Exhibit 4.1
DEVELOPERS DIVERSIFIED REALTY CORPORATION,
and
U.S. BANK TRUST NATIONAL ASSOCIATION
Trustee
EIGHTH SUPPLEMENTAL INDENTURE
Dated as of March 13, 2007
3.00% Convertible Senior Notes due 2012
EIGHTH SUPPLEMENTAL INDENTURE
THIS EIGHTH SUPPLEMENTAL INDENTURE (this
Eighth Supplemental Indenture
) is entered into as
of March 13, 2007 between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
Company
), having its principal place of business at 3300 Enterprise Parkway, Beachwood, Ohio
44122, and U.S. Bank Trust National Association, a national banking association duly organized and
existing under the laws of the United States, as Trustee hereunder (the
Trustee
), having its
Corporate Trust Office at 175 South Street, Columbus, Ohio 43215.
WHEREAS, the Company and the Trustee entered into that certain Indenture, dated as of May 1,
1994 (as supplemented by a First Supplemental Indenture, dated as of May 10, 1995, by a Second
Supplemental Indenture, dated as of July 18, 2003, by a Third Supplemental Indenture, dated as of
January 23, 2004, by a Fourth Supplemental Indenture, dated as of April 22, 2004, by a Fifth
Supplemental Indenture, dated as of April 28, 2005, by a Sixth Supplemental Indenture, dated as of
October 7, 2005, and by a Seventh Supplemental Indenture, dated as of August 28, 2006, the
Original Indenture
), relating to the Companys senior debt securities;
WHEREAS, pursuant to Section 901 of the Indenture, the Company and the Trustee may enter into
supplemental indentures to establish the terms and provisions of a series of Securities issued
pursuant to the Indenture;
WHEREAS, pursuant to Section 301 of the Indenture, the Company and the Trustee desire to
establish the terms of a series of Securities entitled the 3.00% Convertible Senior Notes due
2012 (the
Notes
); and
WHEREAS, the Company and the Trustee have duly authorized the execution and delivery of this
instrument to establish the terms of the Notes set forth herein and have done all things necessary
to make this instrument (together with the Original Indenture, the
Indenture
) a valid agreement
of the parties hereto, in accordance with its terms;
NOW, THEREFORE, in consideration of the premises and the covenants and agreements contained
herein, and for other good and valuable consideration the receipt of which is hereby acknowledged,
and for the equal and proportionate benefit of the Holders of the Securities, the Company and the
Trustee agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01.
Definitions
. Capitalized terms used in this instrument and not
otherwise defined herein shall have the meanings assigned to such terms in the Original Indenture,
as supplemented by the Eighth Supplemental Indenture, or in the form of Note attached as Exhibit A
hereto.
Additional Notes
has the meaning provided in Section 2.02 hereof.
Additional Interest
has the meaning specified for Liquidated Damages in the Registration
Rights Agreement.
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Additional or Special Interest Notice
has the meaning specified in Section 2.26.
Additional Shares
has the meaning specified in Section 2.09.
Business Day
means, with respect to any Note, any day, other than a Saturday, Sunday or any
other day on which banking institutions in The City of New York are authorized or obligated by law
or executive order to close.
Change in Control
means the occurrence at any time any of the following events: (1)
consummation of any transaction or event (whether by means of a share exchange or tender offer
applicable to Common Shares, a liquidation, consolidation, recapitalization, reclassification,
combination or merger of the Company or a sale, lease or other transfer of all or substantially all
of the consolidated assets of the Company) or a series of related transactions or events pursuant
to which all of the outstanding Common Shares are exchanged for, converted into or constitute
solely the right to receive, cash, securities or other property; (2) any person or group (as
such terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act, whether or not
applicable), other than the Company or any majority-owned subsidiary of the Company or any employee
benefit plan of the Company or such subsidiary, is or becomes the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of more than 50% of the total voting
power in the aggregate of all classes of capital shares of the Company then outstanding entitled to
vote generally in elections of the Companys directors; or (3) during any period of 12 consecutive
months after the date of original issuance of the Notes, persons who at the beginning of such
12-month period constituted the Board of Directors of the Company, together with any new persons
whose election was approved by a vote of a majority of the persons then still comprising the Board
of Directors of the Company who were either members of the Board of Directors of the Company at the
beginning of such period or whose election, designation or nomination for election was previously
so approved, cease for any reason to constitute a majority of the Board of Directors of the
Company. Notwithstanding the foregoing, even if any of the events specified in the preceding
clauses (1) through (3) have occurred, except as specified in clause (x), a Change in Control will
not be deemed to have occurred if either: (x) the Closing Sale Price per Common Share for any five
Trading Days within (i) the period of 10 consecutive Trading Days ending immediately after the
later of the Change in Control or the public announcement of the Change in Control, in the case of
a Change in Control relating to an acquisition of capital shares, or (ii) the period of 10
consecutive Trading Days ending immediately after the Change in Control, in the case of a Change in
Control relating to a merger, consolidation or asset sale, equals or exceeds 105% of the Conversion
Price applicable to the Notes in effect on each of those Trading Days;
provided, however
, that the
exception to the definition of Change in Control specified in this clause (x) shall not apply in
the context of a Change in Control for purposes of Section 2.09 or Section 2.10(d); or (y) at least
90% of the consideration (excluding cash payments for fractional shares and cash payments made
pursuant to dissenters appraisal rights) in a merger, consolidation or other transaction otherwise
constituting a Change in Control consists of shares of common stock (or depositary receipts or
other certificates representing common equity interests) traded on a U.S. national securities
exchange or quoted on an established automated over-the-counter trading market in the United States
(or will be so traded or quoted immediately following such merger, consolidation or other
transaction) and as a result of the merger, consolidation or other transaction the Notes become
exchangeable into such shares of common stock (or depositary receipts or other
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certificates representing common equity interests). For the purposes of this definition,
person includes any syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act.
Change in Control Purchase Date
has the meaning provided in Section 2.08 hereof.
Change in Control Purchase Notice
has the meaning provided in Section 2.08 hereof.
Change in Control Purchase Price
has the meaning provided in Section 2.08 hereof.
Closing Sale Price
of the Common Shares or other capital shares or similar equity interests
or other publicly traded securities on any date means the closing sale price per share (or, if no
closing sale price is reported, the average of the closing bid and ask prices or, if more than one
in either case, the average of the average closing bid and the average closing ask prices) on such
date as reported on the principal U.S. securities exchange on which the Common Shares or such other
capital shares or similar equity interests or other securities are traded or, if the Common Shares
or such other capital shares or similar equity interests or other securities are not listed on a
U.S. national or regional securities exchange, as reported by the National Quotation Bureau
Incorporated or another established over-the-counter trading market in the United States. The
Closing Sale Price shall be determined without regard to after-hours trading or extended market
making. In the absence of the foregoing, the Company shall determine the Closing Sale Price on such
basis as it considers appropriate.
Common Shares
means common shares, without par value, of the Company.
Company
has the meaning provided in the first paragraph of this instrument until a successor
Person shall have become such pursuant to the applicable provisions of the Indenture, and
thereafter Company shall mean such successor Person.
Company Notice
has the meaning provided in Section 2.08 hereof.
Conversion Agent
means the office or agency designated by the Company where the Notes may be
presented for conversion.
Conversion Price
means, as of any date of determination, for $1,000 principal amount of
Notes, the quotient of $1,000 divided by the Conversion Rate in effect as of such date, rounded to
the nearest $0.01, with $0.005 rounded upward.
Conversion Rate
means initially 13.3783 Common Shares for each $1,000 principal amount of
Notes, as the same shall be adjusted from time to time in accordance with the provisions hereof and
of the Notes.
Daily Conversion Value
has the meaning provided in Section 2.11 hereof.
Daily Settlement Amount
has the meaning provided in Section 2.11 hereof.
Daily VWAP
has the meaning provided in Section 2.11 hereof.
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Depositary
has the meaning provided in Section 2.03 hereof.
Effective Date
has the meaning specified in Section 2.09.
Exchange Act
means the Securities Exchange Act of 1934, as amended.
Expiration Time
has the meaning specified in Section 2.13.
Initial Purchasers
means Banc of America Securities LLC, J.P. Morgan Securities Inc. and
Wachovia Capital Markets, LLC.
interest
means, when used with reference to the Notes, any interest payable under the terms
of the Notes, including Additional Interest, if any, payable under the terms of the Registration
Rights Agreement and Special Interest, if any, payable pursuant to Section 2.17(c) hereof.
Indenture
has the meaning provided in the preamble of this instrument.
Interest Payment Date
has the meaning provided in Section 2.05 hereof.
Market Disruption Event
has the meaning provided in Section 2.11 hereof.
Notes
has the meaning provided in Section 2.01 hereof which shall be substantially in the
form attached as Exhibit A hereto.
Observation Period
has the meaning provided in Section 2.11 hereof.
PORTAL
SM
Market
means The PORTAL Market operated by the Nasdaq Stock Market or
any successor thereto.
Purchase Agreement
means the Purchase Agreement, dated March 7, 2007, between the Company
and the Initial Purchasers.
Redemption Date
means, with respect to any Note or portion thereof to be redeemed in
accordance with the provisions of Section 2.07 hereof, the date fixed for such redemption in
accordance with the provisions of Section 2.07 hereof.
Redemption Price
has the meaning provided in Section 2.07 hereof.
Reference Dividend
has the meaning specified in Section 2.13.
Registration Rights Agreement
means the Registration Rights Agreement, dated as of March 13,
2007, between the Company and the Initial Purchasers, as amended from time to time in accordance
with its terms.
Regular Record Date
has the meaning provided in Section 2.05 hereof.
Restricted Securities
has the meaning specified in Section 2.23.
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Rule 144A
means Rule 144A as promulgated under the Securities Act as it may be amended from
time to time hereafter.
Scheduled Trading Day
has the meaning provided in Section 2.11 hereof.
Securities Act
means the Securities Act of 1933, as amended.
Share Price
has the meaning specified in Section 2.09.
Special Interest
has the meaning specified in Section 2.17(c).
Spin-Off
has the meaning specified in Section 2.13.
Stated Maturity
has the meaning specified in Section 2.04.
Trading Day
means a day during which trading in securities generally occurs on the New York
Stock Exchange or, if the Common Shares are not then listed on the New York Stock Exchange, on the
principal other U.S. national or regional securities exchange on which Common Shares are then
listed or, if the Common Shares are not then listed on a U.S. national or regional securities
exchange, on the principal other market on which Common Shares are then traded; provided that, for
purposes of Section 2.11, the term Trading Day shall have the meaning set forth in Section 2.11.
Trading Price
means, with respect to the Notes on any date of determination, the average of
the secondary market bid quotations per $1,000 principal amount of Notes obtained by the Trustee
for a $5,000,000 principal amount of Notes at approximately 3:30 p.m., New York City time, on such
determination date from two independent nationally recognized securities dealers selected by the
Company, which may include one or more of the Initial Purchasers or any successor to such entities.
If at least two such bids cannot reasonably be obtained by the Trustee, but one such bid can
reasonably be obtained by the Trustee, then one bid shall be used. If the Trustee cannot reasonably
obtain at least one bid for a $5,000,000 principal amount of Notes from a nationally recognized
securities dealer or, in the reasonable judgment of the Company, the bid quotations are not
indicative of the secondary market value of the Notes, then the Trading Price per $1,000 principal
amount of Notes shall be deemed to be less than 98% of the product of the Closing Sale Price of the
Common Shares and the Conversion Rate on such determination date.
Trust Indenture Act
means the Trust Indenture Act of 1939, as amended.
ARTICLE TWO
TERMS
Section 2.01.
Title
. The Notes shall constitute a series of Securities designated as
the 3.00% Convertible Senior Notes due 2012 of the Company.
Section 2.02.
Aggregate Principal Amount
. The aggregate principal amount of Notes
which may be authenticated and delivered under the Indenture is initially limited in aggregate
principal amount to $600,000,000, except for Notes authenticated and delivered upon registration
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of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 304, 305,
306, 906, 1107 or 1203 of the Indenture and except for any Notes which, pursuant to Section 303 of
the Indenture, are deemed never to have been authenticated and delivered thereunder; provided that
the Company may from time to time, without the consent of the Holders of the Notes, increase the
principal amount of the Notes by issuing additional Securities in the future (the
Additional
Notes
) having the same terms and ranking equally and ratably with the Notes in all respects and
with the same CUSIP number as the Notes, except for the difference in the issue price and interest
accrued prior to the issue date of such Additional Notes, provided that such Additional Notes
constitute part of the same issue as the Notes for U.S. federal income tax purposes. Any
Additional Notes will be treated as a single series with the Notes under the Indenture and shall
have the same terms as to status, redemption, repurchase, conversion and otherwise as the Notes.
Section 2.03.
Registered Securities in Book-Entry Form
. The Notes shall be issuable
in the form of one or more global Securities registered in the name of The Depository Trust
Companys nominee, and shall be deposited with, or on behalf of, The Depository Trust Company, New
York, New York (the
Depositary
). The Notes may be surrendered for registration of transfer and
for conversion at the office or agency of the Company (including the Trustee) maintained for such
purpose in the Borough of Manhattan, The City of New York, or at any other office or agency
maintained by the Company for such purpose.
Section 2.04.
Stated Maturity of Principal
. The Stated Maturity of the principal of
the Notes shall be March 15, 2012.
Section 2.05.
Interest
. The Notes shall bear interest at the rate of 3.00% per annum
from March 13, 2007, or from the most recent Interest Payment Date to which interest has been paid
or provided for, as the case may be, and will be payable semi-annually in arrears on March 15 and
September 15 of each year (each, an
Interest Payment Date
), commencing on September 15, 2007,
until the principal thereof is paid or duly made available for payment, to the Persons in whose
names such Notes are registered at the close of business on the March 1 or September 1 (whether or
not a Business Day) immediately preceding the applicable Interest Payment Date (each, a
Regular
Record Date
). Interest payable on each Interest Payment Date shall equal the amount of interest
accrued for the period commencing on and including the immediately preceding Interest Payment Date
in respect of which interest has been paid (or commencing on and including March 13, 2007, if no
interest has been paid) and ending on and including the day immediately preceding such Interest
Payment Date. Interest on the Notes will be computed on the basis of a 360-day year consisting of
twelve 30-day months.
If the Company shall redeem the Notes in accordance with the provisions of Section 2.07
hereof, or if a Holder shall surrender a Note for repurchase by the Company in accordance with the
provisions of Section 2.08 hereof, subject to the next succeeding sentence, accrued and unpaid
interest (including Additional Interest, if any) shall be payable to each Holder that shall have
surrendered such Note for redemption or repurchase, as the case may be. However, if an Interest
Payment Date shall fall on or prior to the Redemption Date or Change in Control Purchase Date, as
the case may be, for a Note, accrued and unpaid interest (including Additional Interest, if any)
due on such Interest Payment Date shall be payable instead to the Person in whose name such Note is
registered at the close of business on the related Regular Record Date.
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Section 2.06.
Place of Payment
.
The principal of and the interest on the Notes shall
be payable at the office or agency of the Company (including the Trustee) maintained for such
purpose in the Borough of Manhattan, The City of New York in the manner specified in this
Indenture.
Section 2.07.
Redemption
.
If, at any time, the Company determines it is necessary to
redeem the Notes in order to preserve the Companys status as a real estate investment trust, the
Company may, upon not less than 30 nor more than 60 days prior written notice by mail to the
Holders of the Notes, redeem the Notes in whole or in part, for cash equal to 100% of the principal
amount of the Notes to be redeemed plus unpaid interest (including Additional Interest, if any)
accrued thereon to the Redemption Date (such amount, the
Redemption Price
). In such case, the
Company shall provide the Trustee with an Officers Certificate evidencing that the Board of
Directors of the Company has, in good faith, made the determination that it is necessary to redeem
the Notes in order to preserve the Companys status as a real estate investment trust.
If less than all the Notes are to be redeemed, the Trustee shall select the Notes to be
redeemed (in principal amounts of $1,000 and integral multiples thereof) on a
pro rata
basis or by
such other method the Trustee considers fair and appropriate. The Trustee shall make the selection
at least 30 days but not more than 60 days before the Redemption Date from Outstanding Notes not
previously called for redemption. Notes and portions of the principal amount thereof selected for
redemption shall be in integral multiples of $1,000. The Trustee shall notify the Company promptly
of the Notes or portions of the principal amount thereof to be redeemed. If the Trustee selects a
portion of a Note for partial redemption and a Holder converts a portion of the same Note in
accordance with the provisions of Section 2.10 hereof before termination of the conversion right
with respect to the portion of the Note so selected, the converted portion of such Note shall be
deemed to be from the portion selected for redemption. Notes that have been converted during a
selection of Notes to be redeemed shall be treated by the Trustee as Outstanding for the purpose of
such selection.
In the event of any redemption in part, the Company shall not be required to: (i) issue or
register the transfer or exchange of any Note during a period beginning at the opening of business
15 days before any selection of Notes to be redeemed and ending at the close of business on the day
of mailing of the relevant notice of redemption, or (ii) register the transfer or exchange of any
Note, or portion thereof, called for redemption, except the unredeemed portion of any Note being
redeemed in part.
In addition to those matters set forth in Section 1104 of the Indenture, a notice of
redemption sent to the Holders of Notes to be redeemed in accordance with the provisions of the two
preceding paragraphs shall state:
(a) the name of the Paying Agent and Conversion Agent;
(b) the then current Conversion Rate;
(c) that Notes called for redemption may be converted at any time prior to the close of
business on the second Business Day immediately preceding the Redemption Date; and
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(d) that Holders who wish to convert Notes must comply with the procedures relating
thereto specified in Section 2.12 hereof.
Section 2.08.
Repurchase at Option of Holders upon a Change in Control
.
If a Change
in Control occurs prior to the Stated Maturity, a Holder of Notes shall have the right to require
the Company to repurchase such Holders Notes, in whole or in part (in principal amounts of $1,000
or an integral multiple thereof) for cash equal to 100% of the principal amount of the Notes to be
repurchased, plus unpaid interest (including Additional Interest, if any) accrued thereon to the
Change in Control Purchase Date (such amount, the
Change in Control Purchase Price
), subject to
satisfaction by or on behalf of the Holder of the requirements set forth below.
Within 20 days after the occurrence of a Change in Control, the Company shall mail a written
notice of the particular Change in Control and of the repurchase right arising as a result of such
Change in Control (the
Company Notice
) by first-class mail to the Trustee, any Paying Agent and
to each Holder (and to beneficial owners as required by applicable law). The notice shall include
a form of Change in Control Purchase Notice (defined below) to be completed by the Holder and shall
state:
(a) briefly, the events causing a Change in Control and the date of such Change in
Control;
(b) the date by which the Change in Control Purchase Notice must be delivered to the
Paying Agent;
(c) the date on which the Company will repurchase Notes upon a Change in Control, which
must be not less than 15 days nor more than 30 days after the date of the Company Notice
(such date, the
Change in Control Purchase Date
);
(d) the Change in Control Purchase Price;
(e) the name and address of the Trustee, the Paying Agent and the Conversion Agent;
(f) that Notes in respect of which a Change in Control Purchase Notice is provided by a
Holder shall not be convertible unless such Holder validly withdraws such Change in Control
Purchase Notice in accordance with the provisions of this Section 2.08;
(g) that Notes must be surrendered to the Paying Agent to collect payment of the Change
in Control Purchase Price;
(h) that the Change in Control Purchase Price for any Note as to which a Change in
Control Purchase Notice has been duly given will be paid within two Business Days after the
later of the Change in Control Purchase Date or the time at which such Notes are surrendered
for repurchase;
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(i) that, unless the Company defaults in making payment of the Change in Control
Purchase Price, interest on Notes surrendered for repurchase will cease to accrue on and
after the Change in Control Purchase Date; and
(j) the CUSIP number of the Notes.
The Company shall also disseminate a press release through Dow Jones & Company, Inc. or
Bloomberg Business News announcing the occurrence of such Change in Control or publish such
information in a newspaper of general circulation in The City of New York or on the Companys
website, or through such other public medium as the Company shall deem appropriate at such time.
A Holder may exercise its rights specified in this Section 2.08 upon delivery of a written
notice of such Holders exercise of its repurchase right (a
Change in Control Purchase Notice
) to
the Paying Agent at any time prior to the close of business on the third Business Day prior to the
Change in Control Purchase Date, stating:
(a) if such Notes are in certificated form, the certificate number(s) of the Notes
which the Holder will deliver to be repurchased;
(b) the portion of the principal amount of the Notes to be repurchased, in multiples of
$1,000, provided that the remaining principal amount of Notes is in an authorized
denomination; and
(c) that such Note shall be repurchased pursuant to the applicable provisions hereof
and of the Notes.
The Paying Agent shall promptly notify the Company in writing of the receipt by it of any
Change in Control Purchase Notice.
Book-entry transfer of Notes in book-entry form in compliance with appropriate procedures of
the Depositary or delivery of Notes in certificated form (together with all necessary endorsements)
to the Paying Agent on or after the Change in Control Purchase Date at the offices of the Paying
Agent shall be a condition to the receipt by the Holder of the Change in Control Purchase Price
therefor. Holders electing to require the Company to repurchase Notes must effect such transfer or
delivery to the Paying Agent prior to the Change in Control Purchase Date to receive payment of the
Change in Control Purchase Price on or within two Business Days after the Change in Control
Purchase Date. The Company shall pay the Change in Control Purchase Price within two Business Days
after the later of the Change in Control Purchase Date or the time of such transfer or delivery of
the Notes.
A Change in Control Purchase Notice may be withdrawn in whole or in part by a Holder by means
of a written notice of withdrawal delivered to the office of the Paying Agent prior to the close of
business on the third Business Day prior to the Change in Control Purchase Date specifying:
(a) the Holders name;
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(b) the principal amount of Notes in respect of which the Change in Control Purchase
Notice is being withdrawn, which must be an integral multiple of $1,000;
(c) if the Notes subject to the notice of withdrawal are in certificated form, the
certificate number(s) of all Notes subject to the notice of withdrawal; and
(d) the principal amount of Notes, if any, that remains subject to the Change in
Control Purchase Notice, which must be an integral multiple of $1,000.
If Notes subject to the notice of withdrawal are in book-entry form, the above notices must
also comply with the applicable procedures of the Depositary.
On or before 10:00 a.m. (New York City time) on the Change in Control Purchase Date, the
Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is
acting as the Paying Agent, shall segregate and hold in trust) money sufficient to pay the
aggregate Change in Control Purchase Price of the Notes to be repurchased pursuant to this Section
2.08. If the Paying Agent holds, in accordance with the terms of this Indenture, money sufficient
to pay the Change in Control Purchase Price of such Notes on the Change in Control Purchase Date,
then, on and after such date, such Notes shall cease to be Outstanding and interest on such Notes
shall cease to accrue and all rights of the Holders of such Notes shall terminate (other than the
right to receive the Change in Control Purchase Price after delivery or transfer of the Notes).
Such will be the case whether or not book-entry transfer of the Notes in book-entry form is made
and whether or not Notes in certificated form, together with the necessary endorsements, are
delivered to the Paying Agent.
Notwithstanding the foregoing, no Notes may be repurchased by the Company in accordance with
the provisions of this Section 2.08 if there has occurred and is continuing an Event of Default
with respect to the Notes (other than a default in the payment of the Change in Control Purchase
Price).
To the extent legally required in connection with a repurchase of Notes, the Company shall
comply with the provisions of Rule 13e-4 and other tender offer rules under the Exchange Act then
applicable, if any, and will file a Schedule TO or any other schedule required under the Exchange
Act.
The Company may arrange for a third party to purchase Notes for which the Company has received
a valid Change in Control Purchase Notice that has not been properly withdrawn, in the manner and
otherwise in compliance with the requirements set forth herein and in the Notes. If a third party
purchases any Notes under such circumstances, then interest will continue to accrue on the Notes
and such Notes will continue to be Outstanding after the Change in Control Purchase Date for all
purposes of the Indenture and will be fungible with all other Notes then Outstanding.
Section 2.09.
Make Whole Amount
.
If the Effective Date (as defined below) of a Change
in Control occurs prior to the Stated Maturity as a result of a transaction or event described in
clauses (1) or (2) of the definition of Change in Control and a Holder elects to convert its Notes
in connection with such Change in Control pursuant to Section 2.10(d) hereof, the Company shall
increase the applicable Conversion Rate for such Notes surrendered for
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conversion by a number of additional Common Shares (the
Additional Shares
) as specified
below. A conversion of Notes shall be deemed for these purposes to be in connection with such a
Change in Control if the notice of conversion of the Notes is received by the Conversion Agent on
any date from and including the date that is the Effective Date of such Change in Control up to and
including the earlier of the 30th Business Day following the Effective Date of such Change in
Control and the second Business Day preceding the Stated Maturity.
The number of Additional Shares will be determined by reference to the table below and is
based on the date on which such Change in Control transaction becomes effective (the
Effective
Date
) and the price (the
Share Price
) paid per Common Share in such Change in Control
transaction. If holders of Common Shares receive only cash in a Change in Control transaction, the
Share Price shall be the cash amount paid per Common Share. In all other cases, the Share Price
shall be the average of the Closing Sale Prices of the Common Shares on the 10 consecutive Trading
Days up to but excluding the Effective Date.
The Share Prices set forth in the first row of the table (i.e., the column headers) will be
adjusted as of any date on which the Conversion Rate of the Notes is adjusted. The adjusted Share
Prices will equal the Share Prices applicable immediately prior to such adjustment multiplied by a
fraction, the numerator of which is the Conversion Rate immediately prior to the adjustment giving
rise to the Share Price adjustment and the denominator of which is the Conversion Rate as so
adjusted. In addition, the number of Additional Shares will be subject to adjustment in the same
manner as the Conversion Rate in accordance with the provisions of Section 2.13 hereof.
The following table sets forth the Share Price and number of Additional Shares to be received
per $1,000 principal amount of Notes:
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Effective
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Share Price
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Date
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$62.29
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$65.00
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$74.75
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$80.00
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$85.00
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$90.00
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$100.00
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$110.00
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$120.00
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$130.00
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$140.00
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$150.00
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March 7, 2007
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2.67
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2.31
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1.39
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1.06
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0.82
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0.64
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0.40
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0.22
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0.13
|
|
|
|
0.08
|
|
|
|
0.04
|
|
|
|
0.02
|
|
March 15, 2008
|
|
|
2.67
|
|
|
|
2.28
|
|
|
|
1.38
|
|
|
|
1.04
|
|
|
|
0.80
|
|
|
|
0.62
|
|
|
|
0.39
|
|
|
|
0.20
|
|
|
|
0.12
|
|
|
|
0.06
|
|
|
|
0.04
|
|
|
|
0.01
|
|
March 15, 2009
|
|
|
2.67
|
|
|
|
2.23
|
|
|
|
1.36
|
|
|
|
1.04
|
|
|
|
0.79
|
|
|
|
0.61
|
|
|
|
0.37
|
|
|
|
0.17
|
|
|
|
0.11
|
|
|
|
0.03
|
|
|
|
0.03
|
|
|
|
0.00
|
|
March 15, 2010
|
|
|
2.67
|
|
|
|
2.21
|
|
|
|
1.33
|
|
|
|
1.00
|
|
|
|
0.78
|
|
|
|
0.51
|
|
|
|
0.30
|
|
|
|
0.14
|
|
|
|
0.10
|
|
|
|
0.03
|
|
|
|
0.02
|
|
|
|
0.00
|
|
March 15, 2011
|
|
|
2.67
|
|
|
|
2.10
|
|
|
|
0.90
|
|
|
|
0.56
|
|
|
|
0.36
|
|
|
|
0.25
|
|
|
|
0.15
|
|
|
|
0.11
|
|
|
|
0.10
|
|
|
|
0.02
|
|
|
|
0.01
|
|
|
|
0.00
|
|
March 15, 2012
|
|
|
2.67
|
|
|
|
2.01
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
|
|
0.00
|
|
The exact Share Prices and Effective Dates may not be set forth in the table, in which
case:
(a) if the Share Price is between two Share Price amounts in the table or the Effective
Date is between two dates in the table, the Additional Shares will be determined by
straight-line interpolation between the number of Additional Shares set forth for the higher
and lower Share Price amounts and the two dates, as applicable, based on a 365-day year;
(b) if the Share Price is equal to or in excess of $150.00 per Common Share (subject to
adjustment as specified in the second preceding paragraph), no Additional Shares will be
issued upon a conversion of Notes; and
12
(c) if the Share Price is less than $62.29 per Common Share (subject to adjustment as
specified in the second preceding paragraph), no Additional Shares will be issued upon a
conversion of Notes.
Notwithstanding the foregoing, in no event shall the total number of Common Shares issuable
upon a conversion of Notes exceed 16.0483 shares per $1,000 principal amount of Notes, subject to
adjustment in the same manner as the Conversion Rate pursuant to Section 2.13 hereof.
Section 2.10.
Conversion Rights
.
Subject to the restrictions on ownership of the Common Shares as set forth in Section 2.14
hereof and to the conditions set forth herein, Holders may surrender their Notes for conversion for
cash and, if applicable, Common Shares, at the applicable Conversion Rate prior to the close of
business on the second Business Day immediately preceding the Stated Maturity of the Notes at any
time on or after January 15, 2012, and also under any of the circumstances set forth in this
Section 2.10.
(a)
Conversion Upon Satisfaction of Market Price Condition
. A Holder may surrender any of
its Notes for conversion during any calendar quarter beginning after June 30, 2007 (and only during
such calendar quarter) if, and only if, the Closing Sale Price of the Common Shares for at least 20
Trading Days (whether or not consecutive) in the period of 30 consecutive Trading Days ending on
the last Trading Day of the preceding calendar quarter is more than 125% of the Conversion Price
per Common Share in effect on the applicable Trading Day. The Board of Directors of the Company
shall make appropriate adjustments, in its good faith determination, 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, during that 30 consecutive Trading
Day period.
(b)
Conversion Upon Satisfaction of Trading Price Condition
. A Holder may surrender any of
its Notes for conversion during the five consecutive Trading Day period following any five
consecutive Trading Days in which the Trading Price per $1,000 principal amount of Notes (as
determined following a reasonable request by a Holder of the Notes) was less than 98% of the
product of the Closing Sale Price of the Common Shares multiplied by the Conversion Rate.
The Trustee shall have no obligation to determine the Trading Price of the Notes unless the
Company shall have requested such determination, and the Company shall have no obligation to make
such request unless a Holder provides the Company with written reasonable evidence that the Trading
Price per $1,000 principal amount of the Notes would be less than 98% of the product of the Closing
Sale Price of the Common Shares and the Conversion Rate, whereupon the Company shall instruct the
Trustee to determine the Trading Price of the Notes beginning on the next Trading Day and on each
successive Trading Day until the Trading Price is greater than or equal to 98% of the product of
the Closing Sale Price of the Common Shares and the Conversion Rate.
Notwithstanding anything to the contrary in this Eighth Supplemental Indenture (including, but
not limited to, the definition of Trading Price or this Section 2.10 hereof), the sole
13
method by which the Trustee shall determine the Trading Price shall be by the appointment by the
Trustee, at the cost and expense of the Company, of a bid solicitation agent that shall be an
independent nationally recognized investment banking firm to determine the Trading Price as
required by this Eighth Supplemental Indenture. Such bid solicitation agent shall perform all
functions and duties that may be required of the Trustee herein in connection with or related to
the determination of a Trading Price. So long as the Trustee has exercised reasonable care in the
appointment of such bid solicitation agent, the Trustee shall not be liable for any negligent acts
or omissions, or misconduct, of such bid solicitation agent.
(c)
Conversion Upon Notice of Redemption
. A Holder may surrender for conversion any of the
Notes called for redemption at any time prior to the close of business on the second Business Day
prior to the Redemption Date, even if the Notes are not otherwise convertible at such time. The
right to convert Notes pursuant to this clause (c) will expire after the close of business on the
second Business Day prior to the Redemption Date unless the Company defaults in making the payment
due upon redemption. A Holder may convert fewer than all of its Notes so long as the Notes
converted are an integral multiple of $1,000 principal amount and the remaining principal amount of
Notes is in an authorized denomination. However, if a Holder has already delivered a Change in
Control Purchase Notice with respect to a Note, such Holder may not surrender such Note for
conversion until it has withdrawn such notice in accordance with the applicable provisions of
Section 2.08 hereof.
(d)
Conversion Upon Specified Transactions
. If the Company elects to:
(i) distribute to all holders of Common Shares rights entitling them to
purchase, for a period expiring within 45 days, Common Shares at less than the
Closing Sale Price of the Common Shares on the Trading Day immediately preceding the
declaration date of the distribution; or
(ii) distribute to all holders of Common Shares assets, debt securities or
certain rights to purchase securities of the Company, which distribution has a per
share value exceeding 10% of the Closing Sale Price of the Common Shares on the
Trading Day immediately preceding the declaration date of such distribution,
the Company shall notify the Holders of the Notes in writing at least 45 days prior to the
ex-dividend date for such distribution. Following the giving of such notice, Holders may surrender
their Notes for conversion at any time until the earlier of the close of business on the Business
Day immediately prior to the ex-dividend date or an announcement that such distribution will not
take place;
provided, however
, that a Holder may not exercise this right to convert if the Holder
may participate, on an as-converted basis (assuming for such purposes that the Notes are
convertible solely in Common Shares at the then applicable Conversion Rate), in the distribution
without a conversion of Notes. The ex-dividend date is the first date upon which a sale of the
Common Shares does not automatically transfer the right to receive the relevant distribution from
the seller of Common Shares to its buyer.
In addition, if the Company is party to a consolidation, merger or binding share exchange
pursuant to which all of the Common Shares would be exchanged for cash, securities or other
property that is not otherwise a Change in Control, a Holder may surrender Notes for conversion
14
at any time from and including the date that is 15 Business Days prior to the Effective Date
of the transaction up to and including five Business Days after the actual date of such
transaction. The Company shall notify Holders as promptly as practicable following the date it
publicly announces such transaction (but in no event less than 15 Business Days prior to the
anticipated effective time of such transaction).
If a Change in Control occurs prior to the Stated Maturity as a result of a transaction
described in clauses (1) or (2) of the definition of Change in Control, a Holder will have the
right to convert its Notes at any time from and including the Effective Date of such transaction up
to and including the earlier of the 30th Business Day following the Effective Date of the
transaction and the second Business Day prior to the Stated Maturity, provided that, if a Holder
has already delivered a Change in Control Purchase Notice with respect to a Note, such Holder may
not surrender such Note for conversion until it has withdrawn such notice in accordance with the
applicable provisions of Section 2.08 hereof. The Company will notify Holders as promptly as
practicable following the date that it publicly announces such Change in Control (but in no event
later than five Business Days prior to the Effective Date of such Change in Control).
If the Company is a party to a consolidation, merger or binding share exchange (including,
without limitation, by way of a recapitalization, reclassification or change of Common Shares
(other than changes resulting from a subdivision or combination) or a sale, lease or transfer to a
third party of the Companys and the Companys subsidiaries consolidated assets substantially as
an entirety) pursuant to which all of the Common Shares are exchanged for cash, securities or other
property, then at the Effective Date of the transaction any conversion of Notes and the
determination of the sum of the Daily Share Amounts will be based on, and determined by reference
to, the kind and amount of cash, securities or other property that the Holder would have received
if such Holder had converted its Notes into Common Shares immediately prior to the Effective Date
of the transaction. For purposes of the foregoing, where a consolidation, merger or binding share
exchange involves a transaction that causes Common Shares to be exchanged into the right to receive
more than a single type of consideration based upon any form of shareholder election, such
consideration will be deemed to be the weighted average of the types and amounts of consideration
received by the holders of Common Shares that affirmatively make such an election. If a Change in
Control occurs prior to the Stated Maturity as a result of a transaction described in clauses (1)
or (2) of the definition thereof, the Company will adjust the Conversion Rate for Notes surrendered
for conversion in connection with such a Change in Control transaction, as described in Section
2.09 hereof.
(e)
Conversion Upon Delisting of the Common Shares
. A Holder of Notes may surrender any of
its Notes for conversion at any time beginning on the first Business Day after the Common Shares
have ceased to be listed on a U.S. national or regional securities exchange for a 30 consecutive
Trading Day period.
Section 2.11.
Conversion Settlement
.
Upon a conversion of Notes, the Company shall
deliver, in respect of each $1,000 principal amount of Notes being converted, cash and Common
Shares, if any, equal to the sum of the Daily Settlement Amounts for each of the 30 Trading Days
during the Observation Period.
15
The
Daily Settlement Amount
, for each of the 30 Trading Days during the Observation Period,
shall consist of:
(a) cash equal to the lesser of (i) one-thirtieth of $1,000 and (ii) the Daily
Conversion Value (defined below); and
(b) to the extent the Daily Conversion Value exceeds one-thirtieth of $1,000, a number
of Common Shares equal to (i) the difference between the Daily Conversion Value and
one-thirtieth of $1,000, divided by (ii) the Daily VWAP (defined below) for such day.
Daily Conversion Value
means, for each of the 30 consecutive Trading Days during the
Observation Period, one-thirtieth of the product of (i) the applicable Conversion Rate and (ii) the
Daily VWAP of the Common Shares on such day.
Daily VWAP
means, for each of the 30 consecutive Trading Days during the Observation Period,
the per share volume-weighted average price as displayed under the heading Bloomberg VWAP on
Bloomberg page DDR.N <equity> AQR (or its equivalent successor if such page is not
available) in respect of the period from 9:30 a.m. to 4:00 p.m. (New York City time) on such
Trading Day (or if such volume-weighted average price is unavailable, the market value of one
Common Share on such Trading Day determined, using a volume-weighted average method, by a
nationally recognized independent investment banking firm retained for this purpose by the
Company).
Observation Period
with respect to any Note means the 30 consecutive Trading Day period
beginning on and including the second Trading Day after a Note is surrendered to the Conversion
Agent for conversion, except that with respect to any Note surrendered for conversion during the
period beginning on January 15, 2012 and ending on the second Business Day prior to the Stated
Maturity, Observation Period means the first 30 Trading Days beginning on and including the 32nd
Scheduled Trading Day prior to the Stated Maturity.
For the purposes of determining payment upon conversion in accordance with the provisions of
this Section 2.11,
Trading Day
means a day during which (i) trading in Common Shares generally
occurs on the principal U.S. national or regional securities exchange or market on which Common
Shares are listed or admitted for trading and (ii) there is no Market Disruption Event.
Scheduled Trading Day
means a day that is scheduled to be a Trading Day on the principal
U.S. national or regional securities exchange or market on which Common Shares are listed or
admitted for trading.
For the purposes of determining payment upon conversion in accordance with the provisions of
this Section 2.11,
Market Disruption Event
means (i) a failure by the principal U.S. national or
regional securities exchange or market on which Common Shares are listed or admitted to trading to
open for trading during its regular trading session or (ii) the occurrence or existence prior to
1:00 p.m. on any Trading Day for Common Shares for an aggregate one half hour period of any
suspension or limitation imposed on trading (by reason of movements in price
16
exceeding limits permitted by the stock exchange or otherwise) in Common Shares or in any
options, contracts or future contracts relating to Common Shares.
The Company shall deliver the sum of the Daily Settlement Amounts for each of the 30 Trading
Days during the Observation Period to converting Holders on the third Business Day immediately
following the last day of the Observation Period.
The Company shall deliver cash in lieu of any fractional Common Share issuable in connection
with payment of the settlement amount (based on the Closing Sale Price of Common Shares on the last
day of the applicable Observation Period).
Section 2.12.
Conversion Procedures
.
To convert Notes, a Holder must satisfy the
requirements set forth in this Section 2.12.
To convert the Notes, a Holder must (a) complete and manually sign the irrevocable conversion
notice on the reverse of the Note (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent at the office maintained by the Conversion Agent for
such purpose, (b) with respect to Notes which are in certificated form, surrender the Notes to the
Conversion Agent, or, if the Notes are in book-entry form, comply with the appropriate procedures
of the Depositary, (c) furnish appropriate endorsements and transfer documents if required by the
Conversion Agent, the Company or the Trustee and (d) pay any transfer or similar tax, if required.
The date on which the Holder satisfies all such requirements shall be deemed to be the date on
which the applicable Notes shall have been tendered for conversion.
Notes in respect of which a Holder has delivered a Change in Control Purchase Notice may be
converted only if such notice is withdrawn in accordance with the terms of Section 2.08.
In case any Note shall be surrendered for partial conversion, the Company shall execute and
the Trustee shall authenticate and deliver to, or upon the written order of, the Holder of the Note
so surrendered, without charge to such Holder, a new Note or Notes in authorized denominations in
an aggregate principal amount equal to the portion of the surrendered Notes not surrendered for
conversion. A Holder may convert fewer than all of such Holders Notes so long as the Notes
converted are an integral multiple of $1,000 principal amount.
Upon surrender of a Note for conversion by a Holder, such Holder shall deliver to the Company
cash equal to the amount that the Company is required to deduct and withhold under applicable law
in connection with the conversion;
provided, however
, if the Holder does not deliver such cash, the
Company may deduct and withhold from the amount of consideration otherwise deliverable to such
Holder the amount required to be deducted and withheld under applicable law.
Upon conversion of a Note, a Holder will not receive any cash payment representing accrued and
unpaid interest (including original issue discount) on such Note, except as specified in the
immediately following paragraph. Instead, upon a conversion of Notes, the Company will deliver to
the surrendering Holder only the consideration specified in Section 2.11. Delivery of cash and
Common Shares, if any, upon a conversion of Notes will be deemed to satisfy the Companys
obligation to pay the principal of the Notes and any accrued and unpaid interest
17
(including original issue discount) thereon. Accordingly, upon a conversion of Notes, any
accrued and unpaid interest (including original issue discount) will be deemed paid in full rather
than cancelled, extinguished or forfeited. In no event will the Conversion Rate be adjusted to
account for accrued and unpaid interest (including original issue discount) on the Notes.
Holders of Notes at the close of business on a Regular Record Date for an interest payment
will receive payment of interest payable on the corresponding Interest Payment Date notwithstanding
the conversion of such Notes at any time after the close of business on the applicable Regular
Record Date. Notes surrendered for conversion by a Holder after the close of business on any
Regular Record Date for an interest payment and on or prior to the corresponding Interest Payment
Date must be accompanied by payment of an amount equal to the interest that such Holder is to
receive on such Notes on such Interest Payment Date;
provided, however
, that no such payment shall
be required to be made (1) if such Notes have been called for redemption on a Redemption Date that
is after such Regular Record Date and on or prior to such Interest Payment Date, (2) with respect
to overdue interest (including Additional Interest), if any overdue interest exists at the time of
conversion with respect to such Notes or (3) in respect of any conversion that occurs after the
Regular Record Date for the interest payment due on March 15, 2012.
Upon conversion of a Note, the Company, if it is required to deliver Common Shares, will pay
any documentary, stamp or similar issue or transfer tax due on the issue of the Common Shares upon
such conversion unless the tax is due because the Holder requests the Common Shares to be issued or
delivered to a Person other than the Holder, in which case the Holder must pay the tax due prior to
the delivery of such Common Shares. Certificates representing Common Shares will not be issued or
delivered unless all taxes and duties, if any, payable by the Holder have been paid.
A Holder of Notes, as such, shall not be entitled to any rights of a holder of Common Shares.
Such Holder shall only acquire such rights upon the delivery by the Company of Common Shares, if
any, in accordance with the provisions of Section 2.11 upon a conversion of Notes by a Holder.
If a Holder converts more than one Note at the same time, the number of Common Shares, if any,
issuable upon the conversion shall be based on the total principal amount of the Notes surrendered
for conversion.
The Company shall, prior to issuance of any Notes hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Common Shares a sufficient number of Common
Shares to permit the conversion of the Notes at the applicable Conversion Rate. Any Common Shares
delivered upon a conversion of Notes shall be newly issued shares or treasury shares, shall be duly
and validly issued and fully paid and nonassessable and shall be free from preemptive rights and
free of any lien or adverse claim.
The Company shall endeavor promptly to comply with all federal and state securities laws
regulating the issuance and delivery of Common Shares, if any, upon a conversion of Notes and shall
cause to have listed or quoted all such Common Shares on each U.S. national securities
18
exchange or over-the-counter or other domestic market on which the Common Shares are then
listed or quoted.
Except as set forth herein, no other payment or adjustment for interest shall be made upon
conversion of Notes.
Section 2.13.
Conversion Rate Adjustments
.
The Conversion Rate shall be adjusted from
time to time as follows:
(a) If the Company issues Common Shares as a dividend or distribution on Common Shares
to all holders of Common Shares, or if the Company effects a share split or share
combination, the Conversion Rate will be adjusted based on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x OS1/OS0
|
|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately
prior to the adjustment relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate in effect taking such
event into account
|
|
|
|
|
|
|
|
|
|
OS0
|
|
=
|
|
the number of Common Shares outstanding
immediately prior to such event
|
|
|
|
|
|
|
|
|
|
OS1
|
|
=
|
|
the number of Common Shares outstanding
immediately after such event.
|
Any adjustment made pursuant to this clause (a) shall become effective on the date that is
immediately after (x) the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution or (y) the date on which such split or
combination becomes effective, as applicable. If any dividend or distribution described in
this clause (a) is declared but not so paid or made, the new Conversion Rate shall be
readjusted to the Conversion Rate that would then be in effect if such dividend or
distribution had not been declared.
(b) If the Company issues to all holders of Common Shares any rights, warrants, options
or other securities entitling them for a period of not more than 45 days after the date of
issuance thereof to subscribe for or purchase Common Shares, or if the Company issues to all
holders of Common Shares securities convertible into Common Shares for a period of not more
than 45 days after the date of issuance thereof, in either case at an exercise price per
Common Share or a conversion price per Common Share less than the Closing Sale Price of the
Common Shares on the Business Day immediately preceding the time of announcement of such
issuance, the Conversion Rate will be adjusted based on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x (OS0+X)/(OS0+Y)
|
19
|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately prior to the adjustment
relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate taking such event into account
|
|
|
|
|
|
|
|
|
|
OS0
|
|
=
|
|
the number of Common Shares outstanding
immediately prior to such event
|
|
|
|
|
|
|
|
|
|
X
|
|
=
|
|
the total number of Common Shares issuable
pursuant to such rights, warrants, options, other securities or
convertible securities
|
|
|
|
|
|
|
|
|
|
Y
|
|
=
|
|
the number of Common Shares equal to the
quotient of (A) the aggregate price payable to exercise such rights,
warrants, options, other securities or convertible securities and (B)
the average of the Closing Sale Prices of the Common Shares for the 10
consecutive Trading Days prior to the Business Day immediately
preceding the date of announcement for the issuance of such rights,
warrants, options, other securities or convertible securities.
|
For purposes of this clause (b), in determining whether any rights, warrants, options, other
securities or convertible securities entitle the holders to subscribe for or purchase, or
exercise a conversion right for, Common Shares at less than the applicable Closing Sale
Price of the Common Shares, and in determining the aggregate exercise or conversion price
payable for such Common Shares, there shall be taken into account any consideration received
by the Company for such rights, warrants, options, other securities or convertible
securities and any amount payable on exercise or conversion thereof, with the value of such
consideration, if other than cash, to be determined by the Board of Directors of the
Company. If any right, warrant, option, other security or convertible security described in
this clause (b) is not exercised or converted prior to the expiration of the exercisability
or convertibility thereof, the new Conversion Rate shall be readjusted to the Conversion
Rate that would then be in effect if such right, warrant, option, other security or
convertible security had not been so issued.
(c) If the Company distributes capital shares, evidences of indebtedness or other
assets or property of the Company to all holders of Common Shares, excluding:
(i) dividends, distributions, rights, warrants, options, other securities or
convertible securities referred to in clause (a) or (b) above,
(ii) dividends or distributions paid exclusively in cash, and
(iii) Spin-Offs described below in this clause (c),
then the Conversion Rate will be adjusted based on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x SP0/(SP0-FMV)
|
20
|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately
prior to the adjustment relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate taking such event
into account
|
|
|
|
|
|
|
|
|
|
SP0
|
|
=
|
|
the Closing Sale Price of the Common Shares
on the Trading Day immediately preceding the ex-dividend date for such
distribution
|
|
|
|
|
|
|
|
|
|
FMV
|
|
=
|
|
the fair market value (as determined in good
faith by the Board of Directors of the Company) of the capital shares,
evidences of indebtedness, assets or property distributed with respect
to each outstanding Common Share on the earlier of the record date or
the ex-dividend date for such distribution.
|
An adjustment to the Conversion Rate made pursuant to the immediately preceding
clause shall be made successively whenever any such distribution is made and shall
become effective on the ex-dividend date for such distribution.
If the Company distributes to all holders of Common Shares capital shares of any
class or series, or similar equity interest, of or relating to a subsidiary or other
business unit of the Company (a
Spin-Off
), the Conversion Rate in effect immediately
before the close of business on the date fixed for determination of holders of Common
Shares entitled to receive such distribution will be adjusted based on the following
formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x (FMV0+MP0)/MP0
|
|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately
prior to the adjustment relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate taking such event
into account
|
|
|
|
|
|
|
|
|
|
FMV0
|
|
=
|
|
the average of the Closing Sale Prices of the
capital shares or similar equity interest distributed to holders of
Common Shares applicable to one Common Share over the first 10
consecutive Trading Days after the effective date of the Spin-Off
|
|
|
|
|
|
|
|
|
|
MP0
|
|
=
|
|
the average of the Closing Sale Prices of the
Common Shares over the first 10 consecutive Trading Days after the
effective date of the Spin-Off.
|
An adjustment to the Conversion Rate made pursuant to the immediately preceding
clause will occur on the 10th Trading Day from and including the effective date of the
Spin-Off.
21
If any such dividend or distribution described in this clause (c) is declared but not
paid or made, the new Conversion Rate shall be readjusted to be the Conversion Rate that
would then be in effect if such dividend or distribution had not been declared.
(d) If the Company pays or makes any cash dividend or distribution in respect of any of
its quarterly fiscal periods (without regard to when paid) to all holders of Common Shares
in an aggregate amount that, together with other cash dividends or distributions made in
respect of such quarterly fiscal period, exceeds the product of $0.66 (the
Reference
Dividend
) multiplied by the number of Common Shares outstanding on the record date for such
distribution, the Conversion Rate will be adjusted based on the following formula:
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x SP0/(SP0-C)
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|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately
prior to the adjustment relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate taking such event
into account
|
|
|
|
|
|
|
|
|
|
SP0
|
|
=
|
|
the Closing Sale Price of Common Shares on
the Trading Day immediately preceding the ex-dividend date for such
distribution
|
|
|
|
|
|
|
|
|
|
C
|
|
=
|
|
the amount in cash per Common Share that the
Company distributes to holders of Common Shares in respect of such
quarterly fiscal period that exceeds the Reference Dividend.
|
An adjustment to the Conversion Rate made pursuant to this clause (d) shall become
effective on the ex-dividend date for such dividend or distribution. If any dividend or
distribution described in this clause (d) is declared but not so paid or made, the new
Conversion Rate shall be readjusted to the Conversion Rate that would then be in effect if
such dividend or distribution had not been declared.
The Reference Dividend shall be subject to adjustment on account of any of the events
set forth in clauses (a), (b) and (c) above and clause (e) below. Any such adjustment will
be effected by multiplying the Reference Dividend by a fraction, the numerator of which will
equal the Conversion Rate in effect immediately prior to the adjustment on account of such
event and the denominator of which will equal the Conversion Rate as adjusted.
(e) If the Company or any of its subsidiaries makes a payment in respect of a tender
offer or exchange offer for Common Shares to the extent that the cash and value of any other
consideration included in the payment per Common Share exceeds the Closing Sale Price of a
Common Share 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
Expiration Time
), the
Conversion Rate will be adjusted based on the following formula:
22
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
CR0 x (AC + (SP1 x OS1))/(SP1 x OS0)
|
|
|
|
|
|
|
|
|
|
where
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CR0
|
|
=
|
|
the Conversion Rate in effect immediately
prior to the adjustment relating to such event
|
|
|
|
|
|
|
|
|
|
CR1
|
|
=
|
|
the new Conversion Rate taking such event
into account
|
|
|
|
|
|
|
|
|
|
AC
|
|
=
|
|
the aggregate value of all cash and any other
consideration (as determined by the Board of Directors of the Company)
paid or payable for Common Shares purchased in such tender or exchange
offer
|
|
|
|
|
|
|
|
|
|
OS0
|
|
=
|
|
the number of Common Shares outstanding
immediately prior to the date such tender or exchange offer expires
|
|
|
|
|
|
|
|
|
|
OS1
|
|
=
|
|
the number of Common Shares outstanding
immediately after such tender or exchange offer expires (after giving
effect to the purchase or exchange of shares pursuant to such tender or
exchange offer)
|
|
|
|
|
|
|
|
|
|
SP1
|
|
=
|
|
the average of the Closing Sale Prices of
Common Shares for the 10 consecutive Trading Days commencing on the
Trading Day next succeeding the date such tender or exchange offer
expires.
|
If the application of the foregoing formula would result in a decrease in the
Conversion Rate, no adjustment to the Conversion Rate will be made.
Any adjustment to the Conversion Rate made pursuant to this clause (e) shall become
effective on the date immediately following the determination of the average of the Closing
Sale Prices of Common Shares for purposes of SP1 above. If the Company or one of its
subsidiaries is obligated to purchase Common Shares pursuant to any such tender or exchange
offer but is permanently prevented by applicable law from effecting any such purchase or all
such purchases are rescinded, the new Conversion Rate shall be readjusted to be the
Conversion Rate that would be in effect if such tender or exchange offer had not been made.
(f) [RESERVED]
(g) If the Company has in effect a rights plan while any Notes remain Outstanding,
Holders of Notes will receive, upon a conversion of Notes in respect of which the Company is
required to deliver Common Shares, in addition to such Common Shares, rights under the
Companys shareholder rights agreement unless, prior to conversion, the rights have expired,
terminated or been redeemed or unless the rights have separated from the Common Shares. If
the rights provided for in the rights plan adopted by the Company have separated from the
Common Shares in accordance with the provisions of the applicable shareholder rights
agreement so that Holders of Notes would not be entitled to receive any rights in respect of
Common Shares, if any, that the
23
Company is required to deliver upon conversion of Notes, the Conversion Rate will be
adjusted at the time of separation as if the Company had distributed to all holders of
Common Shares capital shares, evidences of indebtedness or other assets or property pursuant
to clause (c) above, subject to readjustment upon the subsequent expiration, termination or
redemption of the rights.
In addition to the adjustments pursuant to clauses (a) through (g) above, the Company
may increase the Conversion Rate in order to avoid or diminish any income tax to holders of
Common Shares resulting from any dividend or distribution of capital shares (or rights to
acquire Common Shares) or from any event treated as such for income tax purposes. The
Company may also, from time to time, to the extent permitted by applicable law, increase the
Conversion Rate by any amount for any period if the Company has determined that such
increase would be in the best interests of the Company. If the Company makes such
determination, it will be conclusive and the Company will mail to Holders of the Notes a
notice of the increased Conversion Rate and the period during which it will be in effect at
least fifteen (15) days prior to the date the increased Conversion Rate takes effect in
accordance with applicable law.
If, in connection with any adjustment to the Conversion Rate as set forth in this
Section 2.13 a Holder shall be deemed for U.S. federal tax purposes to have received a
distribution, the Company may set off any withholding tax it reasonably believes it is
required to collect with respect to any such deemed distribution against cash payments of
interest in accordance with the provisions of Section 2.05 hereof or from cash and Common
Shares, if any, otherwise deliverable to a Holder upon a conversion of Notes in accordance
with the provisions of Section 2.11 hereof or a redemption or repurchase of a Note in
accordance with the provisions of Section 2.07 or 2.08 hereof.
The Company will not make any adjustment to the Conversion Rate if Holders of the Notes
are permitted to participate, on an as-converted basis, in the transactions described above.
Notwithstanding anything to the contrary contained herein, in addition to the other
events set forth herein on account of which no adjustment to the Conversion Rate shall be
made, the applicable Conversion Rate shall not be adjusted for:
(i) the issuance of any Common Shares pursuant to any present or future plan
providing for the reinvestment of dividends or interest payable on securities of the
Company and the investment of additional optional amounts in Common Shares under any
plan;
(ii) the issuance of any Common Shares or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit
plan, employee agreement or arrangement or program of the Company;
24
(iii) the issuance of any Common Shares pursuant to any option, warrant, right,
or exercisable, exchangeable or convertible security outstanding as of the date the
Notes were first issued;
(iv) a change in the par value of the Common Shares;
(v) accumulated and unpaid dividends or distributions; and
(vi) as a result of a tender offer solely to holders of fewer than 100 Common
Shares.
No adjustment in the Conversion Rate will be required unless the adjustment would require an
increase or decrease of at least 1% of the Conversion Rate. If the adjustment is not made because
the adjustment does not change the Conversion Rate by at least 1%, then the adjustment that is not
made will be carried forward and taken into account in any future adjustment. All required
calculations will be made to the nearest cent or 1/1000th of a share, as the case may be.
Notwithstanding the foregoing, all adjustments not previously made will be given effect with
respect to any conversion of Notes.
Whenever the Conversion Rate is adjusted as herein provided, the Company shall, as promptly as
reasonably practicable, file with the Trustee and any Conversion Agent other than the Trustee, an
Officers Certificate setting forth the Conversion Rate after such adjustment and setting forth a
brief statement of the facts requiring such adjustment. 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 the Holders of the Notes within
20 Business Days of the effective date of such adjustment. Failure to deliver such notice shall
not affect the legality or validity of any such adjustment.
For purposes of this Section 2.13, the number of Common Shares at any time outstanding shall
not include shares held in the treasury of the Company but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of Common Shares.
Notwithstanding anything in this Section 2.13 to the contrary, in no event shall the
Conversion Rate be adjusted so that the Conversion Price would be less than $0.01.
Section 2.14.
Ownership Limit; Withholding
. Notwithstanding any other provision of
the Notes or the instructions contained herein, no Holder of Notes shall be entitled to convert
such Notes for Common Shares to the extent that receipt of such shares would cause such Holder
(together with such Holders affiliates) to exceed the ownership limit contained in the Articles of
Incorporation of the Company as in effect from time to time.
At the Maturity of the principal of the Notes, whether at Stated Maturity or upon earlier
redemption or repurchase of Notes or otherwise, and as otherwise required by law, the Company may
deduct and withhold from the amount of consideration otherwise deliverable to such Holder the
amount required to be deducted and withheld under applicable law.
25
Section 2.15.
Merger, Consolidation or Sale
.
Section 801 of the Indenture, for purposes of the Notes, is hereby modified and amended to
include the following additional proviso:
(iii) if as a result of such transaction the Notes become exchangeable into common
stock or other securities issued by a third party, such third party shall assume or fully
and unconditionally guarantee all obligations under the Notes and the Indenture.
Section 2.16.
Satisfaction and Discharge.
The provisions of ARTICLE FOURTEEN of the
Indenture shall not be applicable to the Notes. The Company may satisfy and discharge its
obligations under the Indenture by delivering to the Trustee for cancellation all Outstanding Notes
or by depositing with the Trustee, the Paying Agent or the Conversion Agent, if applicable, after
the Notes have become due and payable, whether on the date of the Stated Maturity of the principal
amount of the Notes, any Redemption Date or Change in Control Purchase Date or upon conversion or
otherwise, cash or Common Shares in accordance with the terms hereof sufficient to pay all of the
Outstanding Notes and paying all other sums payable under the Notes and the Indenture in respect of
the Notes.
Section 2.17.
Events of Default; Waiver of Past Defaults
.
(a) Section 501 of the Indenture is modified and amended for purposes of the Notes to add the
following Events of Default as clauses (9) and (10):
default in the delivery when due of the amounts owing upon conversion, on the terms
set forth herein and in the Notes, upon exercise of a Holders conversion right in
accordance with the terms hereof and of the Notes and the continuation of such default for
10 days;
-and-
failure of the Company to provide a Company Notice within 20 days after the occurrence
of a Change in Control as provided in Section 2.08 of the Eighth Supplemental Indenture.
(b) Clause five of Section 501 of the Indenture is modified and amended for purposes of the
Notes to read as follows :
if any event of default under any bond, debenture, note or other evidence of
indebtedness of the Company (including an event of default with respect to any other series
of securities), or under any mortgage, indenture or other instrument of the Company under
which there may be issued or by which there may be secured or evidenced any indebtedness of
the Company (or by any Subsidiary, the repayment of which the Company has guaranteed or for
which the Company is directly responsible or liable as obligor or guarantor), whether such
indebtedness now exists or shall hereafter be created, shall happen and shall result in an
aggregate principal amount exceeding $25,000,000 becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable, without such
indebtedness having been
26
discharged, or such acceleration having been waived, rescinded or annulled, within a
period of 10 days after there shall have been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at least 10% in
principal amount of the Outstanding Securities of that series a written notice specifying
such default and requiring the Company to cause such indebtedness to be discharged or cause
such acceleration to be rescinded or annulled and stating that such notice is a Notice of
Default hereunder. Subject to the provisions of Section 601, the Trustee shall not be
deemed to have knowledge of such default unless either (A) a Responsible Officer of the
Trustee shall have actual knowledge of such default or (B) the Trustee shall have received
written notice thereof from the Company, from any Holder, from the holder of any such
indebtedness or from the trustee under any such mortgage, indenture or other instrument;
(c) Section 502 of the Indenture is modified and amended with respect to the Notes to add the
following as the final two paragraphs thereto:
Notwithstanding the foregoing, to the extent elected by the Company, the sole remedy
for an Event of Default relating to the failure to comply with the reporting obligations
under Section 1010 of the Indenture or for any failure to comply with the requirements of
Section 314(a)(1) of the Trust Indenture Act, will for the first 365 days after the
occurrence of such an Event of Default consist exclusively of the right to receive special
interest (Special Interest) on the Notes at an annual rate equal to 0.50% of the principal
amount of the Notes. This Special Interest shall be payable semi-annually in arrears, with
the first semi-annual payment due on the first Interest Payment Date following the date on
which such Special Interest shall have begun to accrue on the Notes. Special Interest shall
accrue on all Outstanding Notes from and including the date on which an Event of Default
relating to a failure to comply with the reporting obligations in Section 1010 of the
Indenture or the requirements of Section 314(a)(1) of the Trust Indenture Act first occurs
to but not including the 365th day thereafter (or such earlier date on which such Event of
Default shall have been cured or waived). On such 365th day (or earlier, if such Event of
Default is cured or waived prior to such 365th day), such Special Interest shall cease to
accrue and, if the Event of Default relating to reporting obligations has not been cured or
waived prior to such 365th day, the Notes shall be subject to acceleration as provided in
the first paragraph of this Section 502. The provisions of the Indenture described in this
paragraph shall not affect the rights of Holders in the event of the occurrence of any other
Event of Default. In the event the Company does not elect to pay Special Interest upon an
Event of Default in accordance with this paragraph, the Notes shall be subject to
acceleration as provided in the first paragraph of this Section 502.
If the Company elects to pay Special Interest in connection with an Event of Default
relating to the failure to comply with the reporting obligations under Section 1010 of the
Indenture or for any failure to comply with the requirements of Section 314(a)(1) of the
Trust Indenture Act in accordance with the immediately preceding paragraph, the Company
shall notify all Holders of Notes and the Trustee and Paying Agent of such election on or
before the close of business on the date on which such Event of Default first occurs.
27
(d) Section 508 of the Indenture is modified and amended for purposes of the Notes to read as
follows:
Notwithstanding any other provision in this Indenture, the Holder of any Note shall
have the right which is absolute and unconditional to receive payment of the principal of,
and (subject to Sections 305 and 307) interest on, and amounts owing upon conversion in
respect of, such Note on the respective due dates expressed in such Note (or, in the case of
redemption on the Redemption Date) and to institute suit for the enforcement of any such
payment, and such rights shall not be impaired without the consent of such Holder.
(e) Section 513 of the Indenture is modified and amended for purposes of the Notes to add the
following as clause (3):
(3) in respect of the failure to convert any Notes in accordance with their terms.
Section 2.18.
Modification
. Section 902 of the Indenture is modified for purposes of
the Notes to add the following as clauses (4) and (5):
(4) impair the right to institute suit for the enforcement of the payment and delivery
of amounts owing upon conversion of the Notes; or
(5) make any change that impairs or adversely affects the rights of a Holder to convert
Notes in accordance with the terms hereof and the Notes; or
Section 2.19.
Certain Covenants Not Applicable to the Notes.
The Notes shall not be
entitled to the benefits of the covenants set forth in Section 1004, Section 1005, Section 1011 and
Section 1015 of the Indenture.
Section 2.20.
Calculations in Respect of the Notes
. Except as otherwise specifically
stated herein or in the Notes, all calculations to be made in respect of the Notes shall be the
obligation of the Company. All calculations made by the Company or its agent as contemplated
pursuant to the terms hereof and of the Notes shall be made in good faith and be final and binding
on the Company and the Holders absent manifest error. The Company shall provide a schedule of
calculations to the Trustee, and the Trustee shall be entitled to rely upon the accuracy of the
calculations by the Company without independent verification. The Trustee shall forward
calculations made by the Company to any Holder of Notes upon written request within 20 Business
Days after the effective date of any adjustment.
Section 2.21.
Authorized Denominations
. The Notes shall be issued in denominations of
$1,000 and integral multiples thereof and payments of principal, interest (including Additional
Interest) and Additional Amounts, if any, on the Notes shall be made in U.S. dollars.
Section 2.22.
Conversion Agent, Paying Agent and Securities Registrar
. U.S. Bank
Trust National Association, is hereby appointed as Conversion Agent, Paying Agent and the Security
Registrar for the Notes. The Security Register for the Notes will be maintained by the Security
Registrar at the Trustees Corporate Trust Office. The rights, privileges, protections, immunities
and benefits given to the Trustee pursuant to the Indenture, including, without
28
limitation, its right to be indemnified, are extended to, and shall be enforceable by, each of
the Conversion Agent, the Paying Agent and the Security Registrar.
Section 2.23.
Restrictions on Transfer.
(a) Every Note (and all Notes issued in
exchange therefor or in substitution thereof) that bears or is required under this Section 2.23(a)
to bear the legend set forth in this Section 2.23(a) (together with any Common Shares issued upon
conversion of the Notes, collectively, the
Restricted Securities
) shall be subject to the
restrictions on transfer set forth in this Section 2.23(a) (including those set forth in the legend
below) unless such restrictions on transfer shall be waived by written consent of the Company, and
the Holder of each such Restricted Security, by such Holders acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in this Section 2.23(a), the term transfer
means any sale, pledge, loan, transfer or other disposition whatsoever of any Restricted Security
or any interest therein.
Until the expiration of the holding period applicable to sales of Restricted Securities under
Rule 144(k) under the Securities Act (or any successor provision), any certificate evidencing a
Restricted Security shall bear a legend in substantially the following form, unless such Restricted
Security has been sold pursuant to a registration statement that has been declared effective under
the Securities Act (and which continues to be effective at the time of such transfer) or sold
pursuant to Rule 144 under the Securities Act or any similar provision then in force, or unless
otherwise agreed by the Company in writing, with written notice thereof to the Trustee:
THIS SECURITY AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IS AWARE THAT THE TRANSFER TO IT IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE
SECURITIES ACT AND IS ACQUIRING THIS SECURITY IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT;
(2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS
SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY OR THE COMMON SHARES ISSUABLE UPON CONVERSION
OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (D)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT AND
WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
29
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR THE COMMON SHARES
ISSUABLE UPON CONVERSION OF THIS SECURITY ARE TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
2(C) OR 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS
SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE
OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE
LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY.
PURSUANT TO SECTIONS 1271 THROUGH 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS
SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. TO OBTAIN (I) THE ISSUE PRICE OF THIS
SECURITY, (II) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, (III) THE ISSUE DATE, AND (IV) THE YIELD TO
MATURITY; CONTACT INVESTOR RELATIONS AT 3300 ENTERPRISE PARKWAY, BEACHWOOD, OHIO 44122 OR BY PHONE
AT (216) 755-5500.
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS
SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE
HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.
Any Notes that are Restricted Securities and as to which such restrictions on transfer shall
have expired in accordance with their terms or as to conditions for removal of the foregoing legend
set forth therein have been satisfied may, upon surrender of such Note for exchange to the
Securities Registrar in accordance with the provisions of this Section 2.23, be exchanged for a new
Note or Notes, of like tenor and aggregate principal amount, which shall not bear the restrictive
legend required by this Section 2.23(a). If such Restricted Security surrendered for exchange is
represented by a global Note bearing the legend set forth in this Section 2.23(a), the principal
amount of the legended global Note shall be reduced by the appropriate principal amount and the
principal amount of a global Note without the legend set forth in this Section 2.23(a) shall be
increased by an equal principal amount. If a global Note without the legend set
30
forth in this Section 2.23(a) is not then Outstanding, the Issuer shall execute and the
Trustee shall authenticate and deliver an unlegended global Note to the Depositary.
In the event Rule 144(k) under the Securities Act (or any successor provision) is amended to
shorten the two-year period under Rule 144(k), then, the references in the restrictive legends set
forth above to TWO YEARS, and in the corresponding transfer restrictions described above, and in
the Notes and the Common Shares will be deemed to refer to such shorter period, from and after
receipt by the Trustee of an Officers Certificate and an Opinion of Counsel to that effect. As
soon as reasonably practicable after the Company knows of the effectiveness of any such amendment
to shorten the two-year period under Rule 144(k), unless such changes would otherwise be prohibited
by, or would cause a violation of, the federal securities laws applicable at the time, the Company
will provide to the Trustee an Officers Certificate and an Opinion of Counsel as to the
effectiveness of such amendment and the effectiveness of such change to the restrictive legends and
transfer restrictions.
(b) Any Restricted Securities, prior to the expiration of the holding period applicable to
sales thereof under Rule 144(k) under the Securities Act (or any successor provision), purchased or
owned by the Company or any Affiliate thereof may not be resold by the Company or such Affiliate
and will be surrendered to the Trustee for cancellation. Upon expiration of the holding period
applicable to Restricted Securities under Rule 144(k) under the Securities Act (or any successor
provision), the Notes may, to the extent permitted by applicable law, be reissued or sold or may be
surrendered to the Trustee for cancellation. Any Notes surrendered for cancellation may not be
reissued or resold and will be canceled promptly by the Trustee.
(c) The Trustee shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this instrument or under applicable law
with respect to any transfer of any interest in any Note other than to require delivery of such
certificates and other documentation or evidence as are expressly required by, and to do so if and
when expressly required by, the terms of this instrument, and to examine the same to determine
substantial compliance as to form with the express requirements hereof.
Section 2.24.
Rule 144A Information Requirement.
Within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k) under the Securities
Act (or any successor provision), the Company covenants and agrees that it shall, during any period
in which it is not subject to Section 13 or 15(d) under the Exchange Act, make available to any
Holder or beneficial owner of Notes or any Common Shares issued upon conversion thereof which
continue to be Restricted Securities in connection with any sale thereof and any prospective
purchaser of Notes or such Common Shares designated by such Holder or beneficial owner, the
information required pursuant to Rule 144A(d)(4) under the Securities Act upon the request of any
Holder or beneficial owner of the Notes or such Common Shares, all to the extent required to enable
such Holder or beneficial owner to sell its Notes or Common Shares without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A.
Section 2.25.
Provision of Financial Information.
The Company, for so long as any
Notes are Outstanding, within 15 days after it is required to file the same with the Commission,
will furnish to the Holders of the Notes, or cause the Trustee to furnish to the Holders of the
31
Notes, all annual, quarterly and other reports that it may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act. Delivery of such reports,
information and documents to the Trustee is for informational purposes only and the Trustees
receipt of such shall not constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Companys compliance with any of its
covenants hereunder (as to which the Trustee is entitled to rely exclusively on an Officers
Certificate). If the Company is not required to file the foregoing forms or reports with the
Commission, then it will file with the Trustee and the Commission such reports as may be prescribed
by the Commission at such time.
Section 2.26.
Additional or Special Interest Notice.
In the event that the Company is
required to pay Additional Interest to Holders of Notes pursuant to the Registration Rights
Agreement or shall have elected to pay Special Interest in accordance with the provisions of
Section 2.17(c), the Company will provide written notice (
Additional or Special Interest Notice
)
to the Trustee of its obligation to pay Additional Interest or its election to pay Special Interest
no later than fifteen (15) calendar days prior to the proposed payment date for Additional Interest
or Special Interest, and the Additional or Special Interest Notice shall set forth the amount of
Additional Interest or Special Interest to be paid by the Company on such payment date. The
Trustee shall not at any time be under any duty or responsibility to any Holder of Notes to
determine the Additional Interest or Special Interest, or with respect to the nature, extent or
calculation of the amount of Additional Interest or Special Interest when made, or with respect to
the method employed in such calculation of the Additional Interest or Special Interest.
ARTICLE THREE
FORM OF NOTES
Section 3.01.
Form of Notes
. The Notes and the Trustees certificate of
authentication to be borne by such Notes shall be substantially in the form set forth in Exhibit A
hereto. Any of the Notes may have such letters, numbers or other marks of identification and such
notations, legends, endorsements or changes as the officers executing the same may approve
(execution thereof to be conclusive evidence of such approval) and as are not inconsistent with
the provisions of the Indenture, or as may be required by the Depositary or by the National
Association of Securities Dealers, Inc. in order for the Notes to be eligible for trading on The
PORTAL
SM
Market or as may be required for the Notes to be tradable on any other market
developed for trading of securities pursuant to Rule 144A or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any securities exchange or automated quotation system on which the Notes may be listed, or to
conform to usage, or to indicate any special limitations or restrictions to which any particular
Notes are subject.
ARTICLE FOUR
MISCELLANEOUS
Section 4.01.
Relation to Original Indenture
. This Eighth Supplemental Indenture
supplements the Original Indenture and shall be a part of and subject to all the terms thereof.
Except as supplemented hereby, all of the terms, provisions and conditions of the Original
Indenture and the Securities issued thereunder shall continue in full force and effect.
32
Section 4.02.
Concerning the Trustee
. The Trustee shall not be responsible for any
recital herein, as such recitals shall be taken as statements of the Company, or the validity of
the execution by the Company of this Eighth Supplemental Indenture. The Trustee makes no
representations as to the validity or sufficiency of this instrument.
Section 4.03.
Effect of Headings
. The Article and Section headings herein are for
convenience of reference only and shall not affect the construction hereof.
Section 4.04.
Counterparts
. This instrument may be executed in counterparts, each of
which shall be deemed an original, but all of which shall together constitute one and the same
instrument.
Section 4.05.
Governing Law
. This instrument shall be governed by and construed in
accordance with the laws of the State of Ohio.
[signature page follows]
33
IN WITNESS WHEREOF, the parties hereto have caused this Eighth Supplemental Indenture to
be duly executed as of the day and year first above written.
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DEVELOPERS DIVERSIFIED REALTY CORPORATION
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By:
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/s/ William H. Schafer
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Name:
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William H. Schafer
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Title:
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Executive Vice President and Chief
Financial Officer
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Attest:
/s/ Joan U. Allgood
Name: Joan U. Allgood
Title: Secretary
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U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
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By:
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/s/ K. Wendy Kumar
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Name:
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K. Wendy Kumar
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Title:
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Vice President
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Attest:
/s/ Beverly A. Freeney
Name: Beverly A. Freeney
Title: Vice President
34
Exhibit A
[FORM OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
3.00% Convertible Senior Note due 2012
[Include only for Global Notes]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY,
A NEW YORK CORPORATION (DTC), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY 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 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.
UNLESS AND UNTIL THIS NOTE IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN CERTIFICATED FORM,
THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY DTC TO A NOMINEE THEREOF OR BY A NOMINEE
THEREOF TO DTC OR ANOTHER NOMINEE OF DTC OR BY DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR A
NOMINEE OF SUCH SUCCESSOR.
[Include only for Notes that are Restricted Securities]
THIS SECURITY AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE SECURITIES ACT), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY
ITS ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT), IS AWARE THAT THE TRANSFER TO IT IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE
SECURITIES ACT AND IS ACQUIRING THIS SECURITY IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT;
(2) AGREES THAT IT WILL NOT, WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE OF THIS
SECURITY AND THE LAST DATE ON WHICH DEVELOPERS DIVERSIFIED REALTY CORPORATION (THE COMPANY) OR AN
AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY, RESELL OR OTHERWISE TRANSFER THIS SECURITY OR THE
COMMON SHARES ISSUABLE
A - 1
UPON CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO
A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) PURSUANT
TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(D) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
AND WHICH CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY OR THE COMMON SHARES
ISSUABLE UPON CONVERSION OF THIS SECURITY ARE TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE
2(C) OR 2(D) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THIS SECURITY WITHIN TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE DATE OF THIS
SECURITY AND THE LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS
SECURITY, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS SECURITY TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS
APPLICABLE). IF THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE 2(C) ABOVE, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE TRUSTEE (OR ANY SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS THE COMPANY OR THE TRUSTEE MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL
BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THIS SECURITY PURSUANT TO CLAUSE 2(C) OR 2(D) ABOVE
OR THE EXPIRATION OF TWO YEARS FROM THE LATER OF THE ORIGINAL ISSUE DATE OF THIS SECURITY AND THE
LAST DATE ON WHICH THE COMPANY OR AN AFFILIATE THEREOF WAS THE OWNER OF THIS SECURITY.
[Include for all Notes]
PURSUANT TO SECTIONS 1271 THROUGH 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS
SECURITY HAS BEEN ISSUED WITH ORIGINAL ISSUE DISCOUNT. TO OBTAIN (I) THE ISSUE PRICE OF THIS
SECURITY, (II) THE AMOUNT OF ORIGINAL ISSUE DISCOUNT, (III) THE ISSUE DATE, AND (IV) THE YIELD TO
MATURITY; CONTACT INVESTOR RELATIONS AT 3300 ENTERPRISE PARKWAY, BEACHWOOD, OHIO 44122 OR BY PHONE
AT (216) 755-5500.
[Include only for Notes that are Restricted Securities]
THE HOLDER OF THIS SECURITY IS ENTITLED TO THE BENEFITS OF A REGISTRATION RIGHTS AGREEMENT (AS
SUCH TERM IS DEFINED IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF) AND, BY ITS ACCEPTANCE
HEREOF, AGREES TO BE BOUND BY AND TO COMPLY WITH THE PROVISIONS OF SUCH REGISTRATION RIGHTS
AGREEMENT.
A - 2
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NO. 001
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PRINCIPAL AMOUNT
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CUSIP NO. 251591AR4
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$
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DEVELOPERS DIVERSIFIED REALTY CORPORATION
3.00% Convertible Senior Note due 2012
DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the Company, which term
shall include any successor under the Indenture hereinafter referred to), for value received,
hereby promises to pay to Cede & Co., or its registered assigns,
the principal sum of Million Dollars ($ ) on March 15, 2012 unless redeemed, repurchased or converted prior to such
date in accordance with the terms hereof and of the Indenture.
This Note shall bear interest as specified on the reverse hereof. This Note is convertible
for the consideration specified on the reverse hereof. This Note is subject to redemption by the
Company at its option and to repurchase by the Company at the option of the Holder as specified on
the reverse hereof.
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.
This Note shall not be entitled to the benefits of the Indenture or be valid or become
obligatory for any purpose until the certificate of authentication hereon shall have been signed by
the Trustee.
A - 3
IN WITNESS WHEREOF, the Company has caused this Note to be signed manually or by facsimile by
an authorized signatory.
Dated: March 13, 2007
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DEVELOPERS DIVERSIFIED REALTY CORPORATION
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By:
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Name:
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Title:
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Attest:
Name:
Title:
TRUSTEES CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred to in the
within-mentioned Indenture.
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U.S. BANK TRUST NATIONAL ASSOCIATION
as Trustee
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By:
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Authorized Signatory
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A - 4
[REVERSE OF NOTE]
DEVELOPERS DIVERSIFIED REALTY CORPORATION
3.00% Convertible Senior Note due 2012
This Note is one of a duly authorized issue of notes, debentures, bonds, or other evidences of
indebtedness of the Company (hereinafter called the Securities) of the series hereinafter
specified, all issued or to be issued under and pursuant to an Indenture, dated as of May 1, 1994
(as amended and supplemented by the First Supplemental Indenture, dated as of May 10, 1995, by the
Second Supplemental Indenture, dated as of July 18, 2003, by the Third Supplemental Indenture,
dated as of January 23, 2004, by the Fourth Supplemental Indenture, dated as of April 22, 2004, by
the Fifth Supplemental Indenture, dated as of April 28, 2005, by the Sixth Supplemental Indenture,
dated as of October 7, 2005, by the Seventh Supplemental Indenture, dated as of August 28, 2006,
and by the Eighth Supplemental Indenture, dated as of March 13, 2007, and as further amended or
supplemented from time to time, the Indenture), duly executed and delivered by Developers
Diversified Realty Corporation, an Ohio corporation (the Company), to U.S. Bank Trust National
Association, as trustee (the Trustee, which term includes any successor trustee under the
Indenture with respect to the series of Securities of which this Note is a part), and reference is
hereby made to the Indenture, and all modifications and amendments and indentures supplemental
thereto relating to the Notes, for a description of the rights, limitations of rights, obligations,
duties, and immunities thereunder of the Trustee, the Company, and the Holders of the Notes and the
terms upon which the Notes are authenticated and delivered. The Securities may be issued in one or
more series, which different series may be issued in various aggregate principal amounts, may
mature at different times, may accrue interest (if any) at different rates or formulas and may
otherwise vary as provided in the Indenture. This Note is one of a series of Securities designated
as the 3.00% Convertible Senior Notes due 2012 of the Company, initially limited (except as
permitted under the Indenture) in aggregate principal amount to $600,000,000. Terms used herein
without definition and which are defined in the Indenture have the meanings assigned to them in the
Indenture.
1.
INTEREST
The Notes shall bear interest at the rate of 3.00% per annum from March 13, 2007 or from the
most recent Interest Payment Date (as defined below) to which interest has been paid or duly
provided for, as the case may be, payable semi-annually in arrears on March 15 and September 15 of
each year (each, an Interest Payment Date), commencing on September 15, 2007, until the principal
hereof is paid or duly made available for payment. Interest payable on each Interest Payment Date
shall equal the amount of interest accrued for the period commencing on and including the
immediately preceding Interest Payment Date in respect of which interest has been paid or duly
provided for (or commencing on and including March 13, 2007, if no interest has been paid or duly
provided for) and ending on and including the day immediately preceding such Interest Payment Date.
Interest on the Notes will be computed on the basis of a 360-day year consisting of twelve 30-day
months. Additional Interest and Special Interest shall be payable in respect of the Notes in the
manner and to the extent specified in the Indenture.
A - 5
2.
METHOD OF PAYMENT
Except as provided in the Indenture, the Company shall pay interest on the Notes to the
Persons who are Holders of record of Notes at the close of business (whether or not a Business Day)
on the March 1 and September 1 immediately preceding the applicable Interest Payment Date (each, a
Regular Record Date). Holders must surrender Notes to a Paying Agent and comply with the other
terms of the Indenture to collect the principal amount, Redemption Price or Change in Control
Purchase Price of the Notes, plus, if applicable, accrued and unpaid interest (including Additional
Interest, if any) payable as herein provided at maturity, upon redemption by the Company in order
to preserve the status of the Company as a real estate investment trust or repurchase at the
Holders option upon a Change in Control. The Company shall pay, in money of the United States
that at the time of payment is legal tender for payment of public and private debts, all amounts
due in cash with respect to the Notes on the dates and in the manner provided in this Note and the
Indenture.
3.
PAYING AGENT, CONVERSION AGENT AND SECURITY REGISTRAR
Initially, the Trustee shall act as Paying Agent, Conversion Agent and Security Registrar.
The Company hereby initially designates the Corporate Trust Office of the Trustee in the Borough of
Manhattan, The City of New York as the office to be maintained by it where this Note may be
presented for payment, registration of transfer or exchange, where notices or demands to or upon
the Company in respect of this Note or the Indenture may be served and where the Notes may be
surrendered for conversion in accordance with the provisions of paragraph 6 hereof and the
Indenture. The Company may appoint and change any Paying Agent, Conversion Agent, Security
Registrar or co-registrar or approve a change in the office through which any Paying Agent acts
without notice, other than notice to the Trustee.
4.
REDEMPTION BY THE COMPANY
If the Company determines it is necessary to redeem the Notes for cash in order to preserve
the status of the Company as a real estate investment trust, the Company may redeem the Notes then
Outstanding, in whole or in part, at 100% of the principal amount of the Notes to be redeemed plus
unpaid interest (including Additional Interest, if any) accrued thereon to the Redemption Date (the
Redemption Price).
Notice of any such redemption shall be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder of Notes to be redeemed at the Holders registered
address. Notes in denominations larger than $1,000 principal amount may be redeemed in part but
only in integral multiples of $1,000 principal amount.
5.
REPURCHASE AT OPTION OF HOLDER UPON A CHANGE IN CONTROL
(a) If a Change in Control occurs prior to the Stated Maturity, a Holder shall have the right,
at such Holders option and subject to the terms and conditions of the Indenture, to require the
Company to repurchase all or any of such Holders Notes having a principal amount equal to $1,000
or an integral multiple thereof on the date (the Change in Control Purchase Date) specified by
the Company in the Company Notice (which date shall be no earlier than 15 days and no later than 30
days after the date of such Company Notice) for cash equal to 100% of
A - 6
the principal amount of the Notes to be repurchased plus unpaid interest (including Additional
Interest, if any) accrued thereon to the Change in Control Purchase Date (the Change in Control
Purchase Price).
(c) Holders have the right to withdraw any Change in Control Purchase Notice by delivery to
the Paying Agent of a written notice of withdrawal in accordance with the provisions of the
Indenture.
(d) If the Paying Agent holds, in accordance with the terms of the Indenture, money sufficient
to pay the Change in Control Purchase Price of such Notes on the Change in Control Purchase Date,
then, on and after such date, such Notes shall cease to be Outstanding and interest on such Notes
shall cease to accrue, and all other rights of the Holder shall terminate (other than the right to
receive the Change in Control Purchase Price upon delivery or transfer of the Notes).
6.
CONVERSION
The Notes shall be convertible into the consideration specified in the Indenture at such
times, upon compliance with such conditions and upon the terms set forth in the Indenture.
The initial Conversion Rate shall be 13.3783 Common Shares per $1,000 principal amount of
Notes, subject to adjustment in certain circumstances as specified in the Indenture. Notes
tendered for conversion by a Holder after the close of business on any Regular Record Date for an
interest payment and on or prior to the corresponding Interest Payment Date must be accompanied by
payment of an amount equal to the interest that such Holder is to receive on such Notes on such
Interest Payment Date;
provided, however
, that no such payment shall be required (1) if such Notes
have been called for redemption on a Redemption Date that is after such Regular Record Date and on
or prior to such Interest Payment Date, (2) with respect to overdue interest, if any overdue
interest exists at the time of conversion with respect to such Notes or (3) in respect of any
conversion that occurs after the Regular Record Date for the interest payment due on March 15,
2012.
The Conversion Rate applicable to each Note a notice of conversion in respect of which is
received by the Conversion Agent from and including the Effective Date of a Change in Control
resulting from a transaction described in clauses (1) or (2) of the definition of Change in Control
up to and including the earlier of the 30th Business Day following the Effective Date of such
Change in Control and the Stated Maturity of the Notes shall be increased by the number of
Additional Shares specified in the Indenture.
To convert this Note, the Holder must (a) complete and manually sign the irrevocable
conversion notice set forth below (or complete and manually sign a facsimile of such notice) and
deliver such notice to the Conversion Agent at the office maintained by the Conversion Agent for
such purpose, (b) if this Note is in certificated form, surrender such Note to the Conversion
Agent, (c) furnish appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (d) pay any transfer or similar tax, if required. The date on
which the Holder satisfies all such requirements shall be deemed to be the date on which this Note
shall have been surrendered for conversion.
A - 7
If the Holder has delivered a Change in Control Purchase Notice requiring the Company to
repurchase all or a portion of this Note pursuant to paragraph 5 hereof, then this Note (or portion
hereof subject to such Change in Control Purchase Notice) may be converted only if the Change in
Control Purchase Notice is withdrawn in accordance with the terms of the Indenture.
7.
RANKING
The Notes are senior unsecured obligations of the Company and shall rank pari passu in right
of payment with all other senior unsecured indebtedness of the Company from time to time
outstanding.
8.
DEFAULTED INTEREST
Except as otherwise specified herein or in the Indenture, any Defaulted Interest on this Note
shall forthwith cease to be payable to the Holder hereof on the relevant Regular Record Date by
virtue of having been such Holder, and such Defaulted Interest may be paid by the Company as
provided for in Section 307 of the Indenture.
9.
DENOMINATIONS; TRANSFER; CONVERSION
This Note is issuable only in fully registered form, without coupons, in denominations of
$1,000 and integral multiples thereof. This Note may be exchanged for a like aggregate principal
amount of Notes of other authorized denominations at the office or agency of the Company in The
City of New York, in the manner and subject to the limitations provided herein and in the
Indenture, but without the payment of any charge except for any tax or other governmental charge
imposed in connection therewith. Upon due presentment for registration of transfer of this Note at
the office or agency of the Company in The City of New York, one or more new Notes of authorized
denominations in an equal aggregate principal amount will be issued to the transferee in exchange
therefor, and bearing such restrictive legends as may be required by the Indenture, but without
payment of any charge except for any tax or other governmental charge imposed in connection
therewith. In the event of any redemption in part, the Company shall not be required to: (i) issue
or register the transfer or exchange of any Note during a period beginning at the opening of
business 15 days before any selection of Notes to be redeemed and ending at the close of business
on the day of mailing of the relevant notice of redemption, or (ii) register the transfer or
exchange of any Note, or portion thereof, called for redemption, except the unredeemed portion of
any Note redeemed in part.
10.
PERSONS DEEMED OWNERS
The Holder of this Note may be treated as the owner of this Note for all purposes, and neither
the Company or the Trustee nor any authorized agent of the Company or the Trustee shall be affected
by any notice to the contrary, except as required by law.
11.
ADDITIONAL RIGHTS OF HOLDERS
In addition to the rights provided to Holders of Notes under the Indenture, Holders shall have
all the rights set forth in the Registration Rights Agreement, dated as of March 13, 2007, among
the Company and the Initial Purchasers named therein.
A - 8
12.
MODIFICATION AND AMENDMENT; WAIVER
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and
the modification of the rights and obligations of the Company and the rights of the Holders of the
Securities under the Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in the aggregate principal amount of all Outstanding Securities affected
thereby (voting together as a single class). The Indenture also provides that certain amendments
or modifications may not be made without the consent of each Holder to be affected thereby.
Furthermore, provisions in the Indenture permit the Holders of a majority in the aggregate
principal amount of the Outstanding Securities of any series, in certain instances, to waive, on
behalf of all of the Holders of Securities of such series, certain past defaults under the
Indenture and their consequences. Any such waiver by the Holder of this Note shall be conclusive
and binding upon such Holder and upon all future Holders of this Note and other Notes issued upon
the registration of transfer hereof or in exchange hereof, or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Note.
13.
DEFAULTS AND REMEDIES
If an Event of Default occurs and is continuing, the Trustee, or the Holders of not less than
25% in aggregate principal amount of the Notes at the time Outstanding, may declare the principal
amount and any accrued and unpaid interest, of all the Notes to be due and payable or in the manner
and with the effect provided in the Indenture.
Notwithstanding the foregoing, to the extent elected by the Company, the sole remedy for an
Event of Default relating to the failure to comply with the reporting obligations under Section
1010 of the Indenture or for any failure to comply with the requirements of Section 314(a)(1) of
the Trust Indenture Act, will for the first 365 days after the occurrence of such an Event of
Default consist exclusively of the right to receive special interest on the Notes at an annual rate
equal to 0.50% of the principal amount of the Notes, in the manner and with the effect provided in
the Indenture.
Events of Default in respect of the Notes are set forth in Section 501 of the Indenture.
Holders may not enforce the Indenture or the Notes except as provided in the Indenture.
14.
CONSOLIDATION, MERGER, AND SALE OF ASSETS
In the event of a consolidation or merger of the Company or a sale, lease or conveyance of all
or substantially all of the assets of the Company, as described in ARTICLE EIGHT of the Indenture,
the successor entity to the Company shall succeed to and be substituted for the Company and may
exercise the rights and powers of the Company under the Indenture, and thereafter, except in the
case of a lease, the Company shall be relieved of all obligations and covenants under the Indenture
and the Notes.
15.
CERTAIN COVENANTS NOT TO APPLY
The Notes shall not be entitled to the benefits of the covenants set forth in Section 1004,
Section 1005, Section 1011 and Section 1015 of the Indenture.
A - 9
16.
TRUSTEE AND AGENT DEALINGS WITH THE COMPANY
The Trustee, Paying Agent, Conversion Agent and Securities Registrar under the Indenture, each
in its individual or any other capacity, may become the owner or pledgee of Notes and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise
deal with the Company or its Affiliates with the same rights it would have if it were not Trustee,
Paying Agent, Conversion Agent or Registrar.
17.
CALCULATIONS IN RESPECT OF THE NOTES
Except as otherwise specifically stated herein or in the Indenture, all calculations to be
made in respect of the Notes shall be the obligation of the Company. All calculations made by the
Company or its agent as contemplated pursuant to the terms hereof and of the Indenture shall be
final and binding on the Company and the Holders absent manifest error. The Company shall provide a
schedule of calculations to the Trustee, and the Trustee shall be entitled to rely upon the
accuracy of the calculations by the Company without independent verification. The Trustee shall
forward calculations made by the Company to any Holder of Notes upon written request.
18.
GOVERNING LAW
The Indenture and this Note shall be governed by and construed in accordance with the laws of
the State of Ohio.
A - 10
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
.
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or Typewrite Name and Address
Including Postal Zip Code of Assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
to transfer said Note on the books of the Company, with full power of substitution in the premises.
In connection with any transfer of the Note prior to the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any successor provision)
(other than any transfer pursuant to a registration statement that has been declared effective
under the Securities Act), the undersigned confirms that such Note is being transferred:
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To Developers Diversified Realty Corporation or any of its subsidiaries; or
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To a qualified institutional buyer in compliance with Rule 144A under the
Securities Act of 1933, as amended; or
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Pursuant to and in compliance with Rule 144 under the Securities Act of 1933, as
amended; or
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Pursuant to a registration statement which has been declared effective under the
Securities Act of 1933, as amended, and which continues to be effective at the time
of transfer.
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Unless one of the boxes is checked, the Trustee will refuse to register any of the Notes evidenced
by this certificate in the name of any person other than the registered holder thereof
.
A - 11
Dated:
Signature Guaranteed
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NOTICE:
Signature must be guaranteed by an eligible Guarantor Institution
(banks, stockbrokers, savings and loan associations and credit
unions) with membership in an approved signature guarantee medallion program pursuant to Securities
and Exchange Commission Rule 17Ad-15.
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NOTICE: The signature to this
Assignment must correspond with the name as written upon the face of
the within Note in every particular, without alteration or
enlargement or any change whatever.
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A - 12
CONVERSION NOTICE
To convert this Note as provided in the Indenture, check the box:
o
To convert only part of this Note, state the principal amount to be converted (must be $1,000
or an integral multiple of $1,000): $
.
If, in the event the Company delivers Common Shares and you want the stock certificate made
out in another Persons name, fill in the form below:
(Insert assignees soc. sec. or tax I.D. no.)
(Print or type assignees name, address and zip code)
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Your Signature:
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Date:
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(Sign exactly as your name appears on the
other side of this Note)
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1
.Signature guaranteed by:
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By:
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1
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Signature must be guaranteed by an eligible
Guarantor Institution (banks, stockbrokers, savings and loan associations and
credit unions) with membership in an approved signature guarantee medallion
program pursuant to Securities and Exchange Commission Rule 17Ad-15.
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A - 13
Exhibit 4.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the
Agreement
) is made and entered into as of March 13,
2007 among DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation (the
Company"
), and Banc
of America Securities LLC (
Banc of America
), J.P. Morgan Securities Inc. (
JPMorgan
) and
Wachovia Capital Markets, LLC (
Wachovia
and, together with Banc of America and JP Morgan, the
"
Initial Purchasers
).
This Agreement is made pursuant to the Purchase Agreement, dated March 7, 2007 (the
Purchase
Agreement"
), among the Company, as the issuer of the 3.00% Convertible Senior Notes Due 2012 (the
Notes"
), and the Initial Purchasers, which provides for, among other things, the sale of the Notes
by the Company to the Initial Purchasers.
In order to induce the Initial Purchasers to enter into the Purchase Agreement, the Company
has agreed to provide to the Initial Purchasers and their respective direct and indirect
transferees the registration rights set forth in this Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1.
Definitions.
Capitalized terms used herein without definition shall have the respective
meanings ascribed to them in the Purchase Agreement. As used in this Agreement, the following
capitalized defined terms shall have the following meanings:
Advice
shall have the meaning set forth in the last paragraph of Section 3 hereof.
Affiliate
has the same meaning as given to that term in Rule 405 under the Securities Act or
any successor rule thereunder.
Automatic Shelf Registration Statement
shall mean a Registration Statement filed by a
Well-Known Seasoned Issuer which shall become effective upon filing thereof pursuant to General
Instruction I.D. of Form S-3.
Business Day
means any day other than a Saturday, a Sunday, or a day on which banking
institutions in New York, New York are authorized or required by law or executive order to remain
closed.
Common Shares
means the common shares of the Company, without par value, initially issuable
upon conversion of the Notes.
Company
shall have the meaning set forth in the preamble to this Agreement and also includes
the Companys successors and permitted assigns.
Closing Time
shall mean the Closing Time as defined in the Purchase Agreement.
Effective Date
shall mean the date the initial Shelf Registration Statement becomes
effective or, in the case of designation of an Automatic Shelf Registration Statement as the Shelf
Registration Statement, the date a Prospectus is first made available thereunder for use by the
Holders.
Effectiveness Deadline
shall mean (i) for purposes of Section 2(a)(i) hereof, the 180th day
following the Issue Date, (ii) for purposes of the filing of any post-effective amendment pursuant
to Section 2(a)(iii) hereof, the 30th day after the obligation to make such filing arises, (iii)
for purposes of the filing of any Shelf Registration Statement pursuant to Section 2(a)(iii)
hereof, the 60th day after the obligation to make such filing arises, and (iv) for purposes of any
filing made pursuant to Section 2(a)(iv) hereof, the tenth Business Day after the obligation to
make such filing arises.
Effectiveness Period
shall have the meaning set forth in Section 2(a)(iv) hereof.
Exchange Act
shall mean the Securities Exchange Act of 1934, as amended from time to time.
Filing Deadline
shall mean (i) for purposes of Section 2(a)(i) hereof, the 90th day
following the Issue Date, (ii) for purposes of Section 2(a)(iii) hereof, the tenth Business Day
after the date of receipt by the Company of the information specified therein (or, if a Suspension
Period is then in effect or initiated within five Business Days following the date of receipt of
such information, the tenth Business Day following the end of such Suspension Period), and (iii)
for purposes of Section 2(a)(iv) hereof, the tenth Business Day after the cessation of
effectiveness of any Shelf Registration Statement (or, if a Suspension Period is then in effect or
initiated within five Business Days following the date of receipt of such information, the tenth
Business Day following the end of such Suspension Period).
Holder
shall mean each Initial Purchaser, for so long as such Initial Purchaser owns any
Registrable Securities, and each of such Initial Purchasers respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable Securities.
"
Indenture
shall mean the Indenture, dated as of May 1, 1994, as amended and supplemented by
the First Supplemental Indenture, dated as of May 10, 1995, the Second Supplemental Indenture,
dated as of July 18, 2003, the Third Supplemental Indenture, dated as of January 23, 2004, the
Fourth Supplemental Indenture, dated as of April 22, 2004, the Fifth Supplemental Indenture, dated
as of April 28, 2005, the Sixth Supplemental Indenture, dated as of October 7, 2005, the Seventh
Supplemental Indenture, dated as of August 28, 2006, and the Eighth Supplemental Indenture, dated
as of the Closing Time, between the Company and the Trustee, pursuant to which the Notes are being
issued, and in accordance with which the Common Shares may be issued, as the same may be amended,
supplemented, waived or otherwise modified from time to time in accordance with the terms thereof.
Initial Purchasers
shall have the meaning set forth in the preamble to this Agreement.
Inspectors
shall have the meaning set forth in Section 3(l) hereof.
Issue Date
shall mean March 13, 2007, the date of original issuance of the Notes.
Liquidated Damages
shall have the meaning set forth in Section 2(e) hereof.
2
Majority Holders
shall mean the Holders collectively holding a majority of the aggregate
principal amount of outstanding Notes or the number of outstanding Common Shares, as the context
requires.
Notes
shall have the meaning set forth in the preamble to this Agreement.
Person
shall mean an individual, partnership, corporation, trust or unincorporated
organization, limited liability company, or a government or agency or political subdivision
thereof.
Prospectus
shall mean the prospectus included in a Shelf Registration Statement, including
any preliminary prospectus, any issuer free writing prospectus, as such term is defined in Rule
433 under the Securities Act, and any such prospectus as amended or supplemented by any prospectus
supplement, including a prospectus supplement with respect to the terms of the offering of any
portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments, and, in each case,
including all documents incorporated by reference therein.
Purchase Agreement
shall have the meaning set forth in the preamble to this Agreement.
Questionnaire
shall have the meaning set forth in Section 2(a)(ii) hereof.
Records
shall have the meaning set forth in Section 3(l) hereof.
Registrable Securities
shall mean the Notes and the Common Shares;
provided, however,
that
(i) the Notes shall cease to be Registrable Securities upon the earlier of (1) a Shelf Registration
Statement with respect thereto for the resale of the Notes having been declared effective under the
Securities Act and the Notes having been disposed of pursuant to such Shelf Registration Statement,
(2) the Notes having become eligible to be sold without restriction as contemplated by Rule 144(k)
under the Securities Act by a Person who is not an Affiliate of the Company, or (3) the Notes
having ceased to be outstanding, and (ii) the Common Shares shall cease to be Registrable
Securities upon the earlier of (1) a Shelf Registration Statement with respect to such Common
Shares for the resale thereof having been declared effective under the Securities Act and such
Common Shares having been disposed of pursuant to such Shelf Registration Statement, (2) such
Common Shares having become eligible to be sold without restriction as contemplated by Rule 144(k)
under the Securities Act by a Person who is not an Affiliate of the Company, or (3) such Common
Shares having ceased to be outstanding.
Registration Expenses
shall mean any and all expenses incident to performance of or
compliance by the Company with this Agreement, including without limitation: (i) all SEC or
National Association of Securities Dealers, Inc. (the
NASD
) registration and filing fees,
including, if applicable, the reasonable fees and expenses of any qualified independent
underwriter (and its counsel) that is required to be retained by any Holder of Registrable
Securities in accordance with the rules and regulations of the NASD, (ii) all fees and expenses
incurred in connection with compliance with state securities or blue sky laws (including reasonable
fees and disbursements of one counsel for all underwriters or Holders as a group in connection with
blue sky qualification of any of the Registrable Securities) and compliance with
3
the rules of the NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Shelf Registration Statement, any
Prospectus and any amendments or supplements thereto, and in preparing or assisting in preparing,
printing and distributing any underwriting agreements, securities sales agreements and other
documents relating to the performance of and compliance with this Agreement, (iv) all rating agency
fees, (v) the fees and disbursements of one counsel for the Company and of the independent
certified public accountants of the Company, including the expenses of any cold comfort letters
required by or incident to the performance of and compliance with this Agreement, (vi) the
reasonable fees and expenses of any special experts retained by the Company in connection with the
Shelf Registration Statement and (vii) the reasonable fees and disbursements (not to exceed
$10,000) of one counsel or firm for the Holders of the Registrable Securities in connection with
the review of any Shelf Registration Statement, Prospectus or amendment or supplement thereto in
accordance with the provisions of Section 3(a) hereof, which counsel shall be reasonably
satisfactory to the Company.
Requesting Holder
shall have the meaning set forth in Section 3(a) hereof.
SEC
shall mean the Securities and Exchange Commission.
Securities
shall mean the Notes and the Common Shares.
Securities Act
shall mean the Securities Act of 1933, as amended from time to time.
Shelf Registration
shall mean a registration effected pursuant to Section 2(a) hereof.
Shelf Registration Statement
shall mean a shelf registration statement of the Company
pursuant to the provisions of Section 2(a) hereof which covers all of the Registrable Securities on
Form S-3 or, if not then available to the Company, on another appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all documents incorporated by
reference therein.
Suspension Period
shall have the meaning set forth in Section 2(a)(iv).
Trustee
shall mean the trustee with respect to the Securities under the Indenture.
Well-Known Seasoned Issuer
shall have the meaning set forth in Rule 405 under the Securities
Act.
2.
Registration Under the Securities Act.
(a)
Shelf Registration
.
(i) The Company shall file or cause to be filed (or otherwise designate an existing Automatic
Shelf Registration Statement previously filed with the SEC as) a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities, as promptly as
practicable but in any event on or prior to the Filing Deadline. If the Shelf
4
Registration Statement is not an Automatic Shelf Registration Statement, the Company shall use
its reasonable best efforts to have such Shelf Registration Statement declared effective by the SEC
as promptly as practicable after filing thereof, but in any event on or prior to the Effectiveness
Deadline. If the Shelf Registration Statement is an Automatic Shelf Registration Statement, the
Company shall use its reasonable best efforts to prepare and file a supplement to the Prospectus to
cover resales of the Registrable Securities by the Holders as promptly as practicable after filing
thereof, but in any event on or prior to the Effectiveness Deadline.
(ii) Notwithstanding any other provision hereof, no Holder of Registrable Securities shall be
entitled to include any of their Registrable Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder agrees in writing to be bound by all of the
provisions of this Agreement applicable to such Holder and the Holder furnishes to the Company a
fully completed notice and questionnaire in the form attached as Appendix A to the Offering
Memorandum (the
Questionnaire"
) and such other information in writing as the Company may
reasonably request in writing for use in connection with the Shelf Registration Statement or
Prospectus included therein and in any application to be filed with or under state securities laws.
The Company shall issue a press release through a reputable national newswire service of its
filing (or intention to designate an Automatic Shelf Registration Statement as) the Shelf
Registration Statement and of the anticipated Effective Date thereof. In order to be named as a
selling securityholder in the Prospectus at the time it is first made available for use, each
Holder must furnish the completed Questionnaire and such other information that the Company may
reasonably request in writing, if any, to the Company in writing no later than the tenth Business
Day prior to the anticipated Effective Date as announced in the press release. Each Holder as to
which any Shelf Registration is being effected agrees to furnish to the Company all information
with respect to such Holder necessary to make the information previously furnished to the Company
by such Holder not materially misleading.
(iii) From and after the Effective Date, upon receipt of a completed Questionnaire and such
other information that the Company may reasonably request in writing, if any, the Company will use
its reasonable best efforts to file as promptly as reasonably practicable but in any event on or
prior to the Filing Deadline either (i) if then permitted by the Securities Act or the rules and
regulations thereunder (or then-current SEC interpretations thereof), a supplement to the
Prospectus naming such Holder as a selling securityholder and containing such other information as
necessary to permit such Holder to deliver the Prospectus to purchasers of the Holders Securities,
or (ii) if it is not then permitted under the Securities Act or the rules and regulations
thereunder (or then-current SEC interpretations thereof) to name such Holder as a selling
securityholder in a supplement to the Prospectus, a post-effective amendment to the Shelf
Registration Statement or an additional Shelf Registration Statement as necessary for such Holder
to be named as a selling securityholder in the Prospectus contained therein to permit such Holder
to deliver the Prospectus to purchasers of the Holders Securities (subject, in the case of either
clause (i) or clause (ii), to the Companys right to suspend use of the Shelf Registration
Statement as described in Section 2(a)(iv) hereof). If a post-effective amendment or additional
Shelf Registration Statement is required to be filed, the Company shall use its reasonable best
efforts to have such post-effective amendment or additional Shelf Registration Statement declared
effective by the SEC as promptly as practicable after filing thereof, but in any event on or prior
to the Effectiveness Deadline. The Company shall not be required to
file more
5
than three supplements to the Prospectus, post-effective amendments or additional Shelf
Registration Statements in any fiscal quarter for all such Holders.
(iv) The Company agrees to use its reasonable best efforts to keep the Shelf Registration
Statement continuously effective and the Prospectus usable for resales until there are no
Registrable Securities outstanding (the
Effectiveness Period"
);
provided, however
, that for 30
days or less (whether or not consecutive) in any three-month period, and for 90 days or less in any
12-month period, the Company shall be permitted, by giving written notice to the Holders of
Registrable Securities, to suspend sales thereof if the Shelf Registration Statement is no longer
effective or usable for resales due to circumstances relating to pending developments, public
filings with the SEC and similar events, or because the Prospectus contains an untrue statement of
a material fact or omits to state a material fact required to be stated therein or necessary in
order to make statements therein not misleading (any period of suspension hereunder, a
Suspension
Period"
). If any Shelf Registration Statement ceases to be effective or usable for resales by
Holders for any reason (other than by reason of any such Holders failure to provide a
Questionnaire, in which case the provisions of Section 2(a)(ii) or 2(a)(iii) hereof shall apply) at
any time during the Effectiveness Period, the Company shall, subject to the proviso contained in
the immediately preceding sentence, use its reasonable best efforts to promptly cause such Shelf
Registration Statement to become effective under the Securities Act, and in any event shall, within
ten Business Days of such cessation of effectiveness or usability, (i) file with the SEC one or
more supplements to the Prospectus, post-effective amendments or reports under the Exchange Act in
a manner reasonably expected to obtain the withdrawal of any order suspending the effectiveness of
such Shelf Registration Statement, or (ii) file with the SEC an additional Shelf Registration
Statement. If a post-effective amendment or an additional Shelf Registration Statement is filed,
the Company shall use its reasonable best efforts to (A) cause such post-effective amendment or
Shelf Registration Statement to become effective under the Securities Act as promptly as
practicable after such filing, but in no event later than the applicable Effectiveness Deadline,
and (B) keep such post-effective amendment or Shelf Registration Statement continuously effective
until the end of the Effectiveness Period.
(v) If the Shelf Registration Statement is not an Automatic Shelf Registration Statement, the
Company shall not permit any securities other than (i) the Companys issued and outstanding
securities possessing incidental registration rights and securities into which any such issued and
outstanding securities are convertible and (ii) the Registrable Securities to be included in the
Shelf Registration. The Company will provide to each Holder named therein a reasonable number of
copies of the Prospectus that is a part of the Shelf Registration Statement, notify each such
Holder of the Effective Date and take such other actions as are required to permit unrestricted
resales of the Registrable Securities by such Holder. The Company further agrees to supplement or
amend the Shelf Registration Statement or supplement the Prospectus if and as required by the
rules, regulations or instructions applicable to the registration form used by the Company for such
Shelf Registration Statement or by the Securities Act or by any other rules and regulations
thereunder for shelf registrations, and the Company agrees to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being used or filed with
the SEC.
(b)
Listing
. The Company shall use its reasonable best efforts to maintain the approval of
the Common Shares for listing on the New York Stock Exchange.
6
(c)
Expenses
. The Company shall pay all Registration Expenses in connection with any Shelf
Registration Statement filed pursuant to Section 2(a) hereof. Except as provided herein, each
Holder shall pay all expenses of its counsel, underwriting discounts and commissions and transfer
taxes, if any, relating to the sale or disposition of such Holders Registrable Securities pursuant
to the Shelf Registration Statement.
(d)
Effective Shelf Registration Statement.
If, after the Effective Date the offering of
Registrable Securities pursuant to a Shelf Registration Statement is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other governmental agency or
court, such Shelf Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities pursuant to such Shelf
Registration Statement may legally resume.
(e)
Liquidated Damages.
In the event that:
(i) a Shelf Registration Statement is not filed with the SEC or designated as such by the
Company on or prior to the Filing Deadline pursuant to Section 2(a)(i), then liquidated damages
(
Liquidated Damages"
) shall accrue on the principal amount of the Securities at a rate equal to
0.25% per annum for the first 90-day period from the day following such Filing Deadline, and
thereafter at a rate per annum of 0.50% of the principal amount of the Securities;
(ii) (x) a Shelf Registration Statement is not declared effective by the SEC, or (y) if the
Company shall have designated a previously filed and effective Automatic Shelf Registration
Statement as the Shelf Registration Statement for purposes of this Agreement, the Company shall not
have filed a supplement to the Prospectus to cover resales of the Registrable Securities by the
Holders, in the case of either (x) or (y), on or prior to the Effectiveness Deadline pursuant to
Section 2(a)(i), then Liquidated Damages shall accrue on the principal amount of the Securities at
a rate equal to 0.25% per annum for the first 90-day period from the day following such
Effectiveness Deadline, and thereafter at a rate per annum of 0.50% of the principal amount of the
Securities;
(iii) following the Effective Date, (A) the Company fails to make any filing required pursuant
to Section 2(a)(iii) hereof prior to the Filing Deadline applicable thereto, or (B) in the event
such filing is a post-effective amendment or additional Shelf Registration Statement, such
post-effective amendment or Shelf Registration Statement fails to become effective on or prior to
the Effectiveness Deadline applicable thereto, then Liquidated Damages shall accrue on the
principal amount of the Securities at a rate equal to 0.25% per annum for the first 90-day period
from the day following such Filing Deadline or Effectiveness Deadline, as applicable, and
thereafter at a rate per annum of 0.50% of the principal amount of the Securities;
(iv) following the Effective Date, a Shelf Registration Statement ceases to be effective
(without being succeeded immediately by an additional Shelf Registration Statement that is filed
and immediately becomes effective) or usable for the offer and sale of the Registrable Securities,
other than in connection with (A) a Suspension Period or (B) as a result of a requirement to file a
post-effective amendment or supplement to the Prospectus to make changes to the information
regarding selling securityholders or the plan of distribution provided
7
for therein, and the Company does not cure the lapse of effectiveness or usability within ten
Business Days (or, if a Suspension Period is then in effect, within ten Business Days following the
expiration of such Suspension Period), then Liquidated Damages shall accrue on the principal amount
of the Securities at a rate equal to 0.25% per annum for the first 90-day period from the day
following such tenth Business Day, and thereafter at a rate per annum of 0.50% of the principal
amount of the Securities;
(v) any Suspension Period or Periods exceed 30 days in any three-month period or 90 days in
any 12-month period, then, commencing with the 31st day in such three-month period or the 91st day
in such 12-month period, as the case may be, then Liquidated Damages shall accrue on the principal
amount of the Securities at a rate equal to 0.25% per annum for the first 90-day period from the
day following the 31st or 91st day, as the case may be, and thereafter at a rate per annum of 0.50%
of the principal amount of the Securities; or
(vi) if the Company fails to name as a selling securityholder any Holder that had complied
timely with its obligations hereunder in a manner to entitle such Holder to be so named in (A) any
Shelf Registration Statement at the time it first becomes effective or (B) any Prospectus at the
later of time of filing thereof or the time the Shelf Registration Statement of which the
Prospectus forms a part becomes effective, then Liquidated Damages will accrue on the principal
amount of Securities held by such Holder at a rate equal to 0.25% per annum for the first 90-day
period from the day following the effective date of such Shelf Registration Statement or the time
of filing of such Prospectus, as the case may be, and thereafter at a rate per annum of 0.50% of
the principal amount of the Securities held by such Holder;
provided, however,
that in no event shall Liquidated Damages accrue at a rate per annum exceeding
0.50% of the principal amount of the Securities; and
provided further
that Liquidated Damages on
the principal amount of the Securities as a result thereof shall cease to accrue:
(1) upon the filing or designation of a Shelf Registration Statement (in the case of clause
(i) above);
(2) upon the Effective Date (in the case of clause (ii) above);
(3) upon the filing of a supplement to the Prospectus (in the case of clause (iii)(A) above)
or upon the Effective Date (in the case of clause (iii)(B) above);
(4) upon such time as the Shelf Registration Statement which had ceased to remain effective or
usable for resales again becomes effective and usable for resales (in the case of clause (iv)
above);
(5) upon such time as the Shelf Registration Statement which had ceased to remain effective or
usable for resales again becomes effective and usable for resales (in the case of clause (v)
above); or
(6) upon the time such Holder is permitted to sell its Registrable Securities pursuant to any
Shelf Registration Statement and Prospectus in accordance with applicable law (in the case of
clause (vi) above).
8
Any amounts of Liquidated Damages due pursuant to Section 2(e) will be payable in cash on the
next succeeding interest payment date to Holders entitled to receive such Liquidated Damages on the
relevant record dates for the payment of interest.
Notwithstanding any provision in this Agreement, in no event shall Liquidated Damages accrue
to holders of Common Shares issued upon conversion of Notes. If any Note ceases to be outstanding
during any period for which Liquidated Damages are accruing, the Company will prorate the
Liquidated Damages payable with respect to such Note.
(f)
Specific Enforcement.
Without limiting the remedies available to the Holders, the Company
acknowledges that any failure by it to comply with its obligations under Section 2(a) hereof may
result in material irreparable injury to the Holders for which there is no adequate remedy at law,
that it would not be possible to measure damages for such injuries precisely and that, in the event
of any such failure, any Holder may obtain such relief as may be required to specifically enforce
the Companys obligations under Section 2(a) hereof.
(g)
Certain Representations and Agreements of the Company
. The Company represents and agrees
that, unless it obtains the prior consent of the Holders of a majority of the Registrable
Securities that are registered under the Shelf Registration Statement at such time or the approval
of the counsel for the holders of Registrable Securities or the consent of the Initial Purchasers
in connection with any underwritten offering of Registrable Securities, and each Holder represents
and agrees that, unless it obtains the prior consent of the Company and the Initial Purchasers, it
will not make any offer relating to the Registrable Securities that would constitute an issuer
free writing prospectus, as defined in Rule 433 (an Issuer Free Writing Prospectus), or that
would otherwise constitute a free writing prospectus, as defined in Rule 405, required to be
filed with the SEC. The Company represents that any Issuer Free Writing Prospectus, when taken
together with the information in the Shelf Registration Statement and the Prospectus, will not
include any untrue statement of a material fact or omit to state any material fact necessary in
order to make the statements therein, in light of the circumstances under which they were made, not
misleading.
3.
Registration Procedures
. In connection with the obligations of the Company with respect to
the Shelf Registration Statement pursuant to Section 2(a) hereof, the Company shall use its best
efforts to:
(a) prepare and file with the SEC or designate a Shelf Registration Statement as prescribed by
Section 2(a)(i) hereof within the relevant time period specified in Section 2(a)(i) hereof on the
appropriate form under the Securities Act, which form shall (i) be selected by the Company, (ii) be
available for the sale of the Registrable Securities by the selling Holders thereof, and (iii)
comply as to form in all material respects with the requirements of the applicable form and include
all financial statements required by the SEC to be filed therewith; the Company shall use its
reasonable best efforts to cause such Shelf Registration Statement to become effective and remain
effective and the Prospectus usable for resales in accordance with Section 2 hereof;
provided,
however,
that, before filing any Shelf Registration Statement or Prospectus or any amendments or
supplements thereto, the Company shall furnish to and afford one counsel representing all of the
Holders of the Registrable Securities covered by such Shelf Registration Statement, the managing
underwriters, if any, and any Holder of the Registrable
9
Securities covered by such Shelf Registration Statement, in each case, who requests to review
copies of documents proposed to be filed (a
Requesting Holder
), a reasonable opportunity to
review copies of all such documents (including copies of any documents to be incorporated by
reference therein and all exhibits thereto) proposed to be filed; and the Company shall not file
any Shelf Registration Statement or Prospectus or any amendments or supplements thereto in respect
of which such counsel and any Requesting Holder requests an opportunity to review prior to the
filing of such document if such counsel, the Majority Holders, or the managing underwriters, if
any, shall reasonably object in a timely manner;
(b) prepare and file with the SEC such amendments and post-effective amendments to the Shelf
Registration Statement as may be necessary to keep such Shelf Registration Statement effective for
the Effectiveness Period, and cause each Prospectus to be supplemented, if so determined by the
Company or requested by the SEC, by any required prospectus supplement and as so supplemented to be
filed pursuant to Rule 424 (or any similar provisions then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder applicable to it with respect to the disposition of all securities covered
by a Shelf Registration Statement during the Effectiveness Period in accordance with the intended
method or methods of distribution by the selling Holders thereof described in this Agreement;
(c) (i) furnish to each Holder of Registrable Securities included in the Shelf Registration
Statement and to each underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary prospectus, and any
amendment or supplement thereto, and such other documents as such Holder or underwriter may
reasonably request, in order to facilitate the public sale or other disposition of the Registrable
Securities and (ii) consent to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders of Registrable Securities included in the Shelf Registration Statement
in connection with the offering and sale of the Registrable Securities covered by the Prospectus or
any amendment or supplement thereto;
(d) register or qualify the Registrable Securities under all applicable state securities or
blue sky laws of such jurisdictions by the time the applicable Shelf Registration Statement has
become effective under the Securities Act as any Holder of Registrable Securities covered by a
Shelf Registration Statement and each underwriter of an underwritten offering of Registrable
Securities shall reasonably request in writing in advance of such date of effectiveness, and do any
and all other acts and things which may be reasonably necessary or advisable to enable such Holder
and underwriter to consummate the disposition in each such jurisdiction of such Registrable
Securities owned by such Holder;
provided, however,
that the Company shall not be required to (i)
qualify as a foreign entity or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any general consent to
service of process in any jurisdiction where it would not otherwise be subject to such service of
process or (iii) subject itself to taxation in any such jurisdiction if it is not then so subject;
(e) promptly notify each Holder of Registrable Securities which has submitted a Questionnaire
to the Company, its counsel and the managing underwriters, if any, and promptly confirm such notice
in writing (i) when a Shelf Registration Statement has become effective and when any post-effective
amendments thereto become effective, (ii) of any request by the SEC or
10
any state securities authority for amendments and supplements to a Shelf Registration
Statement or Prospectus or for additional information after the Shelf Registration Statement has
become effective, (iii) of the issuance by the SEC or any state securities authority of any stop
order suspending the effectiveness of a Shelf Registration Statement or the qualification of the
Registrable Securities in any jurisdiction described in Section 3(d) hereof or the initiation of
any proceedings for that purpose, (iv) of the happening of any event or the failure of any event to
occur or the discovery of any facts, during the Effectiveness Period, which makes any statement
made in a Shelf Registration Statement or the related Prospectus untrue in any material respect or
which causes such Shelf Registration Statement or Prospectus to 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, and (v) of the reasonable determination of the Company that a
post-effective amendment to the Shelf Registration Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration
Statement at the earliest possible moment;
(g) furnish to each Holder of Registrable Securities named in a Shelf Registration Statement,
without charge, at least one conformed copy of the Shelf Registration Statement relating to such
Shelf Registration and any post-effective amendment thereto (without documents incorporated therein
by reference or exhibits thereto, unless requested);
(h) cooperate with the selling Holders of Registrable Securities to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to be sold and not
bearing any restrictive legends and registered in such names as the selling Holders or the
underwriters may reasonably request at least two Business Days prior to the closing of any sale of
Registrable Securities pursuant to the Shelf Registration Statement;
(i) promptly after the occurrence of any event specified in Section 3(e)(ii), 3(e)(iii),
3(e)(iv) (subject to the respective grace periods set forth in Section 2(a)(iv)) or 3(e)(v) hereof,
prepare a supplement or post-effective amendment to the Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of the Registrable Securities, such Prospectus will
not include any untrue statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which they were made, not
misleading; and the Company shall notify each Holder which has submitted a Questionnaire to the
Company to suspend use of the Prospectus as promptly as practicable after the occurrence of such an
event, and each Holder hereby agrees to suspend use of the Prospectus until the Company has amended
or supplemented the Prospectus to correct such misstatement or omission;
(j) subject to Section 5 hereof, enter into such agreements (including underwriting
agreements) as are customary in underwritten offerings and take all such other appropriate actions
in connection therewith as are reasonably requested by the Holders collectively holding at least
25% in aggregate principal amount or number, as the context requires, of the Registrable Securities
in order to expedite or facilitate the registration or the disposition of the Registrable
Securities;
11
(k) whether or not an underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by (x) any Initial Purchaser, in the
case where such Initial Purchaser holds Securities acquired by it as part of the initial placement
of such Securities and (y) Holders collectively holding at least 25% in aggregate principal amount
or number, as the context requires, of the Registrable Securities covered thereby: (i) make such
representations and warranties to Holders of such Registrable Securities and the underwriters (if
any), with respect to the business of the Company and its subsidiaries as then conducted and with
respect to the Shelf Registration Statement, Prospectus and documents, if any, incorporated or
deemed to be incorporated by reference therein, in each case, as are customarily made by issuers to
underwriters in underwritten offerings, and confirm the same if and when requested; (ii) obtain
opinions of counsel to the Company and updates thereof (which may be in the form of a reliance
letter) in form and substance reasonably satisfactory to the managing underwriters (if any) and the
Holders collectively holding a majority in aggregate principal amount or number, as the context
requires, of the Registrable Securities being sold, addressed to each selling Holder and the
underwriters (if any) covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested by such underwriters
(it being agreed that the matters to be covered by such opinion may be subject to customary
qualifications and exceptions); (iii) obtain cold comfort letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriters from the independent certified
public accountants of the Company (and, if necessary, any other independent certified public
accountants of any business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering matters of the type customarily
covered in cold comfort letters in connection with underwritten offerings and such other matters
as reasonably requested by such underwriters in accordance with Statement on Auditing Standards No.
72; and (iv) if an underwriting agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in Section 4 hereof (or such other
provisions and procedures acceptable to Holders collectively holding a majority in aggregate
principal amount or number, as the context requires, of Registrable Securities covered by such
Shelf Registration Statement and the managing underwriters) customary for such agreements with
respect to all parties to be indemnified pursuant to said Section (including, without limitation,
such underwriters and selling Holders); and in the case of an underwritten registration, the above
requirements shall be satisfied at each closing under the related underwriting agreement or as and
to the extent required thereunder;
(l) make reasonably available for inspection by any selling Holder of Registrable Securities
who certifies to the Company that it has a current intention to sell Registrable Securities
pursuant to the Shelf Registration, any underwriter participating in any such disposition of
Registrable Securities, if any, and any attorney, accountant or other agent retained by any such
selling Holder or underwriter (collectively, the
Inspectors"
), at the offices where normally kept,
during the Companys normal business hours, all financial and other records, pertinent
organizational and operational documents and properties of the Company and its subsidiaries
(collectively, the
Records"
) as shall be reasonably necessary to enable them to exercise any
applicable due diligence responsibilities, and cause the officers, directors and employees of the
Company and its subsidiaries to supply all relevant information in each case reasonably requested
by any such Inspector in connection with such Shelf Registration
12
Statement; Records and information which the Company, in good faith, deems to be confidential
and any Records and information which it notifies the Inspectors are confidential shall not be
disclosed to any Inspector except where (i) the release of such Records or information is required
by law (including any information required to be disclosed under federal securities laws) upon a
customary opinion of counsel for Inspectors delivered and reasonably satisfactory to the Company,
(ii) the release of such Records or information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) such Records or information previously has been made generally available to the
public; each selling Holder of such Registrable Securities will be required to agree in writing
that Records and information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it as the basis for any market transactions in the securities
of the Company unless and until such is made generally available to the public through no fault of
an Inspector or a selling Holder; and each selling Holder of such Registrable Securities will be
required to further agree in writing that it will, upon learning that disclosure of such Records or
information is sought in a court of competent jurisdiction, or in connection with any action, suit
or proceeding, give notice to the Company and allow the Company at its expense to undertake
appropriate action to prevent disclosure of the Records and information deemed confidential;
(m) comply in all material respects with all applicable rules and regulations of the SEC so
long as any provision of this Agreement shall be applicable and make generally available to its
securityholders earning statements satisfying the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder (or any similar rule promulgated under the Securities Act) no later than 45
days after the end of any twelve-month period (or 90 days after the end of any twelve-month period
if such period is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering, commencing on the first day of
the first fiscal quarter of the Company after the Effective Date, which statements shall cover said
twelve-month periods, provided that the obligations under this Section 3(m) shall be satisfied by
the timely filing of quarterly and annual reports on Forms 10-Q and 10-K under the Exchange Act;
(n) reasonably cooperate with each seller of Registrable Securities covered by a Shelf
Registration Statement and each underwriter, if any, participating in the disposition of such
Registrable Securities and its respective counsel in connection with any filings required to be
made with the NASD;
(o) take all other steps reasonably necessary to effect the registration of the Registrable
Securities covered by a Shelf Registration Statement contemplated hereby; and
(p) the Company may require each seller of Registrable Securities as to which any registration
is being effected to furnish to it such information regarding such seller as may be required by the
staff of the SEC to be included in a Shelf Registration Statement; the Company may exclude from
such registration the Registrable Securities of any seller who fails to furnish such information
within a reasonable time after receiving such request; and the Company shall have no obligation to
register under the Securities Act the Registrable Securities of a seller who so fails to furnish
such information.
13
Each Holder agrees that, upon receipt of any notice from the Company of the occurrence of any
event specified in Section 3(e)(ii), 3(e)(iii), 3(e)(iv) or 3(e)(v) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to a Shelf Registration
Statement until such Holders receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) hereof or until it is advised in writing (the
Advice"
) by the Company
that the use of the applicable Prospectus may be resumed, and, if so directed by the Company, such
Holder will deliver to the Company (at its expense) all copies in such Holders possession, other
than permanent file copies then in such Holders possession, of the Prospectus covering such
Registrable Securities current at the time of receipt of such notice. If the Company shall give
any such notice to suspend the disposition of Registrable Securities pursuant to a Shelf
Registration Statement, the Company shall use its reasonable best efforts to file and have declared
effective (if an amendment) as soon as practicable after the resolution of the related matters an
amendment or supplement to the Shelf Registration Statement and related Prospectus.
4.
Indemnification and Contribution
. (a) The Company hereby agrees to indemnify and hold
harmless the Initial Purchasers, each Holder, each underwriter who participates in an offering of
the Registrable Securities, each Person, if any, who controls any of such parties within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act and each of their
directors, officers, employees and agents, as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
arising out of any untrue statement or alleged untrue statement of a material fact contained in a
Shelf Registration Statement (or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a material fact required to be
stated therein, in the light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred,
to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue statement or omission,
provided that (subject to Section 4(d) hereof) such settlement is effected with the prior written
consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred (including the reasonable fees and
disbursements of counsel chosen by the Initial Purchasers or such Holder), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or omission, to the extent
that any such expense is not paid under subparagraph (i) or (ii) of this Section 4(a);
provided, however,
that this indemnity does not apply to any loss, liability, claim, damage or
expense to the extent arising out of an untrue statement or omission or alleged untrue statement or
omission made in reliance upon and in conformity with written information furnished in writing to
the Company by any Initial Purchaser through the Initial Purchasers or such Holder or
14
underwriter for use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto).
(b) Each Initial Purchaser and each Holder or underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, its directors and officers (including each officer of
the Company who signed the Shelf Registration Statement), and each Person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
against any and all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements
or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such Holder expressly
for use in such Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any
amendment or supplement thereto);
provided, however,
that no Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from the sale of
Registrable Securities.
(c) Each indemnified party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have under this Section 4 to the extent that it is not materially
prejudiced by such failure as a result thereof, and in any event shall not relieve it from
liability which it may have otherwise on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 4(a) or (b) above, counsel to the indemnified parties shall
be selected by the indemnifying party, if it shall so elect, promptly after receiving the aforesaid
notice and if the chosen counsel is reasonably satisfactory to the indemnified party. In any such
proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such indemnified party unless (i) the
indemnifying party and the indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the indemnifying party does not promptly retain counsel reasonably satisfactory to
the indemnified party or (iii) the named parties to any such proceeding (including any impleaded
parties) include both the indemnifying party and the indemnified party and the indemnified party
reasonably concludes that the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them. In no event shall the
indemnifying parties be liable for the fees and expenses of more than one counsel (in addition to
local counsel), separate from their own counsel, for all indemnified parties in connection with any
one action or separate but similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances. No indemnifying party shall, without the prior written
consent of the indemnified parties, settle or compromise or consent to the entry of any judgment
with respect to any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which indemnification or
contribution could be sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional written release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
15
(d) If at any time an indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees
that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected
without its written consent if (i) such settlement is entered into more than 45 days after receipt
by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have
received notice of the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) In order to provide for just and equitable contribution in circumstances in which the
indemnity agreement set forth in this Section 4 is for any reason held to be unenforceable by an
indemnified party although applicable in accordance with its terms, the Company, on the one hand,
and the Holders, on the other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement incurred by the Company
and the Holders, as incurred;
provided, however,
that no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent misrepresentation. As between
the Company, on the one hand, and the Holders, on the other hand, such parties shall contribute to
such aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the relative fault of the
Company, on the one hand, and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or action in respect
thereof, as well as any other relevant equitable considerations. The relative fault of the
Company, on the one hand, and of the Holders, on the other hand, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the
Company, on the one hand, or by or on behalf of the Holders, on the other, and the parties
relative intent, knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company and the Holders of the Registrable Securities agree that it
would not be just and equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into account the
relevant equitable considerations. For purposes of this Section 4, each Affiliate of a Holder, and
each director, officer and employee and Person, if any, who controls a Holder or such Affiliate
within the meaning of Section 15 of the Securities Act shall have the same rights to contribution
as such Holder, and each director and officer of the Company and each Person, if any, who controls
the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act shall have the same rights to contribution as the Company.
5.
Underwritten Registration; Participation Therein
. (a) In no event will the method of
distribution of the Registrable Securities take the form of an underwritten offering without the
prior written consent of the Company. No Holder may participate in an underwritten registration
hereunder unless such Holder agrees to sell such Holders Registrable Securities on the basis
provided in the underwriting arrangements approved by the Persons entitled hereunder to approve
such arrangements and completes and executes all reasonable questionnaires, powers of
16
attorney, indemnities, underwriting agreements, lock-up letters and other documents reasonably
required under the terms of such underwriting arrangements.
(b) The Holders of Registrable Securities covered by the Shelf Registration Statement who
desire to do so may sell the Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Sections 3(k) and 5(a) hereof. In any such underwritten
offering, the underwriter or underwriters and manager or managers that will administer the offering
will be selected by the Holders of a majority in aggregate principal amount or number, as the
context requires, of the Registrable Securities included in such offering;
provided, however,
that
such underwriters and managers must be reasonably satisfactory to the Company.
6.
Miscellaneous.
(a)
Rule 144 and Rule 144A.
For so long as it is subject to the reporting requirements of
Section 13 or 15 of the Exchange Act and any Registrable Securities remain outstanding, the Company
will file the reports required to be filed by it under the Securities Act and Section 13(a) or
15(d) of the Exchange Act and the rules and regulations adopted by the SEC thereunder;
provided,
however,
that if the Company ceases to be so required to file such reports, it will, upon the
request of any Holder of Registrable Securities (a) make publicly available such information as is
necessary to permit sales of its securities pursuant to Rule 144 under the Securities Act, (b)
deliver such information to a prospective purchaser as is necessary to permit sales of its
securities pursuant to Rule 144A under the Securities Act, and (c) take such further action that is
reasonable in the circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities Act, as such rule
may be amended from time to time, (ii) Rule 144A under the Securities Act, as such rule may be
amended from time to time, or (iii) any successor rules or regulations hereafter adopted by the
SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such
Holder a written statement as to whether it has complied with such requirements.
(b)
No Inconsistent Agreements.
The Company has not entered into, and will not enter into,
any agreement which is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted
to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights
granted to the holders of the Companys other issued and outstanding securities under any such
agreements.
(c)
Amendments and Waivers.
The provisions of this Agreement, including the provisions of
this sentence, may not be amended, modified or supplemented, and waivers or consents to departures
from the provisions hereof may not be given, unless the Company has obtained the written consent of
the Holders holding at least a majority of the aggregate principal amount of the Registrable
Securities outstanding and affected by such amendment, modification, supplement, waiver or
departure and the Company signs a writing agreeing to such an amendment, modification or
supplement, or waiver or consent;
provided
that no amendment, modification or supplement or waiver
or consent to the departure with respect to the provisions of Section 4 hereof shall be effective
as against any Holder of Registrable Securities unless consented to in writing by such Holder of
Registrable Securities. Notwithstanding the foregoing
17
sentence, (i) this Agreement may be amended, without the consent of any Holder of Registrable
Securities, by written agreement signed by the Company and the Initial Purchasers, to cure any
ambiguity, correct or supplement any provision of this Agreement that may be inconsistent with any
other provision of this Agreement or to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be inconsistent with other provisions of
this Agreement, (ii) this Agreement may be amended, modified or supplemented, and waivers and
consents to departures from the provisions hereof may be given, by written agreement signed by the
Company and the Initial Purchasers to the extent that any such amendment, modification, supplement,
waiver or consent is, in their reasonable judgment, necessary or appropriate to comply with
applicable law (including any interpretation of the Staff of the SEC) or any change therein and
(iii) to the extent any provision of this Agreement relates to the Initial Purchasers, such
provision may be amended, modified or supplemented, and waivers or consents to departures from such
provisions may be given, by written agreement signed by the Initial Purchasers and the Company.
(d)
Notices.
All notices and other communications provided for or permitted hereunder shall
be made in writing by hand-delivery, registered first-class mail, telex, telecopier, or any courier
guaranteeing overnight delivery (i) if to a Holder, at the most current address given by such
Holder to the Company by means of a notice given in accordance with the provisions of this Section
6(d), which address initially is, with respect to the Initial Purchasers, the respective addresses
of the Initial Purchasers set forth in the Purchase Agreement; and (ii) if to the Company,
initially at the Companys address set forth in the Purchase Agreement and thereafter at such other
address, notice of which is given in accordance with the provisions of this Section 6(d).
All such notices and communications shall be deemed to have been duly given: at the time
delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if
telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
(e)
Successors and Assigns.
This Agreement shall inure to the benefit of and be binding upon
the successors, assigns and transferees of the Initial Purchasers, including, without limitation
and without the need for an express assignment, subsequent Holders;
provided, however,
that
nothing herein shall be deemed to permit any assignment, transfer or other disposition of
Registrable Securities in violation of the terms of the Purchase Agreement, the Indenture relating
to the Notes or the articles of incorporation of the Company. If any transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such
Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking
and holding such Registrable Securities, such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement and such Person shall
be entitled to receive the benefits hereof.
(f)
Third Party Beneficiaries.
Each Holder shall be a third party beneficiary of the
agreements made hereunder between the Company and the Initial Purchasers, and each Initial
Purchaser shall have the right to enforce such agreements directly to the extent it deems such
enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.
18
(g)
Counterparts.
This Agreement may be executed in any number of counterparts and by the
parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same agreement.
(h)
Headings.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof.
(i)
GOVERNING LAW.
THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE STATE OF NEW YORK.
THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY SUIT, ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE MATTERS CONTEMPLATED
HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL JURISDICTION AND IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO
SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION
OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(j)
Severability.
In the event that any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or unenforceable, the
validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.
(k)
Securities Held by the Company or its Affiliates.
Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required hereunder, Registrable
Securities held by the Company or any Affiliates shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
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Very truly yours,
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DEVELOPERS DIVERSIFIED REALTY
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CORPORATION
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By:
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/s/ William H. Schafer
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Name: William H. Schafer
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Title: Executive Vice President and Chief Financial
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Officer
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CONFIRMED AND ACCEPTED, as of the date first above written:
BANC OF AMERICA SECURITIES LLC
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By:
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/s/ Derek Dillon
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Name: Derek Dillon
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Title: Managing Director
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J.P. MORGAN SECURITIES INC.
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By:
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/s/ Thomas A. Grier
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Name: Thomas A. Grier
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Title: Managing Director
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WACHOVIA CAPITAL MARKETS, LLC
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By:
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/s/ Lear Beyer
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Name: Lear Beyer
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Title: Managing Director
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