
originally issued if any of the following occurs:
(1) a person or group within the meaning of Section 13(d) of the Exchange Act,
other than the Company, its Subsidiaries, and its and their employee benefit plans, has
become the direct or indirect beneficial owner, as defined in
3
Rule 13d-3 under the Exchange Act, of the Companys common equity representing more than 50% of the voting
power of the Companys common equity;
(2) consummation of (A) any recapitalization, reclassification or change of the
Common Stock (other than changes resulting from a subdivision or combination) as a result of
which recapitalization, reclassification or change of the Common Stock the Common Stock
would be converted into, or exchanged for, stock, other securities, other property or assets
or (B) (i) any share exchange, consolidation or merger of the Company or any other
transaction pursuant to which the Common Stock will be converted into cash, securities or
other property or (ii) any sale, lease or other transfer in one transaction or a series of
transactions of all or substantially all of the consolidated assets of the Company and its
Subsidiaries, taken as a whole, to any Person other than one of the Companys Subsidiaries;
provided, however, that a transaction where the holders of all classes of the Companys
common equity immediately prior to such transaction that is a share exchange, consolidation
or merger own, directly or indirectly, more than 50% of all classes of common equity of the
continuing or surviving corporation or transferee or the parent thereof immediately after
such event shall not be a Fundamental Change;
(3) the Companys stockholders approve any plan or proposal for the liquidation or
dissolution of the Company; or
(4) the Common Stock (or other common stock into which the Notes are then
convertible) ceases to be listed or quoted on a national securities exchange in the United
States.
Notwithstanding the foregoing, a Fundamental Change as a result of clause (2) above will not be
deemed to have occurred if at least 90% of the consideration received or to be received by the
holders of the Common Stock, excluding cash payments for fractional shares, in connection with the
transaction or transactions constituting the Fundamental Change consists of Publicly Traded
Securities and as a result of such transaction or transactions the Notes become convertible into
such Publicly Traded Securities, excluding cash payments for fractional shares.
Fundamental Change Company Notice
has the meaning specified in Section 3.01(b).
Fundamental Change Purchase Date
has the meaning specified in Section 3.01(a).
Fundamental Change Purchase Notice
has the meaning specified in Section 3.01(a)(i).
Fundamental Change Purchase Price
has the meaning specified in Section 3.01(a).
Global Note
means any registered Note that is in global form.
Indenture
means the Original Indenture, as originally executed and as supplemented from time
to time by one or more indentures supplemental thereto, including this Supplemental Indenture,
entered into pursuant to the applicable provisions of the Indenture, including, for all purposes of
this instrument and any such supplemental indenture, the provisions of the Trust
4
Indenture Act that are deemed to be a part of and govern the Original Indenture, this
Supplemental Indenture and any other such supplemental indenture, respectively.
Initial Dividend Threshold
has the meaning specified in Section 4.04(d)(i).
Initial Notes
has the meaning specified in Section 2.01.
Interest Payment Date
means, with respect to the payment of interest on the Notes, each
March 15 and September 15 of each year.
Last Reported Sale Price
of the Common Stock on any date means the closing sale price per
share of Common Stock (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and the average ask
prices) on that date as reported in composite transactions for the principal U.S. securities
exchange on which the Common Stock is traded. If the Common Stock is not listed for trading on a
U.S. national or regional securities exchange on the relevant date, the
Last Reported Sale Price
shall be the last quoted bid price for the Common Stock in the over-the-counter market on the
relevant date as reported by Pink Sheets LLC or a similar organization. If the Common Stock is not
so quoted, the
Last Reported Sale Price
shall be the average of the mid-point of the last bid and
ask prices for the Common Stock on the relevant date from each of at least three nationally
recognized independent investment banking firms selected by the Company for this purpose.
Make-Whole Fundamental Change
means any transaction or event that constitutes a Fundamental
Change (determined after giving effect to any exceptions or exclusions to such definition, but
without regard to the
proviso
in clause (2) of the definition thereof).
Merger Common Stock
has the meaning specified in Section 4.07(c)(i).
Merger Event
has the meaning specified in Section 4.07(a).
Merger Valuation Percentage
has the meaning specified in Section 4.07(d)(i).
Merger Valuation Period
has the meaning specified in Section 4.07(d)(ii).
Note
or
Notes
has the meaning specified in the fourth paragraph of the recitals of this
Supplemental Indenture, and shall include any Additional Notes issued pursuant to Section 2.01
hereof.
open of business
means 9:00 a.m. (New York City time).
Original Indenture
has the meaning specified in the first paragraph of this Supplemental
Indenture.
Paying Agent
has the meaning set forth in the Original Indenture, which shall initially be
the Trustee, and shall be the Person authorized by the Company to pay the principal amount of,
interest on, or Fundamental Change Purchase Price of, any Notes on behalf of the Company.
5
Physical Notes
means certificated Notes that are not in global form and are registered Notes
issued in denominations of $1,000 principal amount and multiples thereof.
Place of Payment
means, for purposes of the Notes, New York, New York.
Publicly Traded Securities
means, in respect of a transaction described in clause (2) of the
definition of Fundamental Change, shares of common stock traded on the New York Stock Exchange, the
NASDAQ Global Market or the NASDAQ Global Select Market (or any or their respective successors) or
which will be so traded when issued or exchanged in connection with a Fundamental Change.
Reference Property
has the meaning specified in Section 4.07(a).
Regular Record Date
means, with respect to the payment of interest on the Notes, the March 1
(whether or not a Business Day) immediately preceding an Interest Payment Date on March 15 and the
September 1 (whether or not a Business Day) immediately preceding an Interest Payment Date on
September 15.
Scheduled Trading Day
means a day that is scheduled to be a Trading Day on the principal
United States national or regional securities exchange or market on which the Common Stock is
listed or admitted for trading. If the Common Stock is not so listed or admitted for trading,
Scheduled Trading Day
means a Business Day.
Significant Subsidiary
means a significant subsidiary as defined in Article 1, Rule
1-02(w) of Regulation S-X under the Securities Act of 1933, as amended.
Spin-Off
has the meaning specified in Section 4.04(c).
Stated Maturity
means, with respect to any Note and the payment of the principal amount
thereof, March 15, 2018.
Stock Price
has the meaning specified in Section 4.06(c).
Trading Day
means a day on which (i) trading in the Common Stock generally occurs on the New
York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on
the principal other United States national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a United States national or
regional securities exchange, in the principal other market on which the Common Stock is then
traded, and (ii) a Last Reported Sale Price for the Common Stock is available on such securities
exchange or market. If the Common Stock (or other security for which a closing sale price must be
determined) is not so listed or traded,
Trading Day
means a Business Day.
Trigger Event
has the meaning specified in Section 4.04(c).
Underwriters
means the underwriters named in the Underwriting Agreement.
6
Underwriting Agreement
means the Underwriting Agreement, dated March 2, 2011, entered into
by the Company and the Underwriters in connection with the sale of the Notes.
U.S.
means the United States of America.
Valuation Period
has the meaning specified in Section 4.04(c).
ARTICLE 2
THE SECURITIES
SECTION 2.01.
Title and Terms; Payments
. There is hereby established a series of Debt
Securities designated the 3.75% Convertible Senior Notes due 2018 initially limited in aggregate
principal amount to $500,000,000 (or up to $550,000,000 aggregate principal amount if the
Underwriters exercise their over-allotment option in full) , which amount shall be as set forth in
a Company Order for the authentication and delivery of Notes pursuant to Section 303 of the
Original Indenture.
The principal amount of Notes then outstanding shall be payable at Stated Maturity.
The Company may, without the consent of the Holders of the Notes, hereafter issue additional
notes (
Additional Notes
) under the Indenture with the same terms and with the same CUSIP number
as the Notes issued on the date of this Supplemental Indenture (the
Initial Notes
) in an
unlimited aggregate principal amount;
provided
that such Additional Notes must be part of the same
issue as the Initial Notes for federal income tax purposes. Any such Additional Notes shall
constitute a single series together with the Initial Notes for all purposes hereunder, including,
without limitation, for purposes of any waivers, supplements or amendments to the Indenture
requiring the approval of Holders of the Notes and any offers to purchase the Notes.
The Form of Note, the Form of Notice of Conversion, the Form of Fundamental Change Purchase
Notice and the Form of Assignment and Transfer shall be substantially as set forth in Exhibits A,
B, C and D, respectively, hereto, which are incorporated into and shall be deemed a part of this
Supplemental Indenture, in each case with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by the Indenture, and may have such letters, numbers
or other marks of identification and such legends or endorsements placed thereon as may be required
to comply with the rules of any securities exchange or as may, consistently herewith, be determined
to be necessary or appropriate by the officers of the Company executing such Notes, as evidenced by
their execution of the Notes.
The Company shall pay the principal of and interest on any Global Note in immediately
available funds to the Depositary or its nominee, as the case may be, as the registered Holder of
such Global Note and shall make all such payments in accordance with the procedures of the
Depositary.
The Company shall pay the principal of any Physical Notes at the office or agency designated
by the Company for that purpose. The Company has initially designated the Trustee as its Paying
Agent and Debt Security Registrar in respect of the Notes and its agency in New York, New York as a
place where Notes may be presented for payment or for registration of
7
transfer. The Company may, however, change the Paying Agent or Debt Security Registrar for the
Notes without prior notice to the Holders thereof, and the Company may act as Paying Agent or Debt
Security Registrar for the Notes. Interest on any Physical Notes will be payable (i) to Holders of
Physical Notes having an aggregate principal amount of Notes of $5,000,000 or less, by check mailed
to the Holders of such Notes at their address in the Debt Security Register and (ii) to Holders
having an aggregate principal amount of Physical Notes in excess of $5,000,000, either by check
mailed to each Holder at its address in the Debt Security Register or, upon application by a Holder
to the Debt Security Registrar not later than the relevant Regular Record Date, by wire transfer in
immediately available funds to that Holders account within the United States, which application
shall remain in effect until that Holder notifies, in writing, the Registrar to the contrary.
SECTION 2.02.
Book-Entry Provisions for Global Notes
. (a) The Notes initially shall be
issued in the form of one or more Global Notes without interest coupons (i) registered in the name
of Cede & Co., as nominee of the Depositary and (ii) delivered to the Trustee as custodian for the
Depositary.
Members of, or participants in, the Depositary (
Agent Members
) shall have no rights under
this Supplemental Indenture or the Original Indenture with respect to any Global Note held on their
behalf by the Depositary, or the Trustee as its custodian, or under the Global Note, and Cede &
Co., or such other Person designated by the Depositary as its nominee, may be treated by the
Company, the Trustee and any agent of the Company or the Trustee as the absolute owner of the
Global Note 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 impair, as
between the Depositary and its Agent Members, the operation of customary practices governing the
exercise of the rights of any Holder.
(b) Transfers of Global Notes shall be limited to transfers in whole, but not in part, to
the Depositary, its successors or their respective nominees. Interests of beneficial owners in a
Global Note may be transferred or exchanged, in whole or in part, for Physical Notes, only if: (i)
the Depositary notifies the Company at any time that it is unwilling or unable to continue in its
capacity as Depositary for the Notes, or the Depositary ceases to be registered as a clearing
agency under the Exchange Act, and, in either case, a successor Depositary is not appointed within
60 days or (ii) if an Event of Default with respect to the Notes has occurred and is continuing, in
each case in accordance with the rules and procedures of the Depositary. Other than as set forth in
this Section 2.02(b), the Notes shall remain in global form as Global Notes.
(c) In connection with any transfer or exchange of a portion of the beneficial interest in
the Global Note to beneficial owners pursuant to Section 2.02(b), the Debt Security Registrar shall
(if one or more Physical Notes are to be issued) reflect on its books and records the date and a
decrease in the principal amount of the Global Note in an amount equal to the principal amount of
the beneficial interest in the Global Note to be transferred, and the Company shall execute, and
the Trustee shall authenticate and deliver, one or more Physical Notes of like tenor and amount.
In connection with the transfer of the entire Global Note to beneficial owners pursuant to Section
2.02(b), the Global Note shall be deemed to be surrendered to the Trustee for cancellation, and the
Company shall execute, and the Trustee shall authenticate and deliver, to
8
each beneficial owner identified by the Depositary in exchange for its beneficial interest in
the Global Note, an equal aggregate principal amount of Physical Notes of authorized denominations
and the same tenor.
(d) Physical Notes issued in exchange for a Global Note pursuant to this Section 2.02
shall be registered in such names and in such authorized denominations as the Depositary for such
Global Note, pursuant to instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee or an agent of the Company or the Trustee. The Trustee or such agent shall
deliver such Physical Notes to or as directed by the Persons in whose names such Physical Notes are
so registered.
(e) The Holder of Global Notes may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests through Agent Members, to take any
action that a Holder is entitled to take under this Supplemental Indenture, Original Indenture or
the Notes.
SECTION 2.03.
CUSIP Numbers
. In issuing the Notes, the Company may use CUSIP numbers (if
then generally in use), and, if so, the Trustee shall use CUSIP numbers in notices of redemption
as a convenience to Holders of the Notes;
provided
that any such notice may state that no
representation is made as to the correctness of such numbers as printed on the Notes and that
reliance may be placed only on the other identification numbers printed on the Notes, and any such
redemption shall not be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers of the Notes.
SECTION 2.04.
Reporting Requirement
. The Company shall deliver to the Trustee within 15 days
after the same is required to be filed with the Commission, copies of the quarterly and annual
reports and of the information, documents and other reports, if any, that the Company is required
to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act (giving effect to
any grace period provided by Rule 12b-25 under the Exchange Act), and the Company shall otherwise
comply with the requirements of Trust Indenture Act Section 314(a). The Trustee agrees that any
quarterly or annual report or other information, document or other report that the Company files
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act on the Commissions EDGAR
system shall constitute delivery of the same to the Trustee. The Trustee does not have the duty to
review such information, documents or reports, is not considered to have notice of the content of
such information, documents or reports and does not have a duty to verify the accuracy of such
information, documents or reports.
ARTICLE 3
FUNDAMENTAL CHANGES AND PURCHASES THEREUPON
SECTION 3.01.
Purchase at Option of Holders Upon a Fundamental Change
. (a)
Generally
. If a
Fundamental Change occurs at any time, then each Holder of Notes shall have the right, at such
Holders option, to require the Company to purchase for cash any or all of such Holders Notes, or
any portion of the principal amount thereof, that is equal to $1,000 or a multiple of $1,000, on a
date specified by the Company that is no earlier than the 20th calendar day following the date of,
and no later than the 35th calendar day following the date of, delivery of the Fundamental Change
Company Notice (as defined below) (the
Fundamental Change
9
Purchase Date
), at a purchase price equal to 100% of the principal amount thereof, together
with accrued and unpaid interest thereon to, but excluding, the Fundamental Change Purchase Date
(the
Fundamental Change Purchase Price
);
provided
, however, that if a Fundamental Change Purchase
Date is after a Regular Record Date and on or prior to the Interest Payment Date to which such
Regular Record Date relates, the interest payable in respect of such Interest Payment Date shall be
payable to the Holders of record as of the corresponding Regular Record Date and the Fundamental
Change Purchase Price shall be equal to 100% of the principal amount of the Notes to be purchased
pursuant to this Article 3. The requirement for the Company to purchase any Notes on the
Fundamental Change Purchase Date will be subject to extension to comply with applicable law.
Purchases of Notes under this Section 3.01 shall be made, at the option of the Holder thereof,
upon:
(i) delivery to the Paying Agent by a Holder of a duly completed notice (the
Fundamental Change Purchase Notice
) in the form set forth on the reverse of the Note as
Exhibit C thereto, if the Notes are Physical Notes, or in compliance with the Depositarys
procedures for tendering interests in Global Notes, if the Notes are not Physical Notes, in
each case prior to the close of business on the Business Day immediately preceding the
Fundamental Change Purchase Date ; and
(ii) delivery of the Notes, in the case of Physical Notes, to the Paying Agent
appointed by the Company (together with all necessary endorsements for transfer), or
book-entry transfer of the Notes, in compliance with the procedures of the Depositary, such
delivery or transfer being a condition to receipt by the Holder of the Fundamental Change
Purchase Price therefor.
The Fundamental Change Purchase Notice in respect of any Notes to be purchased shall state:
(i) if such Notes are Physical Notes, the certificate numbers of such Notes;
(ii) the portion of the principal amount of such Notes, which must be $1,000 or a
multiple thereof; and
(iii) that such Notes are to be purchased by the Company pursuant to the applicable
provisions of the Notes and this Supplemental Indenture;
provided
,
however
, that if such Notes are in global form, the Fundamental Change Purchase Notice
must also comply with appropriate procedures of the Depositary.
Notwithstanding anything herein to the contrary, any Holder delivering to the Paying Agent the
Fundamental Change Purchase Notice contemplated by this Section 3.01 shall have the right to
withdraw, in whole or in part, such Fundamental Change Purchase Notice at any time prior to the
close of business on the Business Day immediately preceding the Fundamental Change Purchase Date by
delivery of a written notice of withdrawal to the Paying Agent in accordance with Section 3.03
below.
10
The Paying Agent shall promptly notify the Company of the receipt by it of any Fundamental
Change Purchase Notice or written notice of withdrawal thereof.
(b)
Fundamental Change Company Notice
. On or before the 20th calendar day after the
occurrence of a Fundamental Change, the Company shall provide to all Holders of record of the
Notes, the Trustee and the Paying Agent (in the case of any Paying Agent other than the Trustee) a
notice (the
Fundamental Change Company Notice
) of the occurrence of such Fundamental Change and
of the purchase right at the option of the Holders arising as a result thereof. Such notice shall
be sent by first class mail or, in the case of any Global Notes, in accordance with the procedures
of the Depositary for providing notices. Simultaneously with providing such Fundamental Change
Company Notice, the Company shall publish a notice containing the information included therein in a
newspaper of general circulation in The City of New York or shall publish such information on the
Companys website or through such other public medium as the Company may use at such time.
Each Fundamental Change Company Notice shall specify:
(i) the events causing a Fundamental Change;
(ii) the date of the Fundamental Change;
(iii) the last date on which a Holder of Notes may exercise the repurchase right
pursuant to this Article 3;
(iv) the Fundamental Change Purchase Price;
(v) the Fundamental Change Purchase Date;
(vi) the name and address of the Paying Agent and the Conversion Agent, if
applicable;
(vii) if applicable, the applicable Conversion Rate and any adjustments to the
applicable Conversion Rate;
(viii) if applicable, that the Notes with respect to which a Fundamental Change
Purchase Notice has been delivered by a Holder may be converted only if the Holder withdraws
the Fundamental Change Purchase Notice in accordance with the Indenture; and
(ix) the procedures that Holders must follow to require the Company to purchase
their Notes.
No failure of the Company to give the foregoing notices and no defect therein shall limit the
purchase rights of the Holders of Notes or affect the validity of the proceedings for the purchase
of the Notes pursuant to this Section 3.01.
(c)
No Payment During Events of Default.
There shall be no purchase of any Notes pursuant
to this Section 3.01 if there has occurred and is continuing an Event of Default with
11
respect to the Notes (other than an Event of Default that is cured by the payment of the
Fundamental Change Purchase Price of the Notes). The Paying Agent will promptly return to the
respective Holders thereof any Physical Notes held by it during the continuance of an Event of
Default (other than an Event of Default that is cured by the payment of the Fundamental Change
Purchase Price with respect to the Notes) and shall deem canceled any instructions for book-entry
transfer of the Notes in compliance with the procedures of the Depositary, in which case, upon such
return and cancellation, the Fundamental Change Purchase Notice with respect thereto shall be
deemed to have been withdrawn.
SECTION 3.02.
Effect of Fundamental Change Purchase Notice
. Upon receipt by the Paying Agent
of the Fundamental Change Purchase Notice specified in Section 3.01 hereof, the Holder of the Note
in respect of which such Fundamental Change Purchase Notice was given shall (unless such
Fundamental Change Purchase Notice is withdrawn in accordance with Section 3.03 hereof) thereafter
be entitled to receive solely the Fundamental Change Purchase Price in cash with respect to such
Note. Such Fundamental Change Purchase Price shall be paid to such Holder, subject to receipt of
funds by the Paying Agent, on the later of (x) the Fundamental Change Purchase Date with respect to
such Note (
provided
the conditions in Section 3.01 hereof have been satisfied) and (y) the time of
delivery or book-entry transfer of such Note to the Paying Agent by the Holder thereof in the
manner required by Section 3.01 hereof.
SECTION 3.03.
Withdrawal of Fundamental Change Purchase Notice
. A Fundamental Change
Purchase Notice may be withdrawn (in whole or in part) by means of a written notice of withdrawal
delivered to the Paying Agent in accordance with the Fundamental Change Company Notice at any time
prior to the close of business on the Business Day immediately preceding the Fundamental Change
Purchase Date, specifying:
(i) the principal amount of the Notes with respect to which such notice of
withdrawal is being submitted;
(ii) if Physical Notes have been issued, the certificate numbers of the withdrawn
Notes; and
(iii) the principal amount, if any, of such Notes that remains subject to the
original Fundamental Change Purchase Notice, which portion must be in principal amounts of
$1,000 or a multiple of $1,000;
provided
,
however
, that if Physical Notes have not been issued, the notice must comply with
appropriate procedures of the Depositary.
The Paying Agent will promptly return to the respective Holders thereof any Physical Notes
with respect to which a Fundamental Change Purchase Notice has been withdrawn in compliance with
the provisions of this Section 3.03.
SECTION 3.04.
Deposit of Fundamental Change Purchase Price
. Prior to 11:00 a.m. (local time
in The City of New York) on the Fundamental Change Purchase Date, the Company shall deposit with
the Paying Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is acting as
the Paying Agent, shall segregate and hold in trust as provided herein) an
12
amount of money (in immediately available funds if deposited on such Business Day) sufficient
to pay the Fundamental Change Purchase Price of all the Notes or portions thereof that are to be
purchased as of the Fundamental Change Purchase Date. If the Paying Agent holds cash sufficient to
pay the Fundamental Change Purchase Price of the Notes for which a Fundamental Change Purchase
Notice has been tendered and not withdrawn in accordance with this Supplemental Indenture on the
Fundamental Change Purchase Date, then as of such Fundamental Change Purchase Date, (a) such Notes
will cease to be outstanding and interest will cease to accrue thereon (whether or not book-entry
transfer of such Notes is made or such Notes have been delivered to the Paying Agent) and (b) all
other rights of the Holders in respect thereof will terminate (other than the right to receive the
Fundamental Change Purchase Price and previously accrued and unpaid interest upon delivery or
book-entry transfer of such Notes).
SECTION 3.05.
Notes Purchased in Whole or in Part
. Any Note that is to be purchased, whether
in whole or in part, shall be surrendered at the office of the Paying Agent (with, if the Company
or the Trustee so requires in the case of Physical Notes, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the
Holder thereof or such Holders attorney duly authorized in writing) and the Company shall execute
and the Trustee shall authenticate and deliver to the Holder of such Note, without service charge,
a new Note or Notes, of any authorized denomination as requested by such Holder in aggregate
principal amount equal to, and in exchange for, the portion of the principal amount of the Note so
surrendered that is not purchased.
SECTION 3.06.
Covenant to Comply With Applicable Laws Upon Purchase of Notes
. In connection
with any offer to purchase Notes under Section 3.01 hereof, the Company shall, in each case if
required, (i) comply with Rule 13e-4, Rule 14e-1 and any other tender offer rules under the
Exchange Act that may then be applicable, (ii) file a Schedule TO or any other required schedule
under the Exchange Act and (iii) otherwise comply with all federal and state securities laws so as
to permit the rights and obligations under Section 3.01 to be exercised in the time and in the
manner specified in Section 3.01.
SECTION 3.07.
Repayment to the Company
. To the extent that the aggregate amount of cash
deposited by the Company pursuant to Section 3.04 exceeds the aggregate Fundamental Change Purchase
Price of the Notes or portions thereof that the Company is obligated to purchase as of the
Fundamental Change Purchase Date, then, following the Fundamental Change Purchase Date, the Paying
Agent shall promptly return any such excess to the Company.
ARTICLE 4
CONVERSION
SECTION 4.01.
Right to Convert
. (a) Subject to and upon compliance with the provisions of
this Supplemental Indenture, each Holder of Notes shall have the right, at such Holders option, to
convert the principal amount of any such Notes, or any portion of such principal amount equal to
$1,000 or a multiple of $1,000 thereof, at the Conversion Rate in effect on the Conversion Date for
such Notes, at any time prior to the close of business on the second Scheduled Trading Day
immediately preceding March 15, 2018.
13
(b) Notes may not be converted after the close of business on the second Scheduled Trading
Day immediately preceding March 15, 2018.
SECTION 4.02.
Conversion Procedures
. (a) Each Note shall be convertible at the office of
the Conversion Agent and, if applicable, in accordance with the procedures of the Depositary.
(b) In order to exercise the conversion privilege with respect to any interest in a Global
Note, the Holder must complete the appropriate instruction form for conversion pursuant to the
Depositarys book-entry conversion program, furnish appropriate endorsements and transfer documents
if required by the Company or the Conversion Agent, and pay the funds, if any, required by Section
4.03(c) and any taxes or duties if required pursuant to Section 4.08, and the Conversion Agent must
be informed of the conversion in accordance with the customary practice of the Depositary. In order
to exercise the conversion privilege with respect to any Physical Notes, the Holder of any such
Notes to be converted, in whole or in part, shall:
(i) complete and manually sign the conversion notice provided on the back of the
Note (the
Conversion Notice
) or a facsimile of the Conversion Notice;
(ii) deliver the Conversion Notice, which is irrevocable, and the Note to the
Conversion Agent;
(iii) if required, furnish appropriate endorsements and transfer documents,
(iv) make any payment required under Section 4.03(c); and
(v) if required, pay all transfer or similar taxes as set forth in Section 4.08.
The date on which the Holder satisfies all of the applicable requirements set forth above is the
Conversion Date
. The Conversion Agent will, as promptly as possible, and in any event within two
(2) Business Days of the receipt thereof, provide the Company with notice of any conversion by a
Holder of the Notes.
(c) Each Conversion Notice shall state the name or names (with address or addresses) in
which any certificate or certificates for shares of Common Stock which shall be issuable on such
conversion shall be issued. All such Notes surrendered for conversion shall, unless the shares
issuable on conversion are to be issued in the same name as the registration of such Notes, be duly
endorsed by, or be accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the Holder or his duly authorized attorney.
(d) In case any Notes of a denomination greater than $1,000 shall be surrendered for
partial conversion, the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of the Notes so surrendered, without charge, new Notes in authorized denominations in an
aggregate principal amount equal to the unconverted portion of the surrendered Notes.
Each conversion shall be deemed to have been effected as to any such Notes (or portion
thereof) surrendered for conversion on the relevant Conversion Date. The person in whose name the
certificate or certificates for the number of shares of Common Stock that shall be issuable
14
upon such conversion shall become the Holder of record of such shares of Common Stock as of
the close of business on the related Conversion Date.
(e) Upon the conversion of an interest in Global Notes, the Trustee (or other Conversion
Agent appointed by the Company) shall make a notation on such Global Notes as to the reduction in
the principal amount represented thereby. The Company shall notify the Trustee in writing of any
conversions of Notes effected through any Conversion Agent other than the Trustee.
(f) Notwithstanding the foregoing, a Note in respect of which a Holder has delivered a
Fundamental Change Purchase Notice exercising such Holders option to require the Company to
purchase such Note may be converted only if such notice of exercise is withdrawn in accordance with
Article 3 hereof prior to the close of business on the Business Day prior to the relevant
Fundamental Change Purchase Date.
SECTION 4.03.
Payments Upon Conversion
. (a) Upon any conversion of any Notes, on the third
Business Day immediately following the Conversion Date, the Company shall deliver to the converting
Holder a number of shares of Common Stock equal to (i) the aggregate principal amount of such Notes
to be converted divided by $1,000,
multiplied
by (ii) the Conversion Rate in effect as of such
Conversion Date, together with any cash payment for any fractional share of Common Stock as
described in this
Section 4.03
.
(b) Subject to Section 4.03(c) below, upon conversion, Holders shall not receive any
separate cash payment for accrued and unpaid interest unless such conversion occurs between a
Regular Record Date and the Interest Payment Date to which it relates.
(c) Upon the conversion of any Notes, the Holder will not be entitled to receive any
separate cash payment for accrued and unpaid interest except to the extent specified below. The
Companys delivery to the Holder of cash or a combination of cash and Common Stock, if applicable,
together with any cash payment for any fractional share of Common Stock, into which a Note is
convertible will be deemed to satisfy in full the Companys obligation to pay the principal amount
of the Notes so converted and accrued and unpaid interest to, but not including, the Conversion
Date. As a result, accrued and unpaid interest to, but not including, the Conversion Date will be
deemed to be paid in full rather than cancelled, extinguished or forfeited. Notwithstanding the
foregoing, if Notes are converted after the close of business on a Regular Record Date for the
payment of interest, Holders of such Notes at the close of business on such Regular Record Date
will receive the interest payable on such Notes on the corresponding Interest Payment Date
notwithstanding the conversion. Notes surrendered for conversion during the period from the close
of business on any Regular Record Date to the open of business on the immediately following
Interest Payment Date must be accompanied by funds equal to the amount of interest payable on the
Notes so converted;
provided
that no such payment need be made (i) for conversions following the
Regular Record Date immediately preceding March 15, 2018, (ii) if the Company has specified a
Fundamental Change Purchase Date that is after a Regular Record Date and on or prior to the
corresponding Interest Payment Date, or (iii) to the extent of any overdue interest, if any overdue
interest exists at the time of conversion with respect to such Note.
15
(d) The Company shall not issue fractional shares of Common Stock upon conversion of
Notes. If multiple Notes shall be surrendered for conversion at one time by the same Holder, the
number of full shares which shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof to the extent permitted
hereby) so surrendered. If any fractional share of stock would be issuable upon the conversion of
any Notes, the Company shall make payment therefor in cash in lieu of fractional shares of Common
Stock based on the Last Reported Sale Price on the related Conversion Date.
SECTION 4.04.
Adjustment of Conversion Rate
. The Conversion Rate shall be adjusted from time
to time by the Company if any of the following events occurs, except that the Company will not make
any adjustment to the Conversion Rate if Holders of Notes participate, as a result of holding the
Notes, in any of the transactions described under Section 4.04(a) (but only with respect to stock
dividends or distributions), Section 4.04(b), Section 4.04(c), and Section 4.04(d), at the same
time as holders of the Common Stock participate, without having to convert their Notes, as if such
Holders held a number of shares of Common Stock equal to the Conversion Rate in effect for such
Notes immediately prior to the Ex-Dividend Date for such event.
(a) If the Company, at any time or from time to time while any of the Notes are
outstanding, exclusively issues shares of its Common Stock as a dividend or distribution on shares
of Common Stock, or if the Company effects a share split or share combination, then the Conversion
Rate will be adjusted based on the following formula:
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the
open of business on the Ex-Dividend Date of such dividend
or distribution, or immediately prior to the open of
business on the effective date of such share split or
share combination, as applicable;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the open
of business on such Ex-Dividend Date or such effective
date;
|
|
|
|
OS
0
=
|
|
the number of shares of Common Stock outstanding
immediately prior to the open of business on such
Ex-Dividend Date or such effective date; and
|
|
|
|
OS
1
=
|
|
the number of shares of Common Stock outstanding
immediately after giving effect to such dividend,
distribution, share split or share combination.
|
Such adjustment shall become effective immediately after the open of business on the Ex-Dividend
Date for such dividend or distribution or the effective date for such share split or share
combination. If any dividend or distribution of the type described in this Section 4.04(a) is
declared but not so paid or made, the Conversion Rate shall again be adjusted to the Conversion
Rate which would then be in effect if such dividend or distribution had not been declared.
16
(b) If the Company, at any time or from time to time while any of the Notes are
outstanding, issues to all or substantially all holders of the Common Stock any rights or warrants
entitling them for a period of not more than 60 calendar days after the announcement date of such
issuance to subscribe for or purchase shares of the Common Stock at a price per share less than the
average of the Last Reported Sale Prices of Common Stock for the 10 consecutive Trading-Day period
ending on the Trading Day immediately preceding the date of announcement of such issuance, the
Conversion Rate shall be adjusted based on the following formula:
|
|
|
|
|
CR
1
= CR
0
x
|
|
OS
0
+ X
|
|
|
|
|
OS
0
+ Y
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the
open of business on the Ex-Dividend Date for such
issuance;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the open
of business on such Ex-Dividend Date;
|
|
|
|
OS
0
=
|
|
the number of shares of Common Stock outstanding
immediately prior to the open of business on such
Ex-Dividend Date;
|
|
|
|
X =
|
|
the total number of shares of Common Stock issuable
pursuant to such rights or warrants; and
|
|
|
|
Y =
|
|
the number of shares of Common Stock equal to the
aggregate price payable to exercise such rights or
warrants
divided by
the average of the Last Reported Sale
Prices of the Common Stock over the 10 consecutive
Trading Day period ending on the Trading Day immediately
preceding the date of announcement of the issuance of
such rights or warrants.
|
To the extent such rights or warrants are not exercised prior to their expiration or termination,
the Conversion Rate shall be readjusted to the Conversion Rate which would be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the basis of the
delivery of only the number of shares of Common Stock actually delivered. In the event that such
rights or warrants are not so issued, the Conversion Rate shall again be adjusted to be the
Conversion Rate which would then be in effect if the date fixed for the determination of
shareholders entitled to receive such rights or warrants had not been fixed. For the purposes of
this Section 4.04(b), in determining whether any rights or warrants entitle the holders to
subscribe for or purchase shares of Common Stock at less than the average of the Last Reported Sale
Prices of Common Stock for the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the date of announcement of such issuance, and in determining the aggregate
exercise price payable for such shares of Common Stock, there shall be taken into account any
consideration received by the Company for such rights or warrants and any amount payable on the
exercise thereof, with the value of such consideration, if other than cash, as shall be determined
in good faith by the Board of Directors.
17
(c) If the Company, at any time or from time to time while the Notes are outstanding,
distributes shares of any class of capital stock of the Company, evidences of its indebtedness,
other assets or property of the Company or rights or warrants to acquire the Companys capital
stock or other securities to all or substantially all holders of its Common Stock, excluding:
(i) dividends or distributions and rights or warrants as to which an adjustment was
effected pursuant to Section 4.04(a) or Section 4.04(b);
(ii) dividends or distributions paid exclusively in cash; and
(iii) Spin-Offs to which the provisions set forth below in this Section 4.04(c)
shall apply;
then the Conversion Rate shall be adjusted based on the following formula:
|
|
|
|
|
CR
1
= CR
0
x
|
|
SP
0
|
|
|
|
|
SP
0
- FMV
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the open of
business on the Ex-Dividend Date for such distribution;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the open of
business on such Ex-Dividend Date;
|
|
|
|
SP
0
=
|
|
the average of the Last Reported Sale Prices of the Common
Stock over the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the Ex-Dividend Date for such distribution; and
|
|
|
|
FMV=
|
|
the fair market value (as determined by the Board of
Directors) of the shares of capital stock, evidences
of indebtedness, assets, property, rights or warrants
distributed with respect to each outstanding share of
the Common Stock on the Ex-Dividend Date for such
distribution.
|
Such adjustment shall become effective immediately after the open of business on the Ex-Dividend
Date for such distribution. If the Board of Directors determines the FMV (as defined above) of
any distribution for purposes of this Section 4.04(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 average of the Last Reported Sale Prices of the Common Stock.
Notwithstanding the foregoing, if FMV (as defined above) is equal to or greater than
SP
0
(as defined above), in lieu of the foregoing adjustment, each Holder of Notes
shall receive, at the same time and upon the same terms as holders of the Common Stock, the amount
and kind of securities and assets such Holder would have received as if such Holder owned a number
of shares of Common Stock equal to the Conversion Rate in effect on the record date for the
distribution of the securities or assets.
18
With respect to an adjustment pursuant to this Section 4.04(c) where there has been a payment
of a dividend or other distribution on the Common Stock of shares of capital stock of any class or
series, or similar equity interest, of or relating to a Subsidiary or other business unit and such
shares of capital stock or similar equity interests are listed for trading on a securities exchange
(a
Spin-Off
), the Conversion Rate shall be increased based on the following formula:
|
|
|
|
|
CR
1
= CR
0
x
|
|
FMV
0
+ MP
0
|
|
|
|
|
MP
0
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the end of the Valuation Period (as defined below);
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the end of the Valuation Period;
|
|
|
|
FMV
0
=
|
|
the average of the Last Reported Sale Prices of the capital stock or similar equity interest distributed to holders
of Common Stock applicable to one share of Common Stock (determined for purposes of the definition of Last Reported Sale Price as if
such capital stock or similar equity interest were the Common Stock) over the first ten consecutive Trading Day period after, and
including, the Ex-Dividend Date of the Spin-Off (the
Valuation Period
); and
|
|
|
|
MP
0
=
|
|
the average of the Last Reported Sale Prices of Common Stock over the Valuation Period.
|
The adjustment to the Conversion Rate under the preceding paragraph will occur on the last day
of the Valuation Period;
provided
that in respect of any conversion during the Valuation Period,
references above to ten Trading Days shall be deemed replaced with such lesser number of Trading
Days as have elapsed between the Ex-Dividend Date of such Spin-Off and the Conversion Date in
determining the applicable Conversion Rate.
For the purposes of this Section 4.04(c) (and subject in all respects to Section 4.11), rights
or warrants distributed by the Company to all holders of its Common Stock entitling them to
subscribe for or purchase shares of the Companys capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a specified event or events (a
Trigger Event
): (1) are deemed to be transferred with such shares of Common Stock; (2) are not
exercisable; and (3) are also issued in respect of future issuances of Common Stock, shall be
deemed not to have been distributed for purposes of this Section 4.04(c), (and no adjustment to the
Conversion Rate under this Section 4.04(c) will be required) until the occurrence of the earliest
Trigger Event, whereupon such rights and warrants shall be deemed to have been distributed and an
appropriate adjustment (if any is required) to the Conversion Rate shall be made under this Section
4.04(c). If any such right or warrant, including any such existing rights or warrants distributed
prior to the date of this Supplemental Indenture, are subject to events, upon the occurrence of
which such rights or warrants become exercisable to
19
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
Ex-Dividend Date of such deemed distribution (in which case the original rights or warrants shall
be deemed to terminate and expire on such date without exercise by any of the holders). In
addition, in the event of any distribution or deemed distribution of rights or warrants, or any
Trigger Event or other event (of the type described in the preceding sentence) with respect thereto
that was counted for purposes of calculating a distribution amount for which an adjustment to the
Conversion Rate under this Section 4.04(c) was made, (1) in the case of any such rights or warrants
which shall all have been redeemed or purchased without exercise by any Holders thereof, upon such
final redemption or repurchase (x) the Conversion Rate shall be readjusted as if such rights or
warrants had not been issued and (y) the Conversion Rate shall then again be readjusted to give
effect to such distribution, deemed distribution or Trigger Event, as the case may be, as though it
were a cash distribution, equal to the per share redemption or purchase price received by holders
of Common Stock with respect to such rights or warrants (assuming each such holder had retained
such rights or warrants), made to all holders of Common Stock as of the date of such redemption or
purchase, 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 Rate shall be readjusted as if
such rights and warrants had not been issued.
For the purposes of this Section 4.04(c) and subsections (a) and (b) of this Section 4.04, any
dividend or distribution to which this Section 4.04(c) applies which also includes one or both of:
|
(A)
|
|
a dividend or distribution of shares of Common Stock to
which Section 4.04(a) applies (the
Clause A Distribution
), and
|
|
(B)
|
|
a dividend or distribution of rights or warrants to which
Section 4.04(b) applies (the
Clause B Distribution
),
|
then (1) such dividend or distribution, other than the Clause A Distribution and the Clause B
Distribution, shall be deemed to be a dividend or distribution to which this Section 4.04(c)
applies (the
Clause C Distribution
) and any Conversion Rate adjustment required by this Section
4.04(c) with respect thereto shall then be made, and (2) the Clause A Distribution and Clause B
Distribution shall be deemed to immediately follow the Clause C Distribution and any Conversion
Rate adjustment required by Section 4.04(a) and Section 4.04(b) with respect thereto shall then be
made, except that, if determined by the Company, (I) the Ex-Dividend Date of the Clause A
Distribution and the Clause B Distribution shall be deemed to be the Ex-Dividend Date of the Clause
C Distribution and (II) any shares of Common Stock included in the Clause A Distribution or Clause
B Distribution shall be deemed not to be outstanding immediately prior to the open of business on
such Ex-Dividend Date or such effective date within the meaning of Section 4.04(a) or outstanding
immediately prior to the open of business on such Ex-Dividend Date within the meaning of Section
4.04(b).
(d) (i) If any regular, quarterly cash dividend or distribution made to all or substantially
all holders of Common Stock during any quarterly fiscal period exceeds $0.1750 (the Initial
Dividend Threshold), the Conversion Rate shall be adjusted based on the following formula:
20
|
|
|
|
|
CR
1
= CR
0
x
|
|
SP
0
|
|
|
|
|
SP
0
- C
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the
open of business on the Ex-Dividend Date for such
dividend or distribution;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the open
of business on the Ex-Dividend Date for such dividend or
distribution;
|
|
|
|
SP
0
=
|
|
the Last Reported Sale Price of the Common Stock on the
Trading Day immediately preceding the Ex-Dividend Date
for such dividend or distribution; and
|
|
|
|
C =
|
|
the amount in cash per share the Company distributes to
holders of the Common Stock in excess of the Initial
Dividend Threshold.
|
The Initial Dividend Threshold shall be adjusted in a manner inversely proportional to adjustments
to the Conversion Rate;
provided
that no adjustment shall be made to the Initial Dividend Threshold
for any adjustment made to the Conversion Rate pursuant to clause (i) or (ii) of this Section
4.04(d).
(ii) If the Company pays any cash dividend or distribution that is not a regular,
quarterly cash dividend or distribution to all or substantially all holders of Common Stock, the
Conversion Rate shall be adjusted based on the following formula:
|
|
|
|
|
CR
1
=
|
|
CR
0
x SP
0
|
|
|
|
|
SP
0
- C
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the open of business on the Ex-Dividend Date for such
dividend or distribution;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the open of business on the Ex-Dividend Date for such dividend
or distribution;
|
|
|
|
SP
0
=
|
|
the Last Reported Sale Price of the Common Stock on the Trading Day immediately preceding the Ex-Dividend Date
for such dividend or distribution; and
|
|
|
|
C =
|
|
the amount in cash per share the Company distributes to holders of Common Stock.
|
In the case of an adjustment pursuant to this Section 4.04(d), such adjustment shall become
effective immediately after the open of business on the Ex-Dividend Date for the relevant dividend
or distribution. If the portion of the cash so distributed applicable to one share of the Common
Stock is equal to or greater than the Last Reported Sale Price of a share of Common Stock on the
Trading Day immediately preceding the Ex-Dividend Date for such dividend or
21
distribution, in lieu of the adjustment set forth above, adequate provision shall be made so that
each Holder of Notes shall have the right to receive on the date on which such cash dividend or
distribution is distributed to holders of Common Stock, for each $1,000 principal amount of Notes,
the amount of cash such Holder would have received had such Holder owned a number of shares of
Common Stock equal to the Conversion Rate in effect immediately prior to the Ex-Dividend Date for
such distribution.
(e) If the Company or any of its Subsidiaries makes a payment in respect of a tender offer
or exchange offer for Common Stock, to the extent that the cash and value of any other
consideration included in the payment per share of Common Stock exceeds the Last Reported Sale
Price per share of Common Stock on the Trading Day next succeeding the last date on which tenders
or exchanges may be made pursuant to such tender or exchange offer, the Conversion Rate shall be
increased based on the following formula:
|
|
|
|
|
CR
1
= CR
0
x
|
|
AC + (SP
1
x OS
1
)
|
|
|
|
|
OS
0
x SP
1
|
|
|
where,
|
|
|
CR
0
=
|
|
the Conversion Rate in effect immediately prior to the
close of business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding
the date such tender or exchange offer expires;
|
|
|
|
CR
1
=
|
|
the Conversion Rate in effect immediately after the close
of business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding
the date such tender or exchange offer expires;
|
|
|
|
AC =
|
|
the aggregate value of all cash and any other
consideration (as determined by the Board of Directors)
paid or payable for shares purchased in such tender or
exchange offer;
|
|
|
|
OS
0
=
|
|
the number of shares of Common Stock outstanding
immediately prior to the date such tender or exchange
offer expires;
|
|
|
|
OS
1
=
|
|
the number of shares of Common Stock outstanding
immediately after the date such tender or exchange offer
expires (after giving effect to, for the avoidance of
doubt, the purchase of all shares accepted for purchase
or exchange in such tender or exchange offer); and
|
|
|
|
SP
1
=
|
|
the average of the Last Reported Sale Prices of the
Common Stock over the 10 consecutive Trading Day period
commencing on the Trading Day next succeeding the date
such tender or exchange offer expires.
|
The adjustment to the Conversion Rate under this Section 4.04(e) shall occur as of the close of
business on the tenth Trading Day from, and including, the Trading Day next succeeding the date
such tender or exchange offer expires;
provided
that in respect of any conversion within 10 Trading
Days immediately following, and including, the expiration date of any tender or
22
exchange offer, references with respect to 10 Trading Days shall be deemed replaced with such
lesser number of Trading Days as have elapsed between the expiration date of such tender or
exchange offer and the Conversion Date in determining the applicable Conversion Rate.
(f) The Company from time to time may increase the Conversion Rate by any amount for any
period of time of at least 20 Business Days, so long as the increase is irrevocable during the
period and the Board of Directors shall have made a determination that such increase would be in
the best interests of the Company, which determination shall be conclusive. Whenever the Conversion
Rate is increased pursuant to this Section 4.04(f), the Company shall mail to Holders of record of
the Notes a notice of the increase at least one day prior to the date the increased Conversion Rate
takes effect, and such notice shall state the increased Conversion Rate and the period during which
it will be in effect.
(g) The Company may (but shall not be required to) increase the Conversion Rate, in
addition to any adjustments pursuant to Section 4.04(a), 4.04(b), 4.04(c), 4.04(d), 4.04(e) or
4.04(f), if the Board of Directors considers such increase to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock in connection with a
dividend or distribution of shares (or rights to acquire shares) or similar event.
(h) All calculations under this Article 4 shall be made by the Company and shall be made
to the nearest cent (including, in the case of any adjustment to the Conversion Rate, the resulting
adjustment to the Conversion Price) or to the nearest one ten-thousandth of a share. No adjustment
shall be required to be made for the Companys issuance of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or rights to purchase shares of Common
Stock or such convertible or exchangeable securities, other than as provided in this Section 4.04
and in Section 4.11 hereof.
(i) Whenever the Conversion Rate is adjusted as herein provided, the Company shall
promptly file with the Trustee and any Conversion Agent an Officers Certificate setting forth the
Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring
such adjustment. Unless and until a Responsible Officer of the Trustee shall have received such
Officers Certificate, the Trustee shall not be deemed to have knowledge of any adjustment of the
Conversion Rate and may assume without inquiry that the last Conversion Rate of which it has
knowledge is still in effect. Promptly after delivery of such certificate, the Company shall
prepare a notice of such adjustment of the Conversion Rate setting forth the adjusted Conversion
Rate and the date on which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Rate to each Holder of the Notes. Failure to deliver such notice shall
not affect the legality or validity of any such adjustment.
(j) For purposes of this Section 4.04, the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company so long as the Company
does not pay any dividend or make any distribution on shares of Common Stock held in the treasury
of the Company, but shall include shares issuable in respect of scrip certificates issued in lieu
of fractions of shares of Common Stock.
23
(k) Notwithstanding the foregoing, if the application of the foregoing formulas set forth
in this Section 4.04 would result in a decrease in the Conversion Rate, no adjustment to the
Conversion Rate shall be made (other than as a result of a share combination).
(l) Notwithstanding anything to the contrary in this Article 4, no adjustment to the
Conversion Rate shall be made:
(i) upon the issuance of any shares of Common Stock pursuant to any present or
future plan providing for the reinvestment of dividends or interest payable on the Companys
securities and the investment of additional optional amounts in shares of Common Stock under
any plan;
(ii) upon the issuance of any shares of Common Stock or options or rights to
purchase those shares pursuant to any present or future employee, director or consultant
benefit plan or program of or assumed by the Company or any of its Subsidiaries;
(iii) upon the issuance of any shares of Common Stock pursuant to any option,
warrant, right or exercisable, exchangeable or convertible security not described in clause
(ii) above and outstanding as of the date the Notes were first issued;
(iv) for a change in the par value of the Common Stock; or
(v) for accrued and unpaid interest on the Notes.
(m) The Company shall not be required to make an adjustment in the Conversion Rate unless
the adjustment would require a change of at least 1% in the Conversion Rate. However, the Company
will carry forward any adjustments that are less than 1% of the Conversion Rate and make such
carried forward adjustment, regardless of whether the aggregate adjustment is less than 1%, upon
any Conversion Date with respect to the Notes.
SECTION 4.05.
Certain Other Adjustments
. To the extent not otherwise covered by Section
4.04, whenever a provision of this Supplemental Indenture requires the calculation of Last Reported
Sale Prices over a span of multiple days, the Board of Directors will make appropriate adjustments
to such Last Reported Sale Prices, or the Conversion Rate or the amount due upon conversion to
account for any adjustment to the Conversion Rate that becomes effective, or any event requiring an
adjustment to the Conversion Rate where the Ex-Dividend Date of the event occurs, at any time
during the period from which such Last Reported Sale Prices are to be calculated. In addition, the
Board of Directors will make appropriate adjustments to the Conversion Rate where a Conversion Date
occurs on or after an Ex Dividend Date relating to any event requiring an adjustment to the
Conversion Rate and on or prior to the record date relating to such Ex Dividend Date. Any such
adjustment in accordance with the provisions of this Section 4.05 shall be determined in good faith
by the Board of Directors in order to give effect to the intent of Section 4.04 and the other
provisions of this Article 4 and to avoid unjust or inequitable results.
SECTION 4.06.
Adjustments Upon Certain Fundamental Changes
. (a) If a Make-Whole Fundamental
Change occurs and a Holder elects to convert its Notes in connection with such Make-Whole
Fundamental Change, the Company shall, under certain circumstances, increase the
24
Conversion Rate for the Notes so surrendered for conversion by a number of additional shares
of Common Stock (the
Additional Shares
) as described below. A conversion of Notes shall be deemed
for these purposes to be in connection with such Make-Whole Fundamental Change if the notice of
conversion of the Notes is received by the Conversion Agent from, and including, the Effective Date
of the Make-Whole Fundamental Change up to, and including, the Business Day immediately prior to
the related Fundamental Change Purchase Date (or, in the case of an event that would have been a
Fundamental Change but for the proviso in clause (2) of the definition thereof, the 35th calendar
day immediately following the Effective Date of such Make-Whole Fundamental Change).
(b) Upon surrender of Notes for conversion in connection with a Make-Whole Fundamental
Change, the Company shall deliver the shares of Common Stock as provided in Section 4.03,
calculated based on the Conversion Rate as adjusted by the Additional Shares; provided, however,
that if, at the effective time of a Make-Whole Fundamental Change, the Reference Property is
comprised entirely of cash, then, for any conversion of Notes following the effective date of such
Make-Whole Fundamental Change, the amounts deliverable by the Company shall be calculated based
solely on the Stock Price (as defined below) for the Make-Whole Fundamental Change and shall be
deemed to be an amount equal to the Conversion Rate (including any adjustment for Additional
Shares) multiplied by such Stock Price. In such event, the amounts deliverable by the Company shall
be determined and paid to holders in cash on the third Business Day following the Conversion Date.
(c) The number of Additional Shares, if any, by which the Conversion Rate will be
increased will be determined by reference to the table attached as
Schedule A
hereto, based
on the date on which the Make-Whole Fundamental Change occurs or becomes effective (the
Effective
Date
) and the price (the
Stock Price
) paid (or deemed paid) per share of the Common Stock in the
Fundamental Change. If the holders of the Common Stock receive only cash in a Make-Whole
Fundamental Change described in clause (2) of the definition of Fundamental Change, the Stock Price
shall be the cash amount paid per share. Otherwise, the Stock Price shall be the average of the
Last Reported Sale Prices of the Common Stock over the ten Trading-Day period ending on, and
including, the Trading Day immediately preceding the Effective Date of the Make-Whole Fundamental
Change.
The exact Stock Prices and Effective Dates may not be set forth in the table in
Schedule
A
, in which case:
(i) If the Stock Price is between two Stock Prices in the table or the Effective
Date is between two Effective Dates in the table, the number of Additional Shares shall be
determined by a straight-line interpolation between the number of Additional Shares set
forth for the higher and lower Stock Prices and the earlier and later Effective Dates, as
applicable, based on a 365-day year.
(ii) If the Stock Price is greater than $50.00 per share (subject to adjustment in
the same manner as the Stock Prices set forth in the column headings of the table in
Schedule A
pursuant to subsection (d) below), no Additional Shares shall be added to
the Conversion Rate.
25
(iii) If the Stock Price is less than $11.73 per share (subject to adjustments in
the same manner as the Stock Prices set forth in the column headings of the table in
Schedule A
pursuant to subsection (d) below), no Additional Shares shall be added to
the Conversion Rate.
Notwithstanding the foregoing, in no event shall the Conversion Rate exceed 85.2515 shares of
Common Stock per $1,000 principal amount of Notes, subject to adjustments in the same manner as the
Conversion Rate as set forth in Section 4.04.
(d) The Stock Prices set forth in the column headings of the table in
Schedule A
hereto shall be adjusted as of any date on which the Conversion Rate of the Notes is otherwise
adjusted. The adjusted Stock Prices shall equal the Stock Prices applicable immediately prior to
such adjustment, multiplied by a fraction, the numerator of which is the Conversion Rate
immediately prior to such adjustment giving rise to the Stock Price adjustment and the denominator
of which is the Conversion Rate as so adjusted. The number of Additional Shares set forth in such
table shall be adjusted in the same manner as the Conversion Rate as set forth in Section 4.04.
(e) The Company shall notify the Holders of Notes of the Effective Date of any Make-Whole
Fundamental Change and issue a press release announcing such Effective Date no later than five
business days after such Effective Date.
SECTION 4.07.
Effect of Recapitalization, Reclassification, Consolidation, Merger or Sale
.
(a) If any of the following events occur:
(i) any recapitalization or reclassification of, or change in, the Common Stock
(other than changes resulting from a subdivision or combination);
(ii) a consolidation, merger or combination involving the Company; or
(iii) a sale, lease or other transfer to a third party of the consolidated assets
of the Company and its Subsidiaries substantially as an entirety; or
(iv) any statutory share exchange;
in each case as a result of which the Common Stock would be converted into, or exchanged for, or
would be reclassified or changed into, stock, other securities, other property or assets (including
cash or any combination thereof) (any such event, a
Merger
Event
), then at the effective time of
such Merger Event, the Company or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the Trust Indenture Act
as in force at the date of execution of such supplemental indenture) providing that at and after
the effective time of such Merger Event, the right to convert a Note will be changed into a right
to convert such Note as set forth in this Indenture into the kind and amount of shares of stock,
other securities or other property or assets (including cash or any combination thereof) that a
holder of a number of shares of Common Stock equal to the
26
Conversation Rate prior to such Merger
Event would have owned or been entitled to receive (the
Reference Property
) upon such Merger
Event.
If, as a result of the Merger Event, each share of Common Stock is converted into the right to
receive more than a single type of consideration (determined based in part upon any form of
stockholder election), then the Reference Property into which the Notes will be convertible will be
deemed to be the weighted average of the types and amounts of consideration received by the holders
of Common Stock that affirmatively make such an election. The Company will notify Holders of the
weighted average as soon as practicable after such determination is made
The Company shall not become a party to any such Merger Event unless its terms are consistent
with this Section 4.07. Such supplemental indenture shall provide for adjustments which shall be as
nearly equivalent as may be practicable to the adjustments provided for in this Article 4 in the
judgment of the Board of Directors or the board of directors of the successor Person. If, in the
case of any such recapitalization, reclassification, change, consolidation, merger, combination,
sale, lease, other transfer or statutory share exchange, the Reference Property includes shares of
stock, securities or other property or assets (including cash or any combination thereof) of a
Person other than the successor or purchasing Person, as the case may be, in such recapitalization,
reclassification, change, consolidation, merger, combination, sale, lease, other transfer or
statutory share exchange, then such supplemental indenture shall also be executed by such other
Person.
(b) The Company shall cause notice of the execution of such supplemental indenture to be
mailed to each Holder, at the address of such Holder as it appears on the register of the Notes
maintained by the Debt Security Registrar, within 20 days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of such supplemental indenture. The
above provisions of this Section 4.07 shall similarly apply to successive reclassifications,
changes, consolidations, mergers, combinations, sales and conveyances. If this Section 4.07 applies
to any Merger Event, Section 4.04 shall not apply.
(c) In connection with any Merger Event, the Initial Dividend Threshold will subject to
adjustment as described in clause (i), clause (ii) or clause (iii) below, as the case may be.
(i) In the case of a Merger Event in which the Reference Property (determined, as
appropriate, pursuant to the second paragraph of subsection (a) above and excluding any
dissenters appraisal rights) is composed entirely of shares of common stock (the
Merger
Common Stock
), the Initial Dividend Threshold at and after the effective time of such
Merger Event will be equal to (x) the Initial Dividend Threshold immediately prior to the
effective time of such Merger Event,
divided by
(y) the number of shares of Merger Common
Stock that a holder of one share of Common Stock would receive in such Merger Event (such
quotient rounded down to nearest cent).
(ii) In the case of a Merger Event in which the Reference Property (determined, as
appropriate, pursuant to the second paragraph of subsection (a) above and excluding any
dissenters appraisal rights) is composed in part of shares of Merger Common Stock, the
Initial Dividend Threshold at and after the effective time of such Merger Event will be
equal to (x) the Initial Dividend Threshold immediately prior to the
27
effective time of such
Merger Event,
multiplied by
(y) the Merger Valuation Percentage for such Merger Event (such
quotient rounded down to nearest cent).
(iii) For the avoidance of doubt, in the case of a Merger Event in which the
Reference Property (determined, as appropriate, pursuant to the second paragraph of
subsection (a) above and excluding any dissenters appraisal rights) is composed entirely of
consideration other than shares of common stock, the Initial Dividend Threshold at and after
the effective time of such Merger Event will be equal to zero.
(d) For purposes of subsection (c) of this Section 4.07, the following terms shall have
the following meanings:
(i) The
Merger Valuation Percentage
for any Merger Event shall be equal to (x)
the arithmetic average of the Last Reported Sale Prices of one share of such Merger Common
Stock over the relevant Merger Valuation Period (determined as if references to Common
Stock in the definition of Last Reported Sale Price were references to the Merger Common
Stock for such Merger Event),
divided by
(y) the arithmetic average of the Last Reported
Sale Prices of one share of Common Stock over the relevant Merger Valuation Period.
(ii) The
Merger Valuation Period
for any Merger Event means the five consecutive
Trading Day period immediately preceding, but excluding, the effective date for such Merger
Event.
SECTION 4.08.
Taxes on Shares Issued
. The Company will pay any documentary, stamp or similar
issue or transfer tax due on the issue or delivery of shares of Common Stock on conversion of Notes
pursuant hereto; provided, however, that if such documentary, stamp or similar issue or transfer
tax is due because the Holder of such Notes has requested that shares of Common Stock be issued in
a name other than that of the Holder of the Notes converted, then such taxes will be paid by the
Holder, and the Company shall not be required to issue or deliver any stock certificate evidencing
such shares unless and until the Holder shall have paid to the Company the amount of such tax or
shall have established to the satisfaction of the Company that such tax has been paid.
SECTION 4.09.
Reservation of Shares; Shares to be Fully Paid; Compliance With Governmental
Requirements; Listing of Common Stock
. The Company shall reserve, out of its authorized but
unissued shares or shares held in treasury, sufficient shares of Common Stock to satisfy conversion
of the Notes from time to time as such Notes are presented for conversion (assuming that, at the
time of the computation of such number of shares or securities, all such Notes would be converted
by a single Holder).
The Company covenants that all shares of Common Stock that may be issued upon conversion of
Notes shall be newly issued shares or treasury shares, shall be duly authorized, validly issued,
fully paid and non-assessable and shall be free from preemptive rights and free from any tax, lien
or charge (other than those created by the Holder).
28
The Company shall list or cause to have quoted any shares of Common Stock to be issued
upon conversion of Notes on each national securities exchange or over-the-counter or other domestic
market on which the Common Stock is then listed or quoted.
SECTION 4.10.
Responsibility of Trustee
. The Trustee and any Conversion Agent
shall not at any time be under any duty or responsibility to any Holder of Notes to determine or
calculate the Conversion Rate, to determine whether any facts exist which may require any
adjustment of the Conversion Rate, or to confirm the accuracy of any such adjustment when made or
the appropriateness of the method employed, or herein or in any supplemental indenture provided to
be employed, in making the same. The Trustee and any other Conversion Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any shares of Common
Stock or of any other securities or property that may at any time be issued or delivered upon the
conversion of any Notes; and the Trustee and the Conversion Agent make no representations with
respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure
of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or
other securities or property or cash upon the surrender of any Notes for the purpose of conversion
or to comply with any of the duties, responsibilities or covenants of the Company contained in this
Article 4. The rights, privileges, protections, immunities and benefits given to the Trustee,
including without limitation its right to be compensated, reimbursed, and indemnified, are extended
to, and shall be enforceable by, the Trustee in each of its capacities hereunder, including its
capacity as Conversion Agent.
SECTION 4.11.
Notice to Holders Prior to Certain Actions
. In case:
(a) the Company shall declare a dividend (or any other distribution) on its Common
Stock that would require an adjustment in the Conversion Rate pursuant to Section 4.04; or
(b) the Company shall authorize the granting to the holders of all or substantially all
of its Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants that would require an adjustment in the Conversion
Rate pursuant to Section 4.04 or Section 4.12 hereof; or
(c) of any reclassification or reorganization of the Common Stock of the Company (other
than a subdivision or combination of its outstanding Common Stock, or a change in par value,
or from par value to no par value, or from no par value to par value), or of any
consolidation or merger to which the Company is a party and for which approval of any
stockholders of the Company is required, or of the sale, lease or transfer of all or
substantially all of the assets of the Company and its consolidated Subsidiaries; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up of the
Company or any of its Subsidiaries;
then, in each case (unless notice of such event is otherwise required pursuant to another provision
of this Supplemental Indenture), the Company shall cause to be filed with the Trustee
and the Conversion Agent and to be mailed to each Holder of Notes at such Holders address
29
appearing on a list of Holders of Notes, which the Company shall provide to the Trustee, as
promptly as practicable but in any event at least 10 days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to be taken for the purpose of such
dividend (or any other distribution) or rights or warrants, or, if a record is not to be taken, the
date as of which the holders of Common Stock of record to be entitled to such dividend,
distribution or rights or warrants are to be determined, or (y) the date on which such
reclassification, reorganization, consolidation, merger, sale, lease, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the date as of which it is
expected that holders of Common Stock of record shall be entitled to exchange their Common Stock
for securities or other property deliverable upon such reclassification, reorganization,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of such dividend (or any
other distribution), reclassification, reorganization, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
SECTION 4.12.
Stockholder Rights Plan
. Each share of Common Stock issued upon
conversion of Notes pursuant to this Article 4 shall be entitled to receive the appropriate number
of rights, if any, and the certificates representing the Common Stock issued upon such conversion
shall bear such legends, if any, in each case as may be provided by the terms of any stockholder
rights plan adopted by the Company, as the same may be amended from time to time. Notwithstanding
the foregoing, if prior to any conversion such rights have separated from the shares of Common
Stock in accordance with the provisions of the applicable stockholder rights agreement, the
Conversion Rate shall be adjusted at the time of separation as if the Company had distributed to
all holders of the Common Stock, shares of the Companys capital stock, evidences of indebtedness,
assets, property, rights or warrants as described in Section 4.04(c) above, subject to readjustment
in the event of the expiration, termination or redemption of such rights.
ARTICLE 5
REMEDIES
SECTION 5.01.
Events of Default
. In addition to the Events of Default specified
in Section 501 of the Original Indenture, each of the following events shall be an
Event of
Default
wherever used herein with respect to the Notes :
(a) failure by the Company to comply with its obligation to convert the Notes in
accordance with the Indenture upon exercise of a Holders conversion right in accordance
with Article 4 hereof;
(b) failure by the Company to provide a Fundamental Change Company Notice pursuant to
Section 3.01(b) when due;
(c) a final judgment for the payment of $50 million or more (excluding any amounts
covered by insurance) rendered against the Company or any Significant Subsidiary of the
Company, which judgment is not discharged or stayed within 60 days after (i) the date on
which the right to appeal or petition for review thereof has expired if
30
no such appeal or review has commenced or (ii) the date on which all rights to appeal
or petition for review have been extinguished;
(d) the entry of a decree or order by a court having jurisdiction in the premises
adjudging any Significant Subsidiary of the Company a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment, rehabilitation or
composition of or in respect of such Significant Subsidiary under Federal bankruptcy law or
any other applicable Federal or State law, or appointing a receiver, liquidator, assignee,
trustee, sequestrator, rehabilitator or other similar official of such Significant
Subsidiary or of any substantial part of its property, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 60 consecutive days; and
(e) the institution by a Significant Subsidiary of the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the institution of bankruptcy,
rehabilitation or insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under Federal bankruptcy law or any other
applicable Federal or State law, or the consent by it to the filing of such petition or to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator, rehabilitator or
similar official of such Significant Subsidiary or any substantial part of its property, or
the making by it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or the taking of
corporate action by such Significant Subsidiary in furtherance of any such action.
In addition, clause (5) of Section 501 of the Indenture is, with respect to the Notes, hereby
replaced in its entirety with the following:
(5) if an event of default as defined in 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 of the Company or of any Significant Subsidiary of the Company in excess
of $50,000,0000, whether such indebtedness now exists or shall hereafter be created, shall
happen and shall result in such indebtedness becoming or being declared due and payable
prior to the date on which it would otherwise become due and payable, and such acceleration
shall not be rescinded or annulled, or such indebtedness shall not have been discharged,
within a period of 10 days after there has been given, by registered or certified mail, to
the Company by the Trustee or to the Company and the Trustee by the Holders of at least 10%
in principal amount of the Outstanding Notes a written notice specifying such event of
default and requiring that such acceleration be rescinded or annulled or such indebtedness
to be discharged and stating that such notice is a Notice of Default hereunder; or
SECTION 5.02.
Additional Interest
. Notwithstanding any provisions of the
Indenture to the contrary, if the Company so elects, the sole remedy for an Event of Default
relating to any obligation to file documents and reports with the Trustee as required by Section
314(a)(1) of the Trust Indenture Act, Section 2.04 of this Supplemental Indenture, or Section 704
of the Original Indenture shall for the first 180 days following the occurrence of such Event of
Default consist
31
exclusively of the right to receive additional interest on the Notes equal to
0.50% of the principal amount of the Notes (
Additional Interest
). In order to elect to pay
Additional Interest as the sole remedy during the first 180 days after the occurrence of an Event
of Default described in the preceding sentence, the Company must (i) give notice to Holders of the
Notes, the Trustee and the Paying Agent of such election on or before the close of business on the
5th Business Day after the date on which such Event of Default occurs and (ii) pay such Additional
Interest on or before the date on which such Event of Default first occurs. Upon the failure to
timely give all Holders, the Trustee and the Paying Agent such notice or to pay such Additional
Interest, the Notes will be subject to immediate acceleration as provided in Section 502 of the
Original Indenture. On the 180th day after such Event of Default occurs (if such Event of Default
is not cured or waived prior to such 180th day), the Notes shall be subject to acceleration as
provided in Section 502 of the Original Indenture. This Section 5.02 shall not affect the rights of
Holders of Notes in the event of the occurrence of any other Event of Default. Whenever in the
Indenture there is mentioned, in any context, the payment of interest on, or in respect of, any
Note, such mention shall be deemed to include mention of the payment of Additional Interest
provided for in this Section 5.02 to the extent that, in such context, Additional Interest is, was
or would be payable in respect thereof pursuant to the provisions of this Section 5.02, and express
mention of the payment of Additional Interest (if applicable) in any provision shall not be
construed as excluding Additional Interest in those provisions where such express mention is not
made.
SECTION 5.03.
Acceleration of Maturity; Rescission and Annulment
.
(a) The first paragraph of Section 502 of the Indenture is, with respect to the Notes,
hereby replaced in its entirety with the following paragraph:
If an Event of Default, other than an Event of Default specified in clauses (6) or (7)
of Section 501 of the Original Indenture, occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding
Notes may declare the principal of all the Notes, together with accrued and unpaid interest
thereon, to be due and payable immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such declaration the same shall become
immediately due and payable. If an Event of Default specified in clause (6) or (7) of the
Original Indenture occurs, then the principal amount of all the Notes, together with accrued
and unpaid interest thereon, shall automatically become immediately due and payable.
(b) The second paragraph of Section 502 is, with respect to the Notes, modified as
follows:
(i) the first parenthetical in Section 502 which reads (or all Debt Securities, as the
case may be, treated as one class) is hereby deleted;
(ii) the parenthetical in clause (1)(A) of Section 502 which reads (or of all Debt
Securities as the case may be) is hereby deleted; and
32
(iii) each parenthetical in clause (1)(B) and 1(C) of Section 502 which reads (or at
the respective rates of interest of all the Debt Securities, as the case may be) is hereby
deleted.
ARTICLE 6
SATISFACTION AND DISCHARGE
SECTION 6.01.
Satisfaction and Discharge of the Supplemental Indenture
. (a) The
satisfaction and discharge provisions set forth in this Article 6 shall, with respect to the Notes,
supersede in their entirety Article Four of the Original Indenture, and all references in the
Original Indenture to Article Four thereof and satisfaction and discharge provisions therein, as
the case may be, shall, with respect to the Notes, be deemed to be references to this Article 6 and
the satisfaction and discharge provisions set forth in this Article 6, respectively. When (i) the
Company shall deliver to the Registrar for cancellation all Notes theretofore authenticated (other
than any Notes that have been destroyed, lost or stolen and in lieu of or in substitution for which
other Notes shall have been authenticated and delivered) and not theretofore canceled, or (ii) all
the Notes not theretofore canceled or delivered to the Trustee for cancellation shall have become
due and payable (whether at Stated Maturity for the payment of the principal amount thereof, on any
Fundamental Change Purchase Date or upon conversion or otherwise) and the Company shall deposit
with the Trustee, in trust, or deliver to the Holders, as applicable, cash funds sufficient to pay
all amounts due (or shares of Common Stock deliverable following conversion, if applicable) on all
of such Notes (other than any Notes that shall have been mutilated, destroyed, lost or stolen and
in lieu of or in substitution for which other Notes shall have been authenticated and delivered)
not theretofore canceled or delivered to the Trustee for cancellation, including principal and
interest due, accompanied, except in the event the Notes are due and payable solely in cash at the
Stated Maturity of the Notes or upon an earlier Fundamental Change Purchase Date, by a verification
report as to the sufficiency of the deposited amount from an independent certified accountant or
other financial professional reasonably satisfactory to the Trustee (which may include any of the
Underwriters), and if the Company shall also pay or cause to be paid all other sums payable
hereunder by the Company, then this Supplemental Indenture shall cease to be of further effect
(except as to (A) rights hereunder of Holders of the Notes to receive all amounts owing upon the
Notes and the other rights, duties and obligations of Holders of the Notes, as beneficiaries hereof
with respect to the amounts, if any, so deposited with the Trustee and (B) the rights, obligations
and immunities of the Trustee hereunder), and the Trustee, on written demand of the Company
accompanied by an Officers Certificate and an Opinion of Counsel as required by Section 102 of the
Original Indenture and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Supplemental Indenture; the Company, however,
hereby agrees to reimburse the Trustee for any costs or expenses thereafter reasonably and properly
incurred by the Trustee, including the fees and expenses of its counsel, and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the Trustee in connection
with this Supplemental Indenture or the Notes.
SECTION 6.02.
Deposited Monies to Be Held in Trust by Trustee
. Subject to
Section 6.04, all monies deposited with the Trustee pursuant to Section 6.01 shall be held in trust
for the sole benefit of the Holders of the Notes, and such monies shall be applied by the Trustee
to the payment, either directly or through any Paying Agent (including the Company
if acting as
33
its own Paying Agent), to the Holders of the particular Notes for the payment of
all sums due and to become due thereon for principal and interest, if any.
SECTION 6.03.
Paying Agent to Repay Monies Held
. Upon the satisfaction and
discharge of this Indenture, all monies then held by any Paying Agent (if other than the Trustee)
shall, upon written request of the Company, be repaid to it or paid to the Trustee, and thereupon
such Paying Agent shall be released from all further liability with respect to such monies.
SECTION 6.04.
Return of Unclaimed Monies
. Subject to the requirements of
applicable law, any monies deposited with or paid to the Trustee for payment of the principal of or
interest, if any, on the Notes and not applied but remaining unclaimed by the Holders of the Notes
for two years after the date upon which the principal of or interest, if any, on such Notes, as the
case may be, shall have become due and payable, shall be repaid to the Company by the Trustee on
demand, and all liability of the Trustee shall thereupon cease with respect to such monies; and the
Holder of any of the Notes shall thereafter look only to the Company for any payment that such
Holder of the Notes may be entitled to collect unless an applicable abandoned property law
designates another Person.
SECTION 6.05.
Reinstatement
. If the Trustee or the Paying Agent is unable to
apply any money in accordance with Section 6.02 by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such application, the
Companys obligations under the Indenture and the Notes shall be revived and reinstated as though
no deposit had occurred pursuant to Section 6.01 until such time as the Trustee or the Paying Agent
is permitted to apply all such money in accordance with Section 6.02;
provided
,
however
, that if
the Company makes any payment of interest on or principal of any Note following the reinstatement
of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 7
SUPPLEMENTAL INDENTURES
SECTION 7.01.
Amendments or Supplements Without Consent of Holders
. In addition
to any permitted amendment or supplement to the Indenture pursuant to Section 901 of the Original
Indenture, the Company and the Trustee may amend or supplement the Indenture or the Notes without
notice to or the consent of any Holder of the Notes:
(a) to add guarantees with respect to the Notes; or
(b) to conform this Supplemental Indenture and the form or terms of the Notes to the
section entitled Description of Notes set forth in the final prospectus supplement dated
March 2, 2011 relating to the offering and sale of the Notes.
SECTION 7.02.
Amendments or Supplements With Consent of Holders
.
(a) The first paragraph of Section 902 of the Indenture, excluding clauses (1), (2) and (3) of
such paragraph, is, with respect to the Notes, hereby replaced in its entirety with the following:
34
With the consent of the Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series affected by such supplemental indenture (voting
as separate classes), by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into an indenture
or indentures supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders of such series under this Indenture;
provided,
however,
that no such supplemental indenture shall, without the consent of the Holder of
each Outstanding Debt Security affected thereby,
(b) The Company and the Trustee may amend the Indenture with respect to the Notes and the
Notes as provided in Sections 901 and 902 of the Indenture. Notwithstanding the foregoing
provision and in addition to the provisions of Section 902 of the Indenture, without the consent of
each Holder of an outstanding Note affected thereby, no amendment or waiver, including a waiver in
relation to a past Event of Default, may:
(i) make any change that adversely affects the conversion rights of any Notes; or
(ii) reduce any Fundamental Change Purchase Price or amend or modify in any manner
adverse to the Holders of Notes the Companys obligation to make any such payment, whether
through an amendment or waiver of provisions in the covenants or definitions related thereto
or otherwise.
SECTION 7.03.
Notice of Amendments and Supplements.
After an amendment, or
supplement of the Indenture becomes effective, the Company shall give to the Holders affected
thereby a notice briefly describing the amendment or supplement. The Company will mail
supplemental indentures to Holders upon request. 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
supplemental indenture.
ARTICLE 8
INAPPLICABLE PROVISIONS OF THE ORIGINAL INDENTURE
SECTION 8.01.
Limitations on Liens on Stock of Principal Insurance Subsidiaries
.
The provisions of Section 1005 of the Original Indenture shall not apply to the Notes.
SECTION 8.02.
Limitations on Issue or Disposition of Stock of Principal
Insurance Subsidiaries
. The provisions of Section 1006 of the Original Indenture shall not apply
to the Notes.
SECTION 8.03.
Prior Indentures Supplemental to Original Indenture Excluded
. No
provision of any indenture supplemental to the Original Indenture executed prior
to the date hereof between the Company and the Trustee, including, without limitation,
Supplemental Indenture No. 1, dated as of June 16, 1997, Supplemental Indenture No. 2, dated as of
December 31, 1997, and Supplemental Indenture No. 3, dated as of April 29, 2009, shall have any
effect with respect to this Supplemental Indenture, the Notes or the terms hereof and thereof
established hereby.
35
SECTION 8.04.
Articles Thirteen and Fourteen of Original Indenture.
(a) The
provisions concerning conversion rights and related matters set forth in this Supplemental
Indenture shall, with respect to the Notes, supersede in their entirety the provisions of Article
Thirteen of the Original Indenture, and all references in the Original Indenture to Article
Thirteen thereof and the provisions concerning conversion therein shall, with respect to the Notes,
be deemed to be references to the conversion rights and related matters specified in this
Supplemental Indenture.
(b) The Notes shall not constitute Subordinated Debt Securities and the provisions of Article
Fourteen of the Original Indenture shall not apply to the Notes.
ARTICLE 9
MISCELLANEOUS
SECTION 9.01.
Governing Law
.
(a) THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(b) Section 112 of the Original Indenture is, with respect to the Notes, hereby replaced
in its entirety with the following:
This Indenture and the Debt Securities shall be governed by and construed in
accordance with the laws of the State of New York.
SECTION 9.02.
Payments on Business Days
. If any Interest Payment Date or the
Stated Maturity of the Notes or any earlier required repurchase date would fall on a day that is
not a Business Day, the required payment shall be made on the next succeeding Business Day and no
interest on such payment shall accrue in respect of the delay.
SECTION 9.03.
No Security Interest Created
. Nothing in this Supplemental
Indenture or in the Notes, expressed or implied, shall be construed to constitute a security
interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and
in effect, in any jurisdiction.
SECTION 9.04.
Trust Indenture Act
. This Supplemental Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act required to be part
of and to govern indentures qualified under the Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof or the Original Indenture that is
required to be included in an indenture qualified under the Trust Indenture Act, such required
provision shall control.
SECTION 9.05.
Benefits of Indenture
. Nothing in this Supplemental Indenture or
in the Notes, expressed or implied, shall give to any Person, other than the parties hereto, any
Paying Agent, any Conversion Agent, any authenticating agent, any Registrar and their successors
hereunder or the Holders of the Notes, any benefit or any legal or equitable right, remedy or claim
under this Supplemental Indenture.
36
SECTION 9.06.
Calculations
. Except as otherwise provided in this Supplemental
Indenture, the Company shall be responsible for making all calculations called for under the Notes.
These calculations include, but are not limited to, determinations of any Last Reported Sale Price
of the Common Stock, accrued interest payable on the Notes and the Conversion Rate. The Company
shall make all these calculations in good faith and, absent manifest error, the Companys
calculations shall be final and binding on Holders of Notes. The Company shall provide a schedule
of its calculations to each of the Trustee and the Conversion Agent (if different than the
Trustee), and each of the Trustee and Conversion Agent (if different than the Trustee) is entitled
to rely conclusively upon the accuracy of the Companys calculations without independent
verification. The Trustee will forward the Companys calculations to any Holder of Notes upon the
request of that Holder at the sole cost and expense of the Company.
SECTION 9.07.
Table of Contents, Headings, Etc
. The table of contents and the
titles and headings of the articles and sections of this Supplemental 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.
SECTION 9.08.
Execution in Counterparts
. This Supplemental Indenture may be
executed in any number of counterparts, each of which shall be an original, but such counterparts
shall together constitute but one and the same instrument.
SECTION 9.09.
Severability
. In the event any provision of this Supplemental
Indenture or in the Notes shall be invalid, illegal or unenforceable, then (to the extent permitted
by law) the validity, legality or enforceability of the remaining provisions shall not in any way
be affected or impaired.
[Remainder of the page intentionally left blank]
37
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly
executed as of the day and year first above written.
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OLD REPUBLIC INTERNATIONAL CORPORATION
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By:
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/s/ Karl W. Mueller
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Name:
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Karl W. Mueller
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Title:
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SVP + CFO
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[Trustee Signature Follows]
38
|
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WILMINGTON TRUST COMPANY,
as Trustee
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By:
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/s/ Mary C. St. Amand
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Name:
|
Mary C. St. Amand
|
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Title:
|
Vice President
|
|
39
SCHEDULE A
The following table sets forth the amount, if any, by which the Conversion Rate per $1,000
principal amount of Notes will increase pursuant to Section 4.06 of this Supplemental Indenture for
each Stock Price and Effective Date set forth below:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effective Date
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
Stock Price
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
11.73
|
|
|
$
|
12.00
|
|
|
$
|
13.00
|
|
|
$
|
14.00
|
|
|
$
|
15.00
|
|
|
$
|
16.00
|
|
|
$
|
17.50
|
|
|
$
|
20.00
|
|
|
$
|
22.50
|
|
|
$
|
25.00
|
|
|
$
|
30.00
|
|
|
$
|
40.00
|
|
|
$
|
50.00
|
|
3/8/2011
|
|
|
20.9108
|
|
|
|
19.7187
|
|
|
|
15.7263
|
|
|
|
12.5740
|
|
|
|
10.0705
|
|
|
|
8.0731
|
|
|
|
5.7984
|
|
|
|
3.3308
|
|
|
|
1.8968
|
|
|
|
1.0738
|
|
|
|
0.3829
|
|
|
|
0.1803
|
|
|
|
0.1362
|
|
3/15/2012
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
14.5603
|
|
|
|
11.5103
|
|
|
|
9.1072
|
|
|
|
7.2070
|
|
|
|
5.0699
|
|
|
|
2.8041
|
|
|
|
1.5347
|
|
|
|
0.8419
|
|
|
|
0.3195
|
|
|
|
0.1794
|
|
|
|
0.1359
|
|
3/15/2013
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
13.6956
|
|
|
|
10.6935
|
|
|
|
8.3485
|
|
|
|
6.5126
|
|
|
|
4.4769
|
|
|
|
2.3749
|
|
|
|
1.2481
|
|
|
|
0.6705
|
|
|
|
0.2840
|
|
|
|
0.1787
|
|
|
|
0.1354
|
|
3/15/2014
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
13.2082
|
|
|
|
10.1726
|
|
|
|
7.8233
|
|
|
|
6.0044
|
|
|
|
4.0204
|
|
|
|
2.0354
|
|
|
|
1.0268
|
|
|
|
0.5484
|
|
|
|
0.2657
|
|
|
|
0.1782
|
|
|
|
0.1350
|
|
3/15/2015
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
12.9591
|
|
|
|
9.8085
|
|
|
|
7.3974
|
|
|
|
5.5574
|
|
|
|
3.5940
|
|
|
|
1.7132
|
|
|
|
0.8282
|
|
|
|
0.4517
|
|
|
|
0.2558
|
|
|
|
0.1779
|
|
|
|
0.1347
|
|
3/15/2016
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
12.8112
|
|
|
|
9.4410
|
|
|
|
6.9034
|
|
|
|
5.0104
|
|
|
|
3.0628
|
|
|
|
1.3331
|
|
|
|
0.6235
|
|
|
|
0.3709
|
|
|
|
0.2509
|
|
|
|
0.1776
|
|
|
|
0.1345
|
|
3/15/2017
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
12.5824
|
|
|
|
8.7402
|
|
|
|
5.9737
|
|
|
|
4.0113
|
|
|
|
2.1635
|
|
|
|
0.8124
|
|
|
|
0.4201
|
|
|
|
0.3168
|
|
|
|
0.2494
|
|
|
|
0.1775
|
|
|
|
0.1345
|
|
3/15/2018
|
|
|
20.9108
|
|
|
|
18.9926
|
|
|
|
12.5824
|
|
|
|
7.0879
|
|
|
|
2.3260
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
|
|
0.0000
|
|
EXHIBIT A
[FORM OF FACE OF NOTE]
THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS NOTE IS EXCHANGEABLE FOR
NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS NOTE (OTHER THAN A
TRANSFER OF THIS NOTE 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) MAY BE REGISTERED EXCEPT
IN LIMITED CIRCUMSTANCES.
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION (DTC), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
OLD REPUBLIC INTERNATIONAL CORPORATION
3.75% Convertible Senior Note due 2018
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No. R-
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Initially $
|
CUSIP No. 680223 AH7
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OLD REPUBLIC INTERNATIONAL CORPORATION, a Delaware corporation (herein called the
Company
,
which term includes any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay CEDE & CO., or registered assigns, $
DOLLARS ($
) (or such lesser
principal amount as shall be specified in the Schedule of Exchanges of Securities attached hereto
as
Schedule A
) on March 15, 2018 unless earlier converted or repurchased, and to pay
interest thereon as set forth in the manner, at the rates and to the Persons set forth in the
Indenture.
This Note shall bear interest at a rate of 3.75% per annum from March 8, 2011 or from the most
recent date to which interest had been paid or provided to, but excluding, the next scheduled
Interest Payment Date, until the principal hereof shall be repaid. Interest on this Note will be
computed on the basis of a 360-day year composed of twelve 30-day months. Interest is payable
semi-annually in arrears on each March 15 and September 15, commencing on September 15, 2011, to
the Person in whose name this Note (or one or more predecessor securities) is registered at the
close of business on the Regular Record Date for such interest.
A - 1
Additional Interest will be payable
at the option of the Company on the terms set forth in Section 5.02 of the within-mentioned
Supplemental Indenture.
The Company will pay interest on overdue principal, and, to the extent lawful, on overdue
interest, in each case at a rate of 3.75% per annum. Interest not paid when due and any interest on
principal or interest not paid when due will be paid to Holders on a special record date, which
will be the 15th day preceding the date fixed by the Company for the payment of such interest,
whether or not such day is a Business Day. At least 15 days before a special record date, the
Company will send to each Holder and to the Trustee a notice that sets forth the special record
date, the payment date and the amount of interest to be paid.
The Company shall pay principal of and interest on this Note, so long as such Note is a Global
Note, in immediately available funds to the Depositary or its nominee, as the case may be, as the
registered Holder of such Note. The Company shall pay principal of any Notes (other than Notes that
are Global Notes) at the office or agency designated by the Company for that purpose. The Company
has initially designated the Trustee as its Paying Agent and Debt Security Registrar in respect of
the Notes and its agency in New York, New York as a place where Notes may be presented for payment
or for registration of transfer. The Company may, however, change the Paying Agent or Debt Security
Registrar for the Notes without prior notice to the Holders thereof, and the Company may act as
Paying Agent or Debt Security Registrar. Interest on the Notes (other than Notes that are Global
Notes) will be payable (i) to Holders of
the Notes having an aggregate principal amount of Notes of $5,000,000 or less, by check mailed
to the Holders of these Notes at their address in the Debt Security Register and (ii) to Holders
having an aggregate principal amount of Notes in excess of $5,000,000, either by check mailed to
each Holder at its address in the Debt Security Register or, upon application by a Holder to the
Debt Security Registrar not later than the relevant Regular Record Date, by wire transfer in
immediately available funds to that Holders account within the United States, which application
shall remain in effect until that Holder notifies, in writing, the Debt Security Registrar to the
contrary.
Reference is hereby made to the further provisions of this Note set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at
this place.
In the case of any conflict between this Note and the Indenture, the provisions of the
Indenture shall control. This Note, for all purposes, shall be governed by and construed in
accordance with the laws of the State of New York.
Unless the certificate of authentication hereon has been executed by the Trustee referred to
on the reverse hereof by manual signature, this Note shall not be entitled to any benefit under the
Indenture or be valid or obligatory for any purpose.
[Remainder of page intentionally left blank]
A - 2
IN WITNESS WHEREOF, OLD REPUBLIC INTERNATIONAL CORPORATION has caused this instrument to be
signed manually or by facsimile by its duly authorized officers.
Dated:
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OLD REPUBLIC INTERNATIONAL CORPORATION
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By:
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Name:
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Title:
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[SEAL]
Attest:
A - 3
CERTIFICATE OF AUTHENTICATION
This is one of the Debt Securities referred to in the within-mentioned Indenture.
Dated:
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WILMINGTON TRUST COMPANY,
as Trustee
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By:
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Name:
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Title:
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A - 4
[FORM OF REVERSE OF NOTE]
OLD REPUBLIC INTERNATIONAL CORPORATION
3.75% Convertible Senior Note due 2018
This Note is one of a duly authorized issue of Debt Securities of the Company (herein called
the
Notes
), issued under an Indenture dated as of August 15, 1992, as previously amended and
supplemented from time to time in accordance with the terms thereof (herein called the
Original
Indenture
) and as further supplemented by the Supplemental Indenture dated as of March 8, 2011
(herein called the
Supplemental Indenture
and, together with the Original Indenture, as
supplemented by the Supplemental Indenture, the
Indenture
) by and between the Company and
Wilmington Trust Company, herein called the
Trustee
, and reference is hereby made to the
Indenture for a statement of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Notes and of the terms upon which the
Notes are, and are to be, authenticated and delivered. Additional Notes may be issued in an
unlimited aggregate principal amount, subject to certain conditions specified in the Indenture.
This Note is not subject to redemption at the option of the Company prior to March 15, 2018
and, for the avoidance of doubt, this Note is not subject to the provisions of Article 11 of the
Original Indenture.
This Note is not subject to the provisions in Sections 1005 and 1006 of the Original
Indenture, and the provisions in Article 6 of the Supplemental Indenture supersede the entirety of
Article 4 of the Original Indenture.
Upon the occurrence of a Fundamental Change, the Holder has the right, at such Holders
option, to require the Company to repurchase all of such Holders Notes or any portion thereof (in
principal amounts of $1,000 or integral multiples thereof) on the Fundamental Change Purchase Date
at a price equal to the Fundamental Change Purchase Price.
As provided in and subject to the provisions of the Indenture, the Holder hereof has the
right, at its option, at any time prior to the close of business on the second Scheduled Trading
Day immediately preceding March 15, 2018, to convert this Note or a portion thereof that is $1,000
or an integral multiple thereof, into shares of Common Stock at the applicable Conversion Rate
specified in the Indenture, as adjusted from time to time as provided in the Indenture.
As provided in and subject to the provisions of the Indenture, the Company will make all
payments and deliveries in respect of the Fundamental Change Purchase Price and the principal
amount on the Stated Maturity thereof, as the case may be, to the holder who surrenders a Note to
the Paying Agent to collect such payments in respect of the Note. The Company will pay cash amounts
in money of the United States that at the time of payment is legal tender for payment of public and
private debts.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Notes to be effected under the Indenture at any time by the Company and the
A - 5
Trustee with the consent of the Holders of a majority in principal amount of the Notes at the
time outstanding. The Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Notes at the time outstanding, on behalf of the Holders of
all Notes, to waive compliance by the Company with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder
of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this
Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
As provided in and subject to the provisions of the Indenture, in case an Event of Default, as
defined in the Indenture, shall have occurred and be continuing, the principal of and interest on
all Notes may be declared due and payable, by either the Trustee or Holders of not less than 25% in
aggregate principal amount of Notes then outstanding, and upon said declaration shall become due
and payable, in the manner, with the effect and subject to the conditions provided in the
Indenture;
provided
that upon the occurrence of an Event of Default specified in Section 501(6) or
(7) of the Original Indenture, the principal amount of, and interest on, all the Notes shall
automatically become due and payable.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and any premium and interest on this Note at the time, place and rate, and in the coin
and currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable in the Debt Security Register, upon surrender of this Note for
registration of transfer at the office or agency of the Company in any place where the principal of
and interest on this Note are payable, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Debt Security Registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of
this series and of like tenor, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
The Notes are issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to certain limitations
therein set forth, the Notes are exchangeable for a like aggregate principal amount of Notes and of
like tenor of a different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee
and any agent of the Company or Trustee may treat the Person in whose name the Note is registered
as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
A - 6
All defined terms used in this Note that are defined in the Indenture shall have the meanings
assigned to them in the Indenture.
A - 7
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws or regulations:
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TEN COM as tenants in common
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UNIF GIFT MIN ACT
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Custodian
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(Cust)
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TEN ENT as tenants by the entireties
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(Minor)
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JT TEN as joint tenants with right
of survivorship and not as tenants in
common
|
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Uniform Gifts to Minors Act
(State)
|
Additional abbreviations may also be used though not in the above list.
A - 8
SCHEDULE A
SCHEDULES OF EXCHANGES OF SECURITIES
OLD REPUBLIC INTERNATIONAL CORPORATION
3.75% Convertible Senior Notes due 2018
The initial principal amount of this Registered Global Security is $
DOLLARS ($
). The
following, exchanges, purchases or conversions of a part of this Registered Global Security have
been made:
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Amount of decrease in
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Amount of increase in
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Principal amount of
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principal amount of this
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principal amount of this
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this Registered Global
|
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Signature of authorized
|
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Registered Global
|
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Registered Global
|
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Security following
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signatory of
|
Date of Exchange
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Security
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Security
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such decrease or increase
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Trustee or Custodian
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A - 9
EXHIBIT B
[FORM OF NOTICE OF CONVERSION]
To: Old Republic International Corporation
The undersigned owner of this Note hereby irrevocably exercises the option to convert this
Note, or a portion hereof (which is $1,000 or an integral multiple hereof) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to in this Note, and
directs that the shares of Common Stock issuable and deliverable upon conversion, together with any
check in payment for fractional shares of Common Stock, and any Notes representing any unconverted
principal amount hereof, be paid or issued and delivered, as the case may be, to the registered
Holder hereof unless a different name has been indicated below. Subject to certain exceptions set
forth in the Indenture, if this notice is being delivered on a date
after the close of business on a Regular Record Date and prior to the open of business on the
related Interest Payment Date, this notice is accompanied by payment of an amount equal to the
interest payable on such Interest Payment Date on the principal of this Note to be converted. If
any shares of Common Stock are to be issued in the name of a Person other than the undersigned, the
undersigned will pay all transfer taxes payable with respect hereto. Any amount required to be paid
by the undersigned on account of interest accompanies this Note.
Principal amount to be converted (in an integral multiple of $1,000, if less than all):
$
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Signature(s)
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Signature(s) must be guaranteed
by an institution which is a member of one of the
following recognized signature Guarantee
Programs:
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(i) The Securities Transfer Agent Medallion
Program (STAMP); (ii) The New York Stock Exchange
Medallion Program (MNSP); (iii) The Stock
Exchange Medallion Program (SEMP) or (iv) another
guarantee program acceptable to the Trustee.
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Signature Guarantee
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B -1
Fill in for registration of any shares of Common Stock and Notes if to be issued otherwise than to
the registered Holder.
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Please print Name and Address
(including zip code number)
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Social Security or other Taxpayer
Identifying Number
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B -2
EXHIBIT C
[FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE]
To: Old Republic International Corporation
The undersigned registered owner of this Note hereby acknowledges receipt of a notice from Old
Republic International Corporation (the
Company
) as to the occurrence of a Fundamental Change
with respect to the Company and specifying the Fundamental Change Purchase Date and requests and
instructs the Company to repay to the registered holder hereof in accordance with the applicable
provisions of this Note and the Indenture referred to in this Note (1) the entire principal amount
of this Note, or the portion thereof (that is $1,000 principal amount or an integral multiple
thereof) below designated, and (2) if such Fundamental Change Purchase Date does not fall during
the period after a Regular Record Date and on or prior to the corresponding Interest Payment Date,
accrued and unpaid interest thereon to, but excluding, such Fundamental Change Purchase Date.
In the case of certificated Notes, the certificate numbers of the Notes to be repurchased are as
set forth below:
Dated:
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Signature(s)
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Social Security or Other Taxpayer Identification
Number
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principal amount to be repaid (if less than all):
$
,000
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NOTICE: The signature on the Fundamental Change Purchase
Notice must correspond with the name as
written upon the face of the Note in every particular
without alteration or enlargement or any
change whatever.
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C-1
EXHIBIT D
[FORM OF ASSIGNMENT AND TRANSFER]
For value received
hereby sell(s), assign(s) and transfer(s) unto
(Please insert social security or Taxpayer Identification Number of
assignee
) the within Note, and hereby irrevocably constitutes and appoints
attorney to transfer the said Note on the books of the Company, with full power of
substitution in the premises.
Dated:
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Signature(s)
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Signature(s) must be guaranteed
by an institution which is a member of one of the
following recognized signature Guarantee Programs:
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(i) The Securities Transfer Agent Medallion Program
(STAMP); (ii) The New York Stock Exchange Medallion
Program (MNSP); (iii) The Stock Exchange Medallion
Program (SEMP) or (iv) another guarantee program
acceptable to the Trustee.
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Signature Guarantee
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D-1