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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 29, 2000
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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i2 TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 7372 75-2294945
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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ONE i2 PLACE
11701 LUNA ROAD
DALLAS, TEXAS 75234
(469) 357-1000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
WILLIAM M. BEECHER
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
i2 TECHNOLOGIES, INC.
ONE I2 PLACE
11701 LUNA ROAD
DALLAS, TEXAS 75234
(469) 357-1000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copy to:
RONALD G. SKLOSS
BROBECK, PHLEGER & HARRISON LLP
301 CONGRESS AVENUE, SUITE 1200
AUSTIN, TEXAS 78701
TELEPHONE: (512) 477-5495
FACSIMILE: (512) 477-5813
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC: From
time to time after this registration statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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5 1/4% Convertible Subordinated Notes due
December 15, 2006...................... $350,000,000 100%(1)(2) $350,000,000(1) $92,400
Common Stock, par value $0.00025 per
share.................................. 4,605,790(3) -- (4) -- (4) -- (4)
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Total........................... $92,400
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(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(i).
(2) Exclusive of accrued interest and distributions, if any.
(3) Represents the number of shares of common stock initially issuable upon
conversion of the notes registered hereby. This registration statement also
shall cover any additional shares of common stock that become issuable by
reason of any stock dividend, stock split, recapitalization or other similar
transaction effected without the receipt of consideration which results in
an increase in the number of the outstanding shares of common stock, as well
as any additional shares of common stock that become issuable as a result of
antidilution provisions.
(4) No additional consideration will be received for the common stock, and
therefore no registration fee is required pursuant to Rule 457(i).
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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The information in this prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed
with the Securities and Exchange Commission is effective. The prospectus
is not an offer to sell these securities, and is not soliciting an offer
to buy these securities, in any state where the offer or sale is not
permitted.
SUBJECT TO COMPLETION, DATED FEBRUARY 29, 2000
PRELIMINARY PROSPECTUS
i2 TECHNOLOGIES, INC.
$350,000,000 5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE DECEMBER 15, 2006
AND
4,605,790 SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THE NOTES
On December 10, 1999, i2 Technologies, Inc. issued and sold $350,000,000
aggregate principal amount of 5 1/4% Convertible Subordinated Notes due December
15, 2006 in a private offering. The initial purchasers of the notes subsequently
transferred their notes to various other holders in transactions exempt from
registration under the Securities Act of 1933. In connection with our private
offering, we agreed to register the notes and the shares of common stock into
which the notes are convertible to facilitate secondary trading by these
holders, to whom we refer as selling securityholders. This prospectus is part of
a registration statement that fulfills this obligation. All securities offered
by this prospectus are offered by selling securityholders.
The notes are convertible by holders into shares of our common stock at a
rate of 13.1594 shares per each $1,000 principal amount of notes, subject to
adjustment as described in this prospectus. In addition, at certain times and
under certain circumstances, we may redeem the notes at our election or at the
election of the holders of the notes. You can find a more extensive description
of the notes beginning on page 15.
The notes are not secured and are subordinated to all of our present and
future senior indebtedness.
The notes are eligible for trading on the Private Offerings, Resales and
Trading through Automated Linkages, or PORTAL, Market.
Our common stock is quoted on the Nasdaq National Market under the symbol
"ITWO." On February 28, 2000, the closing sale price for our common stock was
$169.25.
INVESTING IN OUR NOTES AND COMMON STOCK INVOLVES RISKS. SEE RISK FACTORS
BEGINNING ON PAGE 3 TO READ ABOUT CERTAIN FACTORS YOU SHOULD CONSIDER BEFORE
BUYING NOTES AND SHARES OF COMMON STOCK BEING OFFERED BY THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is , 2000.
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TABLE OF CONTENTS
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i2 Technologies............................................. 2
Risk Factors................................................ 3
Information Regarding Forward-Looking Statements............ 13
Use of Proceeds............................................. 13
Ratio of Earnings to Fixed Charges.......................... 14
Selected Consolidated Financial Data........................ 15
Description of the Notes.................................... 16
Material United States Federal Income Tax Considerations.... 30
Selling Securityholders..................................... 36
Plan of Distribution........................................ 39
Incorporation by Reference.................................. 40
Where You Can Find More Information......................... 41
Legal Matters............................................... 41
Experts..................................................... 41
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i2 TECHNOLOGIES
We are a leading provider of marketplace services that help enterprises
conduct business more profitably. Our solutions enable enterprises to leverage
the Internet to significantly improve their visibility and responsiveness to
marketplace changes, and to collaborate effectively with suppliers and customers
in real time. Our forward-thinking solutions consider the real conditions of
companies to optimize key business processes -- from product design to customer
relationships. We have recently launched TradeMatrix(TM), a robust platform of
business-to-business solutions, services, and marketplaces, which allow
customers, partners, suppliers, and service providers to do business together in
real time. TradeMatrix offers a broad range of services that include
procurement, commerce, fulfillment, customer care, retail, product development
and planning. We have recently launched electronic marketplaces with our
customers and partners in the automotive, aerospace, high-tech and consumer
packaged goods industries. Our RHYTHM software applications and TradeMatrix are
used to power both public and private Internet-based electronic marketplaces,
consisting of communities of trading partners. Our TradeMatrix platform provides
the basis for the value-added services offered to participants of multiple
digital marketplaces. We also provide services such as consulting, training and
maintenance in support of these offerings.
Our principal executive offices are located at One i2 Place, 11701 Luna
Road, Dallas, Texas 75234, and our telephone number is (469) 357-1000.
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RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are not the
only ones facing our company. Additional risks and uncertainties that we do not
presently know or that we currently deem immaterial may also impair our business
operations.
If any of the following risks actually occur, they could materially
adversely affect our business, financial condition or results of operations. In
that case, the trading price of our common stock could decline.
OUR FINANCIAL RESULTS MAY VARY SIGNIFICANTLY FROM QUARTER TO QUARTER AND WE MAY
FAIL TO MEET EXPECTATIONS, WHICH MAY NEGATIVELY IMPACT THE PRICE OF OUR STOCK.
Our operating results have varied significantly from quarter to quarter in
the past, and we expect our operating results to continue to vary from quarter
to quarter in the future, due to a variety of factors, many of which are outside
of our control. Factors that could affect quarterly operating results include:
- volume and timing of customer orders;
- length of the sales cycle;
- customer budget constraints;
- announcement or introduction of new products or product enhancements by
us or our competitors;
- changes in prices of our products and those of our competitors;
- foreign currency exchange rate fluctuations;
- market acceptance of new products;
- mix of direct and indirect sales;
- changes in our strategic relationships; and
- changes in our business strategy.
Furthermore, customers may defer or cancel their purchases of products if
they experience a downturn in their business or if there is a downturn in the
general economy. We will continue to determine our investment and expense levels
based on expected future revenues. A significant portion of our expenses are not
variable in the short term, and we cannot reduce them quickly to respond to
decreases in revenues. Therefore, if revenues are below expectations, this
shortfall is likely to adversely and disproportionately affect our operating
results. In addition, we may reduce our prices or accelerate investment in
research and development efforts in response to competitive pressures or to
pursue new market opportunities. Any of these activities may further limit our
ability to adjust spending in response to revenue fluctuations. Revenues may not
grow at historical rates in future periods, or they may not grow at all.
Accordingly, we may not maintain positive operating margins in future quarters.
Any of these factors could cause our operating results to be below the
expectations of public market analysts and investors, and the price of our
common stock may fall.
WE ANTICIPATE SEASONAL FLUCTUATIONS IN REVENUES, WHICH MAY CAUSE VOLATILITY IN
THE PRICE OF OUR COMMON STOCK AND THE NOTES.
The market price of our common stock has been volatile in the past, and the
market price of the notes and our common stock may be volatile in the future.
Historically, our revenues have tended to be strongest in the fourth quarter of
the year. We believe that our seasonality is due to the calendar year budgeting
cycles of many of our customers and our compensation policy that rewards sales
personnel for achieving annual revenue quotas. In future periods, these seasonal
trends may cause our quarter-to-quarter
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operating results to vary, which may result in failing to meet the expectations
of public market analysts and investors.
WE DEPEND ON SIGNIFICANT INDIVIDUAL LICENSE SALES. THEREFORE, OUR OPERATING
RESULTS FOR A GIVEN PERIOD COULD SUFFER SERIOUS HARM IF WE FAIL TO CLOSE THE
LARGE SALES WE TARGETED FOR THAT PERIOD.
We generally derive a significant portion of revenues in each quarter from
a small number of relatively large sales. For example, in each quarter of 1999,
the last three quarters of 1998 and each quarter of 1997 and 1996, one or more
customers individually accounted for at least 10% of our total software license
revenues in each respective quarter. Moreover, due to customer purchasing
patterns, we typically realize a significant portion of our software license
revenues in the last few weeks of a quarter. As a result, we are subject to
significant variations in license revenues and results of operations if we incur
any delays in customer orders. If in any future period we fail to close one or
more substantial license sales that we have targeted to close in that period,
this failure could seriously harm our operating results for that period.
WE MAY NOT REMAIN COMPETITIVE, AND INCREASED COMPETITION COULD SERIOUSLY HARM
OUR BUSINESS.
Our competitors offer a variety of solutions addressed at various segments
of the supply chain as well as other eBusiness processes. These competitors
include:
- vendors establishing electronic marketplaces and indirect procurement
capabilities, such as Ariba and Commerce One;
- enterprise resource application software vendors such as Baan, JD
Edwards, Oracle, PeopleSoft and SAP, each currently offering or marketing
competitive software solutions;
- other software vendors who may broaden their product offerings by
internally developing, or by acquiring or partnering with independent
developers of, eBusiness solutions;
- supply chain software vendors, including Manugistics and Logility; and
- corporate information technology departments, which may develop their own
eBusiness solutions.
Historically, a number of enterprise resource planning vendors have jointly
marketed our products as a complement to their own systems. However, as we
attempt to increase our market share and expand our product offerings, and as
enterprise resource planning vendors expand their own product offerings, our
relationships with these vendors have and may continue to become more
competitive. We believe that enterprise resource planning vendors are focusing
significant resources on increasing the functionality of their own planning and
scheduling products.
Relative to us, many of our competitors have:
- longer operating histories;
- significantly greater financial, technical, marketing and other
resources;
- greater name recognition;
- a broader range of products to offer; and
- a larger installed base of customers.
Current and potential competitors have established, or may establish,
cooperative relationships among themselves or with third parties to enhance
their products, which may result in increased competition. In addition, we
expect to experience increasing price competition as we compete for market
share, and we may not be able to compete successfully with our existing or new
competitors. If we experience increased competition, substantial harm may result
to our business, operating results and financial condition.
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OUR STRATEGIES OF ESTABLISHING AND PROMOTING OUR TRADEMATRIX SERVICES IN DIGITAL
TRADING COMMUNITIES IS UNPROVEN AND MAY BE UNSUCCESSFUL.
As part of our business strategy, we are offering our TradeMatrix services
to trading community participants in digital marketplaces to link and provide
value-added services. This strategy is unproven, and currently we are providing
our TradeMatrix services in only a small number of digital trading communities
and are providing only a limited portion of our intended TradeMatrix services.
We have limited experience developing and operating digital marketplaces, and we
cannot assure you that these trading communities will be operated effectively,
that enterprises will join and remain in these trading communities, that we will
develop and provide successfully all intended TradeMatrix services, or that we
will generate significant revenues from these services. To date, we have not
generated significant revenues from these services. If this business strategy is
flawed, or if we are unable to execute it effectively, our business, operating
results and financial condition could be substantially harmed.
In addition, we expect to rely on third parties' efforts to promote our
TradeMatrix services. Because our revenues from these sources are likely to be
largely based on utilization of our digital marketplaces, any failure by these
third parties to successfully promote our TradeMatrix services, or any
reluctance to participate in our digital marketplaces or TradeMatrix on the part
of suppliers, manufacturers, distributors, logistics providers or customers,
could harm our business, results of operations and financial condition.
Furthermore, our TradeMatrix services may be unable to support large
numbers of trading community participants. We currently use third-party service
providers to host these services, and we may internally host some or all of
these services in the future. We may be liable to trading community participants
for damages, or these marketplaces may experience service interruptions, if we
or third-party service providers suffer system failures or if a digital
marketplace or TradeMatrix otherwise becomes inoperable.
RAPID GROWTH IN OUR OPERATIONS COULD CONTINUE TO STRAIN OUR MANAGERIAL AND
OPERATIONAL RESOURCES.
We have experienced rapid growth. Revenues have increased to $395.8 million
in the nine months ended September 30, 1999 from $255.6 million in the nine
months ended September 30, 1998. Our revenues increased to $369.2 million in
1998, from $221.8 million in 1997 and from $101.5 million in 1996. Our employee
count has increased to approximately 2,650 at September 30, 1999 from
approximately 2,240 at December 31, 1998 and from approximately 1,190 at
December 31, 1997. We also have increased the scope of our operating and
financial systems and the geographic distribution of our operations and
customers. This growth has strained our management and operations, and they will
continue to be strained if rapid growth continues. Our officers and other key
employees will need to implement and improve our operational, customer support
and financial control systems and effectively expand, train and manage our
employee base. Further, we expect that we will be required to manage an
increasing number of relationships with various customers and other third
parties. We may not be able to manage future expansion successfully, and our
inability to do so would harm our business, operating results and financial
condition.
ANY DECREASE IN DEMAND FOR OUR RHYTHM SUITE OF PRODUCTS AND SERVICES COULD
SIGNIFICANTLY REDUCE OUR REVENUES.
We derive substantially all of our revenues from licenses of our RHYTHM
suite of products and related services. RHYTHM-related revenues, including
maintenance and consulting contracts, will continue to account for substantially
all of our revenues for the foreseeable future. As a result, our future
operating results will depend upon continued market acceptance of RHYTHM and
enhancements thereto. However, RHYTHM may not achieve continued market
acceptance. Competition, technological change or other factors could decrease
demand for, or market acceptance of, RHYTHM. Any decrease in demand or market
acceptance of RHYTHM could substantially harm our business, operating results
and financial condition.
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WE ARE INVESTING SIGNIFICANT RESOURCES IN DEVELOPING AND MARKETING OUR
INTELLIGENT EBUSINESS SOLUTIONS. THE MARKET FOR THESE SOLUTIONS IS NEW AND
EVOLVING, AND, IF THIS MARKET DOES NOT DEVELOP AS WE ANTICIPATE OR IF WE ARE
UNABLE TO DEVELOP ACCEPTABLE SOLUTIONS, SERIOUS HARM WOULD RESULT TO OUR
BUSINESS.
We currently derive a substantial portion of our revenues from licenses for
decision-support software products associated with supply chain management
software and related services. However, we are investing significant resources
in further developing and marketing enhanced products and services to facilitate
eBusiness over public and private networks. For the first few months after we
introduce new products and services, the demand for and market acceptance of
those products and services are subject to a high level of uncertainty,
especially where acquisition of our products or services requires a large
capital commitment or other significant commitment of resources. Adoption of
eBusiness software solutions, particularly by those individuals and enterprises
that have historically relied upon traditional means of commerce and
communication, will require a broad acceptance of new and substantially
different methods of conducting business and exchanging information. These
products and services involve a new approach to the conduct of business, and, as
a result, intensive marketing and sales efforts may be necessary to educate
prospective customers regarding the uses and benefits of these products and
services in order to generate demand. The market for this broader functionality
may not develop, competitors may develop superior products and services, or we
may not develop acceptable solutions to address this functionality. Any one of
these events could seriously harm our business, operating results and financial
condition.
RAPID ADOPTION OF OUR TRADEMATRIX SERVICES COULD REDUCE OUR SOFTWARE LICENSING
REVENUES.
Our customers may rapidly adopt our TradeMatrix services. Revenues from
these services will be based on utilization of digital marketplaces. This
pricing model differs from our historical model of deriving revenues from
licenses of the RHYTHM suite of products, which we largely recognize upon
executing a contract and delivering software. Although our revenue from digital
marketplaces and TradeMatrix has been immaterial to date, our business model
calls for a growing portion of our revenues in the future to be based upon
utilization fees from these services. To the extent that our customers choose to
use our TradeMatrix services in lieu of licensing the RHYTHM suite of products,
we may recognize lower revenues in the initial periods of our relationships with
these customers.
THE MARKETS IN WHICH WE COMPETE EXPERIENCE RAPID TECHNOLOGICAL CHANGE. IF WE DO
NOT RESPOND TO THE TECHNOLOGICAL ADVANCES OF THE MARKETPLACE, WE COULD SERIOUSLY
HARM OUR BUSINESS.
Enterprises are increasing their focus on decision-support solutions for
eBusiness challenges. As a result, they are requiring their application software
vendors to provide greater levels of functionality and broader product
offerings. Moreover, competitors continue to make rapid technological advances
in computer hardware and software technology and frequently introduce new
products, services and enhancements. We must continue to enhance our current
product line and develop and introduce new products and services that keep pace
with the technological developments of our competitors. We must also satisfy
increasingly sophisticated customer requirements. If we cannot successfully
respond to the technological advances of others, or if our new products or
product enhancements and services do not achieve market acceptance, these events
could seriously harm our business, operating results and financial condition.
IF USE OF THE INTERNET FOR COMMERCE AND COMMUNICATION DOES NOT INCREASE AS WE
ANTICIPATE, OUR BUSINESS WILL SUFFER.
We are offering new and enhanced products and services, some of which, such
as TradeMatrix, depend on increased acceptance and use of the Internet as a
medium for commerce and communication. Rapid growth in the use of the Internet
is a recent phenomenon. As a result, acceptance and use may not continue to
develop at historical rates, and a sufficiently broad base of business customers
may not adopt or continue to use the Internet as a medium of commerce. Demand
and market acceptance for recently introduced services and products over the
Internet are subject to a high level of uncertainty, and there exist few proven
services and products.
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Our business could be seriously harmed if:
- use of the Internet and other online services does not continue to
increase or increases more slowly than expected;
- the necessary communication and computer network technology underlying
the Internet and other online services does not effectively support any
expansion that may occur;
- new standards and protocols are not developed or adopted in a timely
manner; or
- for any other reason -- such as concerns about security, reliability,
cost, ease of use, accessibility or quality of service -- the Internet
does not create a viable commercial marketplace, inhibiting the
development of electronic commerce and reducing the need for and
desirability of our products and services.
FUTURE REGULATION OF THE INTERNET MAY SLOW ITS GROWTH, RESULTING IN DECREASED
DEMAND FOR OUR PRODUCTS AND SERVICES AND INCREASED COSTS OF DOING BUSINESS.
Due to increasing popularity and use of the Internet, it is possible that
state and federal regulators could adopt laws and regulations that impose
additional burdens on companies conducting business online. For example, the
growth and development of the market for Internet-based services may prompt
calls for more stringent consumer protection laws. Moreover, the applicability
to the Internet of existing laws in various jurisdictions governing issues such
as property ownership, sales tax, libel and personal privacy is uncertain and
may take years to resolve. Any new legislation or regulation, the application of
laws and regulations from jurisdictions whose laws do not currently apply to our
business, or the application of existing laws and regulations to the Internet
and other online services could decrease the expansion of the Internet, causing
our costs to increase and harming our growth.
CONCERNS THAT OUR PRODUCTS DO NOT ADEQUATELY PROTECT THE PRIVACY OF CONSUMERS
COULD INHIBIT SALES OF OUR PRODUCTS.
One of the principal features of our customer management software
applications is the ability to develop and maintain profiles of consumers for
use by businesses. Typically, these products capture profile information when
consumers, business customers and employees visit a Web site and volunteer
information in response to survey questions concerning their backgrounds,
interests and preferences. Our products augment these profiles over time by
collecting usage data. Although we have designed our customer management
products to enable the development of applications that permit Web site visitors
to prevent the distribution of any of their personal data beyond that specific
Web site, privacy concerns may nevertheless cause visitors to resist providing
the personal data necessary to support this profiling capability. If we cannot
adequately address consumers' privacy concerns, these concerns could seriously
harm our business, financial condition and operating results.
IF OUR ENCRYPTION TECHNOLOGY FAILS TO ENSURE THE SECURITY OF OUR CUSTOMERS'
ONLINE TRANSACTIONS, SERIOUS HARM TO OUR BUSINESS COULD RESULT.
The secure exchange of value and confidential information over public
networks is a significant concern of consumers engaging in online transactions
and interaction. Our customer management software applications use encryption
technology to provide the security necessary to effect the secure exchange of
value and confidential information. Advances in computer capabilities, new
discoveries in the field of cryptography or other events or developments could
result in a compromise or breach of the algorithms that these applications use
to protect customer transaction data. If any compromise or breach were to occur,
it could seriously harm our business, financial condition and operating results.
WE MAY NOT SUCCESSFULLY INTEGRATE OR REALIZE THE INTENDED BENEFITS OF OUR RECENT
ACQUISITIONS.
We acquired InterTrans Logistics Solutions Limited, or ITLS, in April 1998
and Sales Marketing Administration Research Tracking Technologies, Inc., or
SMART, in July 1999. In addition, we have
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acquired other businesses and products to help broaden and strengthen our
product portfolio. The success of these acquisitions will depend primarily on
our ability to:
- retain, motivate and integrate the acquired personnel;
- integrate multiple information systems; and
- integrate acquired software with our existing products and services.
We may encounter difficulties in integrating our operations and products with
those of ITLS, SMART and others. We may not realize the benefits that we
anticipated when we made these acquisitions. Our failure to successfully
integrate our operations and products with those of ITLS, SMART and others could
seriously harm our business, operating results and financial condition.
WE MAY MAKE FUTURE ACQUISITIONS OR ENTER INTO JOINT VENTURES THAT MAY NOT BE
SUCCESSFUL.
In the future, we may acquire additional businesses, products and
technologies, or enter into joint venture arrangements, that could complement or
expand our business. Management's negotiations of potential acquisitions or
joint ventures and management's integration of acquired businesses, products or
technologies could divert their time and resources. Any future acquisitions
could require us to issue dilutive equity securities, incur debt or contingent
liabilities, amortize goodwill and other intangibles, or write off in-process
research and development and other acquisition-related expenses. Further, we may
not be able to integrate any acquired business, product or technology with our
existing operations or train, retain and motivate personnel from the acquired
business. If we are unable to fully integrate an acquired business, product or
technology or train, retain and motivate personnel from the acquired business,
we may not receive the intended benefits of that acquisition.
WE FACE RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS THAT COULD HARM
OUR COMPANY.
Our international operations are subject to risks inherent in international
business activities. In addition, we may expand our international operations in
the future, which would increase our exposure to these risks. The risks we face
internationally include:
- difficulties and costs of staffing and managing geographically disparate
operations;
- longer accounts receivable payment cycles in certain countries;
- compliance with a variety of foreign laws and regulations;
- unexpected changes in regulatory requirements;
- overlap of different tax structures;
- greater difficulty in safeguarding intellectual property;
- import and export licensing requirements;
- trade restrictions;
- changes in tariff rates;
- political instability; and
- general economic conditions in international markets.
CHANGES IN THE VALUE OF THE U.S. DOLLAR, AS COMPARED TO THE CURRENCIES OF
FOREIGN COUNTRIES WHERE WE TRANSACT BUSINESS, COULD HARM OUR OPERATING RESULTS.
To date, our international revenues have been denominated primarily in U.S.
dollars. The majority of our international expenses and some revenues have been
denominated in currencies other than the U.S. dollar. Therefore, changes in the
value of the U.S. dollar as compared to these other currencies may
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adversely affect our operating results. As our international operations expand,
we will use an increasing number of foreign currencies, causing our exposure to
currency exchange rate fluctuations to increase. Although we have implemented
limited hedging programs to mitigate our exposure to currency fluctuations,
currency exchange rate fluctuations have caused, and will continue to cause,
translation gains and losses and currency transaction gains and losses. While
these gains and losses have not been material to date, they may harm our
business, results of operations or financial condition in the future.
WE DEPEND ON OUR STRATEGIC PARTNERS AND OTHER THIRD PARTIES. IF WE FAIL TO
DERIVE BENEFITS FROM OUR EXISTING AND FUTURE STRATEGIC RELATIONSHIPS, OUR
BUSINESS WILL SUFFER.
From time to time, we have collaborated with other companies, including IBM
and PricewaterhouseCoopers, in areas such as product development, marketing,
distribution and implementation. Maintaining these and other relationships is a
meaningful part of our business strategy. However, some of our current and
potential strategic partners are either actual or potential competitors, which
may impair the viability of these relationships. In addition, some of our
relationships have failed to meet expectations and may fail to meet expectations
in the future. We may not be able to enter into successful new strategic
relationships in the future.
THE LOSS OF ANY OF OUR KEY PERSONNEL OR OUR FAILURE TO ATTRACT ADDITIONAL
PERSONNEL COULD SERIOUSLY HARM OUR COMPANY.
We rely upon the continued service of a relatively small number of key
technical and senior management personnel. Our future success depends on
retaining our key employees and our continuing ability to attract, train and
retain other highly qualified technical and managerial personnel. Very few of
our key technical or senior management personnel are bound by employment
agreements. As a result, our employees could leave with little or no prior
notice. In the past, we have had difficulty recruiting qualified personnel. We
may not be able to attract, assimilate or retain other highly qualified
technical and managerial personnel in the future. Our loss of any of our key
technical and senior management personnel or our inability to attract, train and
retain additional qualified personnel could seriously harm our business,
operating results and financial condition.
IF WE FAIL TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS OR FACE A
CLAIM OF INTELLECTUAL PROPERTY INFRINGEMENT BY A THIRD PARTY, WE COULD LOSE OUR
INTELLECTUAL PROPERTY RIGHTS OR BE LIABLE FOR SIGNIFICANT DAMAGES.
We rely primarily on a combination of copyright, trademark and trade secret
laws, confidentiality procedures and contractual provisions to protect our
proprietary rights. However, these measures afford only limited protection.
Unauthorized parties may attempt to copy aspects of our products or to obtain
and use information that we regard as proprietary. Although we believe software
piracy may be a problem, we are not able to determine the extent to which piracy
of our software products exists. Policing unauthorized use of our products is
difficult, and we cannot be certain that the steps we have taken will prevent
misappropriation of our technology. This is particularly true in foreign
countries where the laws may not protect proprietary rights to the same extent
as the laws of the United States and may not provide us with an effective remedy
against piracy.
As the number of products and competitors continues to grow, the
functionality of products in different industry segments is increasingly
overlapping. As a result, we increasingly may be subject to claims of
intellectual property infringement. Although we are not aware that any of our
products infringe upon the proprietary rights of third parties, third parties
may claim infringement by us with respect to current or future products. Any
infringement claims, with or without merit, could be time-consuming, result in
costly litigation or damages, cause product shipment delays or the loss or
deferral of sales, or require us to enter into royalty or licensing agreements.
If we enter into royalty or licensing agreements in settlement of any litigation
or claims, these agreements may not be on terms acceptable to us. Unfavorable
royalty and licensing agreements could seriously harm our business, operating
results and financial condition.
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<PAGE> 11
We resell some software that we license from third parties. Although we may
continue this practice, third-party software licenses may not continue to be
available to us on commercially reasonable terms. Our inability to maintain or
obtain any of these software licenses will delay or reduce our product shipments
until we can identify, license and integrate equivalent software. Any loss of
these licenses or delay or reduction in product shipments could harm our
business, operating results and financial condition.
OUR PRODUCTS' FAILURE TO REMAIN COMPATIBLE WITH EXISTING AND NEW COMPUTERS AND
SOFTWARE OPERATING SYSTEMS WOULD SERIOUSLY HARM OUR BUSINESS.
Our RHYTHM software can operate on hardware platforms from Digital
Equipment, Hewlett-Packard, IBM and Sun Microsystems and operating systems from
Sun Microsystems and Microsoft. RHYTHM can access data from most widely-used
structured query language databases, including Informix, Oracle and Sybase. If
additional hardware or software platforms gain significant market acceptance, we
may be required to attempt to adapt RHYTHM to those platforms in order to remain
competitive. However, those platforms may not be architecturally compatible with
RHYTHM's software product design, and we may not be able to adapt RHYTHM to
those additional platforms on a timely basis, or at all. Any failure to maintain
compatibility with existing platforms or to adapt to new platforms that achieve
significant market acceptance would seriously harm our business, operating
results and financial condition.
OUR SOFTWARE IS COMPLEX AND MAY CONTAIN UNDETECTED ERRORS.
Our software programs are complex and may contain undetected errors or
"bugs." Although we conduct extensive testing, we may not discover bugs until
our customers install and use a given product or until the volume of services
that a product provides increases. On occasion, we have experienced delays in
the scheduled introduction of new and enhanced products because of bugs.
Undetected errors could result in loss of customers or reputation, adverse
publicity, loss of revenues, delay in market acceptance, diversion of
development resources, increased insurance costs or claims against us by
customers, any of which could seriously harm our business, operating results and
financial condition.
RELEASES OF AND PROBLEMS WITH NEW PRODUCTS MAY CAUSE PURCHASING DELAYS, WHICH
WOULD HARM OUR REVENUES.
Customers may delay their purchasing decisions in anticipation of our new
or enhanced products, or products of competitors. Delays in customer purchasing
decisions could seriously harm our business and operating results. Moreover,
significant delays in the general availability of new releases, significant
problems in the installation or implementation of new releases, or customer
dissatisfaction with new releases could seriously harm our business, operating
results and financial condition.
OUR FAILURE TO SUCCESSFULLY RECRUIT AND RETAIN TECHNICAL AND IMPLEMENTATION
PERSONNEL COULD REDUCE OUR LICENSE REVENUES OR LIMIT THE GROWTH OF OUR LICENSE
REVENUES.
A shortage of qualified technical sales support personnel could harm our
ability to expand sales and enter into new vertical markets. We will depend on
our trained implementation personnel or those of independent consultants to
implement our products and services. A shortage in the number of trained
implementation personnel could limit our ability to implement our software and
services on a timely and effective basis. Delayed or ineffective implementation
of our software and services may limit our ability to expand our revenues and
may result in customer dissatisfaction and harm to our reputation. Any of these
events could seriously harm our business, operating results and financial
condition.
RESIDUAL PROBLEMS RELATING TO THE "YEAR 2000 ISSUE" COULD ADVERSELY AFFECT OUR
COMPANY.
Prior to January 1, 2000, there was a great deal of concern regarding the
ability of computers to adequately distinguish 21st century dates from 20th
century dates due to the two-digit date fields used by many systems. Most
reports to date, however, are that computer systems are functioning normally and
the
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<PAGE> 12
compliance and remediation work accomplished leading up to 2000 was effective to
prevent any problems. Computer experts have warned that there may still be
residual consequences of the change in centuries, and any such difficulties
could result in a decrease in sales of our products, an increase in allocation
of resources to address Year 2000 problems of our customers without additional
revenue commensurate with such dedication of resources, or an increase in
litigation costs relating to losses suffered by our customers due to such Year
2000 problems.
WE MAY BECOME SUBJECT TO PRODUCT LIABILITY CLAIMS.
Our license agreements typically seek to limit our exposure to product
liability claims from our customers. However, these contract provisions may not
preclude all potential claims. Additionally, our general liability insurance may
be inadequate to protect us from all liability that we may face. Product
liability claims could require us to spend significant time and money in
litigation or to pay significant damages. As a result, any claim, whether or not
successful, could harm our reputation and business, operating results and
financial condition.
OUR EXECUTIVE OFFICERS AND DIRECTORS HAVE VOTING CONTROL.
Our executive officers and directors together beneficially own
approximately 44% of the total voting power of our company. Accordingly, these
stockholders will be able to determine the composition of our Board of
Directors, will retain the voting power to approve all matters requiring
stockholder approval and will continue to have significant influence over our
affairs. Certain decisions concerning our operations or financial structure may
present conflicts of interest between the stockholders and the holders of notes.
For example, if we encounter financial difficulties or are unable to pay our
debts as they mature, the interests of our executive officers and directors may
conflict with those of the holders of notes. In addition, our executive officers
and directors may wish to pursue acquisitions, divestitures, financings or other
transactions and business strategies that, in their judgment, could enhance
their equity interest in our company, even though these transactions might
involve increased risks to the holders of notes.
OUR CHARTER AND BYLAWS HAVE ANTI-TAKEOVER PROVISIONS.
Provisions of our Certificate of Incorporation and our Bylaws as well as
Delaware law could make it more difficult for a third party to acquire us, even
if doing so would be beneficial to our stockholders. We are subject to the
provisions of Section 203 of the Delaware General Corporation Law, which
restricts certain business combinations with interested stockholders. The
combination of these provisions may inhibit a non-negotiated merger or other
business combination.
OUR STOCK PRICE HISTORICALLY HAS BEEN VOLATILE, WHICH MAY MAKE IT MORE DIFFICULT
FOR YOU TO RESELL COMMON STOCK WHEN YOU WANT AT PRICES YOU FIND ATTRACTIVE.
The market price of our common stock has been volatile in the past, and the
market price of our common stock may be volatile in the future. The following
factors may significantly affect the market price of our common stock:
- quarterly variations in our results of operations;
- the announcement of new products or product enhancements by us or our
competitors;
- technological innovations by us or our competitors; and
- general market conditions or market conditions specific to particular
industries.
In particular, the stock prices of many companies in the technology and
emerging growth sectors have fluctuated widely due to events unrelated to their
operating performance. These fluctuations may harm the market price of the notes
and the common stock into which the notes are convertible.
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<PAGE> 13
THE PRICE OF OUR COMMON STOCK MAY DECLINE DUE TO SHARES ELIGIBLE FOR FUTURE
SALE.
Sales of substantial amounts of common stock in the public market, or the
appearance that a large number of shares is available for sale, could adversely
affect the market price for our common stock. In addition to the adverse effect
a price decline could have on holders of common stock, that decline would likely
impede our ability to raise capital by issuing additional shares of common stock
or other equity securities.
IF WE ARE REQUIRED TO REGISTER AS AN INVESTMENT COMPANY, WE WOULD BECOME SUBJECT
TO SUBSTANTIAL REGULATION, WHICH WOULD INTERFERE WITH OUR ABILITY TO IMPLEMENT
OUR BUSINESS PLAN.
As a result of our previous financings, we have substantial cash, cash
equivalents and short-term investments. We plan to continue investing the excess
proceeds of these financings in short-term instruments consistent with prudent
cash management and not primarily for the purpose of achieving investment
returns. Investment in securities primarily for the purpose of achieving
investment returns could result in our being an "investment company" under the
Investment Company Act of 1940. The Investment Company Act requires the
registration of companies that are primarily in the business of investing,
reinvesting or trading securities or that fail to meet certain statistical tests
regarding their composition of assets and sources of income, even though they
consider themselves not to be primarily engaged in investing, reinvesting or
trading securities. We believe that we are primarily engaged in a business other
than investing in or trading securities and, therefore, are not an investment
company within the meaning of the Investment Company Act. If the Investment
Company Act required us to register as an investment company, we would become
subject to substantial regulation with respect to our capital structure,
management, operations, transactions with affiliated persons and other matters.
Application of the provisions of the Investment Company Act to us may materially
and adversely affect our business, prospects, operating results and ability to
repay our debt, including the notes.
THE NOTES RANK BELOW OUR EXISTING AND FUTURE SENIOR DEBT, AND WE MAY BE UNABLE
TO REPAY OUR OBLIGATIONS UNDER THE NOTES.
The notes are unsecured and subordinated in right of payment to all of our
existing and future senior debt. Because the notes are subordinate to our senior
debt, if we experience:
- a bankruptcy, liquidation or reorganization,
- an acceleration of the notes due to an event of default under the
indenture, or
- certain other events,
we will be permitted to make payments on the notes only after we have satisfied
all of our senior debt obligations. Therefore, we may not have sufficient assets
remaining to pay amounts due on any or all of the notes. In addition, the notes
effectively are subordinate to all liabilities, including trade payables, of our
subsidiaries and any subsidiaries that we may in the future acquire or
establish. Consequently, our right to receive assets of any subsidiaries upon
their liquidation or reorganization, and the rights of the holders of the notes
to share in those assets, would be subordinate to the claims of the
subsidiaries' creditors.
The notes are our obligations exclusively. The indenture for the notes does
not limit our ability, or that of any of our presently existing or future
subsidiaries, to incur senior debt, other indebtedness and other liabilities. We
may have difficulty paying our obligations under the notes if we, or any of our
subsidiaries, incur additional indebtedness or other liabilities. As of
September 30, 1999, we had approximately $17.4 million of senior debt
outstanding, and our subsidiaries had approximately $49.3 million of outstanding
indebtedness and other liabilities. From time to time we and our subsidiaries
may incur additional indebtedness, including senior debt, which could adversely
affect our ability to pay our obligations under the notes.
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<PAGE> 14
WE MAY BE UNABLE TO REPURCHASE THE NOTES.
At maturity, the entire outstanding principal amount of the notes will
become due and payable. In addition, if a Change in Control, as defined in
"Description of the Notes -- Repurchase at Option of Holders Upon a Change in
Control," of our company occurs, each holder of the notes may require us to
repurchase all or a portion of that holder's notes. At maturity or if a Change
in Control occurs, we may not have sufficient funds or may be unable to arrange
for additional financing to pay the principal amount or repurchase price due.
Under the terms of the indenture for the notes, we may elect, if we meet certain
conditions, to pay the repurchase price with shares of common stock. Any future
borrowing arrangements or agreements relating to senior debt to which we become
a party may contain restrictions on, or prohibitions against, our repurchases of
the notes. If the maturity date or Change in Control occurs at a time when our
other arrangements prohibit us from repurchasing the notes, we could try to
obtain the consent of the lenders under those arrangements to purchase the
notes, or we could attempt to refinance the borrowings that contain the
restrictions. If we do not obtain the necessary consents or refinance these
borrowings, we will be unable to repurchase the notes. In that case, our failure
to repurchase any tendered notes or notes due upon maturity would constitute an
event of default under the indenture. Any such default, in turn, may cause a
default under the terms of our senior debt. As a result, in those circumstances,
the subordination provisions of the indenture would, absent a waiver, prohibit
any repurchase of the notes until we pay the senior debt in full.
THERE IS ONLY A LIMITED MARKET FOR THE NOTES.
There is a limited trading market for the notes. We cannot assure you as to
the liquidity of any markets that may develop for the notes, your ability to
sell your notes or the price at which you may be able to sell your notes. The
notes are eligible for trading on the PORTAL market; however, we do not intend
to apply for listing of the notes on any securities exchange or any automated
quotation system.
INFORMATION REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates by reference forward-looking
statements. In some cases, you can identify forward-looking statements by terms
such as "may," "will," "should," "could," "would," "expects," "plans,"
"anticipates," "believes," "estimates," "projects," "predicts," "potential" or
"continue" or other terms of or the negative of those forms or other comparable
terms. Our forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward-looking statements. These
factors are discussed in more detail elsewhere in this prospectus, including
under the caption "Risk Factors." Because of these uncertainties, you should not
place undue reliance on our forward-looking statements. We do not intend to
update any of these factors or to publicly announce the result of any revisions
to any of our forward-looking statements contained herein, whether as a result
of new information, future events or otherwise.
USE OF PROCEEDS
All of the notes and the shares of common stock issuable upon conversion of
the notes are being sold by the selling securityholders or by their pledgees,
donees, transferees or other successors in interest. We will not receive any
proceeds from the sale of the notes or the shares of our common stock issuable
upon conversion of the notes.
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<PAGE> 15
RATIO OF EARNINGS TO FIXED CHARGES
Our ratio of earnings to fixed charges for each of the periods indicated is
as follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------- --------------
1994 1995 1996 1997 1998 1998 1999
----- ----- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges......... 16.5x 12.6x 10.0x 3.7x 7.5x 6.3x 5.5x
</TABLE>
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
include, as applicable, interest expense, amortization of debt issuance costs
and the estimated interest component of rent expense.
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<PAGE> 16
SELECTED CONSOLIDATED FINANCIAL DATA
The following statement of operations data for the years ended December 31,
1996, 1997, and 1998 has been derived from consolidated financial statements
which have been audited by Arthur Andersen LLP. The data presented for the
periods ending December 31, 1994, 1995 and September 30, 1998 and 1999 have been
derived from unaudited financial statements. Amounts shown are in thousands,
except per share data. Shares outstanding and per share amounts have been
adjusted to reflect a 2-for-1 stock split effected as a 100% stock dividend on
February 17, 2000.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
------- ------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Software licenses......................... $11,178 $24,162 $ 62,063 $141,766 $234,316 $160,514 $242,051
Services.................................. 5,013 10,837 30,569 58,218 91,726 66,113 104,388
Maintenance............................... 1,168 3,462 8,881 21,792 43,115 28,938 49,403
------- ------- -------- -------- -------- -------- --------
Total revenues...................... 17,359 38,461 101,513 221,776 369,157 255,565 395,842
------- ------- -------- -------- -------- -------- --------
Costs and expenses:
Cost of software licenses................. 366 390 260 2,746 7,967 5,681 11,821
Cost of services and maintenance.......... 3,196 7,601 21,761 48,422 77,459 52,630 91,183
Sales and marketing....................... 4,780 10,487 35,484 77,071 129,978 90,914 136,127
Research and development.................. 3,644 8,503 23,559 57,392 94,199 67,371 95,106
General and administrative................ 2,188 5,286 11,108 24,984 38,191 25,851 39,054
In-process research and development and
acquisition-related expenses(1)......... -- -- 1,133 9,306 7,618 7,044 4,825
------- ------- -------- -------- -------- -------- --------
Total costs and expenses............ 14,174 32,267 93,305 219,921 355,412 249,491 378,116
------- ------- -------- -------- -------- -------- --------
Operating income............................ 3,185 6,194 8,208 1,855 13,745 6,074 17,726
Other income (expense), net................. (127) (167) 1,671 3,309 8,753 7,090 4,419
------- ------- -------- -------- -------- -------- --------
Income before income taxes.................. 3,058 6,027 9,879 5,164 22,498 13,164 22,145
Provision for income taxes.................. 1,306 2,054 4,705 6,916 17,279 11,450 14,045
------- ------- -------- -------- -------- -------- --------
Net income (loss)........................... $ 1,752 $ 3,973 $ 5,174 $ (1,752) $ 5,219 1,714 8,100
======= ======= ======== ======== ======== ======== ========
Net income (loss) per share................. $ 0.02 $ 0.04 $ 0.04 $ (0.01) $ 0.04 $ 0.01 $ 0.05
======= ======= ======== ======== ======== ======== ========
Net income (loss) per share, assuming
dilution.................................. $ 0.02 $ 0.03 $ 0.04 $ (0.01) $ 0.03 $ 0.01 $ 0.05
======= ======= ======== ======== ======== ======== ========
Weighted average common shares
outstanding............................... 87,460 90,656 119,580 128,884 143,588 142,700 149,504
Weighted average common shares outstanding,
assuming dilution......................... 110,640 121,788 136,232 128,884 157,060 156,698 163,418
</TABLE>
- ---------------
(1) We incurred acquisition-related expenses related to business combinations of
$1.1 million in 1996, $9.3 million in 1997, $7.6 million in 1998, $7.0
million in the nine months ended September 30, 1998 and $4.8 million in the
nine months ended September 30, 1999, including write-offs of in-process
research and development of $1.1 million in 1996, $4.6 million in 1997, $4.7
million in 1998, $4.4 million in the nine months ended September 30, 1998
and $1.9 million in the nine months ended September 30, 1999. The remaining
costs included in amortization of goodwill and acquired technology and
investment banking, legal and accounting fees and expenses. Excluding these
expenses, net income and net income per share, assuming dilution, would have
been $6.3 million and $0.05 per share in 1996, $5.0 million and $0.03 per
share in 1997, $12.8 million and $0.08 per share in 1998, $8.8 million and
$0.06 per share in the nine months ended September 30, 1998, and $12.9
million and $0.08 per share in the nine months ended September 30, 1999.
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<PAGE> 17
DESCRIPTION OF THE NOTES
We have issued the notes under a document called the "Indenture." The
Indenture is a contract between us and Chase Bank of Texas, National
Association, who acts as trustee (the "Trustee"). The Indenture and the notes
are governed by New York law. Because this section is a summary, it does not
describe every aspect of the notes. This summary is subject to and qualified in
its entirety by reference to all the provisions of the Indenture, including
definitions of certain terms used in the Indenture. For example, in this section
we use capitalized words to signify defined terms that have been given special
meaning in the Indenture. We describe the meaning for only the more important
terms. Wherever we refer to particular defined terms, those defined terms are
incorporated by reference here. In this section, references to "i2 Technologies"
or "us" refer solely to i2 Technologies, Inc. and not our subsidiaries.
GENERAL
The notes are general, unsecured obligations of i2 Technologies. The notes
are subordinated, which means that they rank behind certain of our indebtedness
as described below. The notes are limited to $350,000,000 aggregate principal
amount. Payment of the full principal amount of the notes will be due on
December 15, 2006.
The notes bear interest at the annual rate shown on the front cover of this
prospectus from December 10, 1999. We will pay interest semi-annually on June 15
and December 15 of each year, beginning June 15, 2000, until the principal is
paid or made available for payment. Interest will be paid to the person in whose
name the note is registered at the close of business on the preceding June 1 or
December 1, as the case may be, subject to certain exceptions specified in the
Indenture. Interest payable per $1,000 principal amount of notes for the period
from December 10, 1999 to June 15, 2000, will be $26.9792.
You may convert the notes into shares of common stock initially at the
conversion rate stated on the front cover of this prospectus at any time before
the close of business on December 15, 2006, unless the notes have been
previously redeemed or repurchased. The conversion rate may be adjusted as
described below.
We may redeem the notes at our option at any time on or after December 20,
2002, in whole or in part, at the redemption prices set forth below under
"-- Optional Redemption by i2 Technologies," plus accrued and unpaid interest to
the redemption date. If there is a Change in Control of i2 Technologies, you may
have the right to require us to repurchase your notes as described below under
"-- Repurchase at Option of Holders Upon a Change in Control."
FORM, DENOMINATION, TRANSFER, EXCHANGE AND BOOK-ENTRY PROCEDURES
The notes will be issued:
- only in fully registered form;
- without interest coupons; and
- in denominations of $1,000 and greater multiples.
The notes are evidenced by one or more global notes which are deposited
with the Trustee as custodian for DTC and registered in the name of Cede & Co.
("Cede"), as nominee of DTC. The global note and any notes issued in exchange
for the global note are subject to restrictions on transfer and bear the legend
regarding those restrictions set forth under "Notice to Investors." Except as
set forth below, record ownership of the global note may be transferred, in
whole or in part, only to another nominee of DTC or to a successor of DTC or its
nominee.
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<PAGE> 18
The global note will not be registered in the name of any person, or
exchanged for notes that are registered in the name of any person, other than
DTC or its nominee unless either of the following occurs:
- DTC notifies us that it is unwilling, unable or no longer qualified to
continue acting as the depositary for the global note; or
- an Event of Default with respect to the notes represented by the global
note has occurred and is continuing.
In those circumstances, DTC will determine in whose names any securities issued
in exchange for the global note will be registered.
DTC or its nominee will be considered the sole owner and holder of the
global note for all purposes, and as a result:
- you cannot get notes registered in your name if they are represented by
the global note;
- you cannot receive certificated (physical) notes in exchange for your
beneficial interest in the global notes;
- you will not be considered to be the owner or holder of the global note
or any note it represents for any purpose; and
- all payments on the global note will be made to DTC or its nominee.
The laws of some jurisdictions require that certain kinds of purchasers
(for example, certain insurance companies) can only own securities in definitive
(certificated) form. These laws may limit your ability to transfer your
beneficial interests in the global note to these types of purchasers.
Only institutions (such as a securities broker or dealer) that have
accounts with the DTC or its nominee (called "participants") and persons that
may hold beneficial interests through participants can own a beneficial interest
in the global security note. The only place where the ownership of beneficial
interests in the global security note will appear and the only way the transfer
of those interests can be made will be on the records kept by DTC (for their
participants' interests) and the records kept by those participants (for
interests of persons held by participants on their behalf).
Secondary trading in bonds and notes of corporate issuers is generally
settled in clearing-house (that is, next-day) funds. In contrast, beneficial
interests in a global note usually trade in DTC's same-day funds settlement
system, and settle in immediately available funds. We make no representations as
to the effect that settlement in immediately available funds will have on
trading activity in those beneficial interests.
We will make cash payments of interest on and principal of and the
redemption or repurchase price of the global note, as well as any payment of
Liquidated Damages, to Cede, the nominee for DTC, as the registered owner of the
global note. We will make these payments by wire transfer of immediately
available funds on each payment date.
We have been informed that DTC's practice is to credit participants'
accounts on the payment date with payments in amounts proportionate to their
respective beneficial interests in the notes represented by the global note as
shown on DTC's records, unless DTC has reason to believe that it will not
receive payment on that payment date. Payments by participants to owners of
beneficial interests in notes represented by the global note held through
participants will be the responsibility of those participants, as is now the
case with securities held for the accounts of customers registered in "street
name."
We will send any redemption notices to Cede. We understand that if less
than all the notes are being redeemed, DTC's practice is to determine by lot the
amount of the holdings of each participant to be redeemed.
We also understand that neither DTC nor Cede will consent or vote with
respect to the notes. We have been advised that under its usual procedures, DTC
will mail an "omnibus proxy" to us as soon as
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<PAGE> 19
possible after the record date. The omnibus proxy assigns Cede's consenting or
voting rights to those participants to whose accounts the notes are credited on
the record date identified in a listing attached to the omnibus proxy.
Because DTC can only act on behalf of participants, who in turn act on
behalf of indirect participants, the ability of a person having a beneficial
interest in the principal amount represented by the global note to pledge the
interest to persons or entities that do not participate in the DTC book-entry
system, or otherwise take actions in respect of that interest, may be affected
by the lack of a physical certificate evidencing its interest.
DTC has advised us that it will take any action permitted to be taken by a
holder of notes (including the presentation of notes for exchange) only at the
direction of one or more participants to whose account with DTC interests in the
global note are credited and only in respect of such portion of the principal
amount of the notes represented by the global note as to which such participant
or participants has or have given such direction.
DTC has also advised us as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the Uniform
Commercial Code, as amended, and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934. DTC was
created to hold securities for its participants and facilitate the clearance and
settlement of securities transactions between participants through electronic
book-entry changes in accounts of its participants. Participants include
securities brokers and dealers, banks, trust companies and clearing corporations
and may include certain other organizations. Certain of such participants (or
their representatives), together with other entities, own DTC. Indirect access
to the DTC system is available to other entities such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship with
a participant, either directly or indirectly.
The policies and procedures of DTC, which may change periodically, will
apply to payments, transfers, exchanges and other matters relating to beneficial
interests in the global note. We and the Trustee have no responsibility or
liability for any aspect of DTC's or any participants' records relating to
beneficial interests in the global note, including for payments made on the
global note, and we and the Trustee are not responsible for maintaining,
supervising or reviewing any of those records.
CONVERSION RIGHTS
You may, at your option, convert any portion of the principal amount of a
note that is an integral multiple of $1,000 into shares of common stock at any
time prior to the close of business on the maturity date, unless the note has
been previously redeemed or repurchased, at a conversion rate equal to 13.1594
shares per $1,000 principal amount of notes. This conversion rate is equivalent
to a conversion price of approximately $75.99. The conversion rate is subject to
adjustment as described below. Your right to convert a note called for
redemption or delivered for repurchase will terminate at the close of business
on the Business Day immediately preceding the redemption date or repurchase date
for that note, unless we default in making the payment due upon redemption or
repurchase.
The holder of a note can convert the note by delivering the note to an
office or agency of the Trustee in the Borough of Manhattan, The City of New
York, accompanied by a duly signed and completed notice of conversion, a copy of
which may be obtained from the Trustee. In the case of a global note, DTC will
effect the conversion upon notice from the holder of a beneficial interest in
the global note in accordance with DTC's rules and procedures. The conversion
date will be the date on which the note and the duly signed and completed notice
of conversion are so delivered. As promptly as practicable on or after the
conversion date, we will issue and deliver to the Trustee a certificate or
certificates for the number of full shares of common stock issuable upon
conversion, together with payment in lieu of any fraction of a share. The
certificates will be sent by the Trustee to the Conversion Agent for delivery to
the holder of the note being converted. The shares of common stock issuable upon
conversion of the notes will be fully paid and
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nonassessable and will also rank equally with other shares of our common stock
outstanding from time to time.
If you surrender a note for conversion on a date that is not an Interest
Payment Date, you will not be entitled to receive any interest for the period
from the next preceding Interest Payment Date to the date of conversion, except
as described below. However, if you are a holder of a note on a Regular Record
Date that is surrendered for conversion after the Regular Record Date but before
the next succeeding Interest Payment Date, you will receive the interest payable
on such note on such succeeding Interest Payment Date. Accordingly, any note
surrendered for conversion during the period from the close of business on a
Regular Record Date to the opening of business on the next succeeding Interest
Payment Date must be accompanied by payment of an amount equal to the interest
payable on such Interest Payment Date on the principal amount of notes being
surrendered for conversion. However, you will not be required to make that
payment if you are converting a note, or a portion of a note, that we have
called for redemption, or that you are entitled to require us to repurchase from
you, if your conversion right would terminate because of the redemption or
repurchase between the Regular Record Date and the close of business on the next
succeeding Interest Payment Date.
No other payment or adjustment for interest, or for any dividends on our
common stock, will be made upon conversion. If you receive common stock upon
conversion of a note, you will not be entitled to receive any dividends payable
to holders of common stock as of any record date before the close of business on
the conversion date. We will not issue fractional shares upon conversion of
notes. Instead, we will pay an amount in cash based on the market price of the
common stock at the close of business on the conversion date.
If you deliver a note for conversion, you will not be required to pay any
taxes or duties in respect of the issue or delivery of common stock on
conversion. However, we are not required to pay any tax or duty that may be
payable in respect of any transfer involved in the issue or delivery of the
common stock in a name other than that of the holder of the note. We will not
issue or deliver certificates representing shares of common stock unless the
person requesting the issuance or delivery has paid to us the amount of any such
tax or duty or has established to our satisfaction that such tax or duty is
payable.
The conversion rate is subject to adjustment if:
(1) there is a dividend or other distribution payable in common stock
on shares of our common stock;
(2) we issue to all holders of common stock rights, options or
warrants entitling them to subscribe for or purchase common stock at less
than the then current market price, calculated as described in the
Indenture, of our common stock; however, if those rights, options or
warrants are only exercisable upon the occurrence of certain triggering
events, then the conversion rate will not be adjusted until the triggering
events occur;
(3) we subdivide, reclassify or combine our common stock;
(4) we distribute to all holders of our common stock evidences of our
indebtedness, shares of capital stock, cash or assets, including
securities, but excluding:
- those dividends, distributions and rights, options and warrants
referred to in paragraphs (1) and (2) above;
- dividends and distributions paid exclusively in cash; or
- distributions upon mergers or consolidations;
(5) we make a distribution consisting exclusively of cash, to all
holders of our common stock if: the aggregate amount of the distribution
combined together with (A) other such all-cash distributions made within
the preceding 12 months in respect of which no adjustment has been made and
(B) any cash and the fair market value of other consideration payable in
respect of any tender offer by
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<PAGE> 21
i2 Technologies or any of our subsidiaries for our common stock concluded
within the preceding 12 months in respect of which no adjustment has been
made, exceeds 10% of our market capitalization, being the product of the
current market price per share of the common stock on the record date for
such distribution and the number of shares of common stock then
outstanding; or
(6) the successful completion of a tender offer made by i2
Technologies or any of our subsidiaries for our common stock which involves
aggregate consideration that, together with (A) any cash and other
consideration payable in a tender offer by i2 Technologies or any of our
subsidiaries for our common stock expiring within the 12 months preceding
the expiration of such tender offer in respect of which no adjustment has
been made and (B) the aggregate amount of any such all-cash distributions
referred to in paragraph (5) above to all holders of common stock within
the 12 months preceding the expiration of such tender offer in respect of
which no adjustments have been made, exceeds 10% of our market
capitalization on the expiration of such tender offer.
We reserve the right to make such increases in the conversion rate in
addition to those required by the provisions described above as we may consider
to be advisable so that any event treated for United States federal income tax
purposes as a dividend of stock or stock rights will not be taxable to the
recipients. No adjustment of the conversion rate will be required to be made
until the cumulative adjustments amount to 1.0% or more of the conversion rate.
We will compute any adjustments to the conversion rate and give notice to the
holders of any such adjustments.
If we merge or consolidate with another person or sell or transfer all or
substantially all of our assets, each note then outstanding will, without the
consent of the holder of any note, become convertible only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of shares of
common stock into which the note was convertible immediately prior to the
merger, consolidation or sale. This calculation will be made based on the
assumption that the holder of common stock failed to exercise any rights of
election that the holder may have to select a particular type of consideration.
The adjustment will not be made for a merger that does not result in any
reclassification, conversion, exchange or cancellation of our common stock.
We may, from time to time, increase the conversion rate by any amount for
any period of at least 20 days if our Board of Directors has determined that
such increase would be in our best interests. If our Board of Directors makes
such a determination, it will be conclusive. We will give holders of notes at
least 15 days' notice of such an increase in the conversion rate. No such
increase will be taken into account for purposes of determining whether the
closing price of the common stock exceeds the conversion price by 105% in
connection with an event which otherwise would be a "Change in Control," as
defined below.
If at any time we make a distribution of property to our shareholders that
would be taxable to such shareholders as a dividend for United States federal
income tax purposes, e.g., distributions of evidences of indebtedness or assets
of i2 Technologies, but generally not stock dividends on common stock or rights
to subscribe for common stock, and, pursuant to the anti-dilution provisions of
the Indenture, the number of shares into which notes are convertible is
increased, that increase may be deemed for United States federal income tax
purposes to be the payment of a taxable dividend to holders of notes. See
"Material United States Federal Income Tax Considerations -- Dividends."
SUBORDINATION
The notes are subordinated and, as a result, the payment of the principal,
any premium and interest on the notes, including amounts payable on any
redemption or repurchase, will be subordinated to the prior payment in full, in
cash or other payment satisfactory to holders of Senior Debt, of all of our
Senior Debt.
"Senior Debt" means the principal of, and premium, if any, and interest,
including all interest accruing subsequent to the commencement of any bankruptcy
or similar proceeding, whether or not a claim for post-petition interest is
allowable as a claim in any such proceeding, on, and all fees and other
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<PAGE> 22
amounts payable in connection with, the following, whether absolute or
contingent, secured or unsecured, due or to become due, outstanding on the date
of the Indenture or thereafter created, incurred or assumed:
- our indebtedness evidenced by any credit or loan agreement, note, bond,
debenture or other similar instrument;
- all of our obligations for money borrowed;
- our obligations as lessee under leases required to be capitalized on the
balance sheet of the lessee under generally accepted accounting
principles;
- all our obligations under interest rate, currency and credit swaps, caps,
floors, collars, hedge agreements, forward contracts or similar
agreements or arrangements;
- all our obligations with respect to letters of credit, bank guarantees,
bankers' acceptances and similar facilities, including related
reimbursement obligations;
- all our obligations issued or assumed as the deferred purchase price of
property or services, but excluding trade accounts payable and accrued
liabilities arising in the ordinary course of business;
- all our obligations of the type referred to above of another person and
all dividends of another person, the payment of which, in either case, we
have assumed or guaranteed, or for which we are responsible or liable,
directly or indirectly, jointly or severally, as obligor, guarantor or
otherwise, or which is secured by a lien on our property; or
- renewals, extensions, modifications, replacements, restatements and
refundings of, or any indebtedness or obligation issued in exchange for
any indebtedness or obligation described in the bullets above.
Senior Debt will not include any indebtedness or obligation if the terms of the
indebtedness or obligation, or the terms of the instrument under which the
indebtedness or obligation is issued, expressly provide that the indebtedness or
obligation is not superior in right of payment to the notes. In addition, Senior
Debt will not include any particular indebtedness or obligation that we may owe
to any of our direct or indirect subsidiaries.
We may not make any payment on account of principal, premium or interest on
the notes, or redemption or repurchase of the notes, if either of the following
occurs:
- we default in our obligations to pay principal, premium, interest or
other amounts on our Designated Senior Debt, as defined below, including
a default under any redemption or repurchase obligation, and the default
continues beyond any grace period that we may have to make those
payments; or
- any other default occurs and is continuing on any Designated Senior Debt
and (1) the default permits the holders of the Designated Senior Debt to
accelerate its maturity and (2) the Trustee has received a notice (a
"Payment Blockage Notice") of the default from i2 Technologies or such
other person permitted to give such notice under the Indenture.
If payments of the notes have been blocked by a payment default on Senior
Debt, payments on the notes may resume when the payment default has been cured
or waived or ceases to exist. If payments on the notes have been blocked by a
nonpayment default, payments on the notes may resume on the earlier of (1) the
date the nonpayment default is cured or waived or ceases to exist or (2) 179
days after the Payment Blockage Notice is received.
No nonpayment default that existed on the day a Payment Blockage Notice was
delivered to the Trustee can be used as the basis for any subsequent Payment
Blockage Notice. In addition, once a holder
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<PAGE> 23
of Designated Senior Debt has blocked payment on the notes by giving a Payment
Blockage Notice, no new period of payment blockage can be commenced until both
of the following are satisfied:
- 365 days have elapsed since the effectiveness of the immediately prior
Payment Blockage Notice; and
- all scheduled payments of principal, any premium and interest on the
notes have come due and have been paid in full in cash.
"Designated Senior Debt" means indebtedness under our existing credit
facilities with Chase Bank of Texas and Wells Fargo Bank (Texas) and any other
Senior Debt in which the instrument creating or evidencing the debt, or the
assumption or guarantee of the debt, or related agreements or documents to which
we are a party, expressly provides that the indebtedness will be "Designated
Senior Debt" for purposes of the Indenture. That instrument, agreement or other
document may place limitations and conditions on the right of that Senior Debt
to exercise the rights of Designated Senior Debt.
In addition, upon any acceleration of the principal due on the notes as a
result of an Event of Default or payment or distribution of our assets to
creditors upon any dissolution, winding up, liquidation or reorganization,
whether voluntary or involuntary, marshaling of assets, assignment for the
benefit of credits, or in bankruptcy, insolvency, receivership or other similar
proceedings, all principal, premium, interest and other amounts due on all
Senior Debt must be paid in full, in cash or other payment satisfactory to
holders of Senior Debt, before you will be entitled to receive any payment.
Because of this subordination, in the event of insolvency, our creditors who are
holders of Senior Debt may recover more, ratably, than you would, and this
subordination may reduce or eliminate payments to you. As of September 30, 1999,
we had approximately $17.4 million of Senior Debt outstanding.
In addition, the notes are "structurally subordinated" to all indebtedness
and other liabilities, including trade payables and lease obligations, of our
subsidiaries. This occurs because any right of i2 Technologies to receive any
assets of our subsidiaries upon their liquidation or reorganization, and the
consequent right of the holders of the notes to participate in those assets,
will be effectively subordinated to the claims of that subsidiary's creditors,
including trade creditors, except to the extent that i2 Technologies itself is
recognized as a creditor of the subsidiary, in which case the claims of i2
Technologies would still be subordinate to any security interest in the assets
of the subsidiary and any indebtedness of the subsidiary senior to that held by
i2 Technologies. As of September 30, 1999, our subsidiaries had approximately
$49.3 million of indebtedness and other liabilities outstanding.
The Indenture does not limit our ability or the ability of any of our
subsidiaries to incur indebtedness, including Senior Debt.
OPTIONAL REDEMPTION BY I2 TECHNOLOGIES
On and after December 20, 2002, we may redeem the notes, in whole or in
part, at our option, at the redemption prices specified below. The redemption
price, expressed as a percentage of principal amount, is as follows for the
12-month periods beginning on December 15 of the following years (December 20
through December 14 in the case of the first of such periods):
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---- ----------
<S> <C>
2002..................................................... 103.000%
2003..................................................... 102.250%
2004..................................................... 101.500%
2005..................................................... 100.750%
</TABLE>
and 100% of the principal amount on and after December 15, 2006. In each case we
will also pay accrued interest to, but excluding, the redemption date. If the
redemption date is also an interest payment date, we will pay the accrued
interest becoming due on that date to the holder of record as of the relevant
record
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date. The Indenture requires us to give notice of redemption not more than 60
and not less than 30 days before the redemption date.
No "sinking fund" is provided for the notes, which means that the Indenture
does not require us to redeem or retire the notes periodically.
REPURCHASE AT OPTION OF HOLDERS UPON A CHANGE IN CONTROL
If a Change in Control, as defined below, occurs, you will have the right,
at your option, to require us to repurchase all of your notes not called for
redemption, or any portion of the principal amount of your notes that is equal
to $5,000 or any integral multiple of $1,000 in excess of $5,000. The price we
are required to pay is 100% of the principal amount of the notes to be
repurchased, together with interest accrued to, but excluding, the repurchase
date. If the redemption date is also an interest payment date, we will pay the
accrued interest becoming due on that date to the holder of record as of the
relevant record date.
At our option, instead of paying the repurchase price in cash, we may pay
the repurchase price in common stock valued at 95% of the average of the closing
sales prices of the common stock for the five trading days immediately preceding
and including the third day prior to the repurchase date. We may only pay the
repurchase price in common stock if we satisfy conditions provided in the
Indenture.
Within 30 days after the occurrence of a Change in Control, we are
obligated to give you notice of the Change in Control and of the repurchase
right arising as a result of the Change in Control. We must also deliver a copy
of this notice to the Trustee. To exercise the repurchase right, you must
deliver on or before the 30th day after the date of our notice irrevocable
written notice to the Trustee of your exercise of your repurchase right,
together with the notes with respect to which that right is being exercised. We
are required to make the repurchase on the date that is 45 days after the date
of our notice.
A "Change in Control" will be deemed to have occurred at the time after the
notes are originally issued that any of the following occurs:
(1) any person, including any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Securities Exchange Act of 1934,
acquires beneficial ownership, directly or indirectly, through a purchase,
merger or other acquisition transaction or series of transactions, of
shares of our capital stock entitling that person to exercise 50% or more
of the total voting power of all shares of our capital stock entitled to
vote generally in elections of directors; however, any acquisition by i2
Technologies, any subsidiary of i2 Technologies or any employee benefit
plan of i2 Technologies and any merger or consolidation that is not a
Change in Control under clause (2) below will not trigger this provision;
(2) we consolidate with or merge with or into any other person or
another person merges into us, except if the transaction satisfies any of
the following:
- the holders of 50% or more of the total voting power of all shares of
our capital stock entitled to vote generally in elections of directors
immediately prior to the transaction have, directly or indirectly, 50%
or more of the total voting power of all shares of capital stock of
the continuing or surviving corporation entitled to vote generally in
elections of directors of the continuing or surviving corporation
immediately after the transaction;
- the transaction is a merger which does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of our capital stock;
- the transaction is a merger effected only to change our jurisdiction
of incorporation and it results in a reclassification, conversion or
exchange of outstanding shares of our common stock only into shares of
common stock of i2 Technologies or another corporation; or
(3) we convey, transfer, sell, lease or otherwise dispose of all or
substantially all of our assets to another person.
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However, a Change in Control will not be deemed to have occurred if the
closing sales price per share of our common stock for any five trading days
within 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 stock, or the period of 10 consecutive trading days ending immediately
before the Change in Control, in the case of Change in Control relating to a
merger, consolidation or asset sale, equals or exceeds 105% of the conversion
price of the notes in effect on each of those trading days.
For purposes of these provisions:
- the conversion price is equal to $1,000 divided by the conversion rate;
- whether a person is a "beneficial owner" will be determined in accordance
with Rule 13d-3 under the Securities Exchange Act of 1934; and
- "person" includes any syndicate or group that would be deemed to be a
"person" under Section 13(d)(3) of the Securities Exchange Act of 1934.
Rule 13e-4 under the Securities Exchange Act of 1934 requires the
dissemination of prescribed information to security holders in the event of an
issuer tender offer and may apply in the event that the repurchase option
becomes available to you. We will comply with this rule to the extent it applies
at that time.
We may, to the extent permitted by applicable law, at any time purchase
notes in the open market or by tender at any price or by private agreement. Any
note that we so purchase may, to the extent permitted by applicable law, be
reissued or resold or may, at our option, be surrendered to the Trustee for
cancellation. Any notes surrendered may not be reissued or resold and will be
canceled promptly.
The definition of Change in Control includes a phrase relating to the
conveyance, transfer, sale, lease or disposition of "all or substantially all"
of our assets. There is no precise, established definition of the phrase
"substantially all" under applicable law. Accordingly, your ability to require
us to repurchase your notes as a result of conveyance, transfer, sale, lease or
other disposition of less than all of our assets may be uncertain.
The foregoing provisions would not necessarily provide you with protection
if we are involved in a highly leveraged or other transaction that may adversely
affect you.
Our ability to repurchase notes upon the occurrence of a Change in Control
is subject to important limitations. Some of the events constituting a Change in
Control could result in an event of default under, or be prohibited or limited
by, the terms of any Senior Debt. As a result, unless we were to obtain a
waiver, a repurchase of the notes in cash could be prohibited under the
subordination provisions of the Indenture until the Senior Debt is paid in full.
Although we have the right to repurchase the notes with common stock, subject to
certain conditions, we cannot assure you that we would have the financial
resources, or would be able to arrange financing, to pay the repurchase price in
cash for all the notes that might be delivered by holders of notes seeking to
exercise the repurchase right. If we were to fail to repurchase the notes when
required following a Change in Control, an Event of Default under the Indenture
would occur, whether or not such repurchase is permitted by the subordination
provisions of the Indenture. Any such default may, in turn, cause a default
under our Senior Debt. See "-- Subordination."
MERGERS AND SALES OF ASSETS BY I2 TECHNOLOGIES
We may not consolidate with or merge into any other person or convey,
transfer, sell or lease our properties and assets substantially as an entirety
to any person, and we may not permit any person to consolidate with or merge
into us or convey, transfer, sell or lease such person's properties and assets
substantially as an entirety to us, unless each of the following requirements is
met:
- the person formed by the consolidation or into or with which we merge or
the person to which our properties and assets are conveyed, transferred,
sold or leased, is a corporation, limited liability
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<PAGE> 26
company, partnership or trust organized and existing under the laws of
the United States, any State or the District of Columbia and, if other
than us, shall expressly assume the due and punctual payment of the
principal of, any premium, and interest on the notes and the performance
of our other covenants under the Indenture;
- immediately after giving effect to that transaction, no Event of Default,
and no event which, after notice or lapse of time or both, would become
an Event of Default, shall have occurred and be continuing; and
- if required by the Indenture, an officer's certificate and legal opinion
relating to these conditions is delivered to the Trustee.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture:
- we fail to pay principal of or any premium on any note when due, whether
or not the payment is prohibited by the subordination provisions of the
Indenture;
- we fail to pay any interest on any note when due and that default
continues for 30 days, whether or not the payment is prohibited by the
subordination provisions of the Indenture;
- we fail to give the notice that we are required to give in the event of a
Change in Control, whether or not the notice is prohibited by the
subordination provisions of the Indenture;
- we fail to perform any other covenant in the Indenture and that failure
continues for 60 days after written notice to us by the Trustee or the
holders of at least 25% in aggregate principal amount of outstanding
notes;
- failure to pay when due (after expiration of any applicable grace period)
the principal of, or acceleration of, any indebtedness for money borrowed
by us or any of our significant subsidiaries in excess of $10 million if
the indebtedness is not discharged, or the acceleration is not annulled,
within 30 days after written notice to us by the Trustee or the holders
of at least 25% in aggregate principal amount of the outstanding notes;
or
- events of bankruptcy, insolvency or reorganization with respect to i2
Technologies specified in the Indenture.
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request or direction of any of the holders, unless such holders
shall have furnished to the Trustee reasonable indemnity. Subject to such
provisions for the indemnification of the Trustee, the holders of a majority in
aggregate principal amount of the outstanding notes will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred on the
Trustee.
If an Event of Default, other than an Event of Default arising from events
of bankruptcy, insolvency or reorganization with respect to i2 Technologies,
occurs and is continuing, either the Trustee or the holders of at least 25% in
principal amount of the outstanding notes may accelerate the maturity of all
notes. After acceleration, but before a judgment or decree based on
acceleration, the holders of a majority in aggregate principal amount of
outstanding notes may, under circumstances set forth in the Indenture, rescind
the acceleration if all Events of Default, other than the nonpayment of
principal of the notes which have become due solely because of the acceleration,
have been cured or waived as provided in the Indenture. If an Event of Default
arising from events of bankruptcy, insolvency or reorganization occurs and is
continuing with respect to i2 Technologies, then the principal of, and accrued
interest on, all of the notes will automatically become immediately due and
payable without any declaration or other act on the part of the holders of the
notes or the Trustee.
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<PAGE> 27
Before you may take any action to institute any proceeding relating to the
Indenture, or to appoint a receiver or a trustee, or for any other remedy, each
of the following must occur:
- you must have given the Trustee written notice of a continuing Event of
Default;
- the holders of at least 25% of the aggregate principal amount of all
outstanding notes must make a written request of the Trustee to take
action because of the default and must have offered reasonable
indemnification to the Trustee against the costs, liabilities and
expenses of taking such action; and
- the Trustee must not have taken action for 60 days after receipt of such
notice and furnishing of indemnification.
These limitations do not apply to a suit for the enforcement of payment of
the principal of or any premium or interest on a note, or the repurchase price
payable for a note, on or after the due dates for such payments or of the right
to convert the note in accordance with the Indenture.
We will furnish to the Trustee annually a statement as to our performance
of our obligations under the Indenture and as to any default in performance.
MODIFICATION AND WAIVER
The consent of the holders of a majority in principal amount of the
outstanding notes affected is required to make a modification or amendment to
the Indenture. However, a modification or amendment requires the consent of the
holder of each outstanding note affected if it would:
- change the stated maturity of the principal or interest of a note;
- reduce the principal amount, any premium or interest on any note;
- reduce the amount payable upon a redemption or mandatory repurchase;
- modify the provisions with respect to the repurchase rights of holders of
notes in a manner adverse to the holders;
- change the place of currency of payment on a note;
- impair the right to institute suit for the enforcement of any payment on
any note;
- modify the subordination provisions in a manner that is adverse to the
holders of the notes;
- adversely affect the right to convert the notes;
- modify our obligation to deliver information required under Rule 144A to
permit resales of the notes and common stock issued upon conversion of
the notes if we cease to be subject to the reporting requirements under
the Securities Exchange Act of 1934;
- reduce the percentage of holders whose consent is needed to modify or
amend the Indenture;
- reduce the percentage of holders whose consent is needed to waive
compliance with certain provisions of the Indenture or to waive certain
defaults; or
- modify the provisions dealing with modification and waiver of the
Indenture.
The holders of a majority in principal amount of the outstanding notes must
consent to waive compliance by us with certain restrictive provisions of the
Indenture. The holders of a majority in principal amount of the outstanding
notes may waive any past default, except a default in the payment of principal,
any premium, interest or the repurchase price.
Notes will not be considered outstanding if money for their payment or
redemption has been deposited or set aside in trust for the holders.
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We will generally be entitled to set any day as a record date for the
purpose of determining the holders of outstanding notes that are entitled to
take any action under the Indenture. In limited circumstances, the Trustee will
be entitled to set a record date for action by holders. If a record date is set
for any action to be taken by holders, such action may be taken only by persons
who are holders of outstanding notes on the record date and must be taken within
180 days following the record date or such other period as we may specify (or as
the Trustee may specify, if it set the record date). This period may be
shortened or lengthened (but not beyond 180 days) from time to time.
REGISTRATION RIGHTS
We have entered into a registration rights agreement with the Initial
Purchasers (the "Registration Rights Agreement"). In the Registration Rights
Agreement we agreed, for the benefit of the holders of the notes and the shares
of common stock issuable upon conversion of the notes (together, the
"Registrable Securities") that we will, at our expense:
- use our reasonable efforts to cause the shelf registration statement of
which this prospectus is a part to be declared effective under the
Securities Act within 180 days after the date the notes are originally
issued, subject to our right to postpone having the shelf registration
statement declared effective for an additional 90 days in limited
circumstances; and
- use our reasonable efforts to keep effective the shelf registration
statement until two years after the date the notes are originally issued
or, if earlier, until there are no outstanding Registrable Securities
(the "Effectiveness Period").
We are permitted to suspend the use of this prospectus in connection with
sales of Registrable Securities during prescribed periods of time for reasons
relating to pending corporate developments, public filings with the SEC and
other events. The periods during which we can suspend the use of the prospectus
may not, however, exceed a total of 45 days in any 90-day period or a total of
90 days in any 365-day period. We will issue a release made to Reuters Economic
Services and Bloomberg Business News promptly following the effectiveness of the
shelf registration statement and take certain other actions required to permit
public resales of the Registrable Securities.
We may, upon written notice to all the holders of notes, postpone having
the shelf registration statement declared effective for a reasonable period not
to exceed 90 days if we possess material non-public information, the disclosure
of which would have a material adverse effect on i2 Technologies and its
subsidiaries taken as a whole. Notwithstanding any such postponement, we will
pay liquidated damages ("Liquidated Damages") in respect of the Registrable
Securities if either of the following events ("Registration Defaults") occurs:
- on or prior to 90 days following the date the notes were originally
issued, a shelf registration statement has not been filed with the SEC;
or
- on or prior to 180 days following the date the notes were originally
issued, the shelf registration statement is not declared effective.
In that case, Liquidated Damages will accrue (1) in respect of the notes at
the rates set forth below on the principal amount of the notes and (2) in
respect of the common stock issued upon conversion of the notes, at the rates
set forth below applied to the conversion price at that time. Liquidated Damages
will accrue from and including the day following the Registration Default to,
but excluding, the day on which the Registration Default has been cured.
The rates at which Liquidated Damages will accrue will be as follows:
- 0.25% per annum to and including the 90th day after the Registration
Default; and
- 0.5% per annum from and after the 91st day after the Registration
Default.
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In addition, we will pay Liquidated Damages if either of the following
occurs after the effectiveness of the shelf registration statement if:
- the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 45 days, whether or
not consecutive, during any 90-day period; or
- the shelf registration statement ceases to be effective, or we otherwise
prevent or restrict holders of Registrable Securities from making sales
under the shelf registration statement, for more than 90 days, whether or
not consecutive, during any 12-month period.
In either event, Liquidated Damages will accrue at a rate of 0.5% per annum
(1) in respect of the notes, on the principal amount of the notes and (2) in
respect of the common stock issued upon conversion of the notes, applied to the
conversion price at that time. Liquidated Damages will accrue from the 46th day
of the 90-day period or the 91st day of the 12-month period until the earlier of
the following:
- the time the shelf registration statement again becomes effective or the
holders of Registrable Securities are again able to make sales under the
shelf registration statement, depending on which event triggered the
increase in interest rate; or
- the time the Effectiveness Period expires.
Liquidated Damages will be paid semi-annually in arrears, with the first
semi-annual payment due on the first Interest Payment Date following the date on
which the Liquidated Damages begin to accrue.
A holder who elects to sell any Registrable Securities pursuant to the
shelf registration statement will be required to be named as a selling security
holder in the related prospectus, may be required to deliver a prospectus to
purchasers, may be subject to certain civil liability provisions under the
Securities Act in connection with those sales and will be bound by the
provisions of the Registration Rights Agreement that apply to a holder making
such an election, including certain indemnification provisions.
We will pay all fees and expenses related to the filing of the shelf
registration statement and maintaining its effectiveness for resales of
Registrable Securities. Holders of at least a majority of the Registrable
Securities may request us to undertake one underwritten offering pursuant to the
Registration Rights Agreement. In the event of this one underwritten offering,
we will pay the fees and expenses incurred by us in connection with the
offering, including those of our independent counsel and accountants. In
addition, we will pay the fees and expenses of a single counsel selected by a
plurality of all Electing Holders who own an aggregate of not less than 25% of
the Registrable Securities included in the offering. Except as provided in the
two preceding sentences, each Electing Holder will be responsible for all
underwriting discounts and commissions, fees and expenses payable in connection
with the sale of its Registrable Securities.
We have mailed to registered holders of Registrable Securities a Notice and
Questionnaire, with a response deadline of February 29, 2000. If we receive a
completed Notice and Questionnaire 10 or more days before the effective time of
the registration statement of which this prospectus is a part, the holder will
be entitled to have its Registrable Securities included in the shelf
registration statement at the effective time, provided such holder supplied all
of such holder's requisite information. If we receive the Notice and
Questionnaire nine or fewer days before the effective time of the shelf
registration statement, the Registrable Securities covered by the Notice and
Questionnaire will be included in the shelf registration statement reasonably
promptly after receipt of such Notice and Questionnaire, which may be after the
date the shelf registration statement is declared effective, provided such
holder supplied all of such holder's requisite information.
In the event we receive a properly complete Notice and Questionnaire after
the shelf registration statement has been declared effective, we will within
five business days, file any amendments to the shelf registration statement or
supplements related to the prospectus as are necessary to permit the holder to
sell its Registrable Securities. We will pay Liquidated Damages (1) in respect
of such holder's notes that are
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Registrable Securities at the rate of 0.5% of the principal amount per annum and
(2) in respect of shares of common stock issued upon conversion of notes, at the
rate of 0.5% of the conversion price at the time per annum if either of the
following occurs until the default is cured:
- we fail to file a post-effective amendment or supplement, as the case may
be, to the shelf registration statement within five days after receipt by
us of a completed Notice and Questionnaire; or
- in the case of a post-effective amendment, such amendment is not declared
effective within 45 days of filing (subject to certain exceptions).
In no event will Liquidated Damages in respect to any Registrable
Securities exceed 0.5% in any period. As used above, the term "Electing Holder"
means any holder of Registrable Securities that has returned a completed and
signed Notice and Questionnaire to us in accordance with the procedures
described above.
This summary of certain provisions of the Registration Rights Agreement is
not complete and is subject to, and qualified in its entirety by reference to,
all the provisions of the Registration Rights Agreement, a copy of which will be
made available to beneficial owners of the notes upon request to us.
NOTICES
We will give notice to holders of the notes by mail to the addresses of the
holders as they appear in the Security Register. Notices will be deemed to have
been given on the date of mailing.
REPLACEMENT OF NOTES
We will replace, at the expense of the holders, notes that become
mutilated, destroyed, stolen or lost upon delivery to the Trustee of the
mutilated notes or evidence of the loss, theft or destruction thereof
satisfactory to us and the Trustee. In the case of a lost, stolen or destroyed
note, indemnity satisfactory to the Trustee and us may be required at the
expense of the holder of the note before a replacement note will be issued.
GOVERNING LAW
The Indenture and the notes will be governed by and construed in accordance
with the laws of the State of New York, without regard to conflicts of laws
principles.
THE TRUSTEE
The Trustee for the holders of notes issued under the Indenture is Chase
Bank of Texas, National Association. If an Event of Default shall occur, and
shall not be cured, the Trustee will be required to use the degree of care of a
prudent person in the conduct of his own affairs in the exercise of its powers.
Subject to these provisions, the Trustee will be under no obligation to exercise
any of its rights or powers under the Indenture at the request of any holders of
the notes, unless they shall have furnished to the Trustee reasonable security
or indemnity.
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MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following is a discussion of the material United States federal income
and, in the case of holders of the notes or the common stock who are not U.S.
persons, as that term is defined in the Internal Revenue Code of 1986, as
amended, the estate tax considerations, relating to the purchase, ownership and
disposition of the notes and of the common stock into which notes may be
converted. This discussion is not a complete analysis of all other potential tax
considerations relating to such considerations.
This discussion is based on the provisions of the Internal Revenue Code,
the applicable Treasury regulations promulgated or proposed thereunder, judicial
authority and current administrative rulings and practice. All of these sources
of authority are subject to change, possibly on a retroactive basis.
This discussion deals only with holders that will hold notes and common
stock into which notes may be converted as capital assets as defined in the
Internal Revenue Code. It does not address tax considerations applicable to
investors that may be subject to special tax rules, such as banks, tax-exempt
organizations, insurance companies, dealers in securities or currencies or
persons that will hold notes as a position in a hedging transaction, straddle or
conversion transaction for tax purposes. We have not sought any ruling from the
Internal Revenue Service with respect to the statements made and the conclusions
reached in the following discussion, and there can be no assurance that the
Internal Revenue Service will agree with such statements and conclusions.
We urge investors considering the purchase of notes to consult their own
tax advisors with respect to the application of the United States federal income
and estate tax laws to their particular situations as well as any tax
consequences arising under the laws of any state, local or foreign taxing
jurisdiction or under any applicable tax treaty.
UNITED STATES HOLDERS
Following is a discussion of the material United States federal income tax
considerations applicable to beneficial owners of the notes or the common stock,
into which the notes may be converted who are U.S. persons, as defined in the
Internal Revenue Code. A U.S. person is:
- a citizen or resident of the United States,
- a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof,
- an estate the income of which is subject to United States federal income
taxation regardless of its source, or
- a trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust.
Payment of Interest. Interest on a note generally will be includable in the
income of a holder as ordinary income at the time such interest is received or
accrued, in accordance with such holder's method of accounting for United States
federal income tax purposes.
Amortizable Bond Premium. If a holder of a note acquires the note at a
cost, excluding for this purpose that portion of the purchase price equal to the
value of the conversion option, that is in excess of the amount payable at
maturity, the holder may elect to amortize the excess cost on a constant
interest rate basis over the term of such note. The amortized premium may be
used to offset interest income. However, because the notes may be redeemed at
our option at a price in excess of their principal amount, a holder may be
required to amortize any bond premium based on the earlier call date and the
call price payable at that time. If the holder makes an election to amortize
bond premium, the tax basis with respect to the notes will be reduced by the
allowable bond premium amortization. The amortization election would apply to
all debt instruments held or subsequently acquired by the electing holder and
cannot be revoked without permission from the Internal Revenue Service. On
conversion of a note into shares of common
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stock, no additional amortization of any bond premium will be allowed, and any
remaining premium will be added to the holder's basis in the common stock
received.
Market Discount. Except as described below, gain recognized on the
disposition of a note that has accrued market discount will be treated as
ordinary income, and not capital gain, to the extent of the accrued market
discount. Market discount is defined generally as the excess, if any, of the
principal amount of the note over the tax basis of the note in the hands of the
holder immediately after its acquisition.
Under a de minimis exception, there is no market discount if the excess of
the principal amount of the obligation over the holder's tax basis in the
obligation is less than 0.25% of the principal amount multiplied by the number
of complete years after the acquisition date to the obligation's date of
maturity. Unless the holder elects to accrue market discount on a constant yield
basis, the accrued market discount generally would be the amount calculated by
multiplying the market discount by a fraction, the numerator of which is the
number of days the obligation has been held by the holder and the denominator of
which is the number of days after the holder's acquisition of the obligation up
to and including its maturity date.
If a holder of a note acquired with market discount disposes of such note
in any transaction other than a sale, exchange or involuntary conversion, such
holder will be deemed to have realized an amount equal to the fair market value
of the note and will be required to recognize as ordinary income any accrued
market discount. See the discussion below under "-- Sale, Exchange or Redemption
of the Notes" for the tax consequences of a sale or exchange. A partial
principal payment, if any, on a note will be includable as ordinary income upon
receipt to the extent of any accrued market discount thereon. Although it is not
free from doubt, any accrued market discount not previously taken into income
prior to a conversion of a note into shares of common stock should carry over to
the common stock received on conversion and be treated as ordinary income upon a
subsequent disposition of such common stock, to the extent of any gain
recognized on such disposition. Unless the election described below is in
effect, a holder of a note acquired at a market discount also may be required to
defer the deduction of all or a portion of the interest on any indebtedness
incurred or maintained to purchase or carry the note until the maturity of the
note or the earlier disposition of the note in a taxable transaction.
A holder of a note acquired at a market discount may elect to include the
market discount in income as it accrues on either a straight-line basis or a
constant yield basis. This election would apply to all market discount
obligations acquired by the electing holder on or after the first day of the
first year to which the election applies. The election may be revoked only with
the consent of the Internal Revenue Service. If a holder of a note elects to
include market discount in income currently, the rules discussed above regarding
ordinary income recognition resulting from a sale and certain other disposition
transactions and those regarding the deferral of interest deductions would not
apply.
Sale, Exchange or Redemption of the Notes. Upon the sale, exchange or
redemption of a note, a holder generally will recognize capital gain or loss,
except to the extent the market discount rules discussed above otherwise
provide, equal to the difference between:
- the amount of cash proceeds and the fair market value of any property
received on the sale, exchange or redemption, except to the extent such
amount is attributable to accrued interest income, which is taxable as
ordinary income, and
- such holder's adjusted tax basis in the note.
A holder's adjusted tax basis in a note generally will equal the cost of
the note to such holder, increased by any market discount, as discussed above,
previously included in income by the holder and decreased by any principal
payments received by such holder and bond premium amortized by the holder with
respect to the notes. Any capital gain or loss will be long-term if the holder's
holding period is more than 12 months and will be short-term if the holding
period is equal to or less than 12 months. In the case of individual holders,
long-term capital gains are taxed at a maximum rate of 20%, and short-term
capital gains are taxed at a maximum rate of 39.6%. In taxable years beginning
after December 31, 2000, the rate
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of tax applicable to long-term capital gains in certain circumstances may be
reduced below 20% for property held for more than five years.
Constructive Dividends on Notes. If at any time:
- We make a distribution of cash or property to our stockholders or
purchase common stock and such distribution or purchase would be taxable
to such stockholders as a dividend for United States federal income tax
purposes (e.g., distributions of evidences of our indebtedness or assets,
but generally not stock dividends or rights to subscribe for common
stock) and, pursuant to the anti-dilution provisions of the indenture,
the conversion rate of the notes is increased, or
- the conversion rate of the notes is increased at our discretion,
such increase in the conversion rate may be deemed to be a distribution to
holders of notes treated as a taxable dividend to the extent of our current and
accumulated earnings and profits, then as a tax-free return of capital to the
extent of the holder's adjusted basis in the notes and thereafter as capital
gain from the sale or exchange of such notes. Holders of notes could therefore
have taxable income as a result of an event pursuant to which they received no
cash or property.
Conversion of the Notes. A holder generally will not recognize any income,
gain or loss upon conversion of a note into common stock, except with respect to
cash received in lieu of a fractional share of common stock. Such holder's tax
basis in the common stock received on conversion of a note will be the same as
such holder's adjusted tax basis in the note at the time of conversion, reduced
by any basis allocable to a fractional share interest, and the holder's holding
period for the common stock received on conversion will generally include the
holding period of the note converted.
Cash received in lieu of a fractional share of common stock upon conversion
will be treated as a payment in exchange for the fractional share of common
stock. Accordingly, the receipt of cash in lieu of a fractional share of common
stock generally will result in capital gain or loss, measured by the difference
between the cash received for the fractional share and the holder's adjusted tax
basis in the fractional share.
Dividends on Common Stock. The amount of any distribution by us in respect
of the common stock will be equal to the amount of cash and the fair market
value, on the date of distribution, of any property distributed. Generally,
distributions will be treated as a dividend, subject to tax as ordinary income,
to the extent of our current and accumulated earnings and profits, then as a
tax-free return of capital to the extent of the holder's tax basis in the common
stock and thereafter as gain from the sale of exchange of such stock.
In general, a dividend distribution to a corporate holder will qualify for
the 70% dividends received deduction if the holder owns less than 20% of the
voting power and value of our stock, other than any non-voting, non-convertible,
non-participating preferred stock. A corporate holder that owns 20% or more of
the voting power and value of our stock, other than any non-voting,
non-convertible, non-participating preferred stock, generally will qualify for
an 80% dividends received deduction. The dividends received deduction is
subject, however, to certain holding period, taxable income and other
limitations.
Sale of Common Stock. Upon the sale or exchange of our common stock, a
holder generally will recognize capital gain or loss (except to the extent the
market discount rules discussed above otherwise provide) equal to the difference
between:
- the amount of cash and the fair market value of any property received
upon the sale or exchange and
- such holder's adjusted tax basis in the common stock.
Such capital gain or loss will be long-term if the holder's holding period is
more than 12 months and will be short-term if the holding period is equal to or
less than 12 months. In the case of individual holders, long-term capital gains
are taxed at a maximum rate of 20% and short-term capital gains are taxed at a
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maximum rate of 39.6%. In taxable years beginning after December 31, 2000, the
rate of tax applicable to long-term capital gains in certain circumstances may
be reduced below 20% for property held for more than five years. A holder's
basis and holding period in the common stock received upon conversion of a note
are determined as discussed above under "Conversion of the Notes."
Information Reporting and Backup Withholding Tax. In general, information
reporting requirements will apply to payments of principal, premium, if any, and
interest on a note, payments of dividends on common stock, payments of the
proceeds of the sale of a note and payments of the proceeds of the sale of our
common stock to certain noncorporate United States Holders. The payor will be
required to withhold backup withholding tax at the rate of 31% if:
- the payee fails to furnish a taxpayer identification number to the payor
or establish an exemption from backup withholding,
- the Internal Revenue Service notifies the payor that the taxpayer
identification number furnished by the payee is incorrect,
- there has been a notified payee underreporting with respect to interest,
dividends or original issue discount described in Section 3406(c) of the
Internal Revenue Code or
- there has been a failure of the payee to certify under the penalty of
perjury that the payee is not subject to backup withholding under the
Internal Revenue Code.
Any amounts withheld under the backup withholding rules from a payment to a
United States Holder will be allowed as a credit against such holder's United
States federal income tax and may entitle the holder to a refund, provided that
the required information is furnished to the Internal Revenue Service.
NON-UNITED STATES HOLDERS
Following is a discussion of the material United States federal income and
estate tax consequences applicable to the beneficial owners of notes or the
common stock into which the notes may be converted who are not U.S. persons, as
defined in the Internal Revenue Code.
Payment of Interest. Generally, interest income of a non-U.S. holder that
is not effectively connected with a United States trade or business will be
subject to a withholding tax at a 30% rate, or, if applicable, a lower treaty
rate. However, interest paid on a note by us or any paying agent to a non-U.S.
holder will qualify for an exemption provided under the Internal Revenue Code
for certain portfolio interest income and therefore will not be subject to
United States federal income tax or withholding tax, provided that such interest
income is not effectively connected with a United States trade or business of
the non-U.S. holder and provided that the non-U.S. holder:
- does not actually or constructively own, pursuant to the conversion
feature of the notes or otherwise, 10% or more of the combined voting
power of all classes of our stock entitled to vote,
- is not a controlled foreign corporation as defined in the Internal
Revenue Code related to us actually or constructively through stock
ownership,
- is not a bank which acquired the notes in consideration for an extension
of credit made pursuant to a loan agreement entered into in the ordinary
course of business and
- either
- provides a Form W-8, or a suitable substitute form, signed under
penalties of perjury that includes its name and address and certifies
as to its non-United States status, or
- is a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of
its trade or business and provides a statement to us or our agent
under penalties of perjury in which it certifies that Form W-8, or a
suitable substitute
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form, has been received by it from the non-U.S. holder or qualifying
intermediary and furnishes us or our agent with a copy thereof.
Except to the extent that an applicable treaty otherwise provides, a
non-U.S. holder generally will be taxed in the same manner as a holder who is a
U.S. person with respect to interest if the interest income is effectively
connected with a United States trade or business of the non-U.S. holder.
Effectively connected interest received by a corporate non-U.S. holder may also,
under certain circumstances, be subject to an additional "branch profits tax" at
a 30% rate, or, if applicable, a lower treaty rate. Even though such effectively
connected interest is subject to income tax, and may be subject to the branch
profits tax, it is not subject to withholding tax if the holder delivers a
properly executed Internal Revenue Service Form 4224, or successor form, to the
payor.
Amended Treasury Regulations, which are generally effective for payments
made after December 31, 2000, provide alternative methods for satisfying the
certification requirements described immediately above.
Sales, Exchange or Redemption of the Notes. A non-U.S. holder of a note
will generally not be subject to United States federal income tax or withholding
tax on any gain realized on the sale, exchange or redemption of a note,
including the receipt of cash in lieu of fractional shares upon conversion of a
note into common stock, unless:
- the gain is effectively connected with a United States trade or business
of the non-U.S. holder,
- in the case of a non-U.S. holder who is an individual, such holder is
present in the United States for a period or periods aggregating 183 days
or more during the taxable year of the disposition and certain other
conditions are met or
- the holder is subject to tax pursuant to the provisions of the Internal
Revenue Code applicable to certain United States expatriates.
Conversion of the Notes. In general, no United States federal income tax or
withholding tax will be imposed upon the conversion of a note into common stock
by a non-U.S. holder except with respect to the receipt of cash in lieu of
fractional shares by non-U.S. holders upon conversion of a note where any of the
conditions described above under "Non-United States Holders -- Sale, Exchange or
Redemption of the Notes" is satisfied.
Sale or Exchange of Common Stock. A non-U.S. holder generally will not be
subject to United States federal income tax or withholding tax on the sale or
exchange of common stock unless any of the conditions described above under
"Non-United States Holder -- Sale, Exchange or Redemption of the Notes" is
satisfied.
Dividends. Distributions by us with respect to the common stock that are
treated as dividends paid, or deemed paid, as described above under "United
States Holders -- Dividends on Common Stock" to a non-U.S. holder, excluding
dividends that are effectively connected with the conduct of a trade or business
in the United States by such holder and are taxable as described below, will be
subject to United States federal withholding tax at a 30% rate, or lower rate
provided under any applicable income tax treaty. Except to the extent that an
applicable tax treaty otherwise provides, a non-U.S. holder generally will be
taxed in the same manner as a holder that is a U.S. person on dividends paid, or
deemed paid, that are effectively connected with the conduct of a trade or
business in the United States by the non-U.S. holder. If such non-U.S. holder is
a foreign corporation, it may also be subject to a United States branch profits
tax on such effectively connected income at a 30% rate or such lower rate as may
be specified by an applicable income tax treaty. Even though such effectively
connected dividends are subject to income tax, and may be subject to the branch
profits tax, they will not be subject to U.S. withholding tax if the holder
delivers Internal Revenue Service Form 4224, or successor form, to the payor.
Amended Treasury Regulations, which are generally effective for payments
made after December 31, 2000, provide alternative methods for satisfying the
certification requirements described immediately above.
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Death of a Non-United States Holder. A note held by an individual who is
not a citizen or resident of the United States at the time of death will not be
included in the decedent's gross estate for United States estate tax purposes,
provided that such holder or beneficial owner did not at the time of death
actually or constructively own 10% or more of the combined voting power of all
classes of our stock entitled to vote, and provided that, at the time of death,
payments with respect to such note would not have been effectively connected
with the conduct by such non-U.S. holder of a trade or business within the
United States.
Common stock actually or beneficially held by an individual who is not a
U.S. person at the time of his or her death, or previously transferred by the
non-U.S. person subject to certain retained rights or powers, will be subject to
United States federal estate tax unless otherwise provided by an applicable
estate tax treaty.
Information Reporting and Backup Withholding Tax. United States information
reporting requirements and backup withholding tax will not apply to payments on
a note to a non-U.S. holder if the statement described in "Non-United States
Holders -- Payment of Interest" is duly provided by such holder, provided that
the payor does not have actual knowledge that the holder is a U.S. person.
Information reporting requirements and backup withholding tax generally
will not apply to any payment of the proceeds of the sale of a note, or any
payment of the proceeds of the sale of common stock effected outside the United
States by a foreign office of a broker. However, if the broker:
- is a United States person,
- is a foreign person that derives 50% or more of its gross income for
certain periods from the conduct of a trade or business in the United
States or
- is a controlled foreign corporation for United States federal income tax
purposes,
payment of the proceeds of any such sale effected outside the United States by a
foreign office of such broker will not be subject to backup withholding tax, but
will be subject to information reporting requirements unless such broker has
documentary evidence in its records that the beneficial owner is a non-U.S.
holder and certain other conditions are met, or the beneficial owner otherwise
establishes an exemption. Payment of the proceeds of any such sale to or through
the United States office of a broker is subject to information reporting and
backup withholding requirements, unless the beneficial owner of the note
provides the statement described in "Non-United States Holders -- Payment of
Interest" or otherwise establishes an exemption. Under Treasury regulations,
dividend payments will be subject to information reporting and backup
withholding unless applicable certification requirements are satisfied.
United States Real Property Holding Corporations. The discussion of the
United States taxation of non-U.S. holders of notes and common stock assumes
that we are at no time a United States real property holding corporation within
the meaning of the Internal Revenue Code. Under present law, we would not be a
United States real property holding corporation so long as the fair market value
of our United States real property interests is less than 50% of the sum of the
fair market value of our United States real property interests, our interests in
real property located outside the United States, and our other assets which are
used or held or used in a trade or business. We believe that we are not a United
States real property holding corporation and do not expect to become such a
corporation.
If we become a United States real property holding corporation, gain
recognized by non-U.S. holders on a disposition of notes or common stock would
be subject to United States federal income tax in certain circumstances.
The preceding discussion of material United States federal income tax
considerations is for general information only and is not tax advice.
Accordingly, each prospective holder should consult its own tax adviser as to
particular tax consequences to it of purchasing, holding and disposing of the
notes and the common stock, including the applicability and effect of any state,
local or foreign tax laws, and of any proposed changes in applicable laws.
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SELLING SECURITYHOLDERS
The notes were originally purchased from us on December 10, 1999. The
initial purchasers of the notes have advised us that the notes were resold in
transactions exempt from the registration requirements of the Securities Act to
qualified institutional buyers (within the meaning of Rule 144A under the
Securities Act of 1933). These subsequent purchasers, or their transferees,
pledgees, donees or successors, may from time to time offer and sell any or all
of the notes and/or shares of common stock issuable upon conversion of the notes
pursuant to this prospectus.
The selling securityholders listed below provided us the information
contained in the following table with respect to themselves and the respective
principal amount of notes and common stock beneficially owned by them and which
may be sold by each of them under this prospectus. We have not independently
verified this information.
The selling securityholders may choose to sell notes and/or shares of
common stock issuable upon conversion of the notes from time to time. See "Plan
of Distribution."
The following table sets forth as of February 28, 2000:
- the name of each selling securityholder who has provided us with notice
pursuant to the Registration Rights Agreement of their intent to sell or
otherwise dispose of notes and/or shares of common stock issuable upon
conversion of the notes pursuant to the registration statement,
- the principal amount of notes and the number of shares of common stock
issuable upon conversion of the notes which they may sell from time to
time pursuant to the registration statement, and
- the percentage of outstanding notes and common stock beneficially owned
by the selling securityholder as of February 28, 2000.
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL AMOUNT PERCENTAGE OF COMMON STOCK
OF NOTES THAT NOTES THAT MAY BE
NAME OF SELLING SECURITYHOLDER(1) MAY BE SOLD OUTSTANDING SOLD(2)
- --------------------------------- ---------------- ------------- ------------
<S> <C> <C> <C>
AIG/National Union Fire Insurance................... $ 690,000 * 9,079
Allstate Insurance Co............................... 2,000,000 * 26,318
Associated Electric & Gas Insurance Services
Limited........................................... 650,000 * 8,553
Bank of America Pension Plan........................ 500,000 * 6,579
Bankers Trust Trustee for Daimler Chrysler Corp.
Emp. #1 Pension Plan Dtd. 4/1/89.................. 1,810,000 * 23,818
BBT Fund, L.P....................................... 3,150,000 * 41,452
BNP Arbitrage SNC................................... 6,500,000 1.9% 85,536
Boilermaker-Blacksmith Pension Trust................ 955,000 * 12,567
CALAMOS Convertible Fund -- CALAMOS Investment
Trust............................................. 1,125,000 * 14,804
CALAMOS Convertible Portfolio -- CALAMOS Advisors
Trust............................................. 20,000 * 263
CALAMOS Global Growth and Income Fund -- CALAMOS
Investment Trust.................................. 120,000 * 1,579
CALAMOS Growth and Income Fund -- CALAMOS Investment
Trust............................................. 725,000 * 9,540
Champion International Corporation Master Retirement
Trust............................................. 825,000 * 10,856
City of Knoxville Pension System.................... 290,000 * 3,816
David Lipscomb University General Endowment......... 90,000 * 1,184
Deephaven Domestic Convertible Trading Ltd.......... 2,500,000 * 32,898
Delaware PERS....................................... 1,365,000 * 17,962
Delta Airlines Master Trust......................... 1,800,000 * 23,686
</TABLE>
36
<PAGE> 38
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL AMOUNT PERCENTAGE OF COMMON STOCK
OF NOTES THAT NOTES THAT MAY BE
NAME OF SELLING SECURITYHOLDER(1) MAY BE SOLD OUTSTANDING SOLD(2)
- --------------------------------- ---------------- ------------- ------------
<S> <C> <C> <C>
Deutsche Bank Securities Inc. ...................... 86,175,000 24.6% 1,134,011
Evergreen Income & Growth Fund...................... 2,500,000 * 32,898
EQAT Alliance Balanced.............................. 1,525,000 * 20,068
EQAT Alliance Growth and Income Account............. 2,245,000 * 29,542
EQAT Alliance Growth Investors...................... 1,270,000 * 16,712
EQAT Alliance Separate Account -- Balanced.......... 95,000 * 1,250
EQAT Alliance Separate Account -- Convertibles...... 1,565,000 * 20,594
Fortis Series Fund, Inc. -- Growth and Income
Series............................................ 850,000 * 11,185
Franklin & Marshall College......................... 135,000 * 1,776
Granville Capital Corporation....................... 7,500,000 2.1% 98,695
Greek Catholic Union II............................. 12,000 * 157
Highbridge International LLC........................ 21,675,000 6.2% 285,229
ICI American Holdings Trust......................... 650,000 * 8,553
Island Holdings..................................... 42,000 * 552
Janus Capital Corporation........................... 61,109,000 17.5% 804,157
Jefferies & Company................................. 513,000 * 6,750
Kentfield Trading Ltd............................... 7,925,000 2.26% 104,288
Kettering Medical Center Funded Depreciation
Account........................................... 60,000 * 789
Knoxville Utilities Board Retirement System......... 190,000 * 2,500
Lipper Convertibles, L.P. .......................... 5,500,000 1.6% 72,376
Lipper Offshore Convertibles, L.P. ................. 1,000,000 * 13,159
MSD Portfolio LP -- Investments..................... 10,000,000 2.9% 131,594
Marsico Growth & Income Fund........................ 9,225,000 2.6% 121,395
Memphis Light, Gas and Water Retirement Fund........ 720,000 * 9,474
Merrill Lynch Convertible Fund, Inc. ............... 250,000 * 3,289
Morgan Stanley Dean Witter Convertible Securities
Trust............................................. 2,000,000 * 26,318
Museum of Fine Arts, Boston......................... 55,000 * 723
Nalco Chemical Company.............................. 300,000 * 3,947
Nations Marsico Annuity Growth & Income............. 555,000 * 7,303
Nations Marsico Growth & Income Fund................ 4,220,000 1.2% 55,532
New Hampshire Retirement System..................... 322,000 * 4,237
New York Life Insurance and Annuity Company......... 1,200,000 * 15,791
New York Life Insurance Company..................... 9,800,000 2.8% 128,962
Nomura Securities International, Inc................ 3,500,000 1.0% 46,057
Parker-Hannifin Corporation......................... 65,000 * 855
Penn Treaty Network America Insurance Co............ 130,000 * 1,710
PIMCO Convertible Bond Fund......................... 2,500,000 * 32,898
Port Authority of Allegheny County Retirement and
Disability Allowance Plan for the Employees
Represented by Local 85 of the Amalgamated Transit
Union............................................. 1,005,000 * 13,225
ProMutual........................................... 200,000 * 2,631
Putnam Asset Allocation Funds -- Balanced
Portfolio......................................... 300,000 * 3,947
Putnam Asset Allocation Funds -- Conservative
Portfolio......................................... 200,000 * 2,631
Putnam Balanced Retirement Fund..................... 140,000 * 1,842
Putnam Convertible Income -- Growth Trust........... 3,613,000 1.0% 47,544
Putnam Convertible Opportunities and Income Trust... 55,000 * 723
Radiant Capital LLC................................. 100,000 * 1,315
Retail Clerks Pension Trust......................... 1,000,000 * 13,159
Scudder Dividend and Growth Fund.................... 173,000 * 2,276
</TABLE>
37
<PAGE> 39
<TABLE>
<CAPTION>
SHARES OF
PRINCIPAL AMOUNT PERCENTAGE OF COMMON STOCK
OF NOTES THAT NOTES THAT MAY BE
NAME OF SELLING SECURITYHOLDER(1) MAY BE SOLD OUTSTANDING SOLD(2)
- --------------------------------- ---------------- ------------- ------------
<S> <C> <C> <C>
Southern Farm Bureau Life Insurance -- FRIC......... 600,000 * 7,895
SPT................................................. 795,000 * 10,461
Starvest Combined Portfolio......................... 940,000 * 12,369
State of Oregon Equity.............................. 5,500,000 1.6% 72,376
State Street Bank Custodian for GE Pension Trust.... 955,000 * 12,567
The Dow Chemical Company Employees' Retirement
Plan.............................................. 1,875,000 * 24,673
The Fondren Foundation.............................. 60,000 * 789
The Frist Foundation................................ 220,000 * 2,895
The TCW Group, Inc. ................................ 70,000 * 921
Unifi, Inc. Profit Sharing Plan and Trust........... 95,000 * 1,250
United Food and Commercial Workers Local 1262 and
Employers Pension Fund............................ 395,000 * 5,197
University of Rochester............................. 51,000 * 671
Value Line Convertible Fund, Inc. .................. 500,000 * 6,579
Van Kampen Harbor Fund.............................. 2,524,000 * 33,214
Van Kampen Convertible Securities Fund.............. 476,000 * 6,263
Van Waters & Rogers, Inc. Retirement Plan (f.k.a.
Univar Corporation)............................... 280,000 * 3,684
Zeneca Holdings Trust............................... 625,000 * 8,224
Other holders of notes or future transferees of such
holders(3)........................................ 54,760,000 15.6% 720,653
------------ ---- ---------
Total..................................... $350,000,000 100% 4,605,790
============ ==== =========
</TABLE>
- ---------------
* less than one percent
(1) Each of the named securityholders beneficially owns less than one percent of
our outstanding common stock. Other holders of notes collectively
beneficially own 1.2% of our outstanding common stock. No holder may offer
notes or shares of common stock pursuant to this prospectus until such
holder is named as a selling securityholder. Information about other selling
securityholders will be set forth in prospectus supplements, if required.
(2) Assumes full conversion of the notes held by such holder at the rate of
13.1594 shares per each $1,000 in principal amount of the notes.
(3) Information about other selling securityholders will be set forth in
prospectus supplements, if required.
No selling securityholder nor any of its affiliates has held any position
or office with, has been employed by or otherwise has had any material
relationship with us or our affiliates, during the three years prior to the date
of this prospectus.
A selling securityholder may offer all or some portion of the notes and
shares of our common stock issuable upon conversion of the notes. Accordingly,
no estimate can be given as to the amount or percentage of notes or common stock
that will be held by the selling securityholders upon termination of sales
pursuant to this prospectus. In addition, the selling securityholders identified
in the table above may have sold, transferred or disposed of all or a portion of
their notes since the date on which they provided the information regarding
their holdings in transactions exempt from the registration requirements of the
Securities Act. Information concerning the selling securityholders may change
from time to time and any such changed information will be set forth in
supplements or amendments to this prospectus if and when necessary.
38
<PAGE> 40
PLAN OF DISTRIBUTION
We are registering the notes and the shares of common stock issuable upon
conversion of the notes to permit public secondary trading of such securities by
the holders from time to time after the date of this prospectus. We have agreed,
among other things, to bear all expenses (other than underwriting discounts and
selling commissions) in connection with the registration and sale of the notes
and the shares of common stock issuable upon conversion of the notes covered by
this prospectus.
We will not receive any of the proceeds from the offering of the notes or
the shares of common stock issuable upon conversion of the notes by the selling
securityholders. The notes and shares of common stock issuable upon conversion
of the notes may be sold from time to time:
- directly by any selling securityholder to one or more purchasers,
- to or through underwriters, brokers or dealers,
- through agents on a best-efforts basis or otherwise, or
- through a combination of such methods of sale.
If notes or shares of common stock issuable upon conversion of the notes
are sold through underwriters, brokers or dealers, the selling securityholder
will be responsible for underwriting discounts or commissions or agents'
commissions.
The notes or shares of common stock issuable upon conversion of the notes
may be sold:
- in one or more transactions at a fixed price or prices, which may be
changed,
- at prevailing market prices at the time of sale or at prices related to
such prevailing prices,
- at varying prices determined at the time of sale, or
- at negotiated prices.
Such sales may be effected in transactions (which may involve crosses or
block transactions):
- on any national securities exchange or quotation service on which the
notes or shares of common stock may be listed or quoted at the time of
sale,
- in the over-the-counter market,
- in transactions otherwise than on such exchanges or services or in the
over-the-counter market, or
- through the writing of options.
In connection with sales of the notes or shares of common stock issuable
upon conversion of the notes or otherwise, any selling securityholder may:
- enter into hedging transactions with brokers, dealers or others, which
may in turn engage in short sales of the notes or shares of common stock
issuable upon conversion of the notes in the course of hedging the
positions they assume,
- sell short and deliver notes or shares of common stock issuable upon
conversion of the notes to close out such short positions, or
- loan or pledge notes or shares of common stock issuable upon conversion
of the notes to brokers, dealers or others that in turn may sell such
securities.
A selling securityholder may pledge or grant a security interest in some or
all of the notes or shares of common stock issuable upon conversion of the notes
owned by it, and if it defaults in the performance of its secured obligations,
the pledgees or secured parties may offer and sell the notes or shares of common
stock issuable upon conversion of the notes from time to time pursuant to this
prospectus. The selling
39
<PAGE> 41
securityholders may also transfer and donate shares in other circumstances in
which case the transferees, donees, pledgees or other successors in interest
will be the selling securityholders for purposes of this prospectus.
The selling securityholders may sell short common stock and may deliver
this prospectus in connection with such short sales and use the shares covered
by this prospectus to cover such short sales.
The outstanding common stock is publicly traded on the Nasdaq National
Market. The initial purchasers of the notes have advised us that certain for the
initial purchasers are making and currently intend to continue making a market
in the notes; however, they are not obligated to do so and any such
market-making may be discontinued at any time without notice, in the sole
discretion of the initial purchasers. We do not intend to apply for listing of
the notes on the Nasdaq National Market or any securities exchange. Accordingly,
we cannot assure that any trading market will develop for the notes or have any
liquidity.
The selling securityholders and any brokers, dealers, agents or
underwriters that participate with the selling securityholders in the
distribution of the notes or the shares of common stock issuable upon conversion
of the notes may be deemed to be "underwriters" within the meaning of the
Securities Act, in which event any commissions received by such brokers,
dealers, agents or underwriters and any profits realized by the selling
securityholders on the resales of the notes or the shares may be deemed to be
underwriting commissions or discounts under the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this prospectus. There is
no assurance that any selling securityholder will sell any or all of the notes
or shares of common stock issuable upon conversion of the notes described
herein, and any selling securityholder may transfer, devise or gift such
securities by other means not described herein.
We agreed to indemnify and hold the initial purchasers of the notes
harmless against certain liabilities under the Securities Act. The Registration
Rights Agreement provides for us and the selling securityholders to indemnify
each other against certain liabilities arising under the Securities Act.
We agreed pursuant to the Registration Rights Agreement to use our best
efforts to cause the registration statement to which this prospectus relates to
become effective and to keep the registration statement effective during the
periods described in "Description of the Notes -- Registration Rights."
INCORPORATION BY REFERENCE
The SEC allows us to "incorporate by reference" the information we file
with it, which means that we can disclose important information to you by
referring you to that information. The information incorporated by reference is
considered to be part of this prospectus, and later information filed with the
SEC will update and supersede this information. We incorporate by reference the
documents listed below and any future filings made with the SEC under Section
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until this
offering is completed.
- Our annual report on Form 10-K for the year ended December 31, 1998,
except for pages F-1 through F-18 thereof;
- Our quarterly reports on Form 10-Q for the quarters ended March 31, June
30 and September 30, 1999;
- Our current reports on Form 8-K filed February 4, March 1, April 21, May
19, July 30 and November 30, 1999, and January 21, 2000; and
- The description of our common stock contained in our registration
statement on Form 8-A (File No. 0-28030), as filed with the SEC on March
20, 1996.
40
<PAGE> 42
Any statement contained in the prospectus or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this prospectus to the extent that a statement
contained herein or in any applicable prospectus supplement or any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this prospectus.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the Securities and Exchange Commission, or SEC. You may read
and copy any document we file at the SEC's public reference rooms in Washington,
D.C., New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Our SEC
filings are also available to the public from our Web site at www.i2.com or at
the SEC's Web site at www.sec.gov. However, the information on our Web site does
not constitute a part of this prospectus.
You may obtain a copy of these filings, at no cost, by writing or
telephoning us at the following address. In addition, we will provide without
charge to each person, including any beneficial owner, to whom a copy of this
prospectus has been delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated by reference in this
prospectus, other than exhibits and schedules thereto, unless such exhibits or
schedules are specifically incorporated by reference into the information that
this prospectus incorporates. Written or oral requests for copies of these
documents should be directed to:
Investor Relations
One i2 Place
11701 Luna Road
Dallas, Texas 75234
Telephone: (469) 357-1000
You should rely only on the information provided in this document or
incorporated in this document by reference. We have not authorized anyone to
provide you with different information. You should not assume that the
information in this document, including any information incorporated herein by
reference, is accurate as of any date other than that on the front of the
document.
LEGAL MATTERS
The validity of the securities offered by this prospectus will be passed
upon for us by Brobeck, Phleger & Harrison LLP, Austin, Texas. Certain partners
of Brobeck, Phleger & Harrison LLP own in the aggregate approximately 11,000
shares of our common stock.
EXPERTS
The consolidated financial statements included in our Report on Form 8-K
dated November 30, 1999, incorporated by reference in this prospectus and
elsewhere in the registration statement have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
41
<PAGE> 43
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
WE HAVE NOT AUTHORIZED ANY PERSON TO MAKE A STATEMENT THAT DIFFERS FROM WHAT IS
IN THIS PROSPECTUS. IF ANY PERSON DOES MAKE A STATEMENT THAT DIFFERS FROM WHAT
IS IN THIS PROSPECTUS, YOU SHOULD NOT RELY ON IT. THIS PROSPECTUS IS NOT AN
OFFER TO SELL, NOR IS IT SEEKING AN OFFER TO BUY, THESE SECURITIES IN ANY STATE
IN WHICH THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION IN THIS PROSPECTUS
IS COMPLETE AND ACCURATE AS OF ITS DATE, BUT THE INFORMATION MAY CHANGE AFTER
THAT DATE.
i2 TECHNOLOGIES, INC.
$350,000,000
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
AND
4,605,790 SHARES OF COMMON STOCK
--------------------
PROSPECTUS
--------------------
, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 44
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by the registrant in connection
with the sale of common stock being registered. All amounts are estimates except
the SEC registration fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 92,400
Legal fees and expenses..................................... 30,000
Accounting fees and expenses................................ 5,000
Printing fees............................................... 30,000
Miscellaneous............................................... 5,000
--------
Total............................................. $162,400
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subsection (a) of Section 145 of the Delaware General Corporation Law (the
"DGCL") empowers a corporation to indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, except that no indemnification may be made in
respect to any claim issue or matter as to which such person shall have been
adjudged to be liable to the corporation unless and only to the extent that the
Court of Chancery or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability but in
view of all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which the Court of Chancery or such
other court shall deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful on the merits or otherwise in the
defense of any such action, suit or proceeding referred to in subsections (a)
and (b) of Section 145 or in the defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith; that the indemnification
provided for by Section 145 shall not be deemed exclusive of any other rights
which the indemnified party may be entitled; that indemnification provided by
Section 145 shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of such person's heirs, executors and
administrators; and empowers the corporation to purchase and maintain insurance
on behalf of a director or officer of the corporation against any liability
asserted against him and incurred by him in
II-1
<PAGE> 45
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liabilities under
Section 145.
Section 102(b)(7) of the DGCL provides that a certificate of incorporation
may contain a provision eliminating or limiting the personal liability of a
director to the corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director, provided that such provision shall not
eliminate or limit the liability of the director (i) for any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL or (iv) for any
transaction from which the director derived an improper personal benefit.
Article Eleventh of the registrant's Charter provides that, to the fullest
extent permitted by the DGCL as the same exists or as it may hereafter be
amended, no director of the registrant shall be personally liable to the
registrant or its stockholders for monetary damages for breach of fiduciary duty
as a director.
Article Eleventh of the registrant's Certificate of Incorporation, as
amended, provides that, to the fullest extent permitted by the DGCL, as the same
exists or as it may hereafter be amended, no director of the registrant shall be
personally liable to the registrant or its stockholders for monetary damages for
breach of fiduciary duty as a director.
Section 6.1 of the registrant's Bylaws further provides that the registrant
shall, to the maximum extent and in the manner permitted by the DGCL, indemnify
each of its directors and officers against expenses (including attorneys' fees),
judgments, fines, settlements and other amounts actually and reasonably incurred
in connection with any proceeding, arising by reason of the fact that such
person is or was an agent of the registrant.
The registrant has entered into indemnification agreements with each of its
directors and executive officers.
The registrant maintains officers' and directors' liability insurance.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<C> <S>
3.1 -- Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the registrant's Form 10-Q
for the quarterly period ended September 30, 1999).
3.2 -- Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.1 to the registrant's Form 10-Q for the
quarterly period ended September 30, 1998).
4.1 -- Specimen certificate representing shares of Common Stock
(incorporated by reference to Exhibit 4.1 to the
registrant's Registration Statement on Form S-1 (Reg. No.
333-1752)).
4.2 -- Indenture, dated as of December 10, 1999, between the
registrant and Chase Bank of Texas, National Association,
as trustee, including the form of note set forth in
Section 2.2 thereof.
4.3 -- Registration Rights Agreement, dated as of December 10,
1999, between the registrant and Goldman, Sachs & Co.,
Morgan Stanley Dean Witter and Credit Suisse First
Boston.
5.1 -- Opinion of Brobeck, Phleger & Harrison LLP.
12.1 -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Brobeck, Phleger & Harrison LLP (included in
the opinion filed as Exhibit 5.1 hereto).
</TABLE>
II-2
<PAGE> 46
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<C> <S>
24.1 -- Power of Attorney (included on page II-5 of this
registration statement).
25.1 -- Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of the registration statement, or the most recent
post-effective amendment thereof, which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this registration statement
or any material change to such information in this registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act, and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act, that is
incorporated by reference in this registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-3
<PAGE> 47
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions or otherwise, the registrant has
been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and therefore is unenforceable.
In the event that a claim for indemnification against such liabilities, other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
II-4
<PAGE> 48
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized in the City of Dallas, State of Texas, on this 29th day of February,
2000.
i2 TECHNOLOGIES, INC.
By: /s/ WILLIAM M. BEECHER
----------------------------------
William M. Beecher
Executive Vice President and
Chief Financial Officer
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sanjiv S. Sidhu and William M. Beecher,
and each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution and resubstitution, for him and in his name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement, and to file same,
with all exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in connection therewith,
as fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, and any of
them, or their or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated:
<TABLE>
<CAPTION>
NAME TITLE DATE
---- ----- ----
<C> <S> <C>
/s/ SANJIV S. SIDHU Chairman of the Board and Chief February 29, 2000
- ----------------------------------------------------- Executive Officer (Principal
Sanjiv S. Sidhu executive officer)
/s/ WILLIAM M. BEECHER Executive Vice President and Chief February 29, 2000
- ----------------------------------------------------- Financial Officer (Principal
William M. Beecher financial officer)
/s/ NANCY F. BRIGHAM Controller (Principal accounting February 29, 2000
- ----------------------------------------------------- officer)
Nancy F. Brigham
/s/ SANDEEP R. TUNGARE Director February 29, 2000
- -----------------------------------------------------
Sandeep R. Tungare
/s/ HARVEY B. CASH Director February 29, 2000
- -----------------------------------------------------
Harvey B. Cash
/s/ THOMAS J. MEREDITH Director February 29, 2000
- -----------------------------------------------------
Thomas J. Meredith
</TABLE>
II-5
<PAGE> 49
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
NO. DESCRIPTION
--- -----------
<C> <S>
3.1 -- Certificate of Incorporation, as amended (incorporated by
reference to Exhibit 3.1 to the registrant's Form 10-Q
for the quarterly period ended September 30, 1999).
3.2 -- Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.1 to the registrant's Form 10-Q for the
quarterly period ended September 30, 1998).
4.1 -- Specimen certificate representing shares of Common Stock
(incorporated by reference to Exhibit 4.1 to the
registrant's Registration Statement on Form S-1 (Reg. No.
333-1752)).
4.2 -- Indenture, dated as of December 10, 1999, between the
registrant and Chase Bank of Texas, National Association,
as trustee, including the form of note set forth in
Section 2.2 thereof.
4.3 -- Registration Rights Agreement, dated as of December 10,
1999, between the registrant and Goldman, Sachs & Co.,
Morgan Stanley Dean Witter and Credit Suisse First
Boston.
5.1 -- Opinion of Brobeck, Phleger & Harrison LLP.
12.1 -- Statement re: Computation of Ratio of Earnings to Fixed
Charges.
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of Brobeck, Phleger & Harrison LLP (included in
the opinion filed as Exhibit 5.1 hereto).
24.1 -- Power of Attorney (included on page II-5 of this
registration statement).
25.1 -- Statement of Eligibility of the Trustee on Form T-1.
</TABLE>
<PAGE> 1
EXHIBIT 4.2
-----------------------------------------------------------
i2 TECHNOLOGIES, INC.,
ISSUER,
TO
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
TRUSTEE
-------------------
INDENTURE
Dated as of December 10, 1999
-------------------
U.S.$350,000,000
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE DECEMBER 15, 2006
-----------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
RECITALS OF THE COMPANY.................................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION.....................................................2
SECTION 1.1 Definitions.....................................................................................2
SECTION 1.2 Compliance Certificates and Opinions...........................................................10
SECTION 1.3 Form of Documents Delivered to the Trustee.....................................................11
SECTION 1.4 Acts of Holders of Securities..................................................................12
SECTION 1.5 Notices, Etc...................................................................................13
SECTION 1.6 Notice to Holders of Securities; Waiver........................................................14
SECTION 1.7 Effect of Headings and Table of Contents.......................................................14
SECTION 1.8 Successors and Assigns.........................................................................15
SECTION 1.9 Separability Clause............................................................................15
SECTION 1.10 Benefits of Indenture..........................................................................15
SECTION 1.11 Governing Law..................................................................................15
SECTION 1.12 Legal Holidays.................................................................................15
SECTION 1.13 Conflict with Trust Indenture Act..............................................................16
ARTICLE TWO SECURITY FORMS 16
SECTION 2.1 Form Generally.................................................................................16
SECTION 2.2 Form of Security...............................................................................17
SECTION 2.3 Form of Certificate of Authentication..........................................................31
SECTION 2.4 Form of Conversion Notice......................................................................31
ARTICLE THREE THE SECURITIES 33
SECTION 3.1 Title and Terms................................................................................33
SECTION 3.2 Denominations..................................................................................34
SECTION 3.3 Execution, Authentication, Delivery and Dating.................................................34
SECTION 3.4 Global Securities; Non-Global Securities.......................................................34
SECTION 3.5 Registration, Registration of Transfer and Exchange; Restrictions
on Transfer.................................................................................36
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities................................................40
SECTION 3.7 Payment of Interest; Interest Rights Preserved.................................................41
SECTION 3.8 Persons Deemed Owners..........................................................................42
SECTION 3.9 Cancellation...................................................................................43
SECTION 3.10 Computation of Interest........................................................................43
SECTION 3.11 CUSIP Numbers..................................................................................43
ARTICLE FOUR SATISFACTION AND DISCHARGE................................................................................43
SECTION 4.1 Satisfaction and Discharge of Indenture........................................................43
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 4.2 Application of Trust Money.....................................................................44
ARTICLE FIVE REMEDIES..................................................................................................45
SECTION 5.1 Events of Default..............................................................................45
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.............................................46
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee................................47
SECTION 5.4 Trustee May File Proofs of Claim...............................................................48
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities....................................49
SECTION 5.6 Application of Money Collected.................................................................49
SECTION 5.7 Limitation on Suits............................................................................49
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.....................................................................50
SECTION 5.9 Restoration of Rights and Remedies.............................................................50
SECTION 5.10 Rights and Remedies Cumulative.................................................................50
SECTION 5.11 Delay or Omission Not Waiver...................................................................51
SECTION 5.12 Control by Holders of Securities...............................................................51
SECTION 5.13 Waiver of Past Defaults........................................................................51
SECTION 5.14 Undertaking for Costs..........................................................................51
ARTICLE SIX THE TRUSTEE................................................................................................52
SECTION 6.1 Certain Duties and Responsibilities............................................................52
SECTION 6.2 Notice of Defaults.............................................................................53
SECTION 6.3 Certain Rights of Trustee......................................................................53
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.........................................54
SECTION 6.5 May Hold Securities, Act as Trustee Under Other Indentures.....................................54
SECTION 6.6 Money Held in Trust............................................................................55
SECTION 6.7 Compensation and Reimbursement.................................................................55
SECTION 6.8 Corporate Trustee Required; Eligibility........................................................56
SECTION 6.9 Resignation and Removal; Appointment of Successor..............................................56
SECTION 6.10 Acceptance of Appointment by Successor.........................................................57
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business....................................57
SECTION 6.12 Authenticating Agents..........................................................................58
SECTION 6.13 Disqualification; Conflicting Interests........................................................59
SECTION 6.14 Preferential Collection of Claims Against Company..............................................59
ARTICLE SEVEN CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE.....................................................59
SECTION 7.1 Company May Consolidate, Etc...................................................................59
SECTION 7.2 Successor Substituted..........................................................................60
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-ii-
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ARTICLE EIGHT SUPPLEMENTAL INDENTURES..................................................................................60
SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities...............................60
SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities..................................61
SECTION 8.3 Execution of Supplemental Indentures...........................................................62
SECTION 8.4 Effect of Supplemental Indentures..............................................................63
SECTION 8.5 Reference in Securities to Supplemental Indentures.............................................63
SECTION 8.6 Notice of Supplemental Indentures..............................................................63
ARTICLE NINE COVENANTS.................................................................................................63
SECTION 9.1 Payment of Principal, Premium and Interest.....................................................63
SECTION 9.2 Maintenance of Offices or Agencies.............................................................63
SECTION 9.3 Money for Security Payments To Be Held in Trust................................................64
SECTION 9.4 Existence......................................................................................65
SECTION 9.5 Maintenance of Properties......................................................................65
SECTION 9.6 Payment of Taxes and Other Claims..............................................................66
SECTION 9.7 Statement by Officers as to Default............................................................66
SECTION 9.8 Delivery of Certain Information................................................................66
SECTION 9.9 Resale of Certain Securities; Reporting Issuer.................................................67
SECTION 9.10 Waiver of Certain Covenants....................................................................67
ARTICLE TEN REDEMPTION OF SECURITIES...................................................................................67
SECTION 10.1 Right of Redemption............................................................................67
SECTION 10.2 Applicability of Article.......................................................................68
SECTION 10.3 Election to Redeem; Notice to Trustee..........................................................68
SECTION 10.4 Selection by Trustee of Securities To Be Redeemed..............................................68
SECTION 10.5 Notice of Redemption...........................................................................68
SECTION 10.6 Deposit of Redemption Price....................................................................69
SECTION 10.7 Securities Payable on Redemption Date..........................................................69
SECTION 10.8 Securities Redeemed in Part....................................................................70
SECTION 10.9 Conversion Arrangement on Call for Redemption..................................................70
ARTICLE ELEVEN CONVERSION OF SECURITIES................................................................................71
SECTION 11.1 Conversion Privilege and Conversion Rate.......................................................71
SECTION 11.2 Exercise of Conversion Privilege...............................................................71
SECTION 11.3 Fractions of Shares............................................................................73
SECTION 11.4 Adjustment of Conversion Rate..................................................................73
SECTION 11.5 Notice of Adjustments of Conversion Rate.......................................................77
SECTION 11.6 Notice of Certain Corporate Action.............................................................78
SECTION 11.7 Company to Reserve Common Stock................................................................79
SECTION 11.8 Taxes on Conversions...........................................................................79
</TABLE>
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-iii-
<PAGE> 5
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
SECTION 11.9 Covenant as to Common Stock....................................................................79
SECTION 11.10 Cancellation of Converted Securities...........................................................79
SECTION 11.11 Provision in Case of Consolidation, Merger or Sale of Assets...................................80
SECTION 11.12 Responsibility of Trustee for Conversion Provisions............................................81
ARTICLE TWELVE SUBORDINATION OF SECURITIES.............................................................................81
SECTION 12.1 Securities Subordinate to Senior Debt..........................................................81
SECTION 12.2 No Payments in Certain Circumstances; Payment Over of Proceeds ................................
Upon Dissolution, Etc.......................................................................81
SECTION 12.3 Trustee to Effectuate Subordination............................................................83
SECTION 12.4 No Waiver of Subordination Provisions..........................................................83
SECTION 12.5 Notice to Trustee..............................................................................84
SECTION 12.6 Reliance on Judicial Order or Certificate of Liquidating Agent.................................85
SECTION 12.7 Trustee Not Fiduciary for Holders of Senior Debt...............................................85
SECTION 12.8 Reliance by Holders of Senior Debt on Subordination Provisions.................................85
SECTION 12.9 Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights............................................................................85
SECTION 12.10 Article Applicable to Paying Agents............................................................86
SECTION 12.11 Certain Conversions and Repurchases Deemed Payment.............................................86
ARTICLE THIRTEEN REPURCHASE OF SECURITIES AT THE OPTION OF THE HOLDER UPON A CHANGE IN CONTROL.........................86
SECTION 13.1 Right to Require Repurchase....................................................................86
SECTION 13.2 Conditions to the Company's Election to Pay the Repurchase Price ..............................
in Common Stock.............................................................................87
SECTION 13.3 Notices; Method of Exercising Repurchase Right, Etc............................................88
SECTION 13.4 Certain Definitions............................................................................90
ARTICLE FOURTEEN HOLDERS LISTS AND REPORTS BY TRUSTEE AND COMPANY; NON-RECOURSE........................................92
SECTION 14.1 Company to Furnish Trustee Names and Addresses of Holders......................................92
SECTION 14.2 Preservation of Information....................................................................92
SECTION 14.3 No Recourse Against Others.....................................................................92
SECTION 14.4 Reports by Trustee.............................................................................93
SECTION 14.5 Reports by Company.............................................................................93
</TABLE>
SIGNATURES
EXHIBIT A
EXHIBIT B
EXHIBIT C
Note: This table of contents shall not, for any purpose, be deemed to be a part
of the Indenture.
-iv-
<PAGE> 6
INDENTURE, dated as of December 10, 1999, between i2 Technologies,
Inc., a corporation duly organized and existing under the laws of the State of
Delaware, having its principal office at 909 E. Las Colinas Blvd., Irving, Texas
75039 (herein called the "Company"), and Chase Bank of Texas, National
Association, a national banking association organized under the laws of the
United States of America, as Trustee hereunder (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its 5 1/4%
Convertible Subordinated Notes due December l5, 2006 (herein called the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture.
All things necessary to make the Securities, when the Securities are
executed by the Company and authenticated and delivered hereunder, the valid
obligations of the Company, and to make this Indenture a valid agreement of the
Company, in accordance with their and its terms, have been done. Further, all
things necessary to duly authorize the issuance of the Common Stock of the
Company issuable upon the conversion of the Securities, and to duly reserve for
issuance the number of shares of Common Stock issuable upon such conversion,
have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
<PAGE> 7
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 1.1 Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles in
the United States, and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of such computation; and
(3) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
"Act," when used with respect to any Holder of a Security, has the
meaning specified in Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, to the extent
applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized pursuant to Section
6.12 to act on behalf of the Trustee to authenticate Securities.
"Authorized Newspaper" means a newspaper in the English language,
customarily published on each Monday, Tuesday, Wednesday, Thursday and Friday,
whether or not published on Saturdays, Sundays or holidays, and of general
circulation in a Place of Payment.
-2-
<PAGE> 8
"Board of Directors" means either the board of directors of the Company
or any duly authorized committee of that board.
"Board Resolution" means a resolution duly adopted by the Board of
Directors, a copy of which, certified by the Secretary or an Assistant Secretary
of the Company to have been duly adopted by the Board of Directors and to be in
full force and effect on the date of such certification, shall have been
delivered to the Trustee.
"Business Day," when used with respect to any Place of Payment, Place
of Conversion or any other place, as the case may be, means each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in such Place of Payment, Place of Conversion or other place, as
the case may be, are authorized or obligated by law or executive order to close;
provided, however, that a day on which banking institutions in New York, New
York are authorized or obligated by law or executive order to close shall not be
a Business Day for purposes of Section 10.6.
"Change in Control" has the meaning specified in Section 13.4(b).
"Chase Credit Agreement" means that certain Credit Agreement, dated as
of August 20, 1998, between the Company and Chase Bank of Texas, National
Association, as amended through the date hereof and as further amended, amended
and restated, supplemented or otherwise modified from time to time.
"Closing Price Per Share" means, with respect to the Common Stock, for
any day, (i) the last reported sale price regular way on the Nasdaq National
Market, or if no sale occurred on such date, the average of the reported closing
bid and asked prices regular way, or, (ii) if the Common Stock is not quoted on
the Nasdaq National Market, the last reported sale price regular way per share
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case, on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading, or (iii) if the Common Stock is not quoted on the Nasdaq
National Market or listed or admitted to trading on any national securities
exchange, the average of the closing bid prices in the over-the-counter market
as furnished by any New York Stock Exchange member firm selected from time to
time by the Company for that purpose.
"Code" has the meaning specified in Section 2.1.
"Commission" means the United States Securities and Exchange
Commission, as from time to time constituted, created under the Exchange Act,
or, if at any time after the execution of this instrument such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Stock" means the common stock, par value $0.00025 per share, of
the Company authorized at the date of this instrument as originally executed or
as such stock may be constituted from time to time. Subject to the provisions of
Section 11.11, shares issuable on conversion or repurchase of Securities shall
include only shares of Common Stock or shares of any class or classes
-3-
<PAGE> 9
of common stock resulting from any reclassification or reclassifications
thereof; provided, however, that if at any time there shall be more than one
such resulting class, the shares so issuable on conversion of Securities shall
include shares of all such classes, and the shares of each such class then so
issuable shall be substantially in the proportion which the total number of
shares of such class resulting from all such reclassifications bears to the
total number of shares of all such classes resulting from all such
reclassifications.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Notice" has the meaning specified in Section 13.3.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its Chief Executive Officer, its President or a Vice
President, and by its principal financial officer, Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Constituent Person" has the meaning specified in Section 11.11.
"Conversion Agent" means any Person authorized by the Company to
convert Securities in accordance with Article Eleven. The Company has initially
appointed the Trustee as its Conversion Agent.
"Conversion Price" has the meaning specified in Section 11.4(10).
"Conversion Rate" has the meaning specified in Section 11.1.
"Corporate Trust Office" means the office of the Trustee at which at
any particular time its corporate trust business shall be principally
administered (which at the date of this Indenture is located at 600 Travis
Street, Suite 1150, Houston, Texas 77002, Attention: Corporate Trust Department
(i2 Technologies, Inc. - 5 1/4% Convertible Subordinated Notes due December
2006).
"corporation" means a corporation, company, association, joint-stock
company or business trust.
"Credit Agreements" means the Chase Credit Agreement and the Wells
Credit Agreement.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Depositary" means, with respect to any Securities, a clearing agency
that is registered as such under the Exchange Act and is designated by the
Company to act as Depositary for such Securities (or any successor securities
clearing agency so registered).
"Designated Senior Debt" means (1) Senior Debt under the Credit
Agreements, and (2) any particular Senior Debt in which the instrument creating
or evidencing the same or the assumption or
-4-
<PAGE> 10
guarantee thereof (or related agreements or documents to which the Company is a
party) expressly provides that such indebtedness shall be "Designated Senior
Debt" for purposes of this Indenture (provided that such instrument, agreement
or other document may place limitations and conditions on the right of such
Senior Debt to exercise the rights of Designated Senior Debt.
"Dollar" or "U.S.$" means a dollar or other equivalent unit in such
coin or currency of the United States as at the time shall be legal tender for
the payment of public and private debts.
"DTC" means The Depository Trust Company, a New York corporation.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of 1934
(or any successor statute), as amended from time to time.
"Global Security" means a Security that is registered in the Security
Register in the name of a Depositary or a nominee thereof.
"Holder" means the Person in whose name the Security is registered in
the Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Initial Purchasers" means Goldman, Sachs & Co., Morgan Stanley Dean
Witter, and Credit Suisse First Boston, collectively.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Liquidated Damages" has the meaning specified in the Registration
Rights Agreement.
"Maturity," when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of the repurchase right set forth in
Article Thirteen or otherwise.
"Non-electing Share" has the meaning specified in Section 11.11.
"Notice of Default" has the meaning specified in Section 5.1.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the Chief Executive Officer, the
President or a Vice President and by the
-5-
<PAGE> 11
principal financial officer, the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary of the Company, and delivered to the
Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company and who shall be acceptable to the Trustee.
"Outstanding," when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for the payment or redemption of which money
in the necessary amount has been theretofore deposited with the Trustee
or any Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities, provided that if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 3.6
or in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid
obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities are present at a meeting of Holders
of Securities for quorum purposes or have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such determination as to the presence of a quorum or upon
any such request, demand, authorization, direction, notice, consent or waiver,
only Securities which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Securities on behalf of the Company and, except
as otherwise specifically set forth herein, such term shall include the Company
if it shall act as its own Paying Agent. The Company has initially appointed the
Trustee as its Paying Agent.
-6-
<PAGE> 12
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, trust, estate, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Conversion" has the meaning specified in Section 3.1.
"Place of Payment" has the meaning specified in Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Press Release" shall mean any press release issued by the Issuer and
disseminated through Dow Jones & Company, Inc., Reuters Business News Services,
Bloomberg Business News or other national business news service commonly used by
U.S. businesses in the same line of business as the Company for disseminating
information regarding corporate events.
"Purchase Agreement" means the Purchase Agreement, dated as of December
__, 1999, between the Company and the Initial Purchasers, as such agreement may
be amended from time to time.
"Record Date" means any Regular Record Date or Special Record Date.
"Record Date Period" means the period from the close of business of any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date.
"Redemption Date," when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price," when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreement" shall mean that Registration Rights
Agreement dated as of the date hereof between the Company and the Initial
Purchasers.
"Registrable Securities" has the meaning set forth in the Registration
Rights Agreement.
"Regular Record Date" for interest payable in respect of any Security
on any Interest Payment Date means the June 1 or December 1 (whether or not a
Business Day), as the case may be, next preceding such Interest Payment Date.
"Repurchase Date" has the meaning specified in Section 13.1.
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"Repurchase Price" has the meaning specified in Section 13.1.
"Responsible Officer," when used with respect to the Trustee, means any
Officer within the Corporate Trust office of the Trustee, including, without
limitation, any vice president, assistant vice president, assistant treasurer,
corporate trust officer or other employee of the Trustee customarily performing
functions similar to those performed by any of the above designated officers,
and also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge and familiarity
with the particular subject.
"Restricted Global Security" has the meaning specified in Section 2.1.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of Security set
forth in Section 2.2 to be placed upon each Security.
"Rule 144" means Rule 144 under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Information" has the meaning specified in Section 9.9.
"Securities" has the meaning ascribed to it in the first paragraph
under the caption "Recitals of the Company."
"Securities Act" means the United States Securities Act of 1933 (or any
successor statute), as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.5.
"Senior Debt" means the principal of (and premium, if any) and interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) on, and all fees and
other amounts payable in connection with, the following, whether absolute or
contingent, secured or unsecured, due or to become due, outstanding on the date
of this Indenture or thereafter created, incurred or assumed: (a) indebtedness
of the Company evidenced by credit or loan agreements, notes, bonds, debentures,
or other similar instrument, (b) all obligations of the Company for money
borrowed, (c) obligations of the Company (1) as lessee under leases capitalized
on the balance sheet of the lessee under generally accepted accounting
principles and (2) as lessee under other leases for facilities, equipment, or
other assets whether or not capitalized entered into for financing purposes
(including any so-called "synthetic leases"), (d) obligations of the Company
under interest rate and currency swaps, caps, floors, collars, hedge agreements,
forward contracts, or
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similar agreements or arrangements intended to protect the Company against
fluctuations in interest or currency exchange rates or commodity prices, (e) all
obligations with respect to letters of credit, bank guarantees, bankers'
acceptances and similar facilities issued for the account of the Company and all
reimbursement obligations of the Company with respect to the foregoing, (f) all
obligations of the Company issued or assumed as the deferred purchase price of
any business, property, assets (including intangibles) or services (but
excluding trade accounts payable that constitute liabilities arising in the
ordinary course of business), (g) all obligations of the type referred to in
clauses (a) through (f) above of another Person and all dividends of another
Person, the payment of which, in either case, the Company has assumed or
guaranteed, or for which the Company is responsible or liable, directly or
indirectly, jointly or severally, as obligor, guarantor or otherwise, or which
is secured by a lien on property of the Company, and (h) renewals, extensions,
modifications, replacements, restatements and refundings of, or any indebtedness
or obligation issued in exchange for, any such indebtedness or obligation
described in clauses (a) through (g) of this paragraph; provided, however, that
Senior Debt shall not include the Securities or any such indebtedness or
obligation if the terms of such indebtedness or obligation (or the terms of the
instrument under which, or pursuant to which it is issued) provides that such
indebtedness or obligation is not superior in right of payment to the
Securities; provided, further, that Senior Debt shall not include any
indebtedness or obligation owed by the Company to any direct or indirect
Subsidiary.
"Significant Subsidiary" means, with respect to any Person, a
Subsidiary of such Person that would constitute a "significant subsidiary" as
such term is defined under Rule 1-02 of Regulation S-X of the Commission.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Company pursuant to Section 3.7.
"Stated Maturity," when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means stock or
other similar interests in the corporation which ordinarily has or have voting
power for the election of directors, or persons performing similar functions,
whether at all times or only so long as no senior class of stock or other
interests has or have such voting power by reason of any contingency.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.6 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
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"Trading Days" means (i) if the Common Stock is listed or admitted for
trading on any national securities exchange, days on which such national
securities exchange is open for business; (ii) if the Common Stock is quoted on
the Nasdaq National Market or any other system of automated dissemination of
quotations of securities prices, days on which trades may be effected through
such system; or (iii) if the Common Stock is not listed or admitted for trading
on any national securities exchange or quoted on the Nasdaq National Market or
any other system of automated dissemination of quotation of securities prices,
days on which the Common Stock is traded regular way in the over-the-counter
market and for which a closing bid and a closing asked price for the Common
Stock are available.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this instrument was executed; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction (its "possessions" including Puerto Rico, the
U.S. Virgin Islands, Guam, American Samoa, Wake Island and the Northern Mariana
Islands).
"Unrestricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit C.
"Vice President," when used with respect to the Company, means any vice
president, whether or not designated by a number or a word or words added before
or after the title "vice president."
"Wells Credit Agreement" means that certain Credit Agreement, dated as
of August 20, 1999, between the Company and Wells Fargo Bank (Texas), National
Association, as amended through the date hereof and as further amended, amended
and restated, supplemented or otherwise modified from time to time.
SECTION 1.2 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and, if required by the Trust Indenture Act, an Opinion of Counsel
stating that in the opinion of such counsel all such conditions precedent, if
any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such
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<PAGE> 16
documents is specifically required by any provision of this Indenture relating
to such particular application or request, no additional certificate or opinion
need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 9.8) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he has made
such examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.3 Form of Documents Delivered to the Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or any other Person
stating that the information with respect to such factual matters is in the
possession of the Company or such other Person, unless such counsel knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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SECTION 1.4 Acts of Holders of Securities.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided or permitted by this Indenture to be given or
taken by Holders of Securities may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent or proxy duly appointed in writing by such Holders. Such action
shall become effective when such instrument or instruments is delivered to the
Trustee and, where it is hereby expressly required, to the Company. The Trustee
shall promptly deliver to the Company copies of all such instruments delivered
to the Trustee. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders of Securities signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent or proxy, or of
the holding by any Person of a Security, shall be sufficient for any purpose of
this Indenture and (subject to Section 6.1) conclusive in favor of the Trustee
and the Company if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority.
(c) The principal amount and serial number of any Security held by any
Person, and the date of his holding the same, shall be proved by the Security
Register.
(d) The fact and date of execution of any such instrument or writing
and the authority of the Person executing the same may also be proved in any
other manner which the Trustee deems sufficient; and the Trustee may in any
instance require further proof with respect to any of the matters referred to in
this Section 1.4.
(e) The Company may set any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to vote on
any action, authorized or permitted by this Indenture to be given or taken by
Holders. Promptly and in any case not later than ten days after setting a record
date, the Company shall notify the Trustee and the Holders of such record date.
If not set by the Company prior to the first solicitation of a Holder made by
any Person in respect of any such action, or, in the case of any such vote,
prior to such vote, the record date for any such action or vote shall be the
30th day (or, if later, the date of the most recent list of Holders required to
be provided pursuant to Section 14.1) prior to such first solicitation or vote,
as the case may be. With regard to any record date, the Holders on such date (or
their duly appointed agents or proxies), and only such Persons, shall be
entitled to give or take, or vote on, the relevant action, whether or not such
Holders remain Holders after such record date. Notwithstanding the foregoing,
the Company shall not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any notice, declaration or direction
referred to in the next paragraph.
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<PAGE> 18
Upon receipt by the Trustee from any Holder of (i) any notice of
default or breach referred to in Section 5.1(4), if such default or breach has
occurred and is continuing and the Trustee shall not have given such a notice to
the Company, (ii) any declaration of acceleration referred to in Section 5.2, if
an Event of Default has occurred and is continuing and the Trustee shall not
have given such a declaration to the Company, or (iii) any direction referred to
in Section 5.12, if the Trustee shall not have taken the action specified in
such direction, then, with respect to clauses (ii) and (iii), a record date
shall automatically and without any action by the Company or the Trustee be set
for determining the Holders entitled to join in such declaration or direction,
which record date shall be the close of business on the tenth day (or, if such
day is not a Business Day, the first Business Day thereafter) following the day
on which the Trustee receives such declaration or direction, and, with respect
to clause (i) the Trustee may set any day as a record date for the purpose of
determining the Holders entitled to join in such notice of default. Promptly
after such receipt by the Trustee of any such declaration or direction referred
to in clause (ii) or (iii), and promptly after setting any record date with
respect to clause (i), and as soon as practicable thereafter, the Trustee shall
notify the Company and the Holders of any such record date so fixed. The Holders
on such record date (or their duly appointed agents or proxies), and only such
Persons, shall be entitled to join in such notice, declaration or direction,
whether or not such Holders remain Holders after such record date; provided
that, unless such notice, declaration or direction shall have become effective
by virtue of Holders of the requisite principal amount of Securities on such
record date (or their duly appointed agents or proxies) having joined therein on
or prior to the 90th day after such record date, such notice, declaration or
direction shall automatically and without any action by any Person be cancelled
and of no further effect. Nothing in this paragraph shall be construed to
prevent a Holder (or a duly appointed agent or proxy thereof) from giving,
before or after the expiration of such 90-day period, a notice, declaration or
direction contrary to or different from, or, after the expiration of such
period, identical to, the notice, declaration or direction to which such record
date relates, in which event a new record date in respect thereof shall be set
pursuant to this paragraph. In addition, nothing in this paragraph shall be
construed to render ineffective any notice, declaration or direction of the type
referred to in this paragraph given at any time to the Trustee and the Company
by Holders (or their duly appointed agents or proxies) of the requisite
principal amount of Securities on the date such notice, declaration or direction
is so given.
(f) Except as provided in Sections 5.12 and 5.13, any request, demand,
authorization, direction, notice, consent, election, waiver or other Act of the
Holder of any Security shall bind every future Holder of the same Security and
the Holder of every Security issued upon the registration of transfer thereof or
in exchange therefor or in lieu thereof in respect of anything done, omitted of
suffered to be done by the Trustee or the Company in reliance thereon, whether
or not notation of such action is made upon such Security.
SECTION 1.5 Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
election, waiver or other Act of Holders of Securities or other document
provided or permitted by this Indenture to be made upon, given or furnished to,
or filed with,
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(1) the Trustee by any Holder of Securities or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Trustee and received at its Corporate Trust Office,
Attention: Corporate Trust Department, and shall be deemed given when received.
(2) the Company by the Trustee or by any Holder of Securities shall be
sufficient for every purpose hereunder (unless otherwise herein expressly
provided) if in writing, mailed, first-class postage prepaid, or telecopied and
confirmed by mail, first-class postage prepaid, or delivered by hand or
overnight courier, addressed to the Company at 909 E. Las Colinas Blvd., Irving,
Texas 75039, Attention: Chief Financial Officer, or at any other address
previously furnished in writing to the Trustee by the Company, and shall be
deemed given when received.
Any request, demand, authorization, direction, notice, consent,
election or waiver required or permitted under this Indenture shall be in the
English language, except that any published notice may be in an official
language of the country of publication.
SECTION 1.6 Notice to Holders of Securities; Waiver.
Except as otherwise expressly provided herein, where this Indenture
provides for notice to Holders of Securities of any event, such notice shall be
sufficiently given to Holders if in writing and mailed, first-class postage
prepaid, to each Holder of a Security affected by such event, at the address of
such Holder as it appears in the Security Register, not earlier than the
earliest date and not later than the latest date prescribed for the giving of
such notice.
Neither the failure to mail such notice, nor any defect in any notice
so mailed, to any particular Holder of a Security shall affect the sufficiency
of such notice with respect to other Holders of Securities. In case by reason of
the suspension of regular mail service or by reason of any other cause it shall
be impracticable to give such notice by mail, then such notification to Holders
of Securities as shall be made with the approval of the Trustee, which approval
shall not be unreasonably withheld, shall constitute a sufficient notification
to such Holders for every purpose hereunder.
Such notice shall be deemed to have been given when such notice is
mailed.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders of Securities shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
SECTION 1.7 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
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<PAGE> 20
SECTION 1.8 Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.9 Separability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.10 Benefits of Indenture.
Except as provided in the next sentence, nothing in this Indenture or
in the Securities, express or implied, shall give to any Person, other than the
parties hereto and their successors and assigns hereunder and the Holders of
Securities, any benefit or legal or equitable right, remedy or claim under this
Indenture. The provisions of Article Twelve are intended to be for the benefit
of, and shall be enforceable directly by, the holders of Senior Debt.
SECTION 1.11 Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, THE UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 1.12 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity of any Security or the last day on which a
Holder of a Security has a right to convert his Security shall not be a Business
Day at a Place of Payment or Place of Conversion, as the case may be, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of principal of, premium, if any, or interest on, or the payment of the
Repurchase Price (whether the same is payable in cash or in shares of Common
Stock) with respect to, or delivery for conversion of, such Security need not be
made at such Place of Payment or Place of Conversion, as the case may be, on or
by such day, but may be made on or by the next succeeding Business Day at such
Place of Payment or Place of Conversion, as the case may be, with the same force
and effect as if made on the Interest Payment Date, Redemption Date or
Repurchase Date, or at the Stated Maturity or by such last day for conversion;
provided, however, that in the case that payment is made on such succeeding
Business Day, no interest shall accrue on the amount so payable for the period
from and after such Interest Payment Date, Redemption Date, Repurchase Date,
Stated Maturity or last day for conversion, as the case may be.
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SECTION 1.13 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision
of the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act
that may be so modified or excluded, the latter provision shall be deemed to
apply to this Indenture as so modified or to be excluded, as the case may be.
Until such time as this Indenture shall be qualified under the Trust Indenture
Act, this Indenture, the Company and the Trustee shall be deemed for all
purposes hereof to be subject to and governed by the Trust Indenture Act to the
same extent as would be the case if this Indenture were so qualified on the date
hereof.
ARTICLE TWO
SECURITY FORMS
SECTION 2.1 Form Generally.
The Securities shall be in substantially the form set forth in this
Article, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or the Internal Revenue Code of 1986, as amended, and
regulations thereunder (the "Code"), or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution thereof. All Securities shall be Securities.
The Trustee's certificates of authentication shall be in substantially
the form set forth in Section 2.3.
Conversion notices shall be in substantially the form set forth in
Section 2.4.
Repurchase notices shall be substantially in the form set forth in
Section 2.2.
The Securities shall be printed, lithographed, typewritten or engraved
or produced by any combination of these methods on steel engraved borders if so
required by any securities exchange upon which the Securities may be listed, or
may be produced in any other manner permitted by the rules of any such
securities exchange, or, if the Securities are not listed on a securities
exchange, in any other manner approved by the Company, all as determined by the
officers executing such Securities, as evidenced by their execution thereof.
Upon their original issuance, Securities shall be issued in the form of
one or more Global Securities without interest coupons and shall be registered
in the name of DTC, as Depositary, or its nominee and deposited with the
Trustee, as custodian for DTC, for credit by DTC to the respective accounts of
beneficial owners of the Securities represented thereby (or such other accounts
as they
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<PAGE> 22
may direct). Such Global Security, together with its Successor Securities which
are Global Securities, are collectively herein called the "Restricted Global
Security."
SECTION 2.2 Form of Security.
[FORM OF FACE]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED
SECURITY OTHER THAN ANY RESTRICTED GLOBAL SECURITY:
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A
PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS.
THIS NOTE, ANY SHARES OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND
ANY RELATED DOCUMENTATION MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO
MODIFY THE RESTRICTIONS ON RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY SUCH
SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR TRANSFER OF
RESTRICTED SECURITIES GENERALLY. THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL
BE DEEMED BY THE ACCEPTANCE OF THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO
ANY SUCH AMENDMENT OR SUPPLEMENT.]
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<PAGE> 23
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH RESTRICTED
GLOBAL SECURITY:
THE SECURITIES EVIDENCED BY THIS GLOBAL SECURITY AND ANY COMMON STOCK
ISSUABLE UPON THE CONVERSION OF THE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF ANY BENEFICIAL INTEREST IN THE
SECURITIES IS HEREBY NOTIFIED THAT THE SELLER OF SUCH BENEFICIAL INTEREST IN THE
SECURITIES MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF
THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
EACH BENEFICIAL OWNER OF AN INTEREST IN ANY OF THE SECURITIES EVIDENCED
BY THIS GLOBAL SECURITY (INCLUDING ANY PARTICIPANT IN THE DEPOSITARY HOLDING THE
GLOBAL SECURITY THAT IS SHOWN AS HOLDING SUCH AN INTEREST ON THE RECORDS OF SUCH
DEPOSITARY AND EACH BENEFICIAL OWNER THAT HOLDS THROUGH ANY SUCH PARTICIPANT)
AGREES FOR THE BENEFIT OF I2 TECHNOLOGIES, INC. (THE "COMPANY") THAT ANY
BENEFICIAL INTEREST IN THE SECURITIES AND ANY SHARES OF COMMON STOCK ISSUABLE
UPON THEIR CONVERSION MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT
ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
THEREUNDER (IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN
ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES AND OTHER
JURISDICTIONS.
THIS SECURITY, ANY SHARES OF COMMON STOCK ISSUABLE UPON THE CONVERSION
OF THE SECURITIES EVIDENCED HEREBY AND ANY RELATED DOCUMENTATION MAY BE AMENDED
OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND
OTHER TRANSFERS OF THIS SECURITY, ANY BENEFICIAL INTERESTS HEREIN AND ANY SUCH
SHARES TO REFLECT ANY CHANGE IN APPLICABLE LAW OR REGULATION (OR THE
INTERPRETATION THEREOF) OR IN PRACTICES RELATING TO THE RESALE OR
-18-
<PAGE> 24
TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE HOLDER AND BENEFICIAL OWNERS OF
AN INTEREST IN ANY SUCH SECURITIES OR SHARES SHALL BE DEEMED BY THE ACCEPTANCE
OF THIS SECURITY AND THE BENEFICIAL INTERESTS HEREIN AND ANY SUCH SHARES TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE DEPOSITARY OR A
NOMINEE OF THE DEPOSITARY, WHICH MAY BE TREATED BY THE COMPANY, THE TRUSTEE AND
ANY AGENT THEREOF AS OWNER AND HOLDER OF THIS SECURITY FOR ALL PURPOSES.]
[THE FOLLOWING LEGEND SHALL APPEAR ON THE FACE OF EACH GLOBAL SECURITY
FOR WHICH THE DEPOSITORY TRUST COMPANY IS TO BE THE DEPOSITARY:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
-19-
<PAGE> 25
i2 TECHNOLOGIES, INC.
5 1/4% CONVERTIBLE SUBORDINATED NOTE
DUE DECEMBER 15, 2006
No. U.S.$
--------------- -------
CUSIP No.
-------
i2 TECHNOLOGIES, INC., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company," which term
includes any successor Person to the Company under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay to
_______________, or registered assigns, the principal sum of _______________
United States Dollars (U.S.$ ______) [IF THIS SECURITY IS A GLOBAL SECURITY,
THEN INSERT -- (which principal amount may from time to time be increased or
decreased to such other principal amounts (which, taken together with the
principal amounts of all other Outstanding Securities, shall not exceed
$350,000,000 in the aggregate at any time) by adjustments made on the records of
the Trustee hereinafter referred to in accordance with the Indenture)] on
December 15, 2006 and to pay interest thereon, from December 10, 1999, or from
the most recent Interest Payment Date (as defined below) to which interest has
been paid or duly provided for, semi-annually in arrears on June 15 and December
15 in each year (each, an "Interest Payment Date"), commencing June 15, 2000, at
the rate of 5 1/4% per annum, until the principal hereof is due, and at the rate
of 7 1/4% per annum on any overdue principal and premium, if any, and, to the
extent permitted by law, On any overdue interest. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest, which shall be the June 1 or December
1 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Except as otherwise provided in the Indenture, any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Company, notice whereof shall be
given to Holders of Securities not less than 10 days prior to such Special
Record Date, or be paid at any time in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities may be
listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. Payments of principal shall be made upon the
surrender of this Security at the option of the Holder at the Corporate Trust
Office of the Trustee, or at such other office or agency of the Company as may
be designated by it for such purpose in the Borough of Manhattan, The City of
New York, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, or at such other offices or agencies as the Company may designate, by
United States Dollar check drawn on, or wire transfer to, a United States Dollar
account (such a wire transfer to be made only to a Holder of an aggregate
principal amount of Securities in excess of U.S.$2,000,000, and only if such
Holder shall have furnished wire instructions in writing to the Trustee no later
than 15 days
-20-
<PAGE> 26
prior to the relevant payment date) maintained by the payee with a bank in the
Borough of Manhattan, The City of New York. Payment of interest on this Security
may be made by United States Dollar check drawn on a bank in the Borough of
Manhattan, The City of New York mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register, or, upon written
application by the Holder to the Security Registrar setting forth wire
instructions not later than the relevant Record Date, by wire transfer to a
United States Dollar account (such a wire transfer to be made only to a Holder
of an aggregate principal amount of Securities in excess of U.S.$2,000,000 and
only if such Holder shall have furnished wire instructions in writing to the
Trustee no later than 15 days prior to the relevant payment date) maintained by
the payee with a bank in the Borough of Manhattan, The City of New York.
Except as specifically provided herein and in the Indenture, the
Company shall not be required to make any payment with respect to any tax,
assessment or other governmental charge imposed by any government or any
political subdivision or taxing authority thereof or therein.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof or an Authenticating Agent by the
manual signature of one of their respective authorized signatories, this
Security shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-21-
<PAGE> 27
IN WITNESS WHEREOF, the Company has caused this Security to be duly
executed.
i2 TECHNOLOGIES, INC.
By:
--------------------------------------------
Name: William M. Beecher
Title: Executive Vice President, Operations
and Chief Financial Officer
-22-
<PAGE> 28
[FORM OF REVERSE]
This Security is one of a duly authorized issue of securities of the
Company designated as its "5 1/4% Convertible Subordinated Notes due December
15, 2006" (herein called the "Securities"), limited in aggregate principal
amount not to exceed U.S.$350,000,000 to be issued under an Indenture, dated as
of December 10, 1999 (herein called the "Indenture"), between the Company and
Chase Bank of Texas, National Association, as Trustee (herein called the
"Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Company, the Trustee, the holders of Senior Debt
and the Holders of the Securities and of the terms upon which the Securities
are, and are to be, authenticated and delivered. As provided in the Indenture
and subject to certain limitations therein set forth, Securities are
exchangeable for a like aggregate principal amount of Securities of any
authorized denominations as requested by the Holder surrendering the same upon
surrender of the Security or Securities to be exchanged, at the Corporate Trust
Office of the Trustee. The Trustee upon such surrender by the Holder will issue
the new Securities in the requested denominations.
No sinking fund is provided for the Securities.
The Securities are also subject to redemption at the option of the
Company at any time on or after 2002, in whole or in part, upon not less than 30
nor more than 60 days' notice to the Holders prior to the Redemption Date at the
following Redemption Prices (expressed as percentages of the principal amount)
for the twelve-month period beginning on December 15 of the following years
(except for the period beginning 2002, which shall be from December 20, 2002
through December 14, 2003):
<TABLE>
<CAPTION>
Year Redemption Price
---- ----------------
<S> <C>
2002.......................... 103.000%
2003.......................... 102.250%
2004.......................... 101.500%
2005.......................... 100.750%
</TABLE>
and at a Redemption Price equal to 100% of the principal amount on and after
December 15, 2006, together, in each case, with accrued interest to the
Redemption Date; provided, however, that interest installments on Securities
whose Stated Maturity is on or prior to such Redemption Date will be payable to
the Holders of such Securities, or one or more Predecessor Securities, of record
at the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.
In the event of a redemption of the Securities, the Company will not be
required (a) to register the transfer or exchange of Securities for a period of
15 days immediately preceding the date notice is given identifying the serial
numbers of the Securities called for such redemption or (b) to register the
transfer or exchange of any Security, or portion thereof, called for redemption.
-23-
<PAGE> 29
Notice to the Holders will be given not less than 30 nor more than 60
days prior to the Redemption Date as provided in the Indenture.
In any case where the due date for the payment of the principal of,
premium, if any, interest, or Liquidated Damages on any Security or the last day
on which a Holder of a Security has a right to convert his Security shall be, at
any Place of Payment or Place of Conversion, as the case may be, a day on which
banking institutions at such Place of Payment or Place of Conversion are
authorized or obligated by law or executive order to close, then payment of
principal, premium, if any, interest, or Liquidated Damages, or delivery for
conversion of such Security need not be made on or by such date at such place
but may be made on or by the next succeeding day at such place which is not a
day on which such banking institutions are authorized or obligated by law or
executive order to close, with the same force and effect as if made on the date
for such payment or the date fixed for redemption or repurchase, or by such last
day for conversion, and no interest shall accrue on the amount so payable for
the period after such date.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time following
the original issue date of the Securities and on or before the close of business
on December 15, 2006, or in case this Security or a portion hereof is called for
redemption or the Holder hereof has exercised his right to require the Company
to repurchase this Security or such portion hereof, then in respect of this
Security until and including, but (unless the Company defaults in making the
payment due upon redemption or repurchase, as the case may be) not after, the
close of business on the Business Day immediately preceding the Redemption Date
or the Repurchase Date, as the case may be, to convert this Security (or any
portion of the principal amount hereof that is an integral multiple of
U.S.$1,000, provided that the unconverted portion of such principal amount is
U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof) into fully
paid and nonassessable shares of Common Stock of the Company at an initial
Conversion Rate of 6.5797 (or at the current adjusted Conversion Rate if an
adjustment has been made as provided in the Indenture) by surrender of this
Security, duly endorsed or assigned to the Company or in blank and, in case such
surrender shall be made during the period from the close of business on any
Regular Record Date next preceding any Interest Payment Date to the opening of
business on such Interest Payment Date (except if this Security has been called
for redemption on a Redemption Date or is repurchasable on a Repurchase Date
occurring, in either case, during such period and is surrendered for such
conversion during such period), also accompanied by payment in New York Clearing
House or other funds acceptable to the Company of an amount equal to the
interest otherwise payable on such Interest Payment Date on the principal amount
of this Security then being converted, and also the conversion notice hereon
duly executed, to the Company at the Corporate Trust Office of the Trustee, or
at such other office or agency of the Company, subject to any laws or
regulations applicable thereto and subject to the right of the Company to
terminate the appointment of any Conversion Agent (as defined below) as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate (each a
"Conversion Agent"), provided, further, that if this Security or portion hereof
has been called for redemption on a Redemption Date or is repurchasable on a
Repurchase Date occurring, in either case, during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date to
the opening of business on such
-24-
<PAGE> 30
succeeding Interest Payment Date and is surrendered for conversion during such
period, then the Holder of this Security shall not be required to pay such
interest upon surrender of this Security for conversion. Subject to the
provisions of the preceding sentence and, in the case of a conversion after the
close of business on the Regular Record Date next preceding any Interest Payment
Date and on or before the close of business on such Interest Payment Date, to
the right of the Holder of this Security (or any Predecessor Security) of record
as of such Regular Record Date to receive the related installment of interest to
the extent and under the circumstances provided in the Indenture, no cash
payment or adjustment is to be made on conversion for interest accrued hereon
from the Interest Payment Date next preceding the day of conversion, or for
dividends on the Common Stock issued on conversion hereof. The Company shall
thereafter deliver to the Holder the fixed number of shares of Common Stock
(together with any cash adjustment, as provided in the Indenture) into which
this Security is convertible and such delivery will be deemed to satisfy the
Company's obligation to pay the principal amount of this Security. No fractions
of shares or scrip representing fractions of shares will be issued on
conversion, but instead of any fractional interest (calculated to the nearest
1/100th of a share) the Company shall pay a cash adjustment as provided in the
Indenture. The Conversion Rate is subject to adjustment as provided in the
Indenture. In addition, the Indenture provides that in case of certain
consolidations or mergers to which the Company is a party or the conveyance,
transfer, sale or lease of all or substantially all of the property and assets
of the Company, the Indenture shall be amended, without the consent of any
Holders of Securities, so that this Security, if then Outstanding, will be
convertible thereafter, during the period this Security shall be convertible as
specified above, only into the kind and amount of securities, cash and other
property receivable upon such consolidation, merger, conveyance, transfer, sale
or lease by a holder of the number of shares of Common Stock of the Company into
which this Security could have been converted immediately prior to such
consolidation, merger, conveyance, transfer, sale or lease (assuming such holder
of Common Stock is not a Constituent Person, failed to exercise any rights of
election and received per share the kind and amount received per share by a
plurality of Non-electing Shares. No adjustment in the Conversion Rate will be
made until such adjustment would require an increase or decrease of at least one
percent of such rate, provided that any adjustment that would otherwise be made
will be carried forward and taken into account in the computation of any
subsequent adjustment.
Subject to certain limitations in the Indenture, at any time when the
Company is not subject to Section 13 or 15(d) of the United States Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Security or
the holder of shares of Common Stock issued upon conversion thereof, the Company
will promptly furnish or cause to be furnished Rule 144A Information (as defined
below) to such Holder of Securities or such holder of shares of Common Stock
issued upon conversion of Securities, or to a prospective purchaser of any such
security designated by any such Holder or holder, as the case may be, to the
extent required to permit compliance by such Holder or holder with Rule 144A
under the Securities Act of 1933, as amended (the "Securities Act"), in
connection with the resale of any such security. "Rule 144A information" shall
be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
-25-
<PAGE> 31
The Holder of this Security [IF THIS SECURITY IS A GLOBAL SECURITY,
THEN INSERT -- (including any Person that has a beneficial interest in this
Security)] and the Common Stock issuable upon conversion hereof is entitled to
the benefits of a Registration Rights Agreement, dated as of December 10, 1999
(the "Registration Rights Agreement"), executed by the Company. Pursuant to the
Registration Rights Agreement, the Company has agreed for the benefit of the
Holders from time to time of Securities and the Common Stock issuable upon
conversion thereof, in each case, that are Registrable Securities, at the
Company's expense, (a) to file within 90 calendar days following the First Time
of Delivery (as defined in the Purchase Agreement), a shelf registration
statement (the "Shelf Registration Statement") with the Commission relating to
the offer and sale of the Registrable Securities by the Holders, (b) thereafter
to use all reasonable efforts to cause such Shelf Registration Statement to be
declared effective under the Securities Act within 180 calendar days after the
First Time of Delivery, and (c) to use all reasonable efforts to keep such Shelf
Registration Statement continuously effective in order to permit the Prospectus
(as defined in the Registration Rights Agreement) forming part thereof to be
usable by Electing Holders (as defined in the Registration Rights Agreement) for
a period of the two years from the First Time of Delivery, or such shorter
period that will terminate when there are no Registrable Securities outstanding.
Section 2(a) of the Registration Rights Agreement provides that, upon
written notice to each Holder of a Registrable Security, the Company may
postpone having the Shelf Registration Statement declared effective as required
by Section 2(a) of the Registration Rights Agreement for a reasonable period not
to exceed 90 days if the Company possesses material non-public information, the
disclosure of which would have a material adverse effect on the Company and its
subsidiaries, taken as a whole. Notwithstanding any postponement pursuant to
Section 2(a) of the Registration Rights Agreement, if (i) on or prior to the
90th day following the date of the First Time of Delivery, a Shelf Registration
Statement has not been filed with the Commission, or (ii) on or prior to the
180th day following the date of the First Time of Delivery, such Shelf
Registration Statement is not declared effective by the Commission (each, a
"Registration Default"), the Company shall be required to pay liquidated damages
("Liquidated Damages") from and including the day following such Registration
Default until such Shelf Registration Statement is either so filed or so filed
and subsequently declared effective, as applicable. Such Liquidated Damages
shall be paid semi-annually in arrears, with the first semi-annual payment due
on the first Interest Payment Date in respect of this Security following the
date of such Registration Default, and will accrue at a rate per annum equal to
one-quarter of one percent (.25%) of the principal amount of this Security, to
and including the 90th day following such Registration Default and at a rate per
annum equal to one-half of one percent (.50%) thereof from and after the 91st
day following such Registration Default. In the event that the Shelf
Registration Statement ceases to be effective (or the Holders of Registrable
Securities are otherwise prevented or restricted by the Company from effecting
sales pursuant thereto) during the period of two years from the First Time of
Delivery (or such shorter period that will terminate when there are no
Registrable Securities outstanding) for more than 45 days, whether or not
consecutive, in any 90-day period, or more than 90 days, whether or not
consecutive, during any 12-month period (an "Effectiveness Failure"), then the
Company shall pay Liquidated Damages in the amount of one-half of one percent
(.50%) per annum, from the 46th day of the applicable 90-day period or the 90th
day of the applicable 12-month period, as the case may be, that such Shelf
Registration Statement ceases to be effective (or the Holders of Registrable
Securities are otherwise
-26-
<PAGE> 32
prevented or restricted by the Company from effecting sales pursuant thereto)
until such time as the Effective Failure is cured.
Whenever in this Security there is a reference, in any context, to the
payment of the principal of, premium, if any, or interest on, or in respect of,
any Security such mention shall be deemed to include mention of the payment of
Liquidated Damages payable as described in the preceding paragraph to the extent
that, in such context, Liquidated Damages are, were or would be payable in
respect of this Security pursuant to such paragraph, and an express mention of
the payment of Liquidated Damages (if applicable) in any provisions of this
Security shall not be construed as excluding Liquidated Damages in those
provisions of this Security where such express mention is not made.
If the Holder of this Security [IF THIS SECURITY IS A GLOBAL SECURITY,
THEN INSERT -- (including any Person that has a beneficial interest in this
Security)] elects to sell this Security pursuant to the Shelf Registration
Statement then, by its acceptance hereof, such Holder of this Security agrees to
be bound by the terms of the Registration Rights Agreement relating to the
Registrable Securities which are the subject of such election.
If a Change in Control occurs, the Holder of this Security, at the
Holder's option, shall have the right, in accordance with the provisions of the
Indenture, to require the Company to repurchase this Security (or any portion of
the principal amount hereof that is equal to U.S.$5,000 or any integral multiple
of U.S.$1,000 in excess of U.S.$5,000) for cash at a Repurchase Price equal to
100% of the principal amount thereof plus interest accrued to the Repurchase
Date. At the option of the Company, the Repurchase Price may be paid in cash or,
subject to the conditions provided in the Indenture, by delivery of shares of
Common Stock having a fair market value equal to the Repurchase Price. For
purposes of this paragraph, the fair market value of shares of Common Stock
shall be determined by the Company and shall be equal to 95% of the average of
the Closing Price Per Share for the five consecutive Trading Days immediately
preceding and including the third Trading Day prior to the Repurchase Date.
Whenever in this Security there is a reference, in any context, to the principal
of any Security as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Security to the
extent that such Repurchase Price is, was or would be so payable at such time,
and express mention of the Repurchase Price in any provision of this Security
shall not be construed as excluding the Repurchase Price so payable in those
provisions of this Security when such express mention is not made; provided,
however, that, for the purposes of the second succeeding paragraph, such
reference shall be deemed to include reference to the Repurchase Price only to
the extent the Repurchase Price is payable in cash.
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH SECURITY THAT IS NOT A
GLOBAL SECURITY:
In the event of redemption, repurchase or conversion of this Security
in part only, a new Security or Securities for the unredeemed, unrepurchased or
unconverted portion hereof will be issued in the name of the Holder hereof.]
-27-
<PAGE> 33
[THE FOLLOWING PARAGRAPH SHALL APPEAR IN EACH GLOBAL SECURITY:
In the event of a deposit or withdrawal of an interest in this
Security, including an exchange, transfer, redemption, repurchase or conversion
of this Security in part only, the Trustee, as custodian of the Depositary,
shall make an adjustment on its records to reflect such deposit or withdrawal in
accordance with the Applicable Procedures.]
The indebtedness evidenced by this Security is, to the extent and in
the manner provided in the Indenture, subordinate and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, and this
Security is issued subject to such provisions of the Indenture with respect
thereto. Each Holder of this Security, by accepting the same, (a) agrees to and
shall be bound by such provisions, (b) authorizes and directs the Trustee on his
behalf to take such action as may be necessary or appropriate to effectuate the
subordination so provided and (c) appoints the Trustee his attorney-in-fact for
any and all such purposes.
If an Event of Default shall occur and be continuing, the principal of
all the Securities, together with accrued interest to the date of declaration,
may be declared due and payable in the manner and with the effect provided in
the Indenture. Upon payment (i) of the amount of principal so declared due and
payable, together with accrued interest to the date of declaration, and (ii) of
interest on any overdue principal and, to the extent permitted by applicable
law, overdue interest, all of the Company's obligations in respect of the
payment of the principal of and interest on the Securities shall terminate.
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 written consent of the Holders
of a majority in principal amount of the Securities at the time Outstanding. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities at the time Outstanding, on
behalf of the Holders of all the Securities, to waive compliance by the Company
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued in exchange herefor
or in lieu hereof, whether or not notation of such consent or waiver is made
upon this Security or such other Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default, the Holders of not
less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and furnished the Trustee reasonable indemnity, and shall
have failed to institute any such proceeding, for 60 days after receipt of such
notice, request and furnishing of indemnity. The foregoing shall not apply to
any suit instituted by the Holder of this Security for the enforcement of any
payment of principal hereof, premium, if any, or interest hereon (including
Liquidated Damages) on or after the respective
-28-
<PAGE> 34
due dates expressed herein or for the enforcement of the right to convert this
Security as provided in the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of, premium, if any, and
interest on (including Liquidated Damages) this Security at the times, places
and rate, and in the coin or currency, herein prescribed or to convert this
Security as provided in the Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of Securities is registrable on the Security Register
upon surrender of a Security for registration of transfer at the Corporate Trust
Office of the Trustee or at such other office or agency of the Company as may be
designated by it for such purpose in the Borough of Manhattan, The City of New
York, or at such other offices or agencies as the Company may designate, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed by, the
Holder thereof or his attorney duly authorized in writing, and thereupon one or
more new Securities, of authorized denominations and for the same aggregate
principal amount, will be issued to the designated transferee or transferees by
the Security Registrar. No service charge shall be made for any such
registration of transfer or exchange, but the Company may require payment of a
sum sufficient to recover any tax or other governmental charge payable in
connection therewith.
Prior to due presentation of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner thereof for
all purposes, whether or not such Security be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
Interest on the Securities (including any Liquidated Damages) shall be
computed on the basis of a 360-day year of twelve 30-day months.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
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<PAGE> 35
ELECTION OF HOLDER TO REQUIRE REPURCHASE
1. Pursuant to Section 13.1 of the Indenture, the undersigned hereby
elects to have this Security repurchased by the Company.
2. The undersigned hereby directs the Trustee or the Company to pay it
or _______________ an amount in cash or, at the Company's election, Common Stock
valued as set forth in the Indenture, equal to 100% of the principal amount to
be repurchased (as set forth below), plus interest accrued to the Repurchase
Date, as provided in the Indenture.
Dated:
--------------------------------
Signature(s) must be guaranteed
by an Eligible Guarantor
Institution with membership in
an approved signature guarantee
program pursuant to Rule 17Ad -
15 under the Securities Exchange
Act of 1934.
--------------------------------
Signature
Signature(s) must be guaranteed
by an Eligible Guarantor
Institution with membership in
an approved signature guarantee
program pursuant to Rule 17Ad -
15 under the Securities Exchange
Act of 1934.
--------------------------------
Signature Guaranteed
Principal amount to be repurchased
(an amount of U.S. $5,000 or an integral
multiple of U.S.$1,000 in excess of U.S. $5,000):
Remaining principal amount following such repurchase:
--------------------------------
NOTICE: The Signature to the foregoing Election must correspond to the Name as
written upon the face of this Security in every particular, without alteration
or any change whatsoever.
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<PAGE> 36
SECTION 2.3 Form of Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
Dated: [Date of Authentication]
This is one of the Securities referred to in the within-mentioned
Indenture.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By:
------------------------------
Authorized Signatory
SECTION 2.4 Form of Conversion Notice.
CONVERSION NOTICE
The undersigned Holder of this Security hereby irrevocably exercises
the option to convert this Security, or any portion of the principal amount
hereof (which is an integral multiple of U.S.$1,000) below designated, into
shares of Common Stock in accordance with the terms of the Indenture referred to
in this Security, and directs that such shares, together with a check in payment
for any fractional share and any Securities representing any unconverted
principal amount hereof, be delivered to and be registered in the name of the
undersigned unless a different name has been indicated below. If shares of
Common Stock or Securities are to be registered in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
---------------------------
-----------------------------------
Signature
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<PAGE> 37
If shares or Securities are to be If only a portion of the Securities
registered in the name of a Person is to be converted, please
other than the Holder, please print indicate:
such Person's name and address:
1. Principal amount to be
converted:
- ----------------------------------- U.S.$
Name -------
2. Principal amount and
denomination of Securities
- ----------------------------------- representing unconverted
Address principal amount to be issued:
Amount: U.S.$
-------
- -----------------------------------
Social Security or other Taxpayer Denominations:
Identification Number, if any U.S.$
-------
(any integral multiple of U.S.$1,000)
- -----------------------------------
-----------------------------------
Signature
Signature(s) must be guaranteed by
an Eligible Guarantor Institution
with membership in an approved
signature guarantee program
pursuant to Rule 17Ad - 15 under
the Securities Exchange Act of
1934.
-----------------------------------
Signature Guaranteed
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<PAGE> 38
ARTICLE THREE
THE SECURITIES
SECTION 3.1 Title and Terms.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is limited to U.S.$350,000,000, except for
Securities authenticated and delivered in exchange for, or in lieu of, other
Securities pursuant to Section 3.4, 3.5, 3.6, 8.5, 10.8, 11.2 or 13.3(e).
The Securities shall be known and designated as the "5 1/4% Convertible
Subordinated Notes due December 15, 2006" of the Company. Their Stated Maturity
shall be December 15, 2006 and they shall bear interest on their principal
amount from December 10, 1999, payable semi-annually in arrears on June 15 and
December 15 in each year, commencing June 15, 2000, at the rate of 5 1/4% per
annum until the principal thereof is due and at the rate of 7 1/4% per annum on
any overdue principal and, to the extent permitted by law, on any overdue
interest; provided, however, that payments shall only be made on Business Days
as provided in Section 1.12.
The principal of, premium, if any, and interest on the Securities shall
be payable as provided in the form of Securities set forth in Section 2.2, and
the Repurchase Price, whether payable in cash or in shares of Common Stock,
shall be payable at such places as are identified in the Company Notice given
pursuant to Section 13.3 (any city in which any Paying Agent is located being
herein called a "Place of Payment").
The Registrable Securities are entitled to the benefits of a
Registration Rights Agreement as provided by Sections 2.2 and 9.11. The
Securities are entitled to the payment of Liquidated Damages and additional
interest as provided by Section 9.11.
The Securities shall be redeemable at the option of the Company, as
provided in Article Ten and in the form of Securities set forth in Section 2.2.
The Securities shall be convertible as provided in Article Eleven (any
city in which any Conversion Agent is located being herein called a "Place of
Conversion").
The Securities shall be subordinated in right of payment to Senior Debt
of the Company as provided in Article Twelve.
The Securities shall be subject to repurchase by the Company at the
option of the Holders as provided in Article Thirteen.
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<PAGE> 39
SECTION 3.2 Denominations.
The Securities shall be issuable only in registered form, without
coupons, in denominations of U.S.$1,000 and integral multiples thereof.
SECTION 3.3 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Vice Chairman of the Board, its Chief Executive
Officer, its President or one of its Vice Presidents, under a facsimile of its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. Any such signature may be manual or facsimile.
Securities bearing the manual or facsimile signature of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee or to its order for authentication, together with a Company Order
for the authentication and delivery of such Securities, and the Trustee in
accordance with such Company Order shall authenticate and make available for
delivery such Securities as in this Indenture provided and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature of an authorized signatory, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered
hereunder.
SECTION 3.4 Global Securities; Non-Global Securities.
(A) Global Securities
(a) Each Global Security authenticated under this Indenture
shall be registered in the name of the Depositary designated by the Company for
such Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no
Global Security may be exchanged in whole or in part for Securities registered,
and no transfer of a Global Security in whole or in part may be registered, in
the name of any Person other than the Depositary for such Global Security or a
nominee thereof unless (i) such Depositary (A) has notified the Company that it
is unwilling or unable to continue as Depositary for such Global Security or (B)
has ceased to be
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<PAGE> 40
a clearing agency registered as such under the Exchange Act or announces an
intention permanently to cease business or does in fact do so or (ii) there
shall have occurred and be continuing an Event of Default with respect to such
Global Security.
(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Trustee, as Security Registrar, for exchange or
cancellation, as provided in this Article Three. If any Global Security is to be
exchanged for other Securities or cancelled in part, or if another Security is
to be exchanged in whole or in part for a beneficial interest in any Global
Security, in each case, as provided in Section 3.5, then either (i) such Global
Security shall be so surrendered for exchange or cancellation, as provided in
this Article Three, or (ii) the principal amount thereof shall be reduced or
increased by an amount equal to the portion thereof to be so exchanged or
cancelled, or equal to the principal amount of such other Security to be so
exchanged for a beneficial interest therein, as the case may be, by means of an
appropriate adjustment made on the records of the Trustee, as Security
Registrar, whereupon the Trustee, in accordance with the Applicable Procedures,
shall instruct the Depositary or its authorized representative to make a
corresponding adjustment to its records. Upon any such surrender or adjustment
of a Global Security, the Trustee shall, subject to Section 3.5(c) and as
otherwise provided in this Article Three, authenticate and make available for
delivery any Securities issuable in exchange for such Global Security (or any
portion thereof) to or upon the order of, and registered in such names as may be
directed by, the Depositary or its authorized representative. Upon the request
of the Trustee in connection with the occurrence of any of the events specified
in the preceding paragraph, the Company shall promptly make available to the
Trustee a reasonable supply of Securities that are not in the form of Global
Securities. The Trustee shall be entitled to rely upon any order, direction or
request of the Depositary or its authorized representative which is given or
made pursuant to this Article Three if such order, direction or request is given
or made in accordance with the Applicable Procedures.
(d) Every Security authenticated and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Global Security
or any portion thereof, whether pursuant to this Article Three or otherwise,
shall be authenticated and delivered in the form of, and shall be a registered
Global Security, unless such Security is registered in the name of a Person
other than the Depositary for such Global Security or a nominee thereof, in
which case such Security shall be authenticated and delivered in definitive,
fully registered form, without interest coupons.
(e) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under the Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security will be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members and
such owners of beneficial interests in a Global Security will not be considered
the owners or holders thereof.
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<PAGE> 41
(B) Non-Global Securities
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and make
available for delivery, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at any office
or agency of the Company designated pursuant to Section 9.2, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 3.5 Registration, Registration of Transfer and Exchange; Restrictions on
Transfer.
(a) The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 9.2 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 9.2 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate principal
amount and bearing such restrictive legends as may be required by this
Indenture.
At the option of the Holder, and subject to the other provisions of
this Section 3.5, Securities may be exchanged for other Securities of any
authorized denomination and of a like aggregate principal amount, upon surrender
of the Securities to be exchanged at any such office or agency. Whenever any
Securities are so surrendered for exchange, and subject to the other provisions
of this Section 3.5, the Company shall execute, and the Trustee shall
authenticate and make available for delivery, the Securities which the Holder
making the exchange is entitled to receive. Every Security presented or
surrendered for registration of transfer or for exchange shall (if so required
by the Company or the Security Registrar) be duly endorsed, or be accompanied by
a written instrument of
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<PAGE> 42
transfer in form satisfactory to the Company and the Security Registrar duly
executed, by the Holder thereof or his attorney duly authorized in writing.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and subject to the other provisions of this Section 3.5, entitled to the
same benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
No service charge shall be made for any registration of transfer or
exchange of Securities except as provided in Section 3.6, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Securities, other than exchanges pursuant to Section 3.4, 10.8, 11.2
or 13.3 (other than where the shares of Common Stock are to be issued or
delivered in a name other than that of the Holder of the Security) not involving
any transfer and other than any stamp and other duties, if any, which may be
imposed in connection with any such transfer or exchange by the United States or
any political subdivision thereof or therein, which shall be paid by the
Company.
In the event of a redemption of the Securities, the Company will not be
required (a) to register the transfer of or exchange Securities for a period of
15 days immediately preceding the date notice is given identifying the serial
numbers of the Securities called for such redemption or (b) to register the
transfer of or exchange any Security, or portion thereof, called for redemption.
(b) Securities Act Legends. All Securities shall bear the applicable
Restricted Securities Legend and shall be subject to the restrictions on
transfer specified therein, subject to the following:
(i) subject to the following Clauses of this Section 3.5(b), a
Security or any portion thereof which is exchanged, upon transfer or otherwise,
for a beneficial interest in a Global Security or any portion thereof shall be
deemed to bear and be subject to the Securities Act Legend borne by such Global
Security while represented thereby;
(ii) subject to the following Clauses of this Section 3.5(b),
a new Security which is not a Global Security and is issued in exchange for
another Security (including a beneficial interest in a Global Security) or any
portion thereof, upon transfer or otherwise shall bear the Securities Act Legend
borne by such other Security;
(iii) any Securities which are sold or otherwise disposed of
pursuant to an effective registration statement under the Securities Act
(including the Shelf Registration Statement), together with their Successor
Securities shall not bear a Securities Act Legend; the Company shall inform the
Trustee in writing of the effective date of any such registration statement
registering the Securities under the Securities Act and shall notify the Trustee
at any time when prospectuses may not be delivered with respect to Securities to
be sold pursuant to such registration statement. The Trustee shall not be liable
for any action taken or omitted to be taken by it in good faith in accordance
with the aforementioned registration statement;
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<PAGE> 43
(iv) at any time after the Securities may be freely
transferred without registration under the Securities Act or without being
subject to transfer restrictions pursuant to the Securities Act, a new Security
which does not bear a Securities Act Legend may be issued in exchange for or in
lieu of a Security (other than a Global Security) or any portion thereof which
bears such a legend if the Trustee has received an Unrestricted Securities
Certificate, satisfactory to the Trustee and duly executed by the Holder of such
legended Security or his attorney duly authorized in writing, and after such
date and receipt of such certificate, the Trustee shall authenticate and make
available for delivery such a new Security in exchange for or in lieu of such
other Security as provided in this Article Three;
(v) a new Security which does not bear a Securities Act Legend
may be issued in exchange for or in lieu of a Security (other than a Global
Security) or any portion thereof which bears such a legend if, in the Company's
judgment, placing such a legend upon such new Security is not necessary to
ensure compliance with the registration requirements of the Securities Act, and
the Trustee, at the direction of the Company, shall authenticate and make
available for delivery such a new Security as provided in this Article Three;
and
(vi) notwithstanding the foregoing provisions of this Section
3.5(b), a Successor Security of a Security that does not bear a Securities Act
Legend shall not bear such form of legend unless the Company has reasonable
cause to believe that such Successor Security is a "restricted security" within
the meaning of Rule 144, in which case the Trustee, at the direction of the
Company, shall authenticate and make available for delivery a new Security
bearing a Restricted Securities Legend in exchange for such Successor Security
as provided in this Article Three.
(c) Transfer Procedures.
(i) If an owner of a beneficial interest in a Global Security
deposited with the Depositary or with the Trustee as custodian for the
Depositary wishes at any time to transfer its interest in such Global Security
to a Person who is required to take delivery thereof in the form of a Security
in definitive form, such owner may, subject to the Applicable Procedures, cause
the exchange of such interest for one or more Securities in definitive form of
any authorized denomination or denominations and of the same aggregate principal
amount. Upon receipt by the Trustee, as Security Registrar, of (1) instructions
from the Depositary directing the Trustee to authenticate and deliver one or
more Securities in definitive form of the same aggregate principal amount as the
beneficial interest in the Global Security to be exchanged, such instructions to
contain the name or names of the designated transferee or transferees, the
authorized denomination or denominations of the Securities in definitive form to
be issued and appropriate delivery instructions, (2) if the Security acquired is
required to bear a Restricted Securities Legend, a certificate substantially in
the form of Exhibit A attached hereto given by the owner of such beneficial
interest, (3) if the Security acquired is required to bear a Restricted
Securities Legend, a certificate substantially in the form of Exhibit B attached
hereto given by the person acquiring the Securities in definitive form for which
such interest is being exchanged, to the effect set forth therein, and (4) such
other certifications or other information and, in the case of transfers other
than pursuant to Rule 144A or pursuant to an effective registration statement
under the Securities Act, legal opinions as the
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<PAGE> 44
Company may reasonably require to confirm that such transfer is being made
pursuant to an exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act, then the Trustee, as Security
Registrar, will instruct the Depositary to reduce or cause to be reduced such
Global Security by the aggregate principal amount of the beneficial interest
therein to be exchanged and to debit or cause to be debited from the account of
the Person making such transfer the beneficial interest in the Global Security
that is being transferred as provided in Section 3.4(A)(c), and concurrently
with such reduction and debit the Company shall execute, and the Trustee shall
authenticate and deliver, one or more Securities in definitive form of the same
aggregate principal amount in accordance with the instructions referred to
above.
(ii) If a Holder of a Security in definitive form wishes at
any time to transfer such Security (or portion thereof) to a person who is
required to take delivery thereof in the form of a Security in definitive form
bearing a Restricted Securities Legend, such Holder may, subject to the
restrictions on transfer set forth herein and in such Security in definitive
form, cause the transfer of such Security (or any portion thereof in a principal
amount equal to an authorized denomination) to such transferee. Upon receipt by
the Trustee, as Security Registrar, of (1) such Security in definitive form,
duly endorsed as provided herein, (2) instructions from such Holder directing
the Trustee to authenticate and deliver one or more Securities in definitive
form of the same aggregate principal amount as the Security in definitive form
(or portion thereof) to be transferred, such instructions to contain the name or
names of the designated transferee or transferees, the authorized denomination
or denominations of the Securities in definitive form to be so issued and
appropriate delivery instructions, (3) if the Security acquired is required to
bear a Restricted Securities Legend, a certificate from the holder of the
Security in definitive form to be transferred in substantially the form of
Exhibit A attached hereto, (4) if the Security acquired is required to bear a
Restricted Securities Legend, a certificate substantially in the form of Exhibit
B attached hereto given by the Person acquiring the Securities in definitive
form (or portion thereof), to the effect set forth therein, and (5) such other
certifications or other information and, in the case of transfers other than
pursuant to Rule 144A or pursuant to an effective registration statement under
the Securities Act, legal opinions as the Company may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act,
then the Trustee, as Security Registrar, shall cancel or cause to be canceled
such Security in definitive form and concurrently therewith, the Company shall
execute, and the Trustee shall authenticate and deliver, one or more Securities
in definitive form in the appropriate aggregate principal amount, in accordance
with the instructions referred to above and, if only a portion of a Security in
definitive form is transferred as aforesaid, concurrently therewith the Company
shall execute and the Trustee shall execute and deliver to the transferor a
Security in definitive form in a principal amount equal to the principal amount
which has not been transferred.
(iii) If a Holder of a Security in definitive form wishes at
any time to transfer such Security (or portion thereof) to a Person who is not
required to take delivery thereof in the form of a Security in definitive form,
such Holder shall, subject to the restrictions on transfer set forth herein and
in such Security in definitive form and the Applicable Procedures cause the
exchange of such Security in definitive form for a beneficial interest in a
Global Security. Upon receipt by the Trustee, as Security Registrar, of (1) such
Security in definitive form, duly endorsed as provided
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<PAGE> 45
herein, (2) instructions from such Holder directing the Trustee to increase the
aggregate principal amount of the applicable Global Security deposited with the
Depository or with the Trustee as custodian for the Depository by the same
aggregate principal amount at maturity as the Security in definitive form to be
exchanged, such instructions to contain the name or names of a member of, or
participant in, the Depository that is designated as the transferee, the account
of such member or participant and other appropriate delivery instructions, (3) a
certificate from the transferor satisfactory to the Trustee to the effect that
such transfer complies with Rule 144A or Regulation D, if the applicable Global
Security bears a Restricted Securities Legend, under the Securities Act and is
otherwise being made to a Person who is not required to take a delivery of such
Security in the form of a Security in definitive form and (4) such other
certifications or other information and, in the case of transfers other than
pursuant to Rule 144A or pursuant to an effective registration statement under
the Securities Act, legal opinions as the Company may reasonably require to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act,
then the Trustee, as Security Registrar, shall cancel or cause to be cancelled
such Security in definitive form and concurrently therewith shall increase the
aggregate principal amount of the applicable Global Security by the same
aggregate principal amount as the Security in definitive form cancelled as
provided in Section 3.4(A)(c) and, if only a portion of a Security in definitive
form is transferred as aforesaid, concurrently therewith the Company shall
execute and the Trustee shall execute and deliver to the transferor a Security
in definitive form in a principal amount equal to the principal amount which has
not been transferred.
(iv) In the event that a Global Security is exchanged for
Securities in definitive form pursuant to Section 3.4(A)(b), prior to the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of clauses (i) and (ii) above
(including the certification requirements intended to ensure that such transfers
comply with Rule 144A or Regulation D under the Securities Act, as the case may
be) and such other procedures as may from time to time be adopted by the
Company.
(d) Neither the Trustee, the Paying Agent nor any of their agents shall
(1) have any duty to monitor compliance with or with respect to any federal or
state or other securities or tax laws or (2) have any duty to obtain
documentation on any transfers or exchanges other than as specifically required
hereunder.
SECTION 3.6 Mutilated, Destroyed, Lost or Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there be delivered to the Company and to the Trustee:
(1) evidence to their satisfaction of the destruction, loss or theft of
any Security, and
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<PAGE> 46
(2) such security or indemnity as may be satisfactory to the Company
and the Trustee to save each of them and any agent of either of them harmless,
then, in the absence of actual notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and the Trustee shall authenticate and make available for delivery, in lieu of
any such destroyed, lost or stolen Security, a new Security of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion, but
subject to any conversion rights, may, instead of issuing a new Security, pay
such Security, upon satisfaction of the conditions set forth in the preceding
paragraph.
Upon the issuance of any new Security under this Section 3.6, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto (other than any
stamp and other duties, if any, which may be imposed in connection therewith by
the United States or any political subdivision thereof or therein, which shall
be paid by the Company) and any other expenses (including the fees and expenses
of the Trustee) connected therewith.
Every new Security issued pursuant to this Section 3.6 in lieu of any
mutilated, destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the mutilated,
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and such new Security shall be entitled to all the benefits of this Indenture
equally and proportionately with any and all other Securities duly issued
hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies of any Holder with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.7 Payment of Interest; Interest Rights Preserved.
Subject to the last paragraph of this Section, interest on any Security
which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security (or one or
more Predecessor Securities) is at the close of business on the Regular Record
Date for such interest.
Any interest on any Security which is payable, but is not punctually
paid or duly provided for, on any Interest Payment Date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company, at its election in each case, as
provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities (or their respective Predecessor
Securities) are registered at the close of
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<PAGE> 47
business on a Special Record Date for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on
each Security, the date of the proposed payment and the Special Record Date, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. The Special Record Date for the payment of such
Defaulted Interest shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after the
receipt by the Trustee of the notice of the proposed payment. The Trustee, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder at such Holder's address as
it appears in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor having been so mailed, such Defaulted Interest
shall be paid to the Persons in whose names the Securities (or their respective
Predecessor Securities) are registered at the close of business on such Special
Record Date and shall no longer be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing and following provisions of this Section and
Section 3.5, each Security delivered under this Indenture upon registration of
transfer of or in exchange for or in lieu of any other Security shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security.
Interest on any Security which is converted in accordance with Section
11.2 during a Record Date Period shall be payable in accordance with the
provisions of Section 11.2.
SECTION 3.8 Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if any,
and (subject to Section 3.7) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the Trustee shall be
affected by notice to the contrary.
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SECTION 3.9 Cancellation.
All Securities surrendered for payment, redemption, repurchase,
registration of transfer or exchange or conversion shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee. All Securities so
delivered to the Trustee shall be canceled promptly by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section 3.9. The Trustee shall dispose of all
canceled Securities in accordance with applicable law and its customary
practices in effect from time to time.
SECTION 3.10 Computation of Interest.
Interest on the Securities (including any Liquidated Damages) shall be
computed on the basis of a 360-day year of twelve 30-day months.
SECTION 3.11 CUSIP Numbers.
The Company in issuing Securities may use "CUSIP" numbers (if then
generally in use) in addition to serial numbers; the Trustee shall use such
CUSIP numbers in addition to serial numbers in notices of redemption and
repurchase as a convenience to Holders; provided that any such notice may state
that no representation is made as to the correctness of such CUSIP numbers
either as printed on the Securities or as contained in any notice of a
redemption or repurchase and that reliance may be placed only on the serial or
other identification numbers printed on the Securities, and any such redemption
or repurchase shall not be affected by any defect in or omission of such CUSIP
numbers. The Company shall promptly notify the Trustee in writing of any change
in any such CUSIP number.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be of further effect
(except as to any surviving rights of conversion, or registration of transfer or
exchange, or replacement of Securities herein expressly provided for and any
right to receive Liquidated Damages as provided in the form of Securities set
forth in Section 2.2 and the Company's obligations to the Trustee pursuant to
Section 6.7), and the Trustee, at the expense of the Company, shall execute
proper instruments in form and substance satisfactory to the Trustee
acknowledging satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered (other
than (i) Securities which have been destroyed, lost or stolen and which have
been replaced or paid as provided in
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Section 3.6 and (ii) Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in Section 9.3)
have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee or
its agent for cancellation (other than Securities referred to in clauses (i) and
(ii) of clause (1)(A) above)
(i) have become due and payable, or
(ii) will have become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of the Company, and the Company,
in the case of clause (i), (ii) or (iii) of this Clause 1(B), has deposited or
caused to be deposited with the Trustee as trust funds (immediately available to
the Holders in the case of clause (i)) in trust for the purpose an amount
sufficient to pay and discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for principal, premium,
if any, and interest (including any Liquidated Damages) to the date of such
deposit (in the case of Securities which have become due and payable) or to the
Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Company to any Authenticating Agent under Section 6.12, the obligations of
the Trustee under Section 4.2 and the last paragraph of Section 9.3 and the
obligations of the Company and the Trustee under Section 3.5 and Article Eleven
shall survive. Funds held in trust pursuant to this Section are not subject to
the provisions of Article Twelve.
SECTION 4.2 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 9.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent), to the Persons entitled
thereto, of the principal, premium, if any, and interest for whose payment such
money has been deposited with the Trustee.
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All moneys deposited with the Trustee pursuant to Section 4.1 (and held
by it or any Paying Agent) for the payment of Securities subsequently converted
shall be returned to the Company upon Company Request.
ARTICLE FIVE
REMEDIES
SECTION 5.1 Events of Default.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be occasioned by the provisions of Article Twelve or be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of the principal of or premium, if any, on
any Security at its Maturity, whether or not the such payment is prohibited by
the subordination provisions of this Indenture; or
(2) default in the payment of any interest (including any Liquidated
Damages) upon any Security when it becomes due and payable, and continuance of
such default for a period of 30 days, whether or not the such payment is
prohibited by the subordination provisions of this Indenture; or
(3) failure by the Company to give the Company Notice, if required, in
accordance with Section 13.3; or
(4) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture (other than a covenant or warranty a default in
the performance or breach of which is specifically dealt with elsewhere in this
Section), and continuance of such default or breach for a period of 60 days
after there has been given, by registered or certified mail, to the Company by
the Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities a written notice specifying such
default or breach and requiring it to be remedied and stating that such notice
is a "Notice of Default" hereunder;
(5) a default in the payment when due (after expiration of any
applicable grace period) under any bond, debenture, note or other evidence of
any indebtedness for money borrowed by the Company or any Significant Subsidiary
of the Company or under any mortgage, indenture or instrument under which there
may be issued or by which there may be secured or evidenced any indebtedness for
money borrowed by the Company or any Significant Subsidiary of the Company of a
principal amount in excess of U.S. $10 million, whether such indebtedness now
exists or shall hereafter be created, or a default under any bond, debenture,
note or other evidence of indebtedness for money borrowed by the Company or any
Significant Subsidiary of the Company or under any mortgage, indenture or
instrument under which there may be issued or by which there may be
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secured or evidenced any indebtedness for money borrowed by the Company or any
Significant Subsidiary of the Company resulting in the acceleration of such
indebtedness in excess of U.S. $10 million, if the indebtedness is not
discharged, or the acceleration is not annulled, within 30 days after written
notice to the Company by the Trustee or the holders of at least 25% in aggregate
principal amount of the outstanding notes; or
(6) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable Federal or State law, or appointing a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property, or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(7) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by it to the entry of a decree or order
for relief in respect of the Company in an involuntary case or proceeding under
any applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or similar relief under any applicable Federal or State
law, or the consent by it to the filing of such petition or to the appointment
of or taking possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial part
of its property, or the making by it of an assignment for the benefit of
creditors, or the admission by it in writing of its inability to pay its debts
generally as they become due, or the taking of corporate action by the Company
in furtherance of any such action.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(6) or 5.1(7)) occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal amount of the
Outstanding Securities may declare the principal of all the Securities to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such principal
and all accrued interest thereon shall become immediately due and payable. If an
Event of Default specified in Section 5.1(6) or 5.1(7) occurs, the principal of,
and accrued interest on, all the Securities shall ipso facto become immediately
due and payable without any declaration or other Act of the Holder or any act on
the part of the Trustee.
At any time after such declaration of acceleration has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee as hereinafter in this
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Article Five provided, the Holders of a majority in principal amount of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum sufficient
to pay
(A) all overdue interest (including any Liquidated Damages) on all
Securities,
(B) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and any
interest (including any Liquidated Damages) thereon at the rate borne by the
Securities,
(C) to the extent permitted by applicable law, interest upon
overdue interest at a rate of 7 1/4% per annum, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel;
and
(2) all Events of Default, other than the nonpayment of the principal
of, and any premium and interest on, Securities which have become due solely by
such declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No rescission or annulment referred to above shall affect any
subsequent default or impair any right consequent thereon.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest (including any
Liquidated Damages) on any Security when it becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of or premium, if
any, on any Security at the Maturity thereof,
the Company will upon demand of the Trustee pay to it, for the benefit of the
Holders of such Securities the whole amount then due and payable on such
Securities for principal and interest (including any Liquidated Damages) and
interest on any overdue principal and premium, if any, and, to the extent
permitted by applicable law, on any overdue interest (including any Liquidated
Damages), at a rate of 7 1/4% per annum, and in addition thereto, such further
amount as shall be sufficient to cover the reasonable costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders of Securities by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any such rights, whether for
the specific enforcement of any covenant or agreement in this Indenture or in
aid of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 5.4 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or the
creditors of either, the Trustee (irrespective of whether the principal of, and
any interest on, the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand on the Company for the payment of overdue principal
or interest) shall be entitled and empowered, by intervention in such proceeding
or otherwise,
(1) to file and prove a claim for the whole amount of principal,
premium, if any, and interest (including any Liquidated Damages) owing and
unpaid in respect of the Securities and take such other actions, including
participating as a member, voting or otherwise, of any official committee of
creditors appointed in such matter, and to file such other papers or documents,
in each of the foregoing cases, as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders of Securities allowed in such judicial
proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claim and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder of Securities to make such payments to the Trustee and, in the event
that the Trustee shall consent to the making of such payments directly to the
Holders of Securities, to pay to the Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel and any other amounts due the Trustee under Section 6.7.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder of a Security
any plan of reorganization, arrangement,
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adjustment or composition affecting the Securities or the rights of any Holder
thereof or to authorize the Trustee to vote in respect of the claim of any
Holder of a Security in any such proceeding; provided, however, that the Trustee
may, on behalf of such Holders, vote for the election of a trustee in bankruptcy
or similar official.
SECTION 5.5 Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which judgment
has been recovered.
SECTION 5.6 Application of Money Collected.
Subject to Article Twelve, any money collected by the Trustee pursuant
to this Article Five shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money on
account of principal, premium, if any, or interest, upon presentation of the
Securities and the notation thereon of the payment if only partially paid and
upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.7;
SECOND: To the payment of the amounts then due and unpaid for principal
of, premium, if any, or interest (including any Liquidated Damages) on, the
Securities in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any, and
interest (including any Liquidated Damages), respectively; and
THIRD: Any remaining amounts shall be repaid to the Company.
SECTION 5.7 Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of
an Event of Default that is continuing at the time of such institution;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee hereunder;
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(3) such Holder or Holders have furnished to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request; and
(4) the Trustee for 60 days after its receipt of such notice, request
and furnishing of indemnity has failed to institute any such proceeding;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 5.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest and to Convert.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
3.7) interest (including any Liquidated Damages) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date or Repurchase Date, as the case
may be), and to convert such Security in accordance with Article Eleven, and to
institute suit for the enforcement of any such payment and right to convert, and
such rights shall not be impaired without the consent of such Holder.
SECTION 5.9 Restoration of Rights and Remedies.
If the Trustee or any Holder of a Security has instituted any
proceeding to enforce any right or remedy under this Indenture and such
proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the Company, the Trustee
and the Holders of Securities shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and such Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10 Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee
or to the Holders of Securities is intended to be exclusive of any other right
or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
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SECTION 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or any
acquiescence therein. Every right and remedy given by this Article Five or by
law to the Trustee or to the Holders of Securities may be exercised from time to
time, and as often as may be deemed expedient, by the Trustee or (subject to the
limitations contained in this Indenture) by the Holders of Securities as the
case may be.
SECTION 5.12 Control by Holders of Securities.
The Holders of a majority in principal amount of the Outstanding
Securities shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee or exercising
any trust or power conferred on the Trustee, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
SECTION 5.13 Waiver of Past Defaults.
The Holders, either (a) through the written consent of not less than a
majority in principal amount of the Outstanding Securities, or (b) by the
adoption of a resolution, at a meeting of Holders of the Outstanding Securities
at which a quorum is present, by the Holders of at least a majority in principal
amount of the Outstanding Securities represented at such meeting, may on behalf
of the Holders of all the Securities waive any past default hereunder and its
consequences, except a default (1) in the payment of the principal of, premium,
if any, or interest (including any Liquidated Damages) on any Security, or (2)
in respect of a covenant or provision hereof which under Article Eight cannot be
modified or amended without the consent of the Holder of each Outstanding
Security affected.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
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but the provisions of this Section 5.14 shall not apply to any suit instituted
by the Company, to any suit instituted by the Trustee, to any suit instituted by
any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit instituted by any
Holder of any Security for the enforcement of the payment of the principal of,
premium, if any, or interest (including any Liquidated Damages) on any Security
on or after the respective Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption or repurchase, on or after the
Redemption Date or Repurchase Date, as the case may be) or for the enforcement
of the right to convert any Security in accordance with Article Eleven.
ARTICLE SIX
THE TRUSTEE
SECTION 6.1 Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture, but not to verify the contents thereof.
(b) In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct, except that
(1) this paragraph (c) shall not be construed to limit the effect of
paragraph (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
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(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding Securities relating
to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 6.2 Notice of Defaults.
Within 90 days after the occurrence of any default hereunder as to
which the Trustee has actually received written notice, the Trustee shall give
to all Holders of Securities, in the manner provided in Section 1.6, notice of
such default, unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of the principal
of, premium, if any, or interest on any Security the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interest of the Holders; and provided, further, that in the case of any
default of the character specified in Section 5.1(4), no such notice to Holders
of Securities shall be given until at least 60 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default.
SECTION 6.3 Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(1) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officers' Certificate, other certificate,
statement, instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, coupon, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(2) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors shall be sufficiently evidenced by a Board Resolution;
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(3) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(4) the Trustee may consult with counsel of its selection and the
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon;
(5) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders of Securities pursuant to this Indenture, unless such Holders
shall have furnished to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which might be incurred by it in compliance with
such request or direction;
(6) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, coupon, other evidence of indebtedness or other paper or document, but the
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine the books,
records and premises of the Company, personally or by agent or attorney; and
(7) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder.
SECTION 6.4 Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities (except the
Trustee's certificates of authentication) shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture, of the Securities or of the Common Stock issuable upon the conversion
of the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
SECTION 6.5 May Hold Securities, Act as Trustee Under Other Indentures.
The Trustee, any Authenticating Agent, any Paying Agent, any Conversion
Agent or any other agent of the Company or the Trustee, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Conversion Agent or such other agent.
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The Trustee may become and act as trustee under other indentures under
which other securities, or certificates of interest or participation in other
securities, of the Company are outstanding in the same manner as if it were not
Trustee hereunder.
SECTION 6.6 Money Held in Trust.
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.7 Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing for all
services rendered by it hereunder (which compensation shall not be limited by
any provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee (and its directors, officers, employees
and agents) for, and to hold it harmless against, any and all loss, damage,
claim, liability or expense, including taxes (other than taxes based on the
income of the Trustee), incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
trust, including the reasonable costs, expenses and reasonable attorneys' fees
of defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(6) or Section 5.1(7), the expenses
(including the reasonable charges of its counsel) and the compensation for the
services are intended to constitute expenses of the administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.7, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
The provisions of this Section shall survive the termination of this
Indenture or the earlier resignation or removal of the Trustee.
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SECTION 6.8 Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such, having a
combined capital and surplus of at least U.S.$25,000,000, subject to supervision
or examination by Federal or State authority, in good standing and having an
established place of business in the Borough of Manhattan, The City of New York.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article and a successor shall be appointed pursuant to Section 6.9.
SECTION 6.9 Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee in accordance with the
applicable requirements of Section 6.10.
(b) The Trustee may resign at any time by giving written notice thereof to
the Company. If the instrument of acceptance by a successor Trustee required by
Section 6.10 shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and the Company. If the instrument of acceptance by a successor Trustee
required by Section 6.10 shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the removed Trustee may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8 and shall
fail to resign after written request therefor by the Company or by any Holder of
a Security who has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 5.14, any Holder of a Security who has been
a bona fide Holder of a Security
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for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor Trustee and shall
comply with the applicable requirements of this Section and Section 6.10. If,
within one year after such resignation, removal or incapability, or occurrence
of such vacancy, a successor Trustee shall be appointed by Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 6.10 become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders of Securities
and accepted appointment in the manner required by this Section and Section
6.10, any Holder of a Security who has been a bona fide Holder of a Security for
at least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor Trustee to all Holders of
Securities in the manner provided in Section 1.6. Each notice shall include the
name of the successor Trustee and the address of its Corporate Trust Office.
SECTION 6.10 Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on the request of the Company or the
successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee hereunder. Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be eligible under this Article.
SECTION 6.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation
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shall be otherwise eligible under this Article, without the execution or filing
of any paper or any further act on the part of any of the parties hereto. In
case any Securities shall have been authenticated, but not delivered, by the
Trustee then in office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and deliver the
Securities so authenticated with the same effect as if such successor Trustee
had itself authenticated such Securities.
SECTION 6.12 Authenticating Agents.
The Trustee may, with the consent of the Company, appoint an
Authenticating Agent or Agents acceptable to the Company with respect to the
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon exchange or substitution pursuant to this
Indenture.
Securities authenticated by an Authenticating Agent shall be entitled
to the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder, and every reference in
this Indenture to the authentication and delivery of Securities by the Trustee
or the Trustee's certificate of authentication shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be subject to acceptance
by the Company and shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as Authenticating
Agent and subject to supervision or examination by government or other fiscal
authority. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.12 such Authenticating Agent
shall resign immediately in the manner and with the effect specified in this
Section 6.12.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section 6.12, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section 6.12, the Trustee may appoint a successor
Authenticating Agent which shall be subject to acceptance by the Company. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section 6.12.
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The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section 6.12.
If an Authenticating Agent is appointed with respect to the Securities
pursuant to this Section 6.12, the Securities may have endorsed thereon, in
addition to or in lieu of the Trustee's certification of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities referred to in the within-mentioned
Indenture.
-----------------------------------,
as Trustee
By [Authenticating Agent],
as Authenticating Agent
By
----------------------------------
Authorized Signature
SECTION 6.13 Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.14 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
ARTICLE SEVEN
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 7.1 Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other Person
or convey, transfer or lease all its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or convey, transfer or lease all or
substantially all of its properties and assets substantially as an entirety to
the Company, unless:
(1) in case the Company shall consolidate with or merge into another
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, the Person
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formed by such consolidation or into which the Company is merged, or the Person
which acquires by conveyance or transfer, or which leases the properties and
assets of the Company substantially as an entirety, shall be a corporation,
limited liability company, partnership or trust, shall be organized and validly
existing under the laws of the United States of America, any State thereof or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form satisfactory
to the Trustee, the due and punctual payment of the principal of, premium, if
any, and interest (including Liquidated Damages, if any, payable pursuant to
Section 9.11) on all of the Securities as applicable, and the performance or
observance of every covenant of this Indenture on the part of the Company to be
performed or observed and shall have provided for conversion rights
substantially in accordance with Article Eleven;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that after notice or lapse of time or both, would become
an Event of Default, shall have happened and be continuing; and
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article and that all conditions precedent herein provided for relating to such
transaction have been complied with, together with any documents required under
Section 8.3.
SECTION 7.2 Successor Substituted.
Upon any consolidation of the Company with, or merger of the Company
into any other Person or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with Section
7.1, the successor Person formed by such consolidation or into or with which the
Company is merged or to which such conveyance, transfer or lease is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company under this Indenture with the same effect as if such successor
Person had been named as the Company herein, and thereafter, except in the case
of a lease, the predecessor Person shall be relieved of all obligations and
covenants under this Indenture and the Securities.
ARTICLE EIGHT
SUPPLEMENTAL INDENTURES
SECTION 8.1 Supplemental Indentures Without Consent of Holders of Securities.
Without the consent of any Holders of Securities, the Company, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto for any of the
following purposes:
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(1) to evidence the succession of another Person to the Company and the
assumption by any such successor of the covenants and obligations of the Company
herein and in the Securities as permitted by this Indenture; or
(2) to add to the covenants of the Company for the benefit of the
Holders of Securities or to surrender any right or power herein conferred upon
the Company; or
(3) to secure the Securities; or
(4) to make provision with respect to the conversion rights of Holders
of Securities pursuant to Section 11.11; or
(5) to make any changes or modifications to this Indenture necessary in
connection with the registration of any Registrable Securities under the
Securities Act as contemplated by Section 9.11, provided, such action pursuant
to this clause (5) shall not adversely affect the interests of the Holders of
Securities; or
(6) to comply with the requirements of the Trust Indenture Act or the
rules and regulations of the Commission thereunder in order to effect or
maintain the qualification of this Indenture under the Trust Indenture Act, as
contemplated by this Indenture or otherwise; or
(7) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee; or
(8) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein or which is
otherwise defective, or to make any other provisions with respect to matters or
questions arising under this Indenture as the Company and the Trustee may deem
necessary or desirable, provided such action pursuant to this clause (8) shall
not adversely affect the interests of the Holders of Securities in any material
respect.
Upon Company Request, accompanied by a Board Resolution authorizing the
execution of any such supplemental indenture, and subject to and upon receipt by
the Trustee of the documents described in Section 8.3 hereof, the Trustee shall
join with the Company in the execution of any supplemental indenture authorized
or permitted by the terms of this Indenture and to make any further appropriate
agreements and stipulations which may be therein contained.
SECTION 8.2 Supplemental Indentures with Consent of Holders of Securities.
With either (a) the written consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities, by the Act of said
Holders delivered to the Company and the Trustee, or (b) by the adoption of a
resolution, at a meeting of Holders of the Outstanding Securities at which a
quorum is present, by the Holders of a majority in principal amount of the
Outstanding Securities represented at such meeting, the Company, when authorized
by a Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or
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of modifying in any manner the rights of the Holders of Securities under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent or affirmative vote of the Holder of each Outstanding Security
affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest on, any Security, or reduce the principal amount or the rate of
interest payable thereon or any amount payable upon redemption or repurchase
pursuant to Article Thirteen thereof, or change the obligation of the Company to
pay Liquidated Damages pursuant to Section 9.11 in a manner adverse to the
Holders, or change the coin or currency in which any Security or the interest or
any premium thereon or any other amount in respect thereof is payable, or impair
the right to institute suit for the enforcement of any payment in respect of any
Security on or after the Stated Maturity thereof (or, in the case of redemption
or any repurchase, on or after the Redemption Date or Repurchase Date, as the
case may be) or, except as permitted by Section 11.11, adversely affect the
right to convert any Security as provided in Article Eleven, or modify the
provisions of this Indenture with respect to the subordination of the Securities
in a manner adverse to the Holders of Securities; or
(2) reduce the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such supplemental
indenture or the consent of whose Holders is required for any waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture; or
(3) modify any of the provisions of this Section and Section 5.13 or
9.12, except to increase any percentage contained herein or therein or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Security affected
thereby; or
(4) modify the provisions of Article Thirteen in a manner adverse to
the Holders; or
(5) modify any of the provisions of Section 9.9 or 9.10.
It shall not be necessary for any Act of Holders of Securities under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
SECTION 8.3 Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture, and that such supplemental
indenture has been duly authorized, executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company enforceable
against the Company in accordance with its terms. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
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SECTION 8.4 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
appertaining thereto shall be bound thereby.
SECTION 8.5 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Company and the
Trustee, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in exchange for
Outstanding Securities.
SECTION 8.6 Notice of Supplemental Indentures.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of Section 8.2, the Company
shall give notice to all Holders of Securities of such fact, setting forth in
general terms the substance of such supplemental indenture in the manner
provided in Section 1.6. Any failure of the Company to give such notice, or any
defect therein, shall not in any way impair or affect the validity of any such
supplemental indenture.
ARTICLE NINE
COVENANTS
SECTION 9.1 Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay
the principal of and premium, if any, and interest on the Securities in
accordance with the terms of the Securities and this Indenture. The Company will
deposit or cause to be deposited with the Trustee, no later than the opening of
business on the date of the Stated Maturity of any Security or no later than the
opening of business on the due date for any installment of interest, all
payments so due, which payments shall be in immediately available funds on the
date of such Stated Maturity or due date, as the case may be.
SECTION 9.2 Maintenance of Offices or Agencies.
The Company hereby appoints the Corporate Trust Office of the Trustee
as its agent in the Borough of Manhattan, The City of New York, where Securities
may be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer or exchange, where
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Securities may be surrendered for conversion, and where notices and demands to
or upon the Company in respect of the Securities and this Indenture may be
served.
The Company may at any time and from time to time vary or terminate the
appointment of any such agent or appoint any additional agents for any or all of
such purposes; provided, however, that until all of the Securities have been
delivered to the Trustee for cancellation, or moneys sufficient to pay the
principal of, premium, if any, and interest on the Securities have been made
available for payment and either paid or returned to the Company pursuant to the
provisions of Section 9.3, the Company will maintain in the Borough of
Manhattan, The City of New York, an office or agency where Securities may be
presented or surrendered for payment and conversion, where Securities may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Company in respect of the Securities and this Indenture
may be served. The Company will give prompt written notice to the Trustee, and
notice to the Holders in accordance with Section 1.6, of the appointment or
termination of any such agents and of the location and any change in the
location of any such office or agency.
If at any time the Company shall fail to maintain any such required
office or agency, or shall fail to furnish the Trustee with the address thereof,
presentations and surrenders may be made and notices and demands may be served
on the Corporate Trust Office of the Trustee.
SECTION 9.3 Money for Security Payments To Be Held in Trust.
If the Company shall act as its own Paying Agent, it will, on or before
each due date of the principal of, premium, if any, or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, premium, if any, or interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, no
later than the opening of business on each due date of the principal of,
premium, if any, or interest on any Securities, deposit with the Trustee a sum
sufficient to pay the principal, premium, if any, or interest so becoming due,
such sum to be held for the benefit of the Persons entitled to such principal,
premium, if any, or interest, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of any failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any other
obligor upon the Securities) in the making of any payment of principal, premium,
if any, or interest; and
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(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held by
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security and remaining unclaimed for two years after such
principal, premium, if any, or interest has become due and payable shall be paid
to the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once, in an Authorized Newspaper in each Place of Payment, notice
that such money remains unclaimed and that, after a date specified therein,
which shall not be less than 30 days from the date of such publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
SECTION 9.4 Existence.
Subject to Article Seven, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and franchises; provided, however, that the
Company shall not be required to preserve any such right or franchise if the
Board of Directors shall determine that the preservation thereof is no longer
desirable in the conduct of the business of the Company and that the loss
thereof is not disadvantageous in any material respect to the Holders.
SECTION 9.5 Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of
its business or the business of any Significant Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary so that the business of the Company or such
Significant Subsidiary may be properly and advantageously conducted at all
times.
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SECTION 9.6 Payment of Taxes and Other Claims.
The Company will pay or discharge, or cause to be paid or discharged,
before the same may become delinquent, (1) all taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
subject to Sections 11.8 and 13.3(b),all stamps and other duties, if any, which
may be imposed by the United States or any political subdivision thereof or
therein in connection with the issuance, transfer, exchange or conversion of any
Securities or with respect to this Indenture; provided, however, that, in the
case of clause (1), the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim (a) if
the failure to do so will not, in the aggregate, have a material adverse impact
on the Company, or (b) if the amount, applicability or validity is being
contested in good faith by appropriate proceedings.
SECTION 9.7 Statement by Officers as to Default.
The Company shall deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate (one of the signers of which shall be the Company's principal
executive, principal financial or principal accounting officer), stating whether
or not to the best knowledge of the signers thereof the Company is in default in
the performance and observance of any of the terms, provisions and conditions of
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and, if the Company shall be in default, specifying all such
defaults and the nature and status thereof of which they may have knowledge.
The Company will deliver to the Trustee, forthwith upon becoming aware
of any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or any Event of Default, an Officers'
Certificate specifying with particularity such default or Event of Default and
further stating what action the Company has taken, is taking or proposes to take
with respect thereto.
Any notice required to be given under this Section 9.8 shall be
delivered to the Trustee at its Corporate Trust Office.
SECTION 9.8 Delivery of Certain Information.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the request of a Holder of a Security or the holder of
shares of Common Stock issued upon conversion thereof, the Company will promptly
furnish or cause to be furnished Rule 144A Information (as defined below) to
such Holder of Securities or such holder of shares of Common Stock issued upon
conversion of Securities, or to a prospective purchaser of any such security
designated by any such Holder or holder, as the case may be, to the extent
required to permit compliance by such Holder or holder with Rule 144A under the
Securities Act (or any successor provision thereto) in connection with the
resale of any such security; provided, however, that the Company shall not be
required to furnish such information in connection with any request made on
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or after the date which is two years from the later of (i) the date such a
security (or any such predecessor security) was last acquired from the Company
or (ii) the date such a security (or any such predecessor security) was last
acquired from an "affiliate" of the Company within the meaning of Rule 144 under
the Securities Act (or any successor provision thereto). "Rule 144A Information"
shall be such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
SECTION 9.9 Resale of Certain Securities; Reporting Issuer.
During the period beginning on the last date of original issuance of
the Securities and ending on the date that is two years from such date, the
Company will not, and will not permit any of its subsidiaries or other
"affiliates" (as defined under Rule 144 under the Securities Act or any
successor provision thereto) controlled by it to, resell (x) any Securities
which constitute "restricted securities" under Rule 144 or (y) any securities
into which the Securities have been converted under this Indenture which
constitute "restricted securities" under Rule 144, that in either case have been
reacquired by any of them. The Trustee shall have no responsibility in respect
of the Company's performance of its agreement in the preceding sentence.
SECTION 9.10 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or conditions set forth in this Article Nine or otherwise in this
Indenture (other than a covenant or condition which under Article Eight cannot
be modified or amended without the consent of the Holder of each Outstanding
Security affected), if before the time for such compliance the Holders shall,
through the written consent of, not less than a majority in principal amount of
the Outstanding Securities, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee or any Paying or Conversion Agent
in respect of any such covenant or condition shall remain in full force and
effect.
ARTICLE TEN
REDEMPTION OF SECURITIES
SECTION 10.1 Right of Redemption.
The Securities may be redeemed in accordance with the provisions of the
form of Securities set forth in Section 2.2.
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SECTION 10.2 Applicability of Article.
Redemption of Securities at the election of the Company or otherwise,
as permitted or required by any provision of the Securities or this Indenture,
shall be made in accordance with such provisions and this Article Ten.
SECTION 10.3 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced
by a Board Resolution. In case of any redemption at the election of the Company
of any of the Securities, the Company shall, at least 60 days prior to the
Redemption Date fixed by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee in writing of such Redemption
Date.
SECTION 10.4 Selection by Trustee of Securities To Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected by the Trustee within three Business
Days after it receives the notice described in Section 10.3, from the
Outstanding Securities not previously called for redemption, by such method as
the Trustee may deem fair and appropriate.
If any Security selected for partial redemption is converted in part
before termination of the conversion right with respect to the portion of the
Security so selected, the converted portion of such Security shall be deemed (so
far as may be) to be the portion selected for redemption. Securities which have
been converted during a selection of Securities to be redeemed may be treated by
the Trustee as Outstanding for the purpose of such selection.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount and
certificate numbers thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
SECTION 10.5 Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section
1.6 to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date, and such notice shall be irrevocable.
Concurrently with giving such notice, the Company shall issue a Press Release
including all relevant information set forth in such notice.
All notices of redemption shall identify the Securities to be redeemed
(including CUSIP numbers) and shall state:
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(1) the Redemption Date,
(2) the Redemption Price, and accrued interest, if any,
(3) if less than all Outstanding Securities are to be redeemed, the
aggregate principal amount of Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price, and accrued
interest, if any, will become due and payable upon each such Security to be
redeemed, and that interest thereon shall cease to accrue on and after said
date,
(5) the Conversion Rate, the date on which the right to convert the
Securities to be redeemed will terminate and the places where such Securities
may be surrendered for conversion, and
(6) the place or places where such Securities are to be surrendered for
payment of the Redemption Price and accrued interest, if any.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's written request,
by the Trustee in the name of and at the expense of the Company. Notice of
redemption of Securities to be redeemed at the election of the Company received
by the Trustee shall be given by the Trustee to each Paying Agent in the name of
and at the expense of the Company.
SECTION 10.6 Deposit of Redemption Price.
Not less than one Business Day prior to any Redemption Date, the
Company shall deposit with the Trustee (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 9.3) an amount
of money (which shall be in immediately available funds on such Redemption Date)
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all the Securities which
are to be redeemed on that date other than any Securities called for redemption
on that date which have been converted prior to the date of such deposit.
If any Security called for redemption is converted, any money deposited
with the Trustee or so segregated and held in trust for the redemption of such
Security shall (subject to any right of the Holder of such Security or any
Predecessor Security to receive interest as provided in the last paragraph of
Section 3.7) be paid to the Company on Company Request or, if then held by the
Company, shall be discharged from such trust.
SECTION 10.7 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price,
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including accrued interest) such Securities shall cease to bear interest. Upon
surrender of any Security for redemption in accordance with said notice such
Security shall be paid by the Company at the Redemption Price together with any
accrued and unpaid interest to the Redemption Date; provided, however, that
installments of interest on Securities whose Stated Maturity is on or prior to
the Redemption Date shall be payable to the Holders of such Securities, or one
or more Predecessor Securities, registered as such on the relevant Record Date
according to their terms and the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal amount of, premium, if any, and,
to the extent permitted by applicable law, any accrued interest on such Security
shall, until paid, bear interest from the Redemption Date at a rate of 7 1/4%
per annum and such Security shall remain convertible until the principal of such
Security (or portion thereof, as the case may be) shall have been paid or duly
provided for.
SECTION 10.8 Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered
at an office or agency of the Company designated for that purpose pursuant to
Section 9.2 (with, if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory to the Company and
the Trustee duly executed by, the Holder thereof or his attorney duly authorized
in writing), and the Company shall execute, and the Trustee shall authenticate
and make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
SECTION 10.9 Conversion Arrangement on Call for Redemption.
In connection with any redemption of the Securities, the Company may
arrange for the purchase and conversion of any Securities by an agreement with
one or more investment bankers or other purchasers (the "Purchasers") to
purchase such Securities by paying to the Trustee in trust for the Holders, on
or before the Redemption Date, an amount not less than the applicable Redemption
Price, together with any interest accrued and unpaid to the Redemption Date, of
such Securities. Notwithstanding anything to the contrary contained in this
Article Ten, the obligation of the Company to pay the Redemption Price, together
with any interest accrued and unpaid to the Redemption Date, shall be deemed to
be satisfied and discharged to the extent such amount is so paid by such
Purchasers. If such an agreement is entered into (a copy of which shall be filed
with the Trustee prior to the close of business on the Business Day immediately
prior to the Redemption Date), any Securities called for redemption that are not
duly surrendered for conversion by the Holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, and consistent with
any agreement or agreements with such Purchasers, to be acquired by such
Purchasers from such Holders and (notwithstanding anything to the contrary
contained in this Article Ten) surrendered by such Purchasers for conversion,
all as of immediately prior to the close of business on the Redemption Date (and
the right to convert any such Securities shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it by the
Purchasers to the
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Holders in the same manner as it would monies deposited with it by the Company
for the redemption of Securities. Without the Trustee's prior written consent,
no arrangement between the Company and such Purchasers for the purchase and
conversion of any Securities shall increase or otherwise affect any of the
powers, duties, responsibilities or obligations of the Trustee as set forth in
this Indenture, and the Company agrees to indemnify the Trustee from, and hold
it harmless against, any loss, liability or expense arising out of or in
connection with any such arrangement for the purchase and conversion of any
Securities between the Company and such Purchasers, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
ARTICLE ELEVEN
CONVERSION OF SECURITIES
SECTION 11.1 Conversion Privilege and Conversion Rate.
Subject to and upon compliance with the provisions of this Article, at
the option of the Holder thereof, any Security or any portion of the principal
amount thereof that is U.S.$1,000 or an integral multiple of U.S.$1,000 may be
converted into fully paid and nonassessable shares (calculated as to each
conversion to the nearest 1/100th of a share) of Common Stock of the Company at
the Conversion Rate, determined as hereinafter provided, in effect at the time
of conversion. Such conversion right shall commence upon the original issuance
of the Securities and expire at the close of business on December 15, 2006,
subject, in the case of conversion of any Global Security, to any Applicable
Procedures. In case a Security or portion thereof is called for redemption at
the election of the Company or the Holder thereof exercises his right to require
the Company to repurchase the Security, such conversion right in respect of the
Security, or portion thereof so called, shall expire at the close of business on
the Business Day immediately preceding the Redemption Date or the Repurchase
Date, as the case may be, unless the Company defaults in making the payment due
upon redemption or repurchase, as the case may be (in each case subject as
aforesaid to any Applicable Procedures with respect to any Global Security).
The rate at which shares of Common Stock shall be delivered upon
conversion (herein called the "Conversion Rate") shall be initially 6.5797
shares of Common Stock for each U.S.$1,000 principal amount of Securities. The
Conversion Rate shall be adjusted in certain instances as provided in this
Article Eleven.
SECTION 11.2 Exercise of Conversion Privilege.
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 9.2, accompanied by a duly
signed conversion notice substantially in the form set forth in Section 2.4
stating that the Holder elects to convert such Security or, if less than the
entire principal amount thereof is to be converted,
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the portion thereof to be converted. Each Security surrendered for conversion
(in whole or in part) during a Record Date Period shall (except in the case of
any Security or portion thereof which has been called for redemption or
repurchase if the Holder's conversion right would terminate because of the
redemption or repurchase during the Record Date Period) be accompanied by
payment in New York Clearing House funds or other funds acceptable to the
Company of an amount equal to the interest payable on such Interest Payment Date
on the principal amount of such Security (or part thereof, as the case may be)
being surrendered for conversion. The interest payable on an Interest Payment
Date with respect to any Security (or portion thereof, if applicable) which is
surrendered for conversion during the Record Date Period corresponding to such
Interest Payment Date, shall be paid to the Holder of such Security as of the
Regular Record Date for such Interest Payment Date in an amount equal to the
interest that would have been payable on such Security if such Security (or a
portion thereof) had not been converted. Interest payable in respect of any
Security surrendered for conversion on an Interest Payment Date shall be paid to
the Holder of such Security as of the next preceding Regular Record Date,
notwithstanding the exercise of the right of conversion. Except as provided in
this paragraph and subject to the last paragraph of Section 3.7, no cash payment
or adjustment shall be made upon any conversion on account of any interest
accrued from the Interest Payment Date next preceding the conversion date, in
respect of any Security (or part thereof, as the case may be) surrendered for
conversion, or on account of any dividends on the Common Stock issued upon
conversion. The Company's delivery to the Holder of the number of shares of
Common Stock (and cash in lieu of fractions thereof, as provided in this
Indenture) into which a Security is convertible will be deemed to satisfy the
Company's obligation to pay the principal amount of the Security.
Securities shall be deemed to have been converted on the day of
surrender of such Securities for conversion in accordance with the foregoing
provisions, and at such time the rights of the Holders of such Securities as
Holders shall cease, and the Person or Persons entitled to receive the Common
Stock issuable upon conversion shall be treated for all purposes as the record
holder or holders of such Common Stock at such time. As promptly as practicable
on or after the conversion date, the Company shall issue and deliver to the
Trustee, for delivery to the Holder (unless a different Person is indicated on
the Conversion Notice), a certificate or certificates for the number of full
shares of Common Stock issuable upon conversion, together with payment in lieu
of any fraction of a share, as provided in Section 11.3.
All shares of Common Stock delivered upon such conversion of Securities
shall bear restrictive legends substantially in the form of the legends required
to be set forth on the Securities pursuant to Section 3.5 and shall be subject
to the restrictions on transfer provided in such legends. Neither the Trustee
nor any agent maintained for the purpose of such conversion shall have any
responsibility for the inclusion or content of any such restrictive legends on
such Common Stock; provided, however, that the Trustee or any agent maintained
for the purpose of such conversion shall have provided to the Company or to the
Company's transfer agent for such Common Stock, prior to or concurrently with a
request to the Company to deliver such Common Stock, written notice that the
Securities delivered for conversion are Securities subject to a Restricted
Securities Legend.
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In the case of any Security which is converted in part only, upon such
conversion the Company shall execute and the Trustee shall authenticate and make
available for delivery to the Holder thereof, at the expense of the Company, a
new Security or Securities of authorized denominations in an aggregate principal
amount equal to the unconverted portion of the principal amount of such
Security. A Security may be converted in part, but only if the principal amount
of such Security to be converted is any integral multiple of U.S.$1,000 and the
principal amount of such security to remain Outstanding after such conversion is
equal to U.S.$1,000 or any integral multiple of U.S.$1,000 in excess thereof.
SECTION 11.3 Fractions of Shares.
No fractional shares of Common Stock shall be issued upon conversion of
any Security or Securities. If more than one Security shall be surrendered for
conversion at one time by the same Holder, the number of full shares which shall
be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional share of Common Stock which would
otherwise be issuable upon conversion of any Security or Securities (or
specified portions thereof), the Company shall calculate and pay a cash
adjustment in respect of such fraction (calculated to the nearest 1/100th of a
share) in an amount equal to the same fraction of the Closing Price Per Share at
the close of business on the day of conversion.
SECTION 11.4 Adjustment of Conversion Rate.
The Conversion Rate shall be subject to adjustments from time to time
as follows:
(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company payable in shares of
Common Stock, the Conversion Rate in effect at the opening of business on the
day following the date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be increased by dividing such
Conversion Rate by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such increase to become effective immediately after the opening of
business on the day following the date fixed for such determination. If, after
any such date fixed for determination, any dividend or distribution is not in
fact paid, the Conversion Rate shall be immediately readjusted, effective as of
the date the Board of Directors determines not to pay such dividend or
distribution, to the Conversion Rate that would have been in effect if such
determination date had not been fixed. For the purposes of this paragraph (1),
the number of shares of Common Stock at any time outstanding shall not include
shares held in the treasury of the Company but shall include shares issuable in
respect of scrip certificates issued in lieu of fractions of shares of Common
Stock. The Company will not pay any dividend or make any distribution on shares
of Common Stock held in the treasury of the Company.
(2) In case the Company shall issue rights, options or warrants to all
holders of its Common Stock entitling them to subscribe for or purchase shares
of Common Stock at a price per
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share less than the current market price per share (determined as provided in
paragraph (8) of this Section 11.4) of the Common Stock on the date fixed for
the determination of stockholders entitled to receive such rights, options or
warrants (other than any rights, options or warrants that by their terms will
also be issued to any Holder upon conversion of a Security into shares of Common
Stock without any action required by the Company or any other Person), the
Conversion Rate in effect at the opening of business on the day following the
date fixed for such determination shall be increased by dividing such Conversion
Rate by a fraction of which the numerator shall be the number of shares of
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the aggregate of
the offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such current market price and the
denominator shall be the number of shares of Common Stock outstanding at the
close of business on the date fixed for such determination plus the number of
shares of Common Stock so offered for subscription or purchase, such increase to
become effective immediately after the opening of business on the day following
the date fixed for such determination. If, after any such date fixed for
determination, any such rights, options or warrants are not in fact issued, the
Conversion Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to issue such rights, options or warrants, to
the Conversion Rate that would have been in effect if such determination date
had not been fixed. For the purposes of this paragraph (2), the number of shares
of Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not issue any rights, options or warrants in respect of shares of Common
Stock held in the treasury of the Company.
(3) In case outstanding shares of Common Stock shall be subdivided into
a greater number of shares of Common Stock, the Conversion Rate in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately increased, and, conversely, in case
outstanding shares of Common Stock shall each be combined into a smaller number
of shares of Common Stock, the Conversion Rate in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately reduced, such increase or reduction, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(4) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock evidences of its indebtedness, shares of any
class of capital stock, or other property (including cash or assets or
securities, but excluding (i) any rights, options or warrants referred to in
paragraph (2) of this Section, (ii) any dividend or distribution paid
exclusively in cash, (iii) any dividend or distribution referred to in paragraph
(1) of this Section and (iv) any consideration distributed in any merger or
consolidation to which Section 11.11 applies), the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided in paragraph (8) of this Section 11.4)
of the Common Stock on the date fixed for such determination less the then fair
market value (as
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determined by the Board of Directors, whose determination shall be conclusive
and described in a Board Resolution filed with the Trustee) of the portion of
the assets, shares or evidences of indebtedness so distributed applicable to one
share of Common Stock and the denominator shall be such current market price per
share of the Common Stock, such adjustment to become effective immediately prior
to the opening of business on the day following the date fixed for the
determination of stockholders entitled to receive such distribution. If, after
any such date fixed for determination, any such distribution is not in fact
made, the Conversion Rate shall be immediately readjusted, effective as of the
date the Board of Directors determines not to make such distribution, to the
Conversion Rate that would have been in effect if such determination date had
not been fixed.
(5) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 11.11 applies or as part of a
distribution referred to in paragraph (4) of this Section) in an aggregate
amount that, combined together with (I) the aggregate amount of any other cash
distributions to all holders of its Common Stock made exclusively in cash within
the 12 months preceding the date of payment of such distribution and in respect
of which no adjustment pursuant to this paragraph (5) has been made and (II) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose determination shall be conclusive and described in a Board
Resolution) of consideration payable in respect of any tender offer by the
Company or any of its subsidiaries for all or any portion of the Common Stock
concluded within the 12 months preceding the date of payment of such
distribution and in respect of which no adjustment pursuant to paragraph (6) of
this Section 11.4 has been made (the "combined cash and tender amount") exceeds
10% of the product of the current market price per share (determined as provided
in paragraph (8) of this Section 11.4) of the Common Stock on the date for the
determination of holders of shares of Common Stock entitled to receive such
distribution times the number of shares of Common Stock outstanding on such date
(the "threshold amount"), then, and in each such case, immediately after the
close of business on such date for determination, the Conversion Rate shall be
adjusted so that the same shall equal the rate determined by dividing the
Conversion Rate in effect immediately prior to the close of business on the date
fixed for determination of the stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be equal to the
current market price per share (determined as provided in paragraph (8) of this
Section) of the Common Stock on the date fixed for such determination less an
amount equal to the quotient of (x) the excess of such combined cash and tender
amount over such threshold amount divided by (y) the number of shares of Common
Stock outstanding on such date for determination and (ii) the denominator of
which shall be equal to the current market price per share (determined as
provided in paragraph (8) of this Section 11.4) of the Common Stock on such date
for determination.
(6) In case a tender offer made by the Company or any Subsidiary for
all or any portion of the Common Stock shall expire and such tender offer (as
amended upon the expiration thereof) shall require the payment to stockholders
(based on the acceptance (up to any maximum specified in the terms of the tender
offer) of Purchased Shares (as defined below)) of an aggregate consideration
having a fair market value (as determined by the Board of Directors, whose
determination shall be conclusive and described in a Board Resolution) that
combined together with (I) the aggregate of the cash plus the fair market value
(as determined by the Board of Directors, whose determination shall
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be conclusive and described in a Board Resolution), as of the expiration of such
tender offer, of consideration payable in respect of any other tender offer by
the Company or any Subsidiary for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender offer and
in respect of which no adjustment pursuant to this paragraph (6) has been made
and (II) the aggregate amount of any cash distributions to all holders of the
Company's Common Stock within 12 months preceding the expiration of such tender
offer and in respect of which no adjustment pursuant to paragraph (5) of this
Section has been made (the "combined tender and cash amount") exceeds 10% of the
product of the current market price per share of the Common Stock (determined as
provided in paragraph (8) of this Section 11.4) as of the last time (the
"Expiration Time") tenders could have been made pursuant to such tender offer
(as it may be amended) times the number of shares of Common Stock outstanding
(including any tendered shares) as of the Expiration Time, then, and in each
such case, immediately prior to the opening of business on the day after the
date of the Expiration Time, the Conversion Rate shall be adjusted so that the
same shall equal the rate determined by dividing the Conversion Rate immediately
prior to close of business on the date of the Expiration Time by a fraction (i)
the numerator of which shall be equal to (A) the product of (I) the current
market price per share of the Common Stock (determined as provided in paragraph
(8) of this Section 11.4) on the date of the Expiration Time multiplied by (II)
the number of shares of Common Stock outstanding (including any tendered shares)
on the Expiration Time less (B) the combined tender and cash amount, and (ii)
the denominator of which shall be equal to the product of (A) the current market
price per share of the Common Stock (determined as provided in paragraph (8) of
this Section 11.4) as of the Expiration Time multiplied by (B) the number of
shares of Common Stock outstanding (including any tendered shares) as of the
Expiration Time less the number of all shares validly tendered and not withdrawn
as of the Expiration Time (the shares deemed so accepted up to any such maximum,
being referred to as the "Purchased Shares").
(7) The reclassification of Common Stock into securities including
other than Common Stock (other than any reclassification upon a consolidation or
merger to which Section 11.11 applies) shall be deemed to involve (a) a
distribution of such securities other than Common Stock to all holders of Common
Stock (and the effective date of such reclassification shall be deemed to be
"the date fixed for the determination of stockholders entitled to receive such
distribution" and "the date fixed for such determination" within the meaning of
paragraph (4) of this Section), and (b) a subdivision or combination, as the
case may be, of the number of shares of Common Stock outstanding immediately
prior to such reclassification into the number of shares of Common Stock
outstanding immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective,"
as the case may be, and "the day upon which such subdivision or combination
becomes effective" within the meaning of paragraph (3) of this Section 11.4).
(8) For the purpose of any computation under paragraphs (2), (4), (5)
or (6) of this Section 11.4, the current market price per share of Common Stock
on any date shall be calculated by the Company and be deemed to be the average
of the daily Closing Prices Per Share for the five consecutive Trading Days
selected by the Company commencing not more than 10 Trading Days before, and
ending not later than, the earlier of the day in question and the day before the
"ex date" with respect to the issuance or distribution requiring such
computation. For purposes of this
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paragraph, the term "ex date," when used with respect to any issuance or
distribution, means the first date on which the Common Stock trades regular way
in the applicable securities market or on the applicable securities exchange
without the right to receive such issuance or distribution.
(9) No adjustment in the Conversion Rate shall be required unless such
adjustment (plus any adjustments not previously made by reason of this paragraph
(9)) would require an increase or decrease of at least one percent in such rate;
provided, however, that any adjustments which by reason of this paragraph (9)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.
(10) The Company may make such increases in the Conversion Rate, for
the remaining term of the Securities or any shorter term, in addition to those
required by paragraphs (1), (2), (3), (4), (5) and (6) of this Section 11.4, as
it considers to be advisable in order to avoid or diminish any income tax
liability to any holders of shares of Common Stock resulting from any dividend
or distribution of Common Stock or issuance of rights or warrants to purchase or
subscribe for Common Stock or from any event treated as such for income tax
purposes.
To the extent permitted by applicable law, the Company from time to
time may increase the Conversion Rate by any amount for any period of time if
the period is at least twenty (20) days and the Board of Directors shall have
made a determination that such increase would be in the best interests of the
Company, which determination shall be conclusive; provided, however, that such
increase shall not be taken into account for purposes of determining whether the
Closing Price Per Share of the Common Stock exceeds the Conversion Price by 105%
in connection with an event which would otherwise be a Change in Control.
Whenever the Conversion Rate is increased pursuant to the preceding sentence,
the Company shall give notice of the increase to the Holders of Securities in
the manner provided in Section 1.6 at least fifteen (15) days prior to the date
the increased Conversion Rate takes effect, and such notice shall state the
increased Conversion Rate and the period during which it will be in effect. The
"Conversion Price" shall equal U.S.$1,000 divided by the Conversion Rate
(rounded to the nearest cent).
(11) Notwithstanding the foregoing provisions of this Section, no
adjustment of the Conversion Rate shall be required to be made (a) upon the
issuance of shares of Common Stock pursuant to any present or future plan for
the reinvestment of dividends or (b) because of a tender or exchange offer of
the character described in Rule 13e-4(h)(5) under the Exchange Act or any
successor rule thereto.
SECTION 11.5 Notice of Adjustments of Conversion Rate.
Whenever the Conversion Rate is adjusted as herein provided:
(1) the Company shall compute the adjusted Conversion Rate in
accordance with Section 11.4 and shall prepare a certificate signed by the Chief
Financial Officer of the Company setting forth the adjusted Conversion Rate and
showing in reasonable detail the facts upon which such adjustment is based, and
such certificate shall promptly be filed with the Trustee and with each
Conversion Agent; and
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(2) upon each such adjustment, a notice stating that the Conversion
Rate has been adjusted and setting forth the adjusted Conversion Rate shall be
required, and as soon as practicable after it is required, such notice shall be
provided by the Company to all Holders in accordance with Section 1.6.
Neither the Trustee nor any Conversion Agent shall be under any duty or
responsibility with respect to any such certificate or the information and
calculations contained therein, except to exhibit the same to any Holder of
Securities desiring inspection thereof at its office during normal business
hours.
SECTION 11.6 Notice of Certain Corporate Action.
In case:
(a) the Company shall declare a dividend (or any other distribution) on its
Common Stock payable (i) otherwise than exclusively in cash or (ii) exclusively
in cash in an amount that would require any adjustment pursuant to Section 11.4;
or
(b) the Company shall authorize the granting to the holders of its Common
Stock of rights, options or warrants to subscribe for or purchase any shares of
capital stock of any class or of any other rights; or
(c) of any reclassification of the Common Stock of the Company, or of any
consolidation, merger or share exchange to which the Company is a party and for
which approval of any stockholders of the Company is required, or of the
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding up
of the Company;
then the Company shall cause to be filed at each office or agency maintained for
the purpose of conversion of Securities pursuant to Section 9.2, and shall cause
to be provided to all Holders in accordance with Section 1.6, at least 20 days
(or 10 days in any case specified in clause (a) or (b) above) prior to the
applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution, rights, options or warrants, or, if a record is not to be taken,
the date as of which the holders of Common Stock of record to be entitled to
such dividend, distribution, rights, options or warrants are to be determined or
(y) the date on which such reclassification, consolidation, merger, conveyance,
transfer, sale, lease, dissolution, liquidation or winding up is expected to
become effective, and the date as of which it is expected that holders of Common
Stock of record shall be entitled to exchange their shares of Common Stock for
securities, cash or other property deliverable upon such reclassification,
consolidation, merger, conveyance, transfer, sale, lease, dissolution,
liquidation or winding up.
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Neither the failure to give such notice or the notice referred to in the
following paragraph nor any defect therein shall affect the legality or validity
of the proceedings described in clauses (a) through (d) of this Section 11.6. If
at the time the Trustee shall not be the Conversion Agent, a copy of such notice
shall also forthwith be filed by the Company with the Trustee.
The Company shall cause to be filed at each office or agency maintained
for the purpose of conversion of Securities pursuant to Section 9.2, and shall
cause to be provided to all Holders in accordance with Section 1.6, notice of
any tender offer by the Company or any Subsidiary for all or any portion of the
Common Stock at or about the time that such notice of tender offer is provided
to the public generally.
SECTION 11.7 Company to Reserve Common Stock.
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Stock, for the
purpose of effecting the conversion of Securities, the full number of shares of
Common Stock then issuable upon the conversion of all Outstanding Securities.
SECTION 11.8 Taxes on Conversions.
Except as provided in the next sentence, the Company will pay any and
all taxes and duties that may be payable in respect of the issue or delivery of
shares of Common Stock on conversion of Securities pursuant hereto. The Company
shall not, however, be required to pay any tax or duty which may be payable in
respect of (i) income of the Holder or (ii) any transfer involved in the issue
and delivery of shares of Common Stock in a name other than that of the Holder
of the Security or Securities to be converted, and no such issue or delivery
shall be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax or duty, or has established to the
satisfaction of the Company that such tax or duty has been paid.
SECTION 11.9 Covenant as to Common Stock.
The Company agrees that all shares of Common Stock which may be
delivered upon conversion of Securities, upon such delivery, will have been duly
authorized and validly issued and will be fully paid and nonassessable and,
except as provided in Section 11.8, the Company will pay all taxes, liens and
charges with respect to the issue thereof.
SECTION 11.10 Cancellation of Converted Securities.
All Securities delivered for conversion shall be delivered to the
Trustee or its agent to be canceled by or at the direction of the Trustee, which
shall dispose of the same as provided in Section 3.9.
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SECTION 11.11 Provision in Case of Consolidation, Merger or Sale of Assets.
In case of any consolidation or merger of the Company with or into any
other Person, any merger of another Person with or into the Company (other than
a merger which does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Company) or any
conveyance, sale, transfer or lease of all or substantially all of the assets of
the Company, the Person formed by such consolidation or resulting from such
merger or which acquires such assets, as the case may be, shall execute and
deliver to the Trustee a supplemental indenture providing that the Holder of
each Security then Outstanding shall have the right thereafter, during the
period such Security shall be convertible as specified in Section 11.1, to
convert such Security only into the kind and amount of securities, cash and
other property receivable upon such consolidation, merger, conveyance, sale,
transfer or lease by a holder of the number of shares of Common Stock of the
Company into which such Security might have been converted immediately prior to
such consolidation, merger, conveyance, sale, transfer or lease, assuming such
holder of Common Stock of the Company (i) is not a Person with which the Company
consolidated or merged with or into or which merged into or with the Company or
to which such conveyance, sale, transfer or lease was made, as the case may be
("Constituent Person"), or an Affiliate of a Constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer or lease (provided that if the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
conveyance, sale, transfer, or lease is not the same for each share of Common
Stock of the Company held immediately prior to such consolidation, merger,
conveyance, sale, transfer or lease by others than a Constituent Person or an
Affiliate thereof and in respect of which such rights of election shall not have
been exercised ("Non-electing Share"), then for the purpose of this Section
11.11 the kind and amount of securities, cash and other property receivable upon
such consolidation, merger, conveyance, sale, transfer or lease by the holders
of each Non-electing Share shall be deemed to be the kind and amount so
receivable per share by a plurality of the Non-electing Shares). Such
supplemental indenture shall provide for adjustments which, for events
subsequent to the effective date of such supplemental indenture, shall be as
nearly equivalent as may be practicable to the adjustments provided for in this
Article. The above provisions of this Section 11.11 shall similarly apply to
successive consolidations, mergers, conveyances, sales, transfers or leases.
Notice of the execution of such a supplemental indenture shall be given by the
Company to the Holder of each Security as provided in Section 1.6 promptly upon
such execution.
Neither the Trustee nor any Conversion Agent shall be under any
responsibility to determine the correctness of any provisions contained in any
such supplemental indenture relating either to the kind or amount of shares of
stock or other securities or property or cash receivable by Holders of
Securities upon the conversion of their Securities after any such consolidation,
merger, conveyance, transfer, sale or lease or to any such adjustment, but may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, an Opinion of Counsel with respect thereto,
which the Company shall cause to be furnished to the Trustee upon request.
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SECTION 11.12 Responsibility of Trustee for Conversion Provisions.
The Trustee, subject to the provisions of Section 6.1 and any
Conversion Agent shall not at any time be under any duty or responsibility to
any Holder of Securities to determine whether any facts exist which may require
any adjustment of the Conversion Rate, or with respect to the nature or extent
of any such adjustment when made, or with respect to the method employed, or
herein or in any supplemental indenture provided to be employed, in making the
same, or whether a supplemental indenture need be entered into. Neither the
Trustee, subject to the provisions of Section 6.1, nor any Conversion Agent
shall be accountable with respect to the validity or value (or the kind or
amount) of any Common Stock, or of any other securities or property or cash,
which may at any time be issued or delivered upon the conversion of any
Security; and it or they do not make any representation with respect thereto.
Neither the Trustee, subject to the provisions of Section 6.1, nor any
Conversion Agent shall be responsible for any failure of the Company to make or
calculate any cash payment or to issue, transfer or deliver any shares of Common
Stock or share certificates or other securities or property or cash upon the
surrender of any Security for the purpose of conversion; and the Trustee,
subject to the provisions of Section 6.1, and any Conversion Agent shall not be
responsible for any failure of the Company to comply with any of the covenants
of the Company contained in this Article.
ARTICLE TWELVE
SUBORDINATION OF SECURITIES
SECTION 12.1 Securities Subordinate to Senior Debt.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to the provisions of
Article Four), the indebtedness represented by the Securities and the payment of
the principal of (and premium, if any) and interest and Liquidated Damages, if
any, on, and any payment of the Repurchase Price with respect to, each and all
of the Securities are hereby expressly made subordinate and subject in right of
payment to the prior payment in full of all Senior Debt.
SECTION 12.2 No Payments in Certain Circumstances; Payment Over of Proceeds Upon
Dissolution, Etc.
No payment on account of principal of, premium, if any, or interest on,
or redemption or repurchase of, the Securities or any coupons appertaining
thereto shall be made if either of the following occurs: (i) the Company
defaults in its obligation to pay principal, premium, if any, or interest or
other amounts on its Designated Senior Debt, including default under any
redemption or repurchase obligation, and the default continues beyond any grace
period that the Company may have to make those payments or (ii) any other
default occurs and is continuing on any Designated Senior Debt and (1) the
default permits the holders of the Designated Senior Debt to accelerate its
maturity and (2) the Trustee has received a notice of the default (a "Payment
Blockage Notice") from the Company or any other Person permitted to give such
notice pursuant to Sections 12.5 and 12.6 hereof.
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Notwithstanding the foregoing, the Company may make, and the Trustee
may receive and shall apply, any payment in respect of the Securities (for
principal, premium, if any, or interest Liquidated Damages, if any, or
repurchase) if such payment was made prior to the occurrence of any of the
contingencies specified in clauses (i) and (ii) above.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 365 days shall have
elapsed since the effectiveness of the immediately prior Payment Blockage
Notice, and (B) all scheduled payments of principal, premium, if any, and
interest and Liquidated Damages, if any, on the Securities that have come due
have been paid in full in cash. No nonpayment default that existed or was
continuing on the date of delivery of any Payment Blockage Notice to the Trustee
shall be, or be made, the basis for a subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Securities upon the earlier of: (i) the date upon which the
default is cured or waived, or (ii) in the case of a default referred to in
clause (ii) of the second preceding paragraph, 179 days pass after notice is
received if the maturity of such Designated Senior Debt has not been
accelerated, unless this Article otherwise prohibits the payment or distribution
at the time of such payment or distribution.
Upon (i) any acceleration of the principal amount due on the Securities
or (ii) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, to creditors upon any
dissolution, winding up or total or partial liquidation or reorganization of the
Company, whether voluntary or involuntary, or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, premium, if any, sinking
fund and interest or other amounts due or to become due upon all Senior Debt
shall first be paid in full, or payment thereof provided for in money or money's
worth in accordance with its terms, before any payment is made on account of the
principal of, premium, if any, or interest or Liquidated Damages on, or
repurchase of, the indebtedness evidenced by the Securities or any coupon
appertaining thereto, and upon any such dissolution or winding up or liquidation
or reorganization any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, to which the Holders
of the Securities or any coupons appertaining thereto or the Trustee under this
Indenture would be entitled, except for the provisions hereof, shall be paid by
the Company or by any receiver, trustee in bankruptcy, liquidating trustee,
agent or other Person making such payment or distribution, or by the Holders of
the Securities or any coupons appertaining thereto or by the Trustee under this
Indenture if received by them or it, as the case may be, directly to the holders
of Senior Debt or their representatives, to the extent necessary to pay all
Senior Debt in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Debt, before
any payment or distribution is made to the Holders of the Securities or any
coupons appertaining thereto or to the Trustee under this Indenture.
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In the event that, contrary to the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, shall be received by the Trustee or the Holders of the
Securities before all Senior Debt is paid in full or provision made for such
payment, in accordance with its terms, such payment or distribution shall be
paid over or delivered to, the holders of such Senior Debt or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any of such Senior Debt
have been issued, as their respective interests may appear, for application to
the payment of all Senior Debt remaining unpaid to the extent necessary to pay
all such Senior Debt in full in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the holders of such Senior
Debt.
Subject to the payment in full of all Senior Debt, the Holders of the
Securities and any coupons (together with the holders of any other indebtedness
of the Company which is subordinated in right of payment to the payment in full
of all Senior Debt, but which is not subordinated in right of payment to the
Securities and which by its terms grants such right of subrogation to the
holders thereof) shall be subrogated to the rights of the holders of Senior Debt
to receive payments or distribution of assets of the Company made on the Senior
Debt until the principal of, premium, if any, and interest on, or amounts
payable upon repurchase of, the Securities shall be paid in full; and, for the
purposes of such subrogation, no payments or distributions to the holders of
Senior Debt of any cash, property or securities to which the Holders of the
Securities and any coupons appertaining thereto or the Trustee would be entitled
except for the provisions of this Article, and no payment over pursuant to the
provisions of this Article to the holders of Senior Debt by the Holders of the
Securities or any coupon or the Trustee, shall, as between the Company, its
creditors other than the holders of Senior Debt, and the Holders of Securities
and coupons, be deemed to be a payment by the Company to the holders of or on
account of Senior Debt, it being understood that the provisions of this Article
are and are intended solely for the purpose of defining the relative rights of
the Holders of the Securities and coupons, on the one hand, and the holders of
Senior Debt, on the other hand.
SECTION 12.3 Trustee to Effectuate Subordination.
Each holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
SECTION 12.4 No Waiver of Subordination Provisions.
No right of any present or future holder of any Senior Debt to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder of any Senior Debt, or by
any non-compliance by the Company with the terms, provisions and covenants of
this Indenture, regardless of any knowledge thereof any such holder may have or
be otherwise charged with.
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Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Debt may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Securities, without
incurring responsibility to the Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior Debt, do any
one or more of the following: (i) change the manner, place or terms of payment
or extend the time of payment of, or renew or alter, Senior Debt, or otherwise
amend or supplement in any manner Senior Debt or any instrument evidencing the
same or any agreement under which Senior Debt is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Debt; (iii) release any Person liable in any manner
for the collection of Senior Debt; and (iv) exercise or refrain from exercising
any rights against the Company and any other Person.
SECTION 12.5 Notice to Trustee.
The Company shall give prompt written notice to the Trustee of any fact
known to the Company which would prohibit the making of any payment to or by the
Trustee in respect of the Securities. Notwithstanding the provisions of this
Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a holder of Senior Debt or from any trustee, agent or representative
therefor; and, prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section 12.5 prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (and premium, if
any) or interest on any Security), then, anything herein contained to the
contrary notwithstanding the Trustee shall have full power and authority to
receive such money and to apply the same to the purpose for which such money was
received and shall not be affected by any notice to the contrary which may be
received by it within two Business Days prior to such date or after such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself to be a holder of Senior Debt (or a trustee, agent or representative
therefor) to establish that such notice has been given by a holder of Senior
Debt (or a trustee, agent or representative therefor). In the event that the
Trustee determines in good faith that further evidence is required with respect
to the right of any Person as a holder of Senior Debt to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Debt held by such Person, the extent to which such Person
is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence
is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment,
and during such deferral to also defer application of said payment for which
such money was received pursuant to this Indenture.
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SECTION 12.6 Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such insolvency,
bankruptcy, receivership, liquidation, reorganization, dissolution, winding up
or similar case or proceeding is pending, or a certificate of the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee for the benefit
of creditors, agent or other Person making such payment or distribution,
delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of the Senior Debt and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article.
SECTION 12.7 Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or to
the Company or to any other Person cash, property or securities to which any
holders of Senior Debt shall be entitled by virtue of this Article or otherwise.
With respect to the holders of Senior Debt, the Trustee undertakes to perform or
to observe only such of its covenants or obligations as are specifically set
forth in this Article Twelve, and no implied covenants or obligations with
respect to holders of Senior Debt shall be read into this Indenture against the
Trustee.
SECTION 12.8 Reliance by Holders of Senior Debt on Subordination Provisions.
Each Holder by accepting a Security acknowledges and agrees that the
foregoing subordination provisions are, and are intended to be, an inducement
and a consideration to each holder of any Senior Debt, whether such Senior Debt
was created or acquired before or after the issuance of the Securities, to
acquire and continue to hold, or to continue to hold, such Senior Debt and such
holder of Senior Debt shall be deemed conclusively to have relied on such
subordination provisions in acquiring and continuing to hold, or in continuing
to hold, such Senior Debt.
SECTION 12.9 Rights of Trustee as Holder of Senior Debt; Preservation of
Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt which may at
any time be held by it, to the same extent as any other holder of Senior Debt,
and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
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SECTION 12.10 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting hereunder, the term "Trustee"
as used in this Article shall in such case (unless the context otherwise
requires) be construed as extending to and including such Paying Agent within
its meaning as fully for all intents and purposes as if such Paying Agent were
named in this Article in addition to or in place of the Trustee; provided,
however, that Section 12.9 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
SECTION 12.11 Certain Conversions and Repurchases Deemed Payment.
For the purposes of this Article only, (1) the issuance and delivery of
junior securities upon conversion of Securities in accordance with Article
Eleven or upon the repurchase of Securities in accordance with Article Thirteen
shall not be deemed to constitute a payment or distribution on account of the
principal of or premium or interest or Liquidated Damages on Securities or on
account of the purchase or other acquisition of Securities, and (2) the payment,
issuance or delivery of cash, property or securities (other than junior
securities) upon conversion of a Security shall be deemed to constitute payment
on account of the principal of such Security. For the purposes of this Section,
the term "junior securities" means (a) shares of any stock of any class of the
Company and any cash, property or securities into which the Securities are
convertible pursuant to Article Eleven and (b) securities of the Company which
are subordinated in right of payment to all Senior Debt which may be outstanding
at the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article. Nothing contained in this Article or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Debt and the Holders of the
Securities, the right, which is absolute and unconditional, of the Holder of any
Security to convert such Security in accordance with Article Eleven or to
exchange such Security for Common Stock in accordance with Article Thirteen if
the Company elects to satisfy the obligations under Article Thirteen by the
delivery of Common Stock.
ARTICLE THIRTEEN
REPURCHASE OF SECURITIES AT THE OPTION OF THE
HOLDER UPON A CHANGE IN CONTROL
SECTION 13.1 Right to Require Repurchase.
In the event that a Change in Control (as hereinafter defined) shall
occur, then each Holder shall have the right, at the Holder's option, but
subject to the provisions of Section 13.2, to require the Company to repurchase,
and upon the exercise of such right the Company shall repurchase, all of such
Holder's Securities not theretofore called for redemption, or any portion of the
principal amount thereof that is equal to U.S.$5,000 or any integral multiple of
U.S.$1,000 in excess of U.S.$5,000, on the date (the "Repurchase Date") that is
45 days after the date of the Company Notice (as defined in Section 13.3) at a
purchase price equal to 100% of the principal amount of the
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Securities to be repurchased plus interest accrued to the Repurchase Date (the
"Repurchase Price"); provided, however, that installments of interest on
Securities whose Stated Maturity is on or prior to the Repurchase Date shall be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such on the relevant Record Date according to their
terms and the provisions of Section 3.7. Such right to require the repurchase of
the Securities shall not continue after a discharge of the Company from its
obligations with respect to the Securities in accordance with Article Four,
unless a Change in Control shall have occurred prior to such discharge. At the
option of the Company, the Repurchase Price may be paid in cash or, subject to
the fulfillment by the Company of the conditions set forth Section 13.2, by
delivery of shares of Common Stock having a fair market value equal to the
Repurchase Price. Whenever in this Indenture (including Sections 2.2, 3.1,
5.1(1) and 5.8) there is a reference, in any context, to the principal of any
Security as of any time, such reference shall be deemed to include reference to
the Repurchase Price payable in respect of such Security to the extent that such
Repurchase Price is, was or would be so payable at such time, and express
mention of the Repurchase Price in any provision of this Indenture shall not be
construed as excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made; provided, however, that for the
purposes of Article Thirteen such reference shall be deemed to include reference
to the Repurchase Price only to the extent the Repurchase Price is payable in
cash.
SECTION 13.2 Conditions to the Company's Election to Pay the Repurchase Price in
Common Stock.
The Company may elect to pay the Repurchase Price by delivery of shares
of Common Stock pursuant to Section 13.1 if and only if the following conditions
shall have been satisfied:
(a) The shares of Common Stock deliverable in payment of the Repurchase
Price shall have a fair market value as of the Repurchase Date of not less than
the Repurchase Price. For purposes of Section 13.1 and this Section 13.2, the
fair market value of shares of Common Stock shall be determined by the Company
and shall be equal to 95% of the average of the Closing Price Per Share for the
five consecutive Trading Days immediately preceding and including the third
Trading Day prior to the Repurchase Date;
(b) The Repurchase Price shall be paid only in cash in the event any shares
of Common Stock to be issued upon repurchase of Securities hereunder (i) require
registration under any federal securities law before such shares may be freely
transferable without being subject to any transfer restrictions under the
Securities Act upon repurchase and if such registration is not completed or does
not become effective prior to the Repurchase Date, and/or (ii) require
registration with or approval of any governmental authority under any state law
or any other federal law before such shares may be validly issued or delivered
upon repurchase and if such registration is not completed or does not become
effective or such approval is not obtained prior to the Repurchase Date;
(c) Payment of the Repurchase Price may not be made in Common Stock unless
such stock is, or shall have been, approved for quotation on the Nasdaq National
Market or listing or quotation on a national securities exchange or quotation
system, in either case, prior to the Repurchase Date; and
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(d) All shares of Common Stock which may be issued upon repurchase of
Securities will be issued out of the Company's authorized but unissued Common
Stock and, will upon issue, be duly and validly issued and fully paid and
non-assessable and free of any preemptive rights.
If all of the conditions set forth in this Section 13.2 are not satisfied
in accordance with the terms thereof, the Repurchase Price shall be paid by the
Company only in cash.
SECTION 13.3 Notices; Method of Exercising Repurchase Right, Etc. .
(a) Unless the Company shall have theretofore called for redemption all of
the Outstanding Securities, on or before the 30th day after the occurrence of a
Change in Control, the Company or, at the request and expense of the Company on
or before the 30th day after such occurrence, the Trustee, shall give to all
Holders of Securities, in the manner provided in Section 1.6, notice (the
"Company Notice") of the occurrence of the Change of Control and of the
repurchase right set forth herein arising as a result thereof and the Company
shall issue a Press Release including all relevant information required to be
included in such Company Notice. The Company shall also deliver a copy of such
notice of a repurchase right to the Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be exercised,
(3) the Repurchase Price, and whether the Repurchase Price shall be
paid by the Company in cash or by delivery of shares of Common Stock.
(4) a description of the procedure which a Holder must follow to
exercise a repurchase right, and the place or places where such Securities are
to be surrendered for payment of the Repurchase Price and accrued interest, if
any,
(5) that on the Repurchase Date the Repurchase Price, and accrued
interest, if any, will become due and payable upon each such Security designated
by the Holder to be repurchased, and that interest thereon shall cease to accrue
on and after said date,
(6) the Conversion Rate then in effect, the date on which the right to
convert the principal amount of the Securities to be repurchased will terminate
and the place or places where such Securities may be surrendered for conversion,
(7) the place or places that the certificate required by Section 2.2
shall be delivered, and
(8) the CUSIP number or numbers of such Securities.
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No failure of the Company to give the foregoing notices or defect
therein shall limit any Holder's right to exercise a repurchase right or affect
the validity of the proceedings for the repurchase of Securities.
If any of the foregoing provisions or other provisions of this Article
Thirteen are inconsistent with applicable law, such law shall govern.
(b) To exercise a repurchase right, a Holder shall deliver to the Trustee
on or before the 30th day after the date of the Company Notice (i) written
notice of the Holder's exercise of such right, which notice shall set forth the
name of the Holder, the principal amount of the Securities to be repurchased
(and, if any Security is to repurchased in part, the serial number thereof, the
portion of the principal amount thereof to be repurchased and the name of the
Person in which the portion thereof to remain Outstanding after such repurchase
is to be registered) and a statement that an election to exercise the repurchase
right is being made thereby, and, in the event that the Repurchase Price shall
be paid in shares of Common Stock, the name or names (with addresses) in which
the certificate or certificates for shares of Common Stock shall be issued, and
(ii) the Securities with respect to which the repurchase right is being
exercised. Such written notice shall be irrevocable, except that the right of
the Holder to convert the Securities with respect to which the repurchase right
is being exercised shall continue until the close of business on the Repurchase
Date.
(c) In the event a repurchase right shall be exercised in accordance with
the terms hereof, the Company shall pay or cause to be paid to the Trustee the
Repurchase Price in cash or shares of Common Stock, as provided above, for
payment to the Holder on the Repurchase Date or, if shares of Common Stock are
to be paid, as promptly after the Repurchase Date as practicable; provided,
however, that installments of interest on the Securities whose Stated Maturity
is on or prior to the Repurchase Date shall be payable in cash to the Holders of
such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant Record Date.
(d) If any Security (or portion thereof) surrendered for repurchase shall
not be so paid on the Repurchase Date, the principal amount of such Security (or
portion thereof, as the case may be) shall, until paid, bear interest to the
extent permitted by applicable law from the Repurchase Date at the rate of
7 1/4% per annum, and each Security shall remain convertible into Common Stock
until the principal of such Security (or portion thereof, as the case may be)
shall have been paid or duly provided for.
(e) Any Security which is to be repurchased only in part shall be
surrendered to the Trustee (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee
shall authenticate and make available for delivery to the Holder of such
Security without service charge, a new Security or Securities, containing
identical terms and conditions, each in an authorized denomination in aggregate
principal amount equal to and in exchange for the unrepurchased portion of the
principal of the Security so surrendered.
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(f) Any issuance of shares of Common Stock in respect of the Repurchase
Price shall be deemed to have been effected immediately prior to the close of
business on the Repurchase Date and the Person or Persons in whose name or names
any certificate or certificates for shares of Common Stock shall be issuable
upon such repurchase shall be deemed to have become on the Repurchase Date the
holder or holders of record of the shares represented thereby; provided,
however, that any surrender for repurchase on a date when the stock transfer
books of the Company shall be closed shall constitute the Person or Persons in
whose name or names the certificate or certificates for such shares are to be
issued as the record holder or holders thereof for all purposes at the opening
of business on the next succeeding day on which such stock transfer books are
open. No payment or adjustment shall be made for dividends or distributions on
any Common Stock issued upon repurchase of any Security declared prior to the
Repurchase Date.
(g) No fractions of shares shall be issued upon repurchase of Securities.
If more than one Security shall be repurchased from the same Holder and the
Repurchase Price shall be payable in shares of Common Stock, the number of full
shares which shall be issuable upon such repurchase shall be computed on the
basis of the aggregate principal amount of the Securities so repurchased.
Instead of any fractional share of Common Stock which would otherwise be
issuable on the repurchase of any Security or Securities, the Company will
deliver to the applicable Holder its check for the current market value of such
fractional share. The current market value of a fraction of a share is
determined by multiplying the current market price of a full share by the
fraction, and rounding the result to the nearest cent. For purposes of this
Section, the current market price of a share of Common Stock is the Closing
Price Per Share of the Common Stock on the Trading Day immediately preceding the
Repurchase Date.
(h) Any issuance and delivery of certificates for shares of Common Stock on
repurchase of Securities shall be made without charge to the Holder of
Securities being repurchased for such certificates or for any tax or duty in
respect of the issuance or delivery of such certificates or the securities
represented thereby; provided, however, that the Company shall not be required
to pay any tax or duty which may be payable in respect of (i) income of the
Holder or (ii) any transfer involved in the issuance or delivery of certificates
for shares of Common Stock in a name other than that of the Holder of the
Securities being repurchased, and no such issuance or delivery shall be made
unless and until the Person requesting such issuance or delivery has paid to the
Company the amount of any such tax or duty or has established, to the
satisfaction of the Company, that such tax or duty has been paid.
(i) All Securities delivered for repurchase shall be delivered to the
Trustee to be canceled at the direction of the Trustee, which shall dispose of
the same as provided in Section 3.9.
SECTION 13.4 Certain Definitions.
For purposes of this Article Thirteen,
(a) the term "beneficial owner" shall be determined in accordance with Rule
13d-3, as in effect on the date of the original execution of this Indenture,
promulgated by the Commission pursuant to the Exchange Act;
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(b) a "Change in Control" will be deemed to have occurred at the time after
the Securities are originally issued that any of the following occurs:
(i) any Person, including any syndicate or group deemed to be a
"person" under Section 13(d)(3) of the Exchange Act, acquires beneficial
ownership, directly or indirectly, through a purchase, merger or other
acquisition transaction or series of transactions, of shares of the Company's
capital stock entitling that Person to exercise 50% or more of the total voting
power of all shares of the Company's capital stock entitled to vote generally in
elections of directors; however, any acquisition by the Company, any Subsidiary
of the Company or any employee benefit plan of the Company and any merger or
consolidation that is not a Change in Control under clause (ii) below will not
trigger this provision;
(ii) the Company consolidates with or merges with or into any other
Person or another Person merges into us, except if the transaction satisfies any
of the following: (x) the holders of 50% or more of the total voting power of
all shares of the Company's capital stock entitled to vote generally in
elections of directors immediately prior to the transaction have, directly or
indirectly, 50% or more of the total voting power of all shares of capital stock
of the continuing or surviving corporation entitled to vote generally in
elections of directors of the continuing or surviving corporation immediately
after the transaction; (y) the transaction is a merger which does not result in
any reclassification, conversion, exchange or cancellation of outstanding shares
of the Company's capital stock; or (z) the transaction is a merger effected only
to change the Company's jurisdiction of incorporation and it results in a
reclassification, conversion or exchange of outstanding shares of the Company's
common stock only into other shares of Common Stock or shares of common stock of
another corporation; or
(iii) the Company conveys, transfers, sells, leases or otherwise
disposes of all or substantially all of its assets to another Person.
However, a Change in Control shall not be deemed to have occurred if the
Closing Price Per Share on any five Trading Days within the period of 10
consecutive Trading Days ending immediately after the later of the date of the
Change in Control or the date of the public announcement of the Change in
Control, in the case of a Change in Control under Clause (i) above), or the
period of 10 consecutive Trading Days ending immediately prior to the date the
Change in Control (in the case of a Change in Control under Clause (ii) or (iii)
above) shall in the case of each of such five Trading Days equal or exceed 105%
of the Conversion Price of the Securities in effect of relating to a merger,
consolidation or asset sale, equals or exceeds 105% of the Conversion Price of
the Securities Price of the Securities in effect on such Trading Day.
(c) the term "Conversion Price" shall equal U.S.$1,000 divided by the
Conversion Rate; and
(d) for purposes of Section 13.4(b)(i), the term "Person" shall include any
syndicate or group which would be deemed to be a "Person" under Section 13(d)(3)
of the Exchange Act, as in effect on the date of the original execution of this
Indenture.
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ARTICLE FOURTEEN
HOLDERS LISTS AND REPORTS
BY TRUSTEE AND COMPANY; NON-RECOURSE
SECTION 14.1 Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not more than 15 days after the Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders of Securities as of such Regular Record Date, and
(b) at such other times as the Trustee may reasonably request in writing,
within 30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the time
such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
capacity as Security Registrar.
SECTION 14.2 Preservation of Information.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 14.1 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it at provided in
Section 14.1 upon receipt of a new list so furnished.
(b) After this Indenture has been qualified under the Trust Indenture Act,
the rights of Holders to communicate with other Holders with respect to their
rights under this Indenture or under the Securities, and the corresponding
rights and duties of the Trustee, shall be as provided by the Trust Indenture
Act.
(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of any
disclosure of information as to names and addresses of Holders made pursuant to
the Trust Indenture Act.
SECTION 14.3 No Recourse Against Others.
An incorporator or any past, present or future director, officer, employee
or stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Holder shall waive and release all such
liability. Such waiver and release shall be part of the consideration for the
issue of the Securities.
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SECTION 14.4 Reports by Trustee.
(a) After this Indenture has been qualified under the Trust Indenture Act,
the Trustee shall transmit to Holders such reports concerning the Trustee and
its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto. If
required by Section 313(a) of the Trust Indenture Act, the Trustee shall, within
sixty days after each September 15 following the date of this Indenture, deliver
to Holders a brief report, dated as of such September 15, which complies with
the provisions of such Section 313(a).
(b) After this Indenture has been qualified under the Trust Indenture Act,
a copy of each such report shall, at the time of such transmission to Holders,
be filed by the Trustee with each stock exchange upon which the Securities are
listed, with the Commission and with the Company. The Company will promptly
notify the Trustee when the Securities are listed on any stock exchange.
SECTION 14.5 Reports by Company.
After this Indenture has been qualified under the Trust Indenture Act, the
Company shall file with the Trustee and the Commission, and transmit to Holders,
such information, documents and other reports, and such summaries thereof, as
may be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto; provided that any such information, documents
or reports required to be filed with the Commission pursuant to Section 13 or
15(d) of the Exchange Act shall be filed with the Trustee within 15 days after
the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt thereof shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
---------------------------
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
i2 TECHNOLOGIES, INC.
By: /s/ WILLIAM M. BEECHER
----------------------------------------
Name: William M. Beecher
Title: Executive Vice President,
Operations and Chief Financial
Officer
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, as Trustee
By: /s/ JOHN G. JONES
----------------------------------------
Name: John G. Jones
Title: Vice President
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EXHIBIT A
FORM OF TRANSFER CERTIFICATE FOR TRANSFER
FROM GLOBAL SECURITY OR DEFINITIVE SECURITY
TO DEFINITIVE SECURITY
(Transfers pursuant to Section 3.05(c)(i) or 3.05(c)(ii) of the Indenture)
Chase Bank of Texas, National Association, as Security Registrar
Attn: Corporate Trust Department
Re: i2 Technologies, Inc. 5-1/4% Convertible Subordinated Notes
due December 15, 2006 (the "Securities")
Reference is hereby made to the Indenture dated as of December 10, 1999
(the "Indenture") between i2 Technologies, Inc. and Chase Bank of Texas,
National Association, as Trustee. Capitalized terms used but not defined herein
shall have the meanings given them in the Indenture.
This letter relates to U.S. $__________ aggregate principal amount of
Securities which are held in the form of a [registered Security in definitive
form] [a beneficial interest in Global Security (CUSIP No. ____________ )]* in
the name of [name of transferor] (the "Transferor"), to request the transfer of
the Securities.
In connection with such request, and in respect of such Securities, the
Transferor does hereby certify that such Securities are being transferred in
accordance with (i) the transfer restrictions set forth in the Securities and
the Indenture and (ii) to a transferee that the Transferor reasonably believes
is an institutional "accredited investor" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D under the U.S. Securities Act of 1933, as amended)
(an "Institutional Accredited Investor") which is acquiring such Securities for
its own account or for one or more accounts, each of which is an Institutional
Accredited Investor, over which it exercises sole investment discretion and
(iii) in accordance with applicable securities laws of any state of the United
States.
[Name of Transferor],
By
-------------------------------------
Name:
Title:
Dated:
cc: i2 Technologies, Inc.
Attn: Chief Financial Officer
909 E. Las Colinas Blvd.
Irving, Texas 75039
- --------------------------------------
* Insert if appropriate.
<PAGE> 101
EXHIBIT B
FORM OF ACCREDITED INVESTOR TRANSFEREE CERTIFICATE
(Transfers pursuant to Section 3.5(c)(i) or 3.5(c)(ii) of the Indenture
Chase Bank of Texas,
National Association, as Security Registrar
Attn: Corporate Trust Department
Re: i2 Technologies, Inc. 5 1/4% Convertible Subordinated Notes due
December 15, 2006 (the "Securities")
Reference is hereby made to the Indenture dated as of December 10, 1999
(the "Indenture") between i2 Technologies, Inc. a Delaware corporation (the
"Company"), and Chase Bank of Texas, National Association, as Trustee (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings given them in the Indenture.
In connection with our proposed purchase of $__________ aggregate
principal amount of the Securities, which are convertible into shares of common
stock ("Common Stock") of the Company, we confirm that:
1. We understand that the Securities and the Common Stock issuable upon
conversion thereof have not been registered under the U.S. Securities Act of
1933, as amended (the "Securities Act") and may not be sold or otherwise
transferred other than in accordance with the legends set forth thereon, and we
will notify any purchaser of the Securities or Common Stock issuable upon
conversion thereof from us of the above resale restrictions, if then applicable.
We further understand that in connection with any transfer of the Securities of
the Common Stock issuable upon conversion thereof (other than a transfer
pursuant to an effective registration statement under the Securities Act ) by us
that the Company and the Trustee (or the transfer agent in the case of Common
Stock issuable upon conversion thereof) may request, and if so requested we will
furnish, such certificates and other information and, in the case of a transfer
other than pursuant to an effective registration statement or under Rule 144A
under the Act, a legal opinion as they may reasonably require to confirm that
any such transfer complies with the foregoing restrictions.
2. We are able to fend for ourselves in connection with our purchase of
the Securities, we have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of our investment in
the Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or its investment and can afford the complete loss
of such investment.
3. We understand that the Company and others will rely upon the truth
and accuracy of the foregoing acknowledgments, representations, agreements and
warranties and we agree that if any of the acknowledgements, representations,
agreements or warranties made or deemed to have been
<PAGE> 102
made by us by our purchase of the Securities, for our own account or for one or
more accounts as to each of which we exercise sole investment discretion, are no
longer accurate, we shall promptly notify the Company.
4. With respect to the certificates representing Securities we are
purchasing, we understand that such certificates will be in definitive
registered form and that the notification requirement referred to in (1) above
requires that, until the expiration of the holding period with respect to sales
of the Securities under clause (k) of Rule 144 under the Securities Act, that
such Securities will bear a legend substantially to the following effect:
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON THE CONVERSION OF THIS
NOTE HAVE NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH
PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE AND ANY COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE
MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A
PERSON WHOM THE TRANSFEROR REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT ACQUIRING FOR ITS
OWN ACCOUNT OR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, AND (B) IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE STATES OF THE UNITED STATES AND OTHER JURISDICTIONS. THIS NOTE, ANY SHARES
OF COMMON STOCK ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY
BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON
RESALES AND OTHER TRANSFERS OF THIS NOTE AND ANY SUCH SHARES TO REFLECT ANY
CHANGE IN APPLICABLE LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN
PRACTICES RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY.
THE HOLDER OF THIS NOTE AND SUCH SHARES SHALL BE DEEMED BY THE ACCEPTANCE OF
THIS NOTE AND ANY SUCH SHARES TO HAVE AGREED TO ANY SUCH AMENDMENT OR
SUPPLEMENT.
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<PAGE> 103
5. With respect to certificates representing shares of Common Stock
issuable upon conversion of the Securities, we understand that the notification
requirement referred to in (1) above requires that, until the expiration of the
holding period with respect to sales of such Common Stock under clause (k) of
Rule 144 under the Securities Act, such certificates will bear a Restricted
Securities Legend substantially to the effect set forth as Section 2.2 of the
Indenture and that a copy of such legend may be obtained from the Trustee.
6. We are acquiring the Securities purchased by us for investment
purposes, and not for distribution, for our own account or for one or more
accounts as to each of which we exercise sole investment discretion and we are
and each such account is an Institutional Accredited Investor.
7. You and the Company are entitled to rely on this letter and you and
the Company are irrevocably authorized to produce this letter or a copy hereof
to any interested party in any administrative or legal proceeding or official
inquiry with respect to the matters covered hereby.
Very truly yours,
------------------------------
(Name of Purchaser)
By:
------------------------------
Dated:
-------------------------------------
cc: i2 Technologies, Inc.
Attn: Chief Financial Officer
909 E. Las Colinas Blvd.
Irving, Texas 75039
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<PAGE> 104
EXHIBIT B
EXHIBIT C -- Form of Unrestricted Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Restricted Securities Legend pursuant to Section 3.5(b)(ix))
Chase Bank of Texas
National Association, as Security Registrar
RE: 5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE DECEMBER 15, 2006 OF
i2 TECHNOLOGIES, INC. (THE "SECURITIES")
Reference is made to the Indenture, dated as of December 10, 1999 (the
"Indenture"), from i2 Technologies, Inc. (the "Company") to Chase Bank of Texas,
National Association, as Trustee. Terms used herein and defined in the Indenture
or in Rule 144 under the U.S. Securities Act of 1933 (the "Securities Act") are
used herein as so defined.
This certificate relates to $_______ principal amount of Securities,
which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No. __________
CERTIFICATE No(s). _____________
The Person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) it is the sole beneficial owner
of the Specified Securities or (ii) it is acting on behalf of all the beneficial
owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Restricted Securities Legend pursuant to Section
3.5(b)(iv) of the Indenture. In connection with such exchange, the Owner hereby
certifies that the exchange is occurring after a period of at least two years
has elapsed since the date the Specified Securities were acquired from
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<PAGE> 105
the Company or from an "affiliate" (as such term is defined in Rule 144) of the
Company, whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company. The Owner also
acknowledges that any future transfers of the Specified Securities must comply
with all applicable securities laws of the states of the United States and other
jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Initial Purchasers.
Dated:
---------------
(Print the name of the Undersigned, as such term is defined in the third
paragraph of this certificate.)
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
(If the Undersigned is a corporation, partnership or fiduciary, the title
of the Person signing on behalf of the Undersigned must be stated.)
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<PAGE> 1
EXHIBIT 4.3
5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
REGISTRATION RIGHTS AGREEMENT
Dated as of December 10, 1999
Between
i2 TECHNOLOGIES, INC.
as the Company,
and
GOLDMAN, SACHS & CO.
MORGAN STANLEY DEAN WITTER
CREDIT SUISSE FIRST BOSTON,
as Purchasers
<PAGE> 2
i2 TECHNOLOGIES, INC.
5 1/4% CONVERTIBLE SUBORDINATED NOTES
DUE DECEMBER 15, 2006
REGISTRATION RIGHTS AGREEMENT
Dated as of December 10, 1999
Goldman, Sachs & Co.
As representatives of the several Purchasers
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
i2 Technologies, Inc., a Delaware corporation (the "Company"), proposes
to issue and sell to the Purchasers (as defined herein) upon the terms set forth
in a Purchase Agreement (as defined herein) its 5 1/4% Convertible Subordinated
Notes due December 15, 2006 (the "Securities"). As an inducement to the
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Purchasers thereunder, the Company agrees
with the Purchasers, for the benefit of the Holders (as defined herein) from
time to time of the Registrable Securities (as defined herein), as follows:
1. DEFINITIONS. (a) Capitalized terms used herein without
definition shall have their respective meanings set forth in or pursuant to the
Purchase Agreement. As used in this Agreement, the following capitalized defined
terms shall have the following meanings:
"Act" or "Securities Act" means the United States Securities Act of
1933, as amended.
"Affiliate" of any specified Person means any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with such specified Person. For purposes of this definition, control of
a Person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such Person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Common Stock" means the Company's Common Stock, par value $0.00025 per
share.
"Commission" means the United States Securities and Exchange
Commission.
"DTC" means The Depository Trust Company.
"Effective Failure" has the meaning assigned thereto in Section 7
hereof.
<PAGE> 3
"Effective Time" means the date on which the Commission declares the
Shelf Registration Statement effective or on which the Shelf Registration
Statement otherwise becomes effective.
"Effectiveness Period" has the meaning set forth in Section 2(b)(i)
hereof.
"Electing Holder" has the meaning assigned thereto in Section 3(a)(3)
hereof.
"Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
"Expedited Filing" has the meaning assigned thereto in Section 3(a)(1)
hereof.
"Expedited Filing Questionnaire Deadline" has the meaning assigned
thereto in Section 3(a)(1) hereof.
"Holder" means any Person that has a beneficial interest in any global
Security that is a Restricted Security or any beneficial interest in a global
security representing shares of Common Stock issuable upon conversion of a
Security.
"Indenture" means the Indenture dated as of December 10, 1999 between
the Company and Chase Bank of Texas, National Association, as Trustee, as
amended and supplemented from time to time.
"Liquidated Damages" has the meaning assigned thereto in Section 7
hereof.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten offering,
if any, as set forth in Section 6 hereof.
"NASD Rules" means the Rules of the National Association of Securities
Dealers, Inc., as amended from time to time.
"Notice and Questionnaire" means a Notice of Registration Statement and
Selling Securityholder Questionnaire substantially in the form of Exhibit A
hereto.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.
"Press Release" has the meanings given thereto in the Indenture.
"Prospectus" means the prospectus included in any Shelf Registration
Statement (including, without limitation, any preliminary prospectus, any final
prospectus and any prospectus that discloses information previously omitted from
a prospectus filed as part of an effective registration statement in reliance
upon Rule 430A under the Act), included in the Shelf Registration Statement, as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Shelf Registration Statement and by all other amendments and supplements to such
prospectus, including all material incorporated by reference in such
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<PAGE> 4
prospectus and all documents filed after the date of such prospectus by the
Company under the Exchange Act and incorporated by reference therein.
"Purchase Agreement" means the purchase agreement dated December 6,
1999 between the Company and the Purchasers.
"Purchasers" means you, as the Purchasers named in Schedule I to the
Purchase Agreement.
"Registrable Securities" means all or any portion of the Securities
issued from time to time under the Indenture in registered form and the Common
Stock issuable upon conversion or repurchase of such Securities; provided,
however, that a security ceases to be a Registrable Security when it is no
longer a Restricted Security.
"Registration Default" has the meaning assigned thereto in Section 7
hereof.
"Restricted Security" means any Security or share of Common Stock
issuable upon conversion or repurchase thereof except any such Security or such
share of Common Stock which (i) has been effectively registered under the
Securities Act and sold in a manner contemplated by the Shelf Registration
Statement, (ii) has been transferred in compliance with Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable pursuant
to paragraph (k) of such Rule 144 (or any successor provision thereto), or (iii)
has otherwise been transferred and a new Security or share of Common Stock not
subject to transfer restrictions under the Securities Act has been delivered by
or on behalf of the Company in accordance with Article Three of the Indenture.
"Shelf Registration" means a registration effected pursuant to Section
2 hereof.
"Shelf Registration Statement" means a shelf registration statement of
the Company pursuant to the provisions of Section 2 hereof filed with the
Commission which covers some or all of the Registrable Securities, as
applicable, on an appropriate form under Rule 415 under the Act, or any similar
rule that may be adopted by the Commission, amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
(b) Wherever there is a reference in this Agreement to a
percentage of the "principal amount" of Registrable Securities or to a
percentage of Registrable Securities, any Common Stock constituting Registrable
Securities shall be treated as representing the principal amount of Securities
which was surrendered for conversion or exchange in order to receive such number
of shares of Common Stock.
2. SHELF REGISTRATION.
(a) The Company shall, within 90 calendar days following
the First Time of Delivery (as defined in the Purchase Agreement), file with the
Commission a Shelf Registration
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<PAGE> 5
Statement relating to the offer and sale of the Registrable Securities by the
Holders and, thereafter, shall use all reasonable efforts to cause such Shelf
Registration Statement to be declared effective under the Securities Act within
180 calendar days after the First Time of Delivery (as defined in the Purchase
Agreement); provided, however, that the Company may, upon written notice to all
the Holders, postpone having the Shelf Registration Statement declared effective
for a reasonable period not to exceed 90 days if the Company possesses material
non-public information, the disclosure of which would have a material adverse
effect on the Company and its subsidiaries taken as a whole; provided further
however, that no Holder shall be entitled to have the Registrable Securities
held by it covered by such Shelf Registration unless such Holder is an Electing
Holder.
(b) The Company shall use all reasonable efforts:
(i) To keep the Shelf Registration Statement
continuously effective in order to permit the Prospectus forming part thereof to
be usable by Electing Holders for a period of two years from the First Time of
Delivery, or such shorter period that will terminate when there are no
Registrable Securities outstanding (in either case, such period being referred
to herein as the "Effectiveness Period");
(ii) After the Effective Time of the Shelf
Registration Statement, promptly upon the request of any Holder of Registrable
Securities that is not then an Electing Holder, to take any action reasonably
necessary to enable such Holder to use the Prospectus forming a part thereof for
offers and resales of Registrable Securities, including, without limitation, any
action reasonably necessary to identify such Holder as a selling securityholder
in the Shelf Registration Statement; provided, however, that nothing in this
subparagraph shall relieve such Holder of the obligation to return a completed
and signed Notice and Questionnaire to the Company in accordance with Sections
3(a)(1) or 3(a)(2) hereof; and
(iii) If at any time, the Securities, pursuant to
Article Eleven of the Indenture, are convertible into securities other than
shares of Common Stock, the Company shall, or shall cause any successor under
the Indenture to, cause such securities to be included in the Shelf Registration
Statement no later than the date on which the Securities may then be convertible
into such securities.
The Company shall be deemed not to have used all reasonable efforts to
keep the Shelf Registration Statement effective during the Effectiveness Period
if the Company voluntarily takes any action that would result in Electing
Holders not being able to offer and sell any of their Registrable Securities
during such period, unless (i) such action is required by applicable law or
regulation, or (ii) the Company determines based on the advice of counsel that
it is advisable to disclose in the Shelf Registration Statement a financing,
acquisition or other corporate transaction or other material event or
circumstance affecting the Company or its securities, and the Board of Directors
of the Company (or an executive officer of the Company duly authorized for such
purpose) shall have determined in good faith that such disclosure at such time
is not in the best interests of the Company and its stockholders, and, in the
case of clause (i) above, the Company thereafter promptly complies with the
requirements of paragraph 3(h) below.
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<PAGE> 6
3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) (1) If the Company expects to file and obtain
the effectiveness of a Shelf Registration Statement within 30 days of the date
hereof (an "Expedited Filing"), it shall (x) mail, as promptly as reasonably
practicable after the date hereof to the Holders of Registrable Securities, a
Notice and Questionnaire with a response deadline of 30 days from the date of
such Notice (the "Expedited Filing Questionnaire Deadline"), and (y) as promptly
as reasonably practicable after the response deadline but in any event no later
than 10 days thereafter, prepare a Prospectus supplement (and if required file
an amendment or a supplement to the Shelf Registration Statement) or take such
other measures, if any, as are necessary to include in the Shelf Registration
Statement the Registrable Securities of Electing Holders. If the Company does
not intend to make an Expedited Filing, it shall mail the Notice and
Questionnaire to the Holders of Registrable Securities not less than 30 calendar
days prior to the time the Company intends in good faith to have the Shelf
Registration Statement declared effective. Subject to Section 3(a)(2) hereof, no
Holder of Registrable Securities shall be entitled to be named as a selling
securityholder in the Shelf Registration Statement as of the Effective Time (or
in the first Prospectus supplement filed thereafter in the case of an Expedited
Filing), and no Holder of Registrable Securities shall be entitled to use the
Prospectus forming a part thereof for offers and resales of Registrable
Securities at any time, unless such Holder has returned a completed and signed
Notice and Questionnaire to the Company by the deadline for response set forth
therein; provided, however, that Holders of Registrable Securities shall have at
least 28 calendar days from the date on which the Notice and Questionnaire is
first mailed to such Holders to return a completed and signed Notice and
Questionnaire to the Company.
(2) After the Effective Time of the Shelf
Registration Statement (or the Expedited Filing Questionnaire Deadline in the
case of an Expedited Filing), the Company shall, upon the request of any Holder
of Registrable Securities that is not then an Electing Holder, as promptly as
reasonably practicable, send a Notice and Questionnaire to such Holder. The
Company shall not be required to take any action to name such Holder as a
selling securityholder in the Shelf Registration Statement until such Holder has
returned a completed and signed Notice and Questionnaire to the Company.
Following its receipt of such Notice and Questionnaire, the Company will
reasonably promptly include the Registrable Securities covered thereby in the
Shelf Registration Statement (if not previously included).
(3) The term "Electing Holder" shall mean any
Holder of Registrable Securities that has returned a completed and signed Notice
and Questionnaire to the Company in accordance with Section 3(a)(1) or 3(a)(2)
hereof.
(b) The Company shall, as promptly as reasonably
practicable, take such action as may be necessary so that (i) each of the Shelf
Registration Statement and any amendment thereto and any Prospectus forming part
thereof and any amendment or supplement thereto (and each report or other
document incorporated therein by reference in each case) complies in all
material respects with the Securities Act and the Exchange Act and the
respective rules and regulations thereunder, (ii) each of the Shelf Registration
Statement and any amendment thereto does not, when it becomes effective, contain
an untrue statement of a material fact or omit to state a material fact required
to be stated
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<PAGE> 7
therein or necessary in order to make the statements therein not misleading, and
(iii) each of the Prospectus forming part of the Shelf Registration Statement,
and any amendment or supplement to such Prospectus, does not include an untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(c) (i) The Company shall, as promptly as reasonably
practicable, advise each Electing Holder and shall confirm such advice in
writing if so requested by any such Electing Holder:
(1) when the Shelf Registration Statement and
any amendment thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has become
effective and issue a Press Release indicating the same;
(2) of any request by the Commission for
amendments or supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information;
(3) of the issuance by the Commission of any
stop order suspending effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose; and
(4) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
securities included in the Shelf Registration Statement for sale in any
jurisdiction or the initiation of any proceeding for such purpose.
(ii) The Company shall, as promptly as reasonably
practicable, advise DTC and the trustee under the Indenture of the happening of
any event or the existence of any state of facts that requires the making of any
changes in the Shelf Registration Statement or the Prospectus included therein
so that, as of such date, the Shelf Registration Statement and the Prospectus do
not contain an untrue statement of a material fact and do not omit to state a
material fact required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the circumstances under
which they were made) not misleading (which advice shall be accompanied by an
instruction to suspend the use of the Prospectus until the requisite changes
have been made).
(d) The Company shall use all reasonable efforts to
prevent the issuance, and if issued to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the earliest
possible time.
(e) The Company shall furnish to each Electing Holder,
without charge, at least one copy of such Shelf Registration Statement and any
post-effective amendment thereto, including financial statements and schedules,
and, if the Electing Holder so requests in writing, all reports, other documents
and exhibits that are filed with or incorporated by reference in the Shelf
Registration Statement. The Company shall use all reasonable efforts to take
into account and, if appropriate, reflect in an amendment to the Shelf
Registration Statement such comments on the Shelf Registration Statement as
initially filed as the Electing Holders and their counsel may reasonably
propose.
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<PAGE> 8
(f) The Company shall, during the Effectiveness Period,
deliver to each Electing Holder, without charge, as many copies of the
Prospectus (including each preliminary Prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such Electing
Holder may reasonably request; and the Company consents (except during the
continuance of any event described in Section 3(c)(ii)) to the use of the
Prospectus or any amendment or supplement thereto by each of the Electing
Holders in connection with the offering and sale of the Registrable Securities
covered by the Prospectus or any amendment or supplement thereto during the
Effectiveness Period. The Company shall use all reasonable efforts to take into
account and, if appropriate, reflect in a Prospectus supplement or amendment
such comments as the Electing Holders and their counsel may reasonably propose.
(g) Prior to any offering of Registrable Securities
pursuant to the Shelf Registration Statement, the Company shall (i) register or
qualify or cooperate with the Electing Holders and their respective counsel in
connection with the registration or qualification of such Registrable Securities
for offer and sale under the securities or blue sky laws of such jurisdictions
as any such Electing Holders reasonably request, (ii) keep such registrations or
qualifications in effect and comply with such laws so as to permit the
continuance of offers and sales in such jurisdictions for so long as may be
necessary to enable any Electing Holder or underwriter, if any, to complete its
distribution of Registrable Securities pursuant to the Shelf Registration
Statement and (iii) take any and all other actions necessary or advisable to
enable the disposition in such jurisdictions of such Registrable Securities;
provided, however, that in no event shall the Company be obligated to (a)
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise be required to so qualify but for this
Section 3(g), (b) file any general consent to service of process in any
jurisdiction where it is not as of the date thereof then so subject or (c)
subject itself to taxation in any jurisdiction where it is not as of the date
thereof then so subject.
(h) Upon the occurrence of any event contemplated by
paragraph 3(c)(ii) above, the Company shall as promptly as reasonably
practicable prepare a post-effective amendment or supplement to the Shelf
Registration Statement or the Prospectus, or any document incorporated therein
be reference, or file any other required document so that, as thereafter
delivered to purchasers of the Registrable Securities included therein, the
Prospectus will not include an untrue statement of a material fact or omit to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, if the Company determines based upon the advice of counsel that it is
advisable to disclose in the Shelf Registration Statement a financing,
acquisition or other corporate transaction or other material event affecting the
Company or its securities, and the Board of Directors of the Company (or an
executive officer of the Company duly authorized for such purpose) shall have
determined in good faith that such disclosure would not be in the best interests
of the Company and its stockholders, the Company shall not be required to
prepare and file such amendment, supplement or document for such period as the
Board of Directors of the Company shall have determined in good faith is in the
best interests of the Company and its stockholders. If the Electing Holders are
notified of the occurrence of any event contemplated by paragraph 3(c)(ii)
above, the Electing Holders shall suspend the use of the Prospectus until the
requisite changes to the Prospectus have been made.
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<PAGE> 9
(i) Not later than the Effective Time of the Shelf
Registration Statement, the Company shall provide a CUSIP number for the
Registrable Securities that are debt securities.
(j) The Company shall use its best efforts to comply with
all applicable rules and regulations of the Commission and shall make generally
available to its security holders as soon as practicable, but in any event not
later than eighteen months after (i) the effective date (as defined in Rule
158(c) under the Securities Act) of the Shelf Registration Statement and (ii)
the effective date of each post-effective amendment to the Shelf Registration
Statement and (iii) the date of each filing by the Company with the Commission
of an Annual Report on Form 10-K or 10-KSB that is incorporated by reference in
the Shelf Registration Statement, an earnings statement of the Company and its
subsidiaries satisfying the provisions of Section 11(a) of the Securities Act.
(k) The Company shall cause the Indenture and the
Securities to be qualified under the Trust Indenture Act in a timely manner; and
in connection with such qualification, the Company shall cooperate with the
Trustee under the Indenture and the Holders (as defined in the Indenture) to
effect such changes to the Indenture as may be required for such Indenture to be
so qualified in accordance with the terms of the Trust Indenture Act; and the
Company shall execute and use all reasonable efforts to cause the Trustee to
execute, all documents that may be required to effect such changes and all other
forms and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner.
(l) In the event of an underwritten offering conducted
pursuant to Section 6 hereof, the Company shall, if requested, promptly include
or incorporate in a Prospectus supplement or post-effective amendment to the
Shelf Registration Statement such information as the Managing Underwriters
reasonably agree should be included therein and to which the Company does not
reasonably object and shall make all required filings of such Prospectus
supplement or post-effective amendment as soon as reasonably practicable after
it is notified of the matters to be included or incorporated in such Prospectus
supplement or post-effective amendment.
(m) Upon request, the Company shall enter into such
customary agreements (including an underwriting agreement in customary form in
the event of an underwritten offering conducted pursuant to Section 6 hereof)
and take all other appropriate actions in order to expedite or facilitate the
registration and disposition of the Registrable Securities, and in connection
therewith, if an underwriting agreement is entered into, cause the same to
contain indemnification and contribution provisions and procedures substantially
identical to those set forth in Section 5 (or such other provisions and
procedures acceptable to the Managing Underwriters, if any) with respect to all
parties to be indemnified pursuant to Section 5 hereof in respect of such
underwritten offering.
(n) The Company shall, upon request:
(i) make reasonably available for inspection by
one representative of the Electing Holders designated in writing by the Holders
of a majority of the Registrable Securities to be registered thereunder, any
underwriter participating in any underwritten offering pursuant to Section 6
hereof, and any attorney, accountant or other agent retained by such
representative or any such
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<PAGE> 10
underwriter all relevant financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, as is customary
for similar due diligence examinations;
(ii) cause the Company's officers, directors and
employees to make reasonably available for inspection all relevant information
reasonably requested by such representative or any such underwriter, attorney,
accountant or agent in connection with any such Shelf Registration Statement, in
each case, as is customary for similar due diligence examinations; provided,
however, that any information that is designated in writing by the Company, in
good faith, as confidential at the time of delivery of such information shall be
kept confidential by such representative, any Holders or any such underwriter,
attorney, accountant or agent, unless (x) such disclosure is made in connection
with a court proceeding or required by law, or (y) such information becomes
available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided, further, that as
promptly as reasonably practicable before disclosure is made pursuant to clause
(x) above, the Company is given prior written notice;
(iii) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, make such representations and warranties
to the Electing Holders and the underwriters, if any, in form, substance and
scope as are customarily made by the Company to underwriters in primary
underwritten offerings and covering matters including, but not limited to, those
set forth in the Purchase Agreement;
(iv) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain opinions of counsel to the
Company and updates thereof (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the Managing Underwriters, if
any) addressed to each Electing Holder and the underwriters, if any, covering
such matters as are customarily covered in opinions requested in underwritten
offerings and such other matters as may be reasonably requested by such Electing
Holders and underwriters (it being agreed that the matters to be covered by such
opinion or written statement by such counsel delivered in connection with such
opinions shall include in customary form, without limitation, as of the date of
the opinion and as of the effective date of the Shelf Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from such Shelf Registration Statement and the Prospectus included therein, as
then amended or supplemented, including the documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading);
(v) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, obtain "cold comfort" letters and
updates thereof from the independent public accountants of the Company (and, if
necessary, any other independent public accountants of any subsidiary of the
Company or of any business acquired by the Company for which financial
statements and financial data are, or are required to be, included in the Shelf
Registration Statement), addressed to each Electing Holder (if such holder has
provided such letter, representations, or documentation, if any, required for
such "cold comfort" letter to be so addressed) and the underwriters, if any, in
customary form and covering matters of the type customarily covered in "cold
comfort" letters in connection with primary underwritten offerings;
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<PAGE> 11
(vi) in connection with any underwritten offering
conducted pursuant to Section 6 hereof, deliver such documents and certificates
as may be reasonably requested by any such Electing Holders and the Managing
Underwriters, if any, including those to evidence compliance with Section 3(h)
hereof and with any customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
(o) The Company will use all reasonable efforts to cause
the shares of Common Stock issuable upon conversion of the Securities to be
quoted on the Nasdaq National Market or other trading system or stock exchange
on which the Common Stock primarily trades on or prior to the Effective Time of
any Shelf Registration Statement hereunder.
(p) In the event that any broker-dealer registered under
the Exchange Act shall be an "affiliate" (as defined in Rule 2720(b)(1) of the
NASD Rules (or any successor provision thereto)) of the Company or has a
"conflict of interest" (as defined in Rule 2720(b)(7) of the NASD Rules (or any
successor provision thereto)) and such broker-dealer shall underwrite,
participate as a member of an underwriting syndicate or selling group or assist
in the distribution of any Registrable Securities covered by the Shelf
Registration Statement, whether as a Holder of such Registrable Securities or as
an underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, assist such broker or dealer in respect thereof, or
otherwise, the Company shall assist such broker-dealer in complying with the
requirements of the NASD Rules, including, without limitation, by (A) engaging a
"qualified independent underwriter" (as defined in Rule 2720(b)(15) of the NASD
Rules (or any successor provision thereto)) to participate in the preparation of
the Shelf Registration Statement relating to such Registrable Securities, to
exercise usual standards of due diligence in respect thereto and to recommend
the public offering price of such Registrable Securities, (B) indemnifying any
such qualified independent underwriter to the extent of the indemnification of
underwriters provided in Section 5 hereof, and (C) providing such information to
such broker-dealer as may be required in order for such broker-dealer to comply
with the requirements of the NASD Rules.
(q) The Company shall use all reasonable efforts to take
all other steps necessary to effect the registration, offering and sale of the
Registrable Securities covered by the Shelf Registration Statement contemplated
hereby.
4. REGISTRATION EXPENSES. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 2, 3 and 6 hereof, subject to the provisions of Section 6 with respect
to the payment of fees and expenses in connection with an underwritten offering.
5. INDEMNIFICATION AND CONTRIBUTION.
(a) Indemnification by the Company. In connection with
any Shelf Registration Statement, the Company shall indemnify and hold harmless
each Electing Holder and each underwriter, selling agent or other securities
professional, if any, who facilitates the disposition of Registrable Securities,
and each of their respective officers and directors and each person, if any, who
controls such Electing Holder, underwriter, selling agent or other securities
professional within the
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<PAGE> 12
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act
(each such person being sometimes referred to herein as an "Indemnified Person")
against any losses, claims, damages or liabilities, joint or several, to which
such Indemnified Person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based on any untrue statement or alleged
untrue statement of a material fact contained in any Shelf Registration
Statement (or any amendment thereto) under which such Registrable Securities are
registered under the Securities Act, or any Prospectus contained therein or
furnished by the Company to any Indemnified Person, or any amendment or
supplement thereto, or arise out of or are based upon the omission or alleged
omission therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading (in the case of the Prospectus, in
light of the circumstances under which they were made), and the Company hereby
agrees to reimburse such Indemnified Person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such action or claim as such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in such Shelf Registration Statement or Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by such Indemnified Person expressly for
use therein and provided, further, that the Company shall not be liable to any
Indemnified Person under the indemnity agreement in any such case with respect
to any preliminary prospectus to the extent that any such loss, claim, damage or
liability of such Indemnified Person results from the fact that such Indemnified
Person sold Registrable Securities to a person as to whom it shall be
established that there was not sent or given, at or prior to the written
confirmation of such sale, a copy of the Prospectus (excluding documents
incorporated by reference) or the Prospectus as then amended or supplemented
(excluding documents incorporated by reference) in any case where such delivery
is required by the Act if the Company has previously furnished copies thereof
upon request therefor in sufficient quantity to such Indemnified Person and the
loss, claim, damage or liability of such Indemnified Person results from an
untrue statement or omission of a material fact contained in the preliminary
prospectus which was identified in writing at such time to such Indemnified
Person and corrected in Prospectus (excluding any document incorporated by
reference) or in the Prospectus as then amended or supplemented (excluding
documents incorporated by reference) and such correction would have cured the
defect giving rise to such loss, claim, damage or liability.
(b) Indemnification by the Holders and Any Agents and
Underwriters. Each Electing Holder agrees, as a consequence of the inclusion of
any such holder's Registrable Securities in such Shelf Registration Statement,
and each underwriter, selling agent or other securities professional, if any,
who facilitates the disposition of Registrable Securities shall agree, as a
consequence of facilitating such disposition of Registrable Securities,
severally and not jointly, to (i) indemnify and hold harmless the Company, its
directors, officers who sign any 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 losses, claims,
damages or liabilities to which the Company or such other persons may become
subject, under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out
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<PAGE> 13
of or are based upon an untrue statement or alleged untrue statement of a
material fact contained in such Shelf Registration Statement or Prospectus, or
any amendment or supplement thereto, or arise out of or are based upon an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading (in
the case of the Prospectus, in light of the circumstances under which they were
made), in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Electing Holder, underwriter, selling agent or other securities
professional expressly for use therein and (ii) reimburse the Company for any
legal or other expenses reasonably incurred by the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Notices and Claims. Promptly after receipt by an
indemnified party under subsection (a) or (b) above of notice of the
commencement of any action, such indemnified party shall, if a claim in respect
thereof is to be made against an indemnifying party under this Section 5, notify
such indemnifying party in writing of the commencement thereof; but the omission
to so notify the indemnifying party shall not relieve it from any liability
which it may have to the indemnified party otherwise than under this Section 5.
In case any such action shall be brought against any indemnified party and it
shall notify an indemnifying party of the commencement thereof, such
indemnifying party shall be entitled to participate therein and, to the extent
that it shall wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party) and, after notice from
the indemnifying party of its election so to assume the defense thereof, such
indemnifying party shall not be liable to such indemnified party under this
Section 5 for any legal expenses of other counsel or any other expenses, in each
case subsequently incurred by such indemnified party, in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment with
respect to, any pending or threatened action or claim in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified party is an actual party to such action or claim) unless such
settlement, compromise or judgment (i) includes an unconditional release of the
indemnified party from all liability arising out of such action or claim and
(ii) does not include a statement as to, or an admission of, fault, culpability
or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If the indemnification provided for in
this Section 5 is unavailable to or insufficient to hold harmless an indemnified
party under subsection (a) or (b) of this Section 5 in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages or
liabilities (or actions in respect thereof) in such proportion as is appropriate
to reflect the relative fault of the indemnifying party and the indemnified
party in connection with the statements or omissions which resulted in such
losses, claims, damages and liabilities (or actions in respect thereof), as well
as any other relevant equitable considerations. The relative fault of such
indemnifying party and indemnified party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a
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<PAGE> 14
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such indemnifying party or by such
indemnified party, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 5(d) were determined by pro rata allocation (even if
the Electing Holders or any underwriters, selling agents or other securities
professionals or all of them were treated as one entity for such purpose) or by
any other method of allocation that does not take into account the equitable
considerations referred to in this Section 5(d). The amount paid or payable by
an indemnified party as a result of the losses, claims, damages or liabilities
(or actions in respect thereof) referred to above shall be deemed to include any
legal or other fees or expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The obligations of the Electing
Holders and any underwriters, selling agents or other securities professionals
in this Section 5(d) to contribute shall be several in proportion to the
percentage of principal amount of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.
(e) Notwithstanding any other provision of this Section
5, in no event shall any Electing Holder be required to undertake liability to
any person under this Section 5 for any amounts in excess of the dollar amount
of the proceeds received by such Electing Holder from the sale of such Electing
Holder's Registrable Securities (after deducting any fees, discounts and
commissions applicable thereto) pursuant to any Shelf Registration Statement
under which such Registrable Securities are registered under the Securities Act.
(f) The obligations of the Company under this Section 5
shall be in addition to any liability which the Company may otherwise have to
any Indemnified Person and the obligations of any Electing Holder, underwriter,
selling agent or other securities professional under this Section 5 shall be in
addition to any liability which any such Electing Holder, underwriter, selling
agent or other securities professional shall otherwise have to the Company. The
remedies provided in this Section 5 are not exclusive and shall not limit any
rights or remedies which may otherwise be available to an indemnified party at
law or in equity.
6. UNDERWRITTEN OFFERING. Any Electing Holder who desires to do
so may sell Registrable Securities (in whole or in part) in an underwritten
offering, provided that (i) the Electing Holders of at least 25% in aggregate
principal amount of the Registrable Securities then covered by the Shelf
Registration Statement shall request such an offering and (ii) at least such
aggregate principal amount of such Registrable Securities shall be included in
such offering, and provided, further, that the Company shall not be obligated to
cooperate with more than one underwritten offering. Upon receipt of such a
request, the Company shall provide all Holders of Registrable Securities written
notice of the request, which notice shall inform such Holders that they have the
opportunity to participate in the offering. In any such underwritten offering,
the investment banker or bankers and manager or managers that will administer
the offering will be selected by, and the underwriting arrangements with respect
thereto will be approved by, the Holders of a majority of the Registrable
Securities to be included in such offering; provided, however, that such
investment
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<PAGE> 15
bankers and managers and underwriting arrangements must be reasonably
satisfactory to the Company. No Holder may participate in any underwritten
offering contemplated hereby unless (a) such Holder agrees to sell such Holder's
Registrable Securities to be included in the underwritten offering in accordance
with any approved underwriting arrangements, (b) such Holder completes and
executes all reasonable questionnaires, powers of attorney, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such approved underwriting arrangements, and (c) if such Holder is not
then an Electing Holder, such Holder returns a completed and signed Notice and
Questionnaire to the Company in accordance with Section 3(a)(2) hereof within a
reasonable amount of time before such underwritten offering. The holders
participating in any underwritten offering shall be responsible for any
underwriting discounts and commissions and fees and, subject to the following
sentence, expenses of their own counsel. The Company will pay the fees and
expenses of a single counsel selected by a plurality of all Electing Holders who
own an aggregate of not less than twenty-five percent (25%) of the Registrable
Securities included in the underwritten offering. The Company shall pay all
expenses customarily borne by issuers in an underwritten offering, including but
not limited to filing fees, the fees and disbursements of its counsel and
accountants and any printing expenses incurred in connection with such
underwritten offering. Notwithstanding the foregoing or the provisions of
Sections 3(l) and 3(m) hereof, upon receipt of a request from the Managing
Underwriters or a representative of Holders of a majority of the Registrable
Securities to be included in an underwritten offering to prepare and file an
amendment or supplement to the Shelf Registration Statement and Prospectus in
connection with an underwritten offering, the Company may delay the filing of
any such amendment or supplement for up to 90 days if the Board of Directors of
the Company (or an executive officer of the Company duly authorized for such
purpose) shall have determined in good faith that the Company has a valid
business reason for such delay.
7. LIQUIDATED DAMAGES. Pursuant to Section 2(a) hereof, the
Company may, upon written notice to all the Holders, postpone having the Shelf
Registration Statement declared effective for a reasonable period not to exceed
90 days if the Company possesses material non-public information, the disclosure
of which would have a material adverse effect on the Company and its
subsidiaries taken as a whole. Notwithstanding any such postponement, if (i) on
or prior to the 90th day following the date of the First Time of Delivery (as
defined in the Purchase Agreement), a Shelf Registration Statement has not been
filed with the Commission or (ii) on or prior to the 180th day following the
date of the First Time of Delivery (as defined in the Purchase Agreement), such
Shelf Registration Statement is not declared effective by the Commission (each,
a "Registration Default"), the Company shall be required to pay liquidated
damages ("Liquidated Damages"), from and including the day following such
Registration Default until such Shelf Registration Statement is either so filed
or so filed and subsequently declared effective, as applicable. Such Liquidated
Damages shall be paid semi-annually in arrears, with the first semi-annual
payment due on the first Interest Payment Date (as defined in the Indenture), as
applicable, following the date of such Registration Default, and will accrue at
a rate per annum equal to an additional one-quarter of one percent (0.25%) of
the principal amount of Restricted Securities, to and including the 90th day
following such Registration Default and one-half of one percent (0.5%) thereof
from and after the 91st day following such Registration Default. In the event
that the Shelf Registration Statement ceases to be effective (or the Holders of
Registrable Securities are otherwise prevented or restricted by the Company from
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<PAGE> 16
effecting sales pursuant thereto) during the Effectiveness Period (an "Effective
Failure") for more than 45 days, whether or not consecutive, in any 90 day
period, or more than 90 days, whether or not consecutive, during any
twelve-month period, then the Company shall pay Liquidated Damages in the amount
of one-half of one percent (0.5%) per annum from the 46th day of the applicable
90 day period or the 90th day of the applicable twelve-month period, as the case
may be, that such Shelf Registration Statement ceases to be effective (or the
Holders of Registrable Securities are otherwise prevented or restricted by the
Company from effecting sales pursuant thereto) until such time as the Effective
Failure is cured. For the purpose of determining an Effective Failure, days on
which the Company has been obligated to pay Liquidated Damages in accordance
with the foregoing in respect of a prior Effective Failure within the applicable
90 day or twelve-month period, as the case may be, shall not be included. The
Liquidated Damages as set forth in this Section 7 shall be the exclusive
monetary remedy available to the Holders of Registrable Securities for such
Registration Default or Effective Failure. In no event shall the Company be
required to pay Liquidated Damages in excess of the applicable maximum amount of
one-half of one percent (0.5%) set forth above, regardless of whether one or
multiple Registration Defaults exist.
8. MISCELLANEOUS.
(a) Other Registration Rights. The Company may grant
registration rights that would permit any Person that is a third party the right
to piggy-back on any Shelf Registration Statement, provided that if the Managing
Underwriters, if any, of any underwritten offering conducted pursuant to Section
6 hereof notifies the Company and the Electing Holders that the total amount of
securities which the Electing Holders and the holders of such piggy-back rights
intend to include in any Shelf Registration Statement is so large as to
materially threaten the success of such offering (including the price at which
such securities can be sold), then the amount, number or kind of securities to
be offered for the account of holders of such piggy-back rights will be reduced
to the extent necessary to reduce the total amount of securities to be included
in such offering to the amount, number or kind recommended by the Managing
Underwriters prior to any reduction in the amount of Registrable Securities to
be included in such Shelf Registration Statement.
(b) Amendments and Waivers. The provisions of this
Agreement, including the provisions of this Section 8(b), may be amended, and
waivers or consents to departures from the provisions hereof may be given, only
by a written instrument duly executed by the Company and the Holders of a
majority in aggregate principal amount of Registrable Securities then
outstanding. Each Holder of Registrable Securities outstanding at the time of
any such amendment, waiver or consent or thereafter shall be bound by any
amendment, waiver or consent effected pursuant to this Section 8(b), whether or
not any notice, writing or marking indicating such amendment, waiver or consent
appears on the Registrable Securities or is delivered to such Holder.
(c) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a Holder, at the most current address
given by such Holder to the Company in accordance with the provisions of this
Section 8(c);
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<PAGE> 17
(2) if to the Purchasers, initially at the
address set forth in the Purchase Agreement; and
(3) if to the Company, initially at its address
set forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received.
The Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the successors and assigns of each of the
parties and the Holders, including, without the need for an express assignment
or any consent by the Company thereto, subsequent Holders of Registrable
Securities. The Company hereby agrees to extend the benefits of this Agreement
to any Holder of Registrable Securities and any such Holder may specifically
enforce the provisions of this Agreement, and shall be bound by all of the terms
and provisions of this Agreement, as if an original party hereto.
(e) Counterparts. This agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. This agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to any provisions relating to conflicts of laws.
(h) Severability. In the event that any one or more of
the provisions contained herein, or the application thereof in any
circumstances, is held invalid, illegal or unenforceable in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way
impaired or affected thereby, it being intended that all of the rights and
privileges of the parties shall be enforceable to the fullest extent permitted
by law.
(i) Survival. The respective indemnities, agreements,
representations, warranties and other provisions set forth in this Agreement or
made pursuant hereto shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Electing Holder, any director, officer or partner of such Electing
Holder, any agent or underwriter, any director, officer or partner of such agent
or underwriter, or any controlling person of any of the foregoing, and shall
survive the transfer and registration of the Registrable Securities of such
Holder.
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<PAGE> 18
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
i2 Technologies, Inc.
By: /s/ WILLIAM M. BEECHER
---------------------------------------------
Name: William M. Beecher
Title: Executive Vice President, Operations
Chief Financial Officer
The foregoing Registration Rights Agreement is hereby confirmed and
accepted as of the date first above written.
Goldman, Sachs & Co.
By: /S/ GOLDMAN, SACHS & CO.
--------------------------------------------
(Goldman, Sachs & Co.)
On behalf of each of the Purchasers
[Signature Page to Registration Rights Agreement]
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<PAGE> 19
Exhibit A
i2 TECHNOLOGIES, INC.
INSTRUCTION TO DTC PARTICIPANTS
(DATE OF MAILING)
URGENT -- IMMEDIATE ATTENTION REQUESTED
DEADLINE FOR RESPONSE: (DATE)
The Depository Trust Company ("DTC") has identified you as a DTC
Participant through which beneficial interests in i2 Technologies, Inc. (the
"Company") 5 1/4% Convertible Subordinated Notes due December 15, 2006 (the
"Securities") are held.
The Company is in the process of registering the Securities under the
Securities Act of 1933, as amended, for resale by the beneficial owners thereof.
In order to have their Securities included in the registration statement,
beneficial owners, INCLUDING BENEFICIAL OWNERS RESIDENT OUTSIDE THE UNITED
STATES, must complete and return the enclosed Notice of Registration Statement
and Selling Securityholder Questionnaire.
IT IS IMPORTANT THE BENEFICIAL OWNERS OF THE SECURITIES RECEIVE A COPY
OF THE ENCLOSED MATERIALS AS SOON AS POSSIBLE as their rights to have the
Securities included in the registration statement depend upon their returning
the Notice and Questionnaire [DEADLINE FOR RESPONSE]. Please forward a copy of
the enclosed materials to each beneficial owner that holds interests in the
Securities through you. If you require more copies of the enclosed materials or
have any questions regarding this matter, please contact [Name, address and
telephone number of contact at the Company].
<PAGE> 20
i2 TECHNOLOGIES, INC.
NOTICE OF REGISTRATION STATEMENT AND SELLING SECURITYHOLDER
QUESTIONNAIRE
(DATE)
i2 Technologies, Inc. (the "Company") has filed or intends shortly to
file with the United States Securities and Exchange Commission (the
"Commission") a registration statement on form S-3 (the "Shelf Registration
Statement") for the registration and resale under the United States Securities
Act of 1933, as amended (the "Securities Act"), of the Company's 5 1/4%
Convertible Subordinated Notes due December 15, 2006 (CUSIP No. 465754AD1) (the
"Notes"), and Common Stock, par value $0.00025 per share, of the Company
issuable upon conversion or repurchase thereof, in accordance with the terms of
the Registration Rights Agreement dated as of December 10, 1999 (the
"Registration Rights Agreement") between the Company and the purchasers named
therein (the "Purchasers"). A copy of the Registration Rights Agreement is
attached hereto. All capitalized terms not otherwise defined herein shall have
the meanings ascribed thereto in the Registration Rights Agreement.
In order to have Registrable Securities included in the Shelf
Registration Statement (or a supplement or amendment thereto), this Notice of
Registration Statement and Selling Securityholder Questionnaire ("Notice and
Questionnaire") must be completed, executed and delivered to the Company at the
address set forth herein for receipt ON OR BEFORE [insert date that is 30 days
from the Notice Date] (the "Questionnaire Deadline"). Unless the Company
otherwise consents, beneficial owners of Registrable Securities who do not
complete, execute and return this Notice and Questionnaire by such date (i) will
not be named as selling securityholders in the Shelf Registration Statement (or
a supplement or amendment thereto) and related Prospectus and (ii) may not sell
their Registrable Securities pursuant thereto. Beneficial owners of Registrable
Securities not having returned a Notice and Questionnaire by the Questionnaire
Deadline may, however, receive another Notice and Questionnaire from the Company
upon request. Following its receipt of a completed Notice and Questionnaire in
return, the Company will reasonably promptly include the Registrable Securities
covered thereby in the Shelf Registration Statement.
Certain legal consequences arise from being named as a selling
securityholder in the Shelf Registration Statement and related Prospectus.
Accordingly, Holders and beneficial owners of Registrable Securities are advised
to consult their own securities law counsel regarding the consequences of being
named or not being named as a selling securityholder in the Shelf Registration
Statement and related Prospectus.
The term "Registrable Securities" is defined in the Registration Rights
Agreement to mean all or any portion of the Notes issued under the Indenture and
the Common Stock issuable upon conversion or repurchase thereof; provided,
however, that a security ceases to be a Registrable Security when it is no
longer a Restricted Security.
<PAGE> 21
The term "Restricted Security" is defined in the Registration Rights
Agreement to mean any Note or share of Common Stock issuable upon conversion or
repurchase thereof except any such Note or share of Common Stock which (i) has
been effectively registered under the Securities Act and sold in a manner
contemplated by the Shelf Registration Statement, (ii) has been transferred in
compliance with Rule 144 under the Securities Act (or any successor provision
thereto) or is transferable pursuant to paragraph (k) of such Rule 144 (or any
successor provision thereto), or (iii) has otherwise been transferred and a new
Note or share of Common Stock not subject to transfer restrictions under the
Securities Act has been delivered by or on behalf of the Company in accordance
with Article Three of the Indenture.
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<PAGE> 22
ELECTION
The undersigned holder (the "Selling Securityholder") of Registrable
Securities hereby elects to include in the Shelf Registration Statement the
Registrable Securities beneficially owned by it and listed below in Item (3)
(unless otherwise specified under Item (3)). The undersigned, by signing and
returning this Notice and Questionnaire, agrees to be bound with respect to such
Registrable Securities by the terms and conditions of this Notice and
Questionnaire and the Registration Rights Agreement, including, without
limitation, Section 5 of the Registration Rights Agreement, as if the
undersigned Selling Securityholder were an original party thereto.
Upon any sale of Registrable Securities pursuant to the Shelf
Registration Statement, the undersigned Selling Securityholder will be required
to deliver to the Company and the Trustee under the Indenture the Notice of
Transfer completed and signed set forth in Appendix I to the Notice and
Questionnaire and hereby undertakes to do so.
The undersigned Selling Securityholder hereby provides the following
information to the Company and represents and warrants that such information is
accurate and complete:
<PAGE> 23
QUESTIONNAIRE
(1) (a) Full Legal Name of Selling Securityholder:
--------------------------------------------------------------
(b) Full Legal Name of Registered Holder (if not the same as in
(a) above) of Registrable Securities Listed in (3) Below:
--------------------------------------------------------------
(c) Full Legal Name of DTC Participant (if applicable and if not
the same as (b) above) Through Which Registrable Securities
Listed in (3) Below are Held:
--------------------------------------------------------------
(2) Address for Notices to Selling Securityholder:
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
Telephone:
--------------------------------------------------------------
Fax:
--------------------------------------------------------------------
Contact:
--------------------------------------------------------------
(3) Beneficial Ownership of Registrable Securities:
Except as set forth below, the undersigned Selling Securityholder does
not beneficially own any Notes or Common Stock previously issued upon
conversion or repurchase of any Note.
Principal amount of Notes beneficially owned:
--------------------------
Number of shares of Common Stock beneficially owned and issued to date
upon conversion or repurchase of Notes (if any):
-----------------------
Principal amount of Notes which the undersigned wishes to be included
in the Shelf Registration Statement:
-----------------------------------
Number of shares of Common Stock (if any) issued upon conversion or
repurchase of Registrable Securities which are to be included in the
Shelf Registration Statement:
------------------------------------------
(4) Other shares of Common Stock or other Notes of the Company Owned by the
Selling Securityholder:
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<PAGE> 24
Except as set forth below, and under Item (3) above, the undersigned
Selling Securityholder is not the beneficial or registered owner of any
shares of Common Stock or any other securities of the Company. State
any exceptions here:
(5) Relationships with the Company:
Except as set forth below, neither the Selling Securityholder nor any
of its affiliates, officers, directors or principal equity holders (5%
or more) has held any position or office or has had any other material
relationship with the Company (or its predecessors or affiliates)
during the past three years.
State any exceptions here:
(6) Plan of Distribution:
Except as set forth below, the undersigned Selling Securityholder
intends to distribute the Registrable Securities listed above in Item
(3) only as follows (if at all): Such Registrable Securities may be
sold from time to time directly by the undersigned Selling
Securityholder or, alternatively, through underwriters, broker-dealers
or agents. Such Registrable Securities may be sold in one or more
transactions at fixed prices, at prevailing market prices at the time
of sale, at varying prices determined at the time of sale, or at
negotiated prices. Such sales may be effected in transactions (which
may involve crosses or block transactions) (i) on any national
securities exchanges or U.S. inter-dealer quotation system of a
registered national securities association on which the Registrable
Securities may be listed or quoted at the time of sale, (ii) in the
over-the-counter market, (iii) in transactions otherwise than on such
exchanges or services or in the over-the-counter market, or (iv)
through the writing of options. In connection with sales of the
Registrable Securities or otherwise, the Selling Securityholder may
enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the Registrable Securities in the course of
hedging the positions they assume. The Selling Securityholder may also
sell Registrable Securities short and deliver Registrable Securities to
close out such short position, or loan or pledge Registrable Securities
to broker-dealers that in turn may sell such securities.
State any exceptions here:
Note: In no event may such method(s) of distribution take the form of
an underwritten offering of the Registrable Securities without the
prior agreement of the Company.
By signing below, the Selling Securityholder acknowledges that it
understands its obligation to comply, and agrees that it will comply,
with the prospectus delivery and other provisions of the Securities Act
and Exchange Act and the respective rules thereunder, particularly
Regulation M.
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<PAGE> 25
In the event that the Selling Securityholder transfers all or any
portion of the Registrable Securities listed in Item (3) above after
the date on which such information is provided to the Company, the
Selling Securityholder agrees to notify the transferee(s) at the time
of the transfer of its rights and obligations under this Notice and
Questionnaire and the Registration Rights Agreement.
By signing below, the Selling Securityholder consents to the disclosure
of the information contained herein in its answers to Items (1) through
(6) above and the inclusion of such information in the Shelf
Registration Statement and related Prospectus. The Selling
Securityholder understands that such information will be relied upon by
the Company in connection with the preparation of the Shelf
Registration Statement and related Prospectus.
In accordance with the Selling Securityholder's obligation under the
Registration Rights Agreement to provide such information as may be
required by law for inclusion in the Self Registration Statement, the
Selling Securityholder agrees to promptly notify the Company of any
inaccuracies or changes in the information provided herein which may
occur subsequent to the date hereof at any time while the Self
Registration Statement remains in effect. All notices hereunder and
pursuant to the Registration Rights Agreement shall be made in writing
by hand delivery, first-class mail, or air courier guaranteeing
overnight delivery as follows:
To the Company:
i2 Technologies, Inc.
[Address]
Attention: [contact person]
Once this Notice and Questionnaire is executed by the Selling
Securityholder and received by the Company, the terms of this Notice
and Questionnaire, and the representations and warranties contained
herein, shall be binding on, shall inure to the benefit of and shall be
enforceable by the respective successors, heirs, personal
representatives and assigns of the Company and the Selling
Securityholder with respect to the Registrable Securities beneficially
owned by such Selling Securityholder and listed in Item (3) above. This
Agreement shall be governed in all respects by the laws of the State of
New York.
-4-
<PAGE> 26
IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Dated:
-------------------------
- -------------------------------
Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)
By:
----------------------------
Name:
Title:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR
RECEIPT ON OR BEFORE (DEADLINE FOR RESPONSE) TO THE COMPANY AT:
i2 Technologies, Inc.
[Address]
Attention: [contact person]
-5-
<PAGE> 27
APPENDIX I
NOTICE TO TRANSFER PURSUANT TO REGISTRATION STATEMENT
- ------------------------------
- ------------------------------
- ------------------------------
- ------------------------------
i2 Technologies, Inc.
[Address]
Attention: [contact person]
Re i2 Technologies, Inc. 5 1/4% Convertible Subordinated Notes
due December 15, 2006 (the "Notes")
Dear Sirs:
Please be advised that _________________________________ has
transferred $_____ aggregate principal amount of the above-referenced notes or
______ shares of the Company's Common Stock, issued on conversion, repurchase or
redemption of Notes, pursuant to the Registration Statement Form S-3 (File No.
333-_________) filed by the Company.
We hereby certify that the prospectus delivery requirements, if any, of
the Securities Act of 1933, as amended, have been satisfied with respect to the
transfer described above and that the above-named beneficial owner of the Notes
or Common Stock is named as a selling security holder in the Prospectus dated
____________ or in amendments or supplements thereto, and that the aggregate
principal amount of the Notes or number of shares of Common Stock transferred
are [a portion of] the Notes or Common Stock listed in such Prospectus as
amended or supplemented opposite such owner's name.
Dated:
----------------------------
Very truly yours,
--------------------------------------
(Name)
By:
----------------------------------
(Authorized Signature)
<PAGE> 1
EXHIBIT 5.1
[BROBECK, PHLEGER & HARRISON LLP LETTERHEAD]
February 29, 2000
i2 Technologies, Inc.
One i2 Place
11701 Luna Road
Dallas, Texas 75234
(469) 357-1000
Re: i2 Technologies, Inc. Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to i2 Technologies, Inc., a Delaware corporation
(the "Company"), in connection with the Company's Registration Statement on Form
S-3 (the "Registration Statement") filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended (the "Act"), relating to
the registration of the resale of (i) $350,000,000 aggregate principal amount of
5 1/4% Convertible Subordinated Notes (the "Notes") issued by the Company and
(ii) 4,605,790 shares of the Company's common stock, par value $0.00025 per
share (the "Common Stock"), issuable upon conversion of the Notes, plus such
indeterminate number of shares of Common Stock as may become issuable by means
of an adjustment to the conversion price of the Notes (the "Conversion Shares").
This opinion is being furnished in accordance with the requirements of Item
16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
In rendering our opinion, we have reviewed such documents as we deemed
necessary. We have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity to original
documents of all documents submitted to us as certified, facsimile or
photostatic copies, the authenticity of the originals of such latter documents
and the legal competence of all signatories to such documents.
We assume that the appropriate action will be taken, prior to the offer and
sale of the Notes and the Conversion Shares under the Registration Statement, to
register and qualify the Notes and the Conversion Shares for sale under all
applicable state securities or "blue sky" laws. We express no opinion herein as
to the laws of any state or jurisdiction other than the General Corporation Law
of the State of Delaware, the laws of the State of New York and the federal
securities laws.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Notes have been duly and validly authorized and issued by the
Company and constitute the legally valid and binding obligation of the
Company; and
2. The Conversion Shares have been duly and validly authorized by the
Company and, when issued upon conversion of the Notes in accordance with
the terms of such Notes, will be validly issued, fully paid and
non-assessable.
It is understood that this opinion is to be used only in connection with
the offer and sale of the Notes or the Conversion Shares while the Registration
Statement is in effect.
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act, the rules and
regulations of the Securities and Exchange Commission promulgated thereunder or
Item 509 of Regulation S-K.
<PAGE> 2
This opinion letter is rendered as of the date first written above and we
disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company or the
Shares.
Very truly yours,
BROBECK, PHLEGER & HARRISON LLP
<PAGE> 1
EXHIBIT 12.1
STATEMENT RE COMPUTATION OF
RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------------------- -------------
1994 1995 1996 1997 1998 1998 1999
----- ----- ----- ---- ---- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed charges.......... 16.5x 12.6x 10.0x 3.7x 7.5x 6.3x 5.5x
</TABLE>
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
include, as applicable, interest expense, amortization of debt issuance costs
and the estimated interest component of rent expense.
<PAGE> 1
EXHIBIT 23.1
CONSENT
As independent accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated November 19, 1999
included in i2 Technologies, Inc.'s Form 8-K, dated November 30, 1999, for the
year ended December 31, 1998, and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas
February 29, 2000
<PAGE> 1
EXHIBIT 25.1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------
F O R M T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF
1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE
PURSUANT TO SECTION 305(b)(2)____.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
<TABLE>
<S> <C>
ORGANIZED UNDER THE LAWS OF 74-0800980
THE UNITED STATES OF AMERICA (I.R.S. employer
(State of incorporation identification no.)
if not a National Bank)
712 MAIN STREET
HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip Code)
</TABLE>
LEE BOOCKER
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002
(713) 216-2448
(Name, address and telephone
number of agent for service)
------------------------------------------
I2 TECHNOLOGIES, INC.
(Exact name of obligor as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 75-2294945
(State or other jurisdictions of (I.R.S. employer
incorporation or organization)
identification nos.)
ONE I2 PLACE
11701 LUNA ROAD
IRVING, TEXAS 75234
(Address of obligor's principal executive offices) (Zip Code)
</TABLE>
$ 350,000,000 5 1/4% CONVERTIBLE SUBORDINATED NOTES DUE 2006
(Title of the indenture securities)
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
<TABLE>
<CAPTION>
NAME ADDRESS
---- -------
<S> <C>
Comptroller of the Currency Washington, D.C.
Board of Governors of the Federal Reserve System Washington, D.C.
Federal Deposit Insurance Corporation Washington, D.C.
</TABLE>
(b) Whether it is authorized to exercise corporate trust
powers.
Yes, the trustee is authorized to exercise corporate trust
powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION. (SEE NOTE ON PAGE 3)
The obligor is not an affiliate of the trustee.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY:
Exhibit 1. A copy of the Articles of Association of the
Trustee as now in effect.
Exhibit 2. A copy of the certificate of authority of
the Trustee to commence business.
Exhibit 3. A copy of the authorization of the Trustee
to exercise corporate trust powers.
Exhibit 4. A copy of the existing bylaws of the
Trustee.
Exhibit 5. Not Applicable.
Exhibit 6. The consents of the United States
institutional trustees required by Section
321(b) of the Trust Indenture Act of 1939.
Exhibit 7. A copy of the latest report of condition of
the Trustee published pursuant to law or the
requirements of its supervising or examining
authority.
Exhibit 8. Not Applicable.
Exhibit 9. Not Applicable.
<PAGE> 3
NOTE REGARDING INCORPORATED EXHIBIT
The exhibits incorporated herein by reference, except for Exhibit 6.
Exhibit 1. Incorporated by reference to exhibit bearing
the same designation and previously filed with the
Securities and Exchange Commission as exhibit to the
Form S-3 File No. 333-93011.
Exhibit 2 Incorporated by reference to exhibit bearing
the same designation and previously filed with the
Securities and Exchange Commission as exhibit to the
Form S-3 File No. 333-93011.
Exhibit 3. Incorporated by reference to exhibit bearing
the same designation and previously filed with the
Securities and Exchange Commission as exhibit to the
Form S-3 File No. 333-93011.
Exhibit 4. Incorporated by reference to exhibit bearing
the same designation and previously filed with the
Securities and Exchange Commission as exhibit to the
Form S-3 File No. 333-93011.
Exhibit 6. Incorporated herewith.
Exhibit 7. Incorporated by reference to exhibit bearing
the same designation and previously filed with the
Securities and Exchange Commission as exhibit to the
Form S-3 File No. 333-93011.
NOTE: THE ANSWER TO ITEM 2 IS BASED IN PART ON INFORMATION PROVIDED OR
CONFIRMED BY THE OBLIGOR. THE ACCURACY AND COMPLETENESS OF SUCH
INFORMATION IS HEREBY DISCLAIMED BY THE TRUSTEE.
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, Chase Bank of Texas, National Association, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Houston, and State of Texas, on the 29th day of February 2000.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ John G. Jones
----------------------------------
Name: John G. Jones
Title: Vice President
<PAGE> 5
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under an Indenture between i2 Technologies,
Inc., a Delaware corporation (the "Company") and Chase Bank of Texas, National
Association, as Trustee, entered into in connection with the issuance of the
Company's Convertible Subordinated Notes.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
By: /s/ John G. Jones
-------------------------------------
Name: John G. Jones
Title: Vice President
Date: February 29, 2000
