<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 10-K/A
___________________
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 1998
Commission File No. 000-22697
AT HOME CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 77-0408542
(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
425 Broadway Street
Redwood City, CA 94063
(Address of Principal Executive Offices, including Zip Code)
(650) 569-5000
(Registrant's telephone number, including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
NONE
Securities Registered Pursuant to Section 12(g) of the Act:
Series A Common Stock
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [x] No []
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. x
<TABLE>
<CAPTION>
As of January 31, 1999
------------------------
<S> <C>
Aggregate market value of the voting stock held by non-affiliates of the
Registrant based on the closing bid price of such stock:................................. $4,698,327,500
Number of shares of Series A Common Stock outstanding:..................................... 106,355,301
Number of shares of Series B Common Stock outstanding:..................................... 15,400,000
Number of shares of Series K Common Stock outstanding:..................................... 2,609,707
</TABLE>
This amended filing contains additional exhibits only. Information in the
originally filed Form 10-K is presented as of the original filing date, and has
not been updated in this amended filing.
================================================================================
<PAGE>
AT HOME CORPORATION
1998 ANNUAL REPORT ON FORM 10-K/A
EXPLANATORY NOTE
The sole purpose of this Form 10-K/A is to file additional exhibits to
the Registrant's Form 10-K, which was originally filed with the Securities and
Exchange Commission on February 19, 1999. No changes have been made to the text
of the Form 10-K other than to Item 14 (Exhibits, Financial Statement Schedules
and Reports on Form 8-K).
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) (3) Exhibits.
<TABLE>
<CAPTION>
Exhibit
Number Title
------- -----
<C> <S>
3.01 Third Amended and Restated Certificate of Incorporation of Registrant filed August 14, 1996 (1)
3.02 Certificate of Amendment of Third Amended and Restated Certificate of Incorporation of
Registrant filed April 11, 1997 (1)
3.03 Certificate of Designation of Series C Convertible Participating Preferred Stock of Registrant
filed April 11, 1997 (1)
3.04 Form of Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation
of Registrant effective July 15, 1997 (1)
3.05 Form of Second Amended and Restated Bylaws of Registrant effective July 16, 1997 (1)
3.06 Form of Fourth Amended and Restated Certificate of Incorporation of Registrant filed July 16,
1997 (1)
3.07 Certificate of Amendment to Fourth Amended and Restated Certificate of Incorporation of
Registrant filed July 9, 1998
4.01 Third Amended and Restated Registration Rights Agreement, dated April 11, 1997, among
Registrant and the parties indicated therein (1)
4.02 Letter Agreement relating to Tag-Along/Drag-Along Rights, dated April 11, 1997, among
Registrant and the parties indicated therein (1)
4.03 Canadian Purchase Letter Agreement, dated April 11, 1997, among Registrant and the parties
indicated therein (1)
4.04 Form of Amended and Restated Stockholders' Agreement, dated August 1, 1996, among Registrant
and the parties indicated therein, as amended on May 15, 1997 (1)
4.05 Form of certificate of Registrant's Series A common stock (1)
4.06 Narrative Communications Corp. 1998 Equity Incentive Plan, assumed by Registrant as of December
30, 1998 (*)(**)
4.07 Registrant's 1997 Equity Incentive Plan, as amended (*)(2)
4.08 Registrant's 1997 Employee Stock Purchase Plan, as amended (*)(2)
9.01 Voting Agreement, dated April 11, 1997, among Registrant, TCI Internet Holdings, Inc., Comcast
PC Investments, Inc., Cox Teleport Providence, Inc., Rogers Cablesystems Limited and Shaw
Cablesystems Ltd. (1)
10.01 A Stock Purchase Agreement, dated August 29, 1995, among Registrant, TCI Internet Services, Inc.,
Kleiner Perkins Caufield & Byers VII, KPCB VII Founders Fund and KPCB Information Sciences
Zaibatsu Fund II (1)
10.01 B Letter Agreement and Term Sheet, dated October 2, 1997, among Registrant, Cablevision Systems
Corporation, CSC Parent Corporation, Comcast Corporation, Cox Enterprises, Inc., Kleiner
Perkins Caufield & Byers and Tele- Communications, Inc. (3)
10.02 A Letter Agreement, dated May 9, 1996, among Registrant, TCI Internet Holdings, Inc., Kleiner
Perkins Caufield & Byers VII, KPCB VII Founders Fund and KPCB Information Sciences Zaibatsu
Fund II (1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Title
------- -----
<C> <S>
10.02 B Warrant Purchase Agreement, dated October 10, 1997, between Registrant and Cablevision Systems
Corporation (3)
10.03 A Stock Purchase and Exchange Agreement, dated August 1, 1996, among Registrant, TCI Internet
Holdings, Inc., Kleiner Perkins Caufield & Byers VII, KPCB Information Sciences Zaibatsu Fund
II, James Clark, Comcast PC Investments, Inc. and Cox Teleport Providence, Inc. (1)
10.03 B Warrant to purchase Series A common stock of Registrant, dated October 10, 1997, issued to CSC
Parent Corporation (3)
10.04 A Term Sheet, dated June 4, 1996, among Registrant, TCI Internet Holdings, Inc., Kleiner Perkins
Caufield & Byers VII, KPCB Information Sciences Zaibatsu Fund II, KPCB VII Founders Fund,
Comcast PC Investments, Inc. and Cox Teleport Providence, Inc. (1)
10.04 B Contingent warrant to purchase Series A common stock of Registrant, dated October 10, 1997,
issued to CSC Parent Corporation (3)
10.05 Stock Purchase Agreement, dated April 11, 1997, among Registrant, Rogers Cablesystems Limited,
Shaw Cablesystems Ltd., Sun Microsystems, Inc., Netscape Communications Corporation, James
Barksdale, Motorola, Inc. and Bay Networks, Inc. (1)
10.06 Term Sheet, dated March 18, 1997, among Registrant, Shaw Cablesystems Ltd. and Rogers
Cablesystems Limited (1)
10.07 Master Communications Services Agreement, dated April 2, 1997, between Registrant and Teleport
Communications Group Inc. (1)
10.08 Lease, dated October 17, 1996, between Registrant and Martin/Campus Associated, L.P. (1)
10.09 Form of Indemnification Agreement between Registrant and each of its directors and executive
officers (*)(1)
10.10 Registrant's 1996 Incentive Stock Option Plan (*)(1)
10.11 Registrant's 1996 Incentive Stock Option Plan No. 2 (*)(1)
10.12 Narrative Communications Corp. 1995 Stock Option Plan, assumed by Registrant as of December 30,
1998 (*)(**)
10.13 Description of Registrant's 1998 Executive Incentive Plan (*)(**)
10.14 Restricted Stock Purchase Agreement, dated July 31, 1996, between Registrant and Thomas A.
Jermoluk for purchase of Series A common stock (*)(1)
10.15 Restricted Stock Purchase Agreement, dated July 31, 1996, between Registrant and Thomas A.
Jermoluk for purchase of Series K preferred stock (*)(1)
10.16 Restricted Stock Purchase Agreement, dated July 31, 1996, between Registrant and William R.
Hearst III for purchase of Series A common stock (*)(1)
10.17 Restricted Stock Purchase Agreement, dated July 29, 1996, between Registrant and Ken Goldman
for purchase of Series A common stock (*)(1)
10.18 Form of Restricted Stock Purchase Agreement and Promissory Note between Registrant and other
officers for purchase of Series A common stock (*)(1)
10.19 Employment Letter Agreement, dated July 19, 1996 between Registrant and Thomas A. Jermoluk
(*)(1)
10.20 Letter of Agreement, dated May 15, 1997, among Registrant and the parties indicated therein,
including as exhibits the Master Distribution Agreement Term Sheet and the Term Sheet for Form
of LCO Agreement (1)
10.21 Build To Suit Lease, dated September 29, 1997, between Registrant and Martin/Campus Associates,
L.P. (425 Broadway, Redwood City, California) (4)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Title
------- -----
<C> <S>
10.22 Build To Suit Lease, dated September 29, 1997, between Registrant and Martin/Campus Associates,
L.P. (440 Broadway, Redwood City, California) (4)
10.23 Loan and Security Agreement, dated September 30, 1997, between Registrant and Silicon Valley
Bank (4)
10.24 Binding Warrant Term Sheet, dated February 24, 1998, among Registrant, Rogers Communications,
Inc. and Shaw Communications, Inc. (5)
10.25 Warrant Purchase Agreement, dated May 5, 1998, between Registrant and Century Communications
Corp. (**)
10.26 Warrant to purchase Series A common stock of Registrant, dated May 5, 1998, issued to Century
Communications Corp. (**)
10.27 Form of warrant to Purchase Series A common stock of Registrant to be issued to Century
Communications Corp. (**)
10.28 Warrant Purchase Agreement, dated June 27, 1998, between Registrant and Garden State
Cablevision L.P. (**)
10.29 Warrant to purchase Series A common stock of Registrant, dated June 27, 1998, issued to Garden
State Cablevision L.P. (**)
10.30 Warrant Purchase Agreement, dated June 26, 1998, between Registrant and Jones Intercable Inc.
(**)
10.31 Warrant to purchase Series A common stock of Registrant, dated June 26, 1998, issued to Jones
Intercable Inc. (**)
10.32 Agreement and Plan of Merger, dated December 30, 1998, between Registrant and Narrative
Communications Corp. (incorporated by reference to Exhibit 2.1 of Registrant's Report on Form
8-K filed with the Securities and Exchange Commission on January 14, 1999 (File No. 000-22697))
(**)
10.33 IRU Capacity Agreement, dated December 19, 1998, between Registrant and AT&T Corp. (**)(***)
10.34 Form of Loan Modification Agreement between Registrant and Silicon Valley Bank (**)
10.35 Build to Suit Option Agreement, dated October 25, 1996, between Registrant and Martin/Campus
Associates, L.P., together with First Amendment to Build to Suit Option Agreement (**)
10.36 Build to Suit Lease, dated July 14, 1998, between Registrant and Martin/Campus Associates, L.P.
(420 Broadway, Redwood City, California) (**)
10.37 Form of Build to Suit Lease between Registrant and Martin/Campus Associates, L.P. (430
Broadway, Redwood City, California) (**)
10.38 Indenture, dated December 28, 1998, between Registrant to State Street Bank and Trust Company
of California, N.A., as trustee
10.39 Registration Rights Agreement, dated December 28, 1998, between Registrant and Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. Incorporated and
Goldman, Sachs & Co.
11.01 Statement regarding the computation of net loss and of pro forma net loss per share (**)
21.01 Subsidiaries of Registrant
23.01 Consent of Ernst & Young LLP, Independent Auditors (**)
24.01 Power of Attorney executed by each officer and director (see page 45 of Form 10-K) (**)
27.01 Financial data schedule for year ended December 31, 1998 (**)
</TABLE>
__________
* Management contracts or compensatory plans required to be filed as an exhibit
to Form 10-K.
<PAGE>
** Previously filed as an exhibit of the same number to Registrant's annual
report on Form 10-K, filed with the Securities and Exchange Commission on
February 19, 1999.
*** Confidential treatment has been requested with respect to certain
information contained in this document. Confidential portions have been
omitted from this public filing and have been filed separately with the
Securities and Exchange Commission.
(1) Incorporated by reference to exhibits of the same number to our registration
statement on Form S-1 declared effective by the Securities and Exchange
Commission on July 11, 1997 (File No. 333-27323).
(2) Incorporated by reference to exhibits of the same number to our registration
statement on Form S-8 filed with the Securities Exchange Commission on July
28, 1998 (File No. 333-60037).
(3) Incorporated by reference to exhibits of the same number to our current
report on Form 8-K filed with the Securities and Exchange Commission on
October 21, 1997 (File No. 000-22697).
(4) Incorporated by reference to exhibits of the same number to our quarterly
report on Form 10-Q filed with the Securities and Exchange Commission on
November 14, 1997 (File No. 000-22697).
(5) Incorporated by reference to exhibits of the same number to our quarterly
report on Form 10-Q filed with the Securities and Exchange Commission on May
15, 1998 (File No. 000-22697), as amended on February 8, 1999.
(b) Reports on Form 8-K.
No such reports were filed in the fourth quarter of 1998.
(c) Exhibits. -- See (a)(3) above.
(d) Financial Statement Schedules. -- Not applicable.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date: 3/30/99 AT HOME CORPORATION
By: /s/ Kenneth A. Goldman
--------------------
Kenneth A. Goldman
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Name Title Date
---- ----- ----
Principal Executive Officer:
<S> <C> <C>
/s/ Thomas A. Jermoluk* President, Chief Executive Officer 3/30/99
- --------------------------------------------------- and Chairman of the Board
Principal Financial Officer:
/s/ Kenneth A. Goldman Senior Vice President and 3/30/99
- --------------------------------------------------- Chief Financial Officer
Chief Accounting Officer:
/s/ Robert A. Lerner* Corporate Controller 3/30/99
- ---------------------------------------------------
Additional Directors:
/s/ William R. Hearst III* Vice Chairman 3/30/99
- ---------------------------------------------------
Director
- ---------------------------------------------------
C. Michael Armstrong
/s/ L. John Doerr* Director 3/30/99
- ---------------------------------------------------
/s/ Leo J. Hindery, Jr.* Director 3/30/99
- ---------------------------------------------------
/s/ John C. Malone* Director 3/30/99
- ---------------------------------------------------
Director
- ---------------------------------------------------
John C. Petrillo
/s/ Brian L. Roberts* Director 3/30/99
- ---------------------------------------------------
/s/ Larry E. Romrell* Director 3/30/99
- ---------------------------------------------------
/s/ James R. Shaw, Jr.* Director 3/30/99
- ---------------------------------------------------
/s/ David M. Woodrow* Director 3/30/99
- ---------------------------------------------------
</TABLE>
* By: /s/ Kenneth A. Goldman
---------------------------
Kenneth A. Goldman
Attorney-in-fact
<PAGE>
EXHIBIT INDEX
Exhibit
Number Title
- ------- -----
3.07 Certificate of Amendment to Fourth Amended and Restated Certificate
of Incorporation of Registrant filed July 9, 1998
10.38 Indenture, dated December 28, 1998, between Registrant to State
Street Bank and Trust Company of California, N.A., as trustee
10.39 Registration Rights Agreement, dated December 28, 1998, between
Registrant and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Morgan Stanley & Co. Incorporated and Goldman,
Sachs & Co.
21.01 Subsidiaries of Registrant
<PAGE>
EXHIBIT 3.07
CERTIFICATE OF AMENDMENT
OF
FOURTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
AT HOME CORPORATION
(a Delaware corporation)
At Home Corporation, a Delaware corporation, does hereby certify that
the following amendment to the corporation's Fourth Amended and Restated
Certificate of Incorporation has been duly adopted in accordance with the
provisions of Section 242 of the Delaware General Corporation Law.
Article V, Section B, paragraph 4(a)(9) is hereby amended to read in
its entirety as follows:
(9) Any increase during a calendar year in the total number
of shares of Series A Common Stock issued to, and reserved for issuance to,
management (including shares reserved for issuance upon exercise of options,
warrants or other rights) pursuant to all incentive compensation plans
(collectively, the "Management Stock Plan") where the total of all such
increases during that calendar year (including the proposed increase which is
the subject of consideration) exceeds the Maximum Amount (as defined below)
for such calendar year. The "Maximum Amount" for any calendar year equals
(i) 0.04 multiplied by the number of shares of Common
Stock outstanding on a fully diluted basis, assuming the issuance of all
shares reserved for issuance in the Management Stock Plan prior to such
increase and the assumed issuance of shares upon the exercise of all other
outstanding options, warrants and other rights to acquire shares, as of the
close of business on December 31 of the immediately preceding calendar year
(the "Base Date"); plus
----
(ii) the excess, if any, of
(x) the Maximum Amount calculated as of the
close of business on December 31 of the calendar year immediately preceding
the Base Date, over
(y) the total number of shares (A) added to the
reserve under the Management Stock Plan in the calendar year in which the Base
Date occurs plus (B) issued under the Management Stock Plan in the calendar
year in which the Base Date occurs (other than any shares which had previously
been reserved prior to the calendar year in which the Base Date occurs and are
subsequently issued in the calendar year in which the Base Date occurs).
* * * * * * * * * *
<PAGE>
IN WITNESS WHEREOF, said corporation has caused this Certificate of
Amendment to be executed and attested by its duly authorized officers this 23rd
day of June, 1998.
AT HOME CORPORATION.
By: /s/ Thomas A. Jermoluk
----------------------
Thomas A. Jermoluk
President and Chief Executive Officer
ATTEST:
/s/ David G. Pine
- -----------------
David G. Pine, Secretary
<PAGE>
EXHIBIT 10.38
AT HOME CORPORATION
TO
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.
AS TRUSTEE
INDENTURE
DATED AS OF DECEMBER 28, 1998
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION..... 1
Section 1.1 Definitions.......................................... 1
Section 1.2 Compliance Certificates and Opinions................. 10
Section 1.3 Form of Documents Delivered to Trustee............... 10
Section 1.4 Acts of Holders; Record Dates........................ 11
Section 1.5 Notices, Etc., to Trustee and Company................ 13
Section 1.6 Notice to Holders; Waiver............................ 13
Section 1.7 Conflict with Trust Indenture Act.................... 13
Section 1.8 Effect of Headings and Table of Contents............. 14
Section 1.9 Successors and Assigns............................... 14
Section 1.10 Separability Clause.................................. 14
Section 1.11 Benefits of Indenture................................ 14
Section 1.12 Governing Law........................................ 14
Section 1.13 Legal Holidays....................................... 14
Section 1.14 Indenture and Securities Solely Corporate Obligations 14
ARTICLE II SECURITY FORM................................................15
Section 2.1 Forms Generally....................................... 15
Section 2.2 Form of Face of Security.............................. 15
Section 2.3 Form of Reverse of Security........................... 19
Section 2.4 Form of Trustee's Certificate of Authentication....... 28
Section 2.5 Form of Conversion Notice............................. 28
Section 2.6 Form of Certification................................. 29
Section 2.7 Form of Option of Holder to Elect Purchase............ 30
Section 2.8 Form of Assignment.................................... 31
ARTICLE III THE SECURITIES............................................ 32
Section 3.1 Title and Terms...................................... 32
Section 3.2 Denominations........................................ 33
Section 3.3 Execution, Authentication, Delivery and Dating....... 33
Section 3.4 Temporary Securities................................. 33
Section 3.5 Registration; Registration of Transfer and Exchange.. 34
Section 3.6 Mutilated, Destroyed, Lost and Stolen Securities..... 39
Section 3.7 Payment of Cash Interest; Interest Rights Preserved.. 39
Section 3.8 Persons Deemed Owners................................ 41
Section 3.9 Cancellation......................................... 41
Section 3.10 Computation of Interest.............................. 41
-i-
<PAGE>
ARTICLE IV SATISFACTION AND DISCHARGE................................. 42
Section 4.1 Satisfaction and Discharge of Indenture.............. 42
Section 4.2 Application of Trust Money........................... 43
ARTICLE V REMEDIES.................................................... 43
Section 5.1 Events of Default.................................... 43
Section 5.2 Acceleration of Stated Maturity; Rescission and
Annulment............................................ 45
Section 5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee........................................... 46
Section 5.4 Trustee May File Proofs of Claim..................... 46
Section 5.5 Trustee May Enforce Claims Without Possession of
Securities........................................... 47
Section 5.6 Application of Money Collected....................... 47
Section 5.7 Limitation on Suits.................................. 47
Section 5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest and to Convert.................. 48
Section 5.9 Restoration of Rights and Remedies................... 48
Section 5.10 Rights and Remedies Cumulative....................... 48
Section 5.11 Delay or Omission Not Waiver......................... 49
Section 5.12 Control by Holders................................... 49
Section 5.13 Waiver of Past Defaults.............................. 49
Section 5.14 Undertaking for Costs................................ 49
Section 5.15 Waiver of Usury, Stay or Extension Laws.............. 50
ARTICLE VI THE TRUSTEE................................................ 50
Section 6.1 Certain Duties and Responsibilities.................. 50
Section 6.2 Notice of Defaults................................... 51
Section 6.3 Certain Rights of Trustee............................ 51
Section 6.4 Not Responsible for Recitals or Issuance of
Securities........................................... 52
Section 6.5 May Hold Securities.................................. 52
Section 6.6 Money Held in Trust.................................. 53
Section 6.7 Compensation and Reimbursement....................... 53
Section 6.8 Disqualification; Conflicting Interests.............. 53
Section 6.9 Corporate Trustee Required; Eligibility.............. 53
Section 6.10 Resignation and Removal; Appointment of Successor.... 54
Section 6.11 Acceptance of Appointment by Successor............... 55
Section 6.12 Merger, Conversion, Consolidation or Succession to
Business............................................. 55
Section 6.13 Preferential Collection of Claims Against Company.... 55
Section 6.14 Appointment of Authenticating Agent.................. 55
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY......... 57
-ii-
<PAGE>
Section 7.1 Company To Furnish Trustee Names and Addresses of
Holders .............................................. 57
Section 7.2 Preservation of Information; Communications to
Holders............................................... 57
Section 7.3 Reports by Trustee.................................... 58
Section 7.4 Reports by Company.................................... 58
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..... 58
Section 8.1 Company May Consolidate, Etc., Only on Certain Terms.. 58
Section 8.2 Successor Substituted................................. 59
ARTICLE IX AMENDMENTS................................................. 59
Section 9.1 Without Consent of Holders............................ 59
Section 9.2 With Consent of Holders............................... 60
Section 9.3 Compliance with Trust Indenture Act................... 61
Section 9.4 Revocation and Effect of Consents, Waivers and Actions 61
Section 9.5 Notation on or Exchange of Securities................. 62
Section 9.6 Trustee to Sign Supplemental Indentures............... 62
Section 9.7 Effect of Supplemental Indentures..................... 62
ARTICLE X COVENANTS................................................... 62
Section 10.1 Payment of Securities................................ 62
Section 10.2 Maintenance of Office or Agency...................... 62
Section 10.3 Money for Security Payments To Be Held in Trust...... 63
Section 10.4 Statement by Officers as to Default.................. 64
Section 10.5 Existence............................................ 64
Section 10.6 Calculation of Original Issue Discount............... 65
Section 10.7 Delivery of Certain Information...................... 65
ARTICLE XI REDEMPTION OF SECURITIES................................... 65
Section 11.1 Right to Redeem; Notices to Trustee.................. 65
Section 11.2 Selection of Securities to Be Redeemed............... 65
Section 11.3 Notice of Redemption................................. 66
Section 11.4 Effect of Notice of Redemption....................... 67
Section 11.5 Deposit of Redemption Price.......................... 67
Section 11.6 Securities Redeemed in Part.......................... 67
Section 11.7 Conversion Arrangement on Call for Redemption........ 67
ARTICLE XII SUBORDINATION OF SECURITIES............................... 68
Section 12.1 Securities Subordinate to Senior Indebtedness........ 68
Section 12.2 Payment Over of Proceeds upon Dissolution, Etc....... 68
-iii-
<PAGE>
Section 12.3 No Payment When Senior Indebtedness in Default....... 69
Section 12.4 Payment Permitted If No Default...................... 70
Section 12.5 Subrogation to Rights of Holders of Senior
Indebtedness......................................... 71
Section 12.6 Provisions Solely To Define Relative Rights.......... 71
Section 12.7 Trustee To Effectuate Subordination.................. 72
Section 12.8 No Waiver of Subordination Provisions................ 72
Section 12.9 Notice to Trustee.................................... 72
Section 12.10 Reliance on Judicial Order or Certificate of
Liquidating Agent.................................... 73
Section 12.11 Trustee Not Fiduciary for Holders of Senior
Indebtedness......................................... 73
Section 12.12 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights..................... 73
Section 12.13 Article Applicable to Paying Agents.................. 73
Section 12.14 Certain Conversions Deemed Payment................... 74
ARTICLE XIII CONVERSION OF SECURITIES................................. 74
Section 13.1 Conversion Privilege................................ 74
Section 13.2 Conversion Procedure................................ 75
Section 13.3 Fractional Shares................................... 76
Section 13.4 Taxes on Conversion................................. 77
Section 13.5 Company To Provide Stock............................ 77
Section 13.6 Adjustment for Change in Common Stock............... 77
Section 13.7 Adjustment for Rights Issue......................... 78
Section 13.8 Adjustment for Other Distributions.................. 79
Section 13.9 When Adjustment May Be Deferred..................... 81
Section 13.10 When No Adjustment Required......................... 81
Section 13.11 Notice of Adjustment................................ 82
Section 13.12 Voluntary Increase.................................. 82
Section 13.13 Notice of Certain Transactions...................... 83
Section 13.14 Reorganization of Company Special Distributions..... 83
Section 13.15 Company Determination Final......................... 84
Section 13.16 Trustee's Adjustment Disclaimer..................... 84
Section 13.17 Simultaneous Adjustments............................ 84
Section 13.18 Successive Adjustments.............................. 84
ARTICLE XIV RIGHT TO REQUIRE REPURCHASE............................... 84
Section 14.1 Purchase of Securities at Option of the Holder upon
Change in Control.................................... 84
Section 14.2 Purchase of Securities at the Option of the Holder... 88
Section 14.3 Effect of Purchase Notice or Change in Control
Purchase Notice...................................... 94
Section 14.4 Deposit of Purchase Price or Change in Control
Purchase Price....................................... 95
Section 14.5 Securities Purchased in Part......................... 96
Section 14.6 Covenant to Comply with Securities Laws upon Purchase
of Securities........................................ 96
Section 14.7 Repayment to the Company............................. 96
-iv-
<PAGE>
ARTICLE XV SPECIAL TAX EVENT CONVERSION................................ 96
Section 15.1 Optional Conversion to Semiannual Coupon Debenture
Upon Tax Event....................................... 96
-v-
<PAGE>
INDENTURE, dated as of December 28, 1998, between At Home Corporation, a
corporation duly organized and existing under the laws of the State of Delaware
(herein called the "Company"), and State Street Bank and Trust Company of
California, N.A., a national banking association duly organized and existing
under the laws of the United States of America, as Trustee (herein called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its Convertible
Subordinated Debentures due 2018 (herein called the "Securities"), to be issued
in one or more series as provided in this Indenture.
All things necessary to make the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, 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.
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 agreed, for the equal and proportionate
benefit of all Holders of the Securities or of any series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS
--------------------------------
OF GENERAL APPLICATION
----------------------
Section I.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 other terms used herein which are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with generally accepted accounting principles,
and, except as otherwise herein expressly provided, the term "generally accepted
accounting principles" with respect to any computation required or permitted
hereunder shall mean such accounting principles as are generally accepted at
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the date of such computation;
(4) unless the context otherwise requires, any reference to an "Article"
or a "Section" refers to an Article or Section, as the case may be, of this
Indenture; and
(5) 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.
Certain terms used in Article XIV have the meanings specified therein.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person who directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under 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 Members" has the meaning specified in Section 3.5.
"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, in each case to the extent
applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee pursuant
to Section 6.14 to act on behalf of the Trustee to authenticate Securities.
"Average Sale Price" has the meaning specified in Section 13.1.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution 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, and delivered to the Trustee.
"Business Day" means a day on which banking institutions are open for
business and carrying out transactions in Dollars at the relevant place of
payment.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or, if at any time after the
execution of this instrument such Commission is not existing and performing the
duties now assigned to it under the Trust
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Indenture Act, then the body performing such duties at such time.
"Common Stock" means the Series A Common Stock, the Series B Common Stock,
par value $0.01 per share, of the Company, and the Series K Common Stock, par
value $0.01 per share, of the Company, and any other stock of any class of the
Company which has no preference in respect of dividends or of amounts payable in
the event of any voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not subject to redemption by the Company, as each
such class exists on the date of this Indenture, or shares of any class or
classes resulting from any reclassification or reclassifications thereof and
which have no preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or winding up of
the Company and which are not subject to redemption by the Company.
"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 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 President or a Vice President, and by its Treasurer,
an Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered
to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee located
at Library Tower, 633 West 5th Street, 12th Floor, Los Angeles, California
90071, Attention: Corporate Trust Department (At Home Corporation - Convertible
Subordinated Debentures due 2018), or such other location at which at any
particular time the Trustee's corporate trust business shall be administered.
"Corporation" means a corporation, association, company (including, without
limitation, a limited liability company), joint-stock company or business trust.
"Default" means any event that is, or after notice or passage of time or
both would be, an Event of Default.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Definitive Security" means a certificated Security bearing the restricted
securities legend set forth in Section 2.2 and which is held by an Institutional
Accredited Investor in accordance with Section 2.1(c).
"Depositary" means, with respect to the Securities issued in whole or in
part in the form of one or more Global Securities, a clearing agency registered
under the Exchange Act that is
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designated to act as Depositary for such Securities as contemplated by Section
3.5.
"Dollar" 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" has the meaning specified in Section 2.2.
"Event of Default" has the meaning specified in Section 5.1.
"Ex-Dividend Time" has the meaning specified in Section 13.1.
"Excess Shares" has the meaning specified in Section 2.3.
"Exchange Act" means the Securities Exchange Act of 1934 as it may be
amended from time to time, and any successor act thereto, and the rules and
regulations of the Commission promulgated thereunder.
"Expiration Date" has the meaning specified in Section 1.4.
"Global Security" has the meaning specified in Section 2.1.
"Holder" means a Person in whose name a 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 Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.
"Institutional Accredited Investor" means an institutional "accredited
investor" as described in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Issue Date" means the date of first issuance of the Securities under this
Indenture.
"Issue Price" of any Security means, in connection with the original
issuance of such
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Security, the initial issue price at which the Security is sold as set forth
on the face of the Security.
"Liquidated Damages" shall mean liquidated damages paid to all holders of
Registrable Securities (as defined in that certain Registration Rights
Agreement, dated December 28, 1998, between the Company and the Initial
Purchasers (the "Registration Rights Agreement")) in accordance with and
pursuant to the provisions of Section 2(e) of the Registration Rights Agreement.
"Market Price" means the average of the Sale Price of the Series A Common
Stock for the five Trading Day period ending on and including the third Trading
Day immediately prior to but not including, the applicable Purchase Date
appropriately adjusted to take into account the actual occurrence, during the
seven Trading Days preceding such Purchase Date, of any event described in
Section 13.6, 13.7 or 13.8; subject, however, to the conditions set forth in
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Sections 13.9 and 13.10.
"Maturity", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal 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 conversion or
repurchase right or otherwise.
"Nasdaq National Market" means the Nasdaq National Market operated by
Nasdaq Stock Market, Inc., a subsidiary of the National Association of
Securities Dealers, Inc.
"Notice of Default" means a written notice of the kind specified in Section
5.1(3) or 5.1(7).
"Officers' Certificate" means a certificate signed by any of the Chairman
of the Board, the President or a Vice President, and by any of 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 an
employee of the Company.
"Original Issue Discount" of any Security means the difference, if any,
between the Issue Price and the Principal Amount of such Security as set forth
on the face of such Security.
"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 whose payment or redemption money in the necessary
amount
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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 shall have been duly given pursuant to
this Indenture or provision therefor satisfactory to the Trustee shall have
been made;
(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; and
(iv) Securities which have been converted pursuant to Article XIII;
provided, however, that in determining whether the Holders of the requisite
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Principal Amount of the Outstanding Securities have given, made or taken
any request, demand, authorization, direction, notice, consent, waiver or
other action hereunder as of any date, Securities owned by the Company or
any other obligor upon the Securities or any Affiliate of the Company or of
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 request, demand, authorization, direction, notice,
consent, waiver or other action, only Securities which the Trustee 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
of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest on any Securities on behalf of
the Company.
"Person" means any individual, corporation, partnership, joint venture,
trust, limited liability corporation, unincorporated organization or government
or any agency or political subdivision thereof.
"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.
"Principal Amount" of a Security means the Principal Amount at Stated
Maturity as set forth
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on the face of the Security.
"Purchase Notice" has the meaning specified in Section 14.2.
"Qualified Institutional Buyer" means a "qualified institutional buyer" as
defined in Rule 144A.
"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
in whole or in part, means the price at which it is to be redeemed as set forth
in the Securities.
"Regular Record Date" for the interest payable on any Interest Payment Date
means the close of business on June 13 or December 13 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee, means any
officer or authorized employee of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"Restricted Security" means a Security required to bear the restrictive
legend set forth in the form of Security set forth in Section 2.2 of this
Indenture.
"Rule 144A" has the meaning specified in Section 2.1.
"Rule 144A Information" has the meaning specified in Section 10.9.
"Sale Price" on any Trading Day means the closing per share sale price for
the Series A Common Stock (or if no closing sale price is reported, the average
of the bid and ask prices or, if more than one in either case the average of the
average bid and the average ask prices) on such Trading Day as reported by the
Nasdaq National Market, or if the Series A Common Stock is not reported thereon,
on the New York Stock Exchange or, if the Series A Common Stock is not then
listed thereon, such other national or regional securities exchange upon which
the Series A Common Stock is listed on such Trading Day, as reported in
composite transactions for such exchange. If the Series A Common Stock is not
listed on the New York Stock Exchange or a United States national or regional
stock exchange or quoted on the Nasdaq National Market, the Company shall be
entitled to determine the "Sale Price" on the basis of such quotation as it
deems appropriate.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture and "Security" means one of
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such Securities.
"Securities Act" means the Securities Act of 1933 as it may be amended from
time to time, and any successor act thereto, and the rules and regulations of
the Commission promulgated thereunder.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Senior Indebtedness" means, without duplication, the principal, premium
(if any) and unpaid 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), rent and
end of term payments payable on or in connection with, and, to the extent not
included in the foregoing, all amounts payable as fees, costs, expenses,
liquidated damages, indemnities, repurchase and other put obligations and other
amounts to the extent accrued or due on or in connection with, all present and
future (i) indebtedness of the Company for borrowed money, (ii) obligations of
the Company evidenced by bonds, debentures, notes or similar instruments, (iii)
all obligations of the Company under (w) securities repurchase agreements (x)
interest rate swaps, caps, collars, options and similar arrangements, (y) any
foreign exchange contract, currency swap contract, futures contract, currency
option contract or other foreign currency hedge, and (z) credit swaps, caps,
floors, collars and similar arrangements, (iv) obligations incurred, assumed or
guaranteed by the Company in connection with the acquisition by it or a
subsidiary of any business, properties or assets (except purchase-money
indebtedness classified as accounts payable under generally accepted accounting
principles), (v) obligations of the Company as lessee under leases required to
be capitalized on the balance sheet of the lessee under generally accepted
accounting principles and liabilities under any financing lease or so-called
"synthetic" lease transaction entered into by the Company, (vi) reimbursement
obligations of the Company in respect of letters of credit, bank guarantees or
bankers' acceptances, (vii) obligations of the Company to make payments to any
entity as consideration for the acquisition by the Company of subscribers to its
current Internet services or to future similar or related services, or to
acquire rights to transport data using assets owned by any other entity, and
(viii) obligations of the Company under direct or indirect guarantees in respect
of, and obligations (contingent or otherwise) to purchase or otherwise acquire,
or otherwise to assure a creditor against loss in respect of, indebtedness or
obligations of others of the kinds referred to in clauses (i) through (vii)
above, provided that Senior Indebtedness shall not include: (a) any indebtedness
--------
or obligations of the kinds referred to in clause (i) through (viii) above
(collectively, "Debt") as to which, in the instrument or agreement creating or
evidencing the same or pursuant to which the same is outstanding, it is
expressly provided that such Debt shall be subordinated in right of payment to
any other Debt of the Company, unless such instrument or agreement expressly
provides that such Debt shall be senior in right of payment to the Securities;
(b) any Debt of the Company as to which, in the instrument or agreement creating
or evidencing the same or pursuant to
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which the same is outstanding, it is expressly provided that such Debt shall
not be senior in right of payment to, or is pari passu in right of payment
with, or ranks junior in right of payment to, the Securities; (c) Debt of the
Company in respect of the Securities; and (d) any Debt of the Company to any
Subsidiary of the Company.
"Series A Common Stock" means the Series A Common Stock, par value $0.01
per share, of the Company, as such class exists on the date of this instrument
as originally executed. Subject to the provisions of Section 13.14, shares
issuable upon conversion of the Securities shall include only shares of Series A
Common Stock or shares of any class or classes of common stock resulting from
any reclassification or reclassifications thereof and which have no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which are
not subject to redemption by the Company; provided that if at any time there
--------
shall be more than one such resulting class, 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.
"Share Certificate" means a certificate evidencing ownership of shares of
Series A Common Stock.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or 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 which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Surrendered Securities" has the meaning specified in Section 2.6.
"Tax Event" means that the Company shall have received an opinion from
independent tax counsel experienced in such matters to the effect that, on or
after December 28, 1998, as a result of (a) any amendment to, or change
(including any announced prospective change) in, the laws (or any regulations
thereunder) of the United States or any political subdivision or taxing
authority thereof or therein or (b) any amendment to, or change in, an
interpretation or application of such laws or
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regulations by any legislative body, court, governmental agency or regulatory
authority, in each case which amendment or change is enacted, promulgated,
issued or announced or which interpretation is issued or announced or which
action is taken, on or after December 28, 1998, there is more than an
insubstantial risk that interest (including Original Issue Discount) payable
on the Securities either (i) would not be deductible on a current accrual
basis or (ii) would not be deductible under any other method, in either case
in whole or in part, by the Company (by reason of deferral, disallowance, or
otherwise) for United States federal income tax purposes.
"Time of Determination" means the time and date of the determination of
stockholders entitled to receive rights, warrants, options or a distribution, in
each case, to which Section 13.7 or 13.8 apply.
"Trading Day" means each day on which the securities exchange or quotation
system which is used to determine the Sale Price is open for trading or
quotation.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed and the rules and regulations
thereunder; provided, however, that in the event the Trust Indenture Act of 1939
-------- -------
or such rules and regulations are amended after such date, "Trust Indenture Act"
means, to the extent required by any such amendment, the Trust Indenture Act of
1939 and such rules and regulations 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
thereof and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction.
"Vice President", when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
Section I.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, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
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(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 each 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 I.3 Form of Documents Delivered to 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 his 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 stating that the
information with respect to such factual matters is in the possession of the
Company, 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.
Section I.4 Acts of Holders; Record Dates. Any request, demand,
-----------------------------
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Indenture to be given or taken by Holders 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 duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or
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instruments are delivered to the Trustee. The Trustee shall promptly deliver
to the Company copies of all such instruments and records 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 signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent 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.
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. The fact and date of the execution of any such instrument or writing,
or the authority of the Person executing the same, may also be proved in any
other manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
Any request, demand, authorization, direction, notice, consent, 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 or 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.
The Company may, but shall not be obligated to, set any day as a record
date for the purpose of determining the Holders of Outstanding Securities
entitled to give or take 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; provided that the Company may not set a
--------
record date for, and the provisions of this paragraph shall not apply with
respect to, the giving or making of any notice, declaration, request or
direction referred to in the next paragraph. If any record date is set pursuant
to this paragraph, the Holders of Outstanding Securities on such record date,
and no other Holders, shall be entitled to take the relevant action, whether or
not such Holders remain Holders after such record date; provided that no such
--------
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite Principal Amount of Outstanding
Securities on such record date; and provided, further, that for the purpose of
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determining whether Holders of the requisite Principal Amount of such Securities
have taken such action, no Security shall be deemed to have been Outstanding on
such record date unless it is also Outstanding on the date such action is to
become effective. Nothing in this paragraph shall prevent the Company from
setting a new record date for any action for which a record date has previously
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been set pursuant to this paragraph (whereupon the record date previously set
shall automatically and with no action by any Person be cancelled and of no
effect), nor shall anything in this paragraph be construed to render ineffective
any action taken by Holders of the requisite Principal Amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Company, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of determining
the Holders of Outstanding Securities entitled to join in the giving or making
of (i) any Notice of Default, (ii) any declaration of acceleration referred to
in Section 5.2, (iii) any request to institute proceedings referred to in
Section 5.7(2) or (iv) any direction referred to in Section 5.12. If any record
date is set pursuant to this paragraph, the Holders of Outstanding Securities on
such record date, and no other Holders, shall be entitled to join in such
notice, declaration, request or direction, whether or not such Holders remain
Holders after such record date; provided that no such action shall be effective
--------
hereunder unless taken on or prior to the applicable Expiration Date by Holders
of the requisite Principal Amount of Outstanding Securities on such record date;
and provided, further, that for the purpose of determining whether Holders of
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the requisite Principal Amount of such Securities have taken such action, no
Security shall be deemed to have been Outstanding on such record date unless it
is also Outstanding on the date such action is to become effective. Nothing in
this paragraph shall be construed to prevent the Trustee from setting a new
record date for any action (whereupon the record date previously set shall
automatically and without any action by any Person be cancelled and of no
effect), nor shall anything in this paragraph be construed to render ineffective
any action taken by Holders of the requisite Principal Amount of Outstanding
Securities on the date such action is taken. Promptly after any record date is
set pursuant to this paragraph, the Trustee, at the Company's expense, shall
cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
hereto that sets such record date may designate any day as the "Expiration Date"
and from time to time may change the Expiration Date to any earlier or later
day; provided that no such change shall be effective unless notice of the
--------
proposed new Expiration Date is given to the other party hereto in writing, and
to each Holder of Securities in the manner set forth in Section 1.6, on or
before the existing Expiration Date. Notwithstanding the foregoing, no
Expiration Date shall be later than the 180th day after the applicable record
date and, if an Expiration Date is not designated with respect to any record
date set pursuant to this Section, the party hereto that set such record date
shall be deemed to have designated the 180th day after such record date as the
Expiration Date with respect thereto.
Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with
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regard to any particular Security may do so with regard to all or any part of
the Principal Amount of such Security or by one or more duly appointed agents
each of which may do so pursuant to such appointment with regard to all or any
part of such Principal Amount.
Section I.5 Notices, Etc., to Trustee and Company. Any request, demand,
-------------------------------------
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficiently given
if made, given, furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, or
(2) the Company by the Trustee or by any Holder shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first-
class postage prepaid, to the Company addressed to it at the address of its
principal office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the Company.
Section I.6 Notice to Holders; Waiver. Where this Indenture
-------------------------
provides for notice to Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in writing and mailed,
first-class postage prepaid, to each Holder affected by such event, at his
address as it appears in the Security Register, not later than the latest date
(if any), and not earlier than the earliest date (if any), prescribed for the
giving of such notice. Such notice shall be conclusively deemed to have been
given and received by Holders when such notice is mailed, whether or not such
Holder receives such notice. In any case where notice to Holders is given by
mail, neither the failure to mail such notice, nor any defect in any notice so
mailed, to any particular Holder shall affect the sufficiency of such notice
with respect to other Holders. 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 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.
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 as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
Section I.7 Conflict with Trust Indenture Act. If any provision hereof
---------------------------------
limits, qualifies or conflicts with a provision of the Trust Indenture Act
which 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 which 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. To the extent
a Security conflicts with a provision in the Indenture,
-14-
<PAGE>
the Indenture governs.
Section I.8 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.
Section I.9 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 I.10 Separability Clause. In case any provision in
-------------------
this Indenture or in the Securities shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section I.11 Benefits of Indenture. Nothing in this Indenture or
---------------------
in the Securities, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder and the Holders of
Securities, any benefit or any legal or equitable right, remedy or claim under
this Indenture. The provisions of Article XII are intended to be for the
benefit of, and shall be enforceable directly by, the holders of Senior
Indebtedness of the Company.
Section I.12 Governing Law. THIS INDENTURE AND THE SECURITIES
-------------
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section I.13 Legal Holidays. In any case where any Interest
--------------
Payment Date, Redemption Date, Repurchase Date or Stated Maturity of any
Security or the last date on which a Holder has the right to convert his
Securities shall not be a Business Day then (notwithstanding any other
provision of this Indenture or of the Securities) payment of interest or
principal (and premium, if any) or conversion of the Securities need not be
made on such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the Interest Payment Date, Redemption
Date, Repurchase Date or at the Stated Maturity, or on such last day for
conversion, provided that no interest or Original Issue Discount shall accrue
for the period from and after such Interest Payment Date, Redemption Date,
Repurchase Date or Stated Maturity, as the case may be.
Section I.14 Indenture and Securities Solely Corporate Obligations.
-----------------------------------------------------
No recourse for the payment of the principal of or premium, if any, or
interest (including any Liquidated Damages) on any Security and no recourse
under or upon any obligation, covenant or agreement of the Company in this
Indenture or in any supplemental indenture or in any Security, or because of the
creation of any indebtedness represented thereby, shall be had against any
-15-
<PAGE>
incorporator, stockholder, employee, agent, officer, or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby waived and released as a condition
of, and as a consideration for, the execution of this Indenture and the issue of
the Securities.
ARTICLE II
SECURITY FORMS
--------------
Section II.1 Forms Generally. The Securities and the Trustee's
---------------
certificate of authentication 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 Depositary therefor or as may, consistently herewith,
be determined by the officers executing such Securities, as evidenced by their
execution of the Securities.
The definitive Securities shall be printed, lithographed or engraved on
steel engraved borders or may be produced in any other manner, all as determined
by the officers executing such Securities, as evidenced by their execution of
such Securities.
In certain cases described elsewhere herein, the legends set forth in the
first four paragraphs of Section 2.2 may be omitted from Securities issued
hereunder.
(a) Rule 144A Securities. Securities offered and sold in reliance on Rule
--------------------
144A ("Rule 144A") under the Securities Act and to subsequent transferees,
directly or indirectly, of such Securities shall be issued in fully registered
book-entry form in one or more Global Securities (each a "Global Security"),
without interest coupons, substantially in the form of Security set forth in
Sections 2.2 and 2.3, with such applicable legends as are provided for in
Section 2.2, except as otherwise permitted herein. Such Global Securities shall
be registered in the name of a nominee of the Depositary and deposited with the
Trustee, as custodian for the Depositary, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. The aggregate Principal
Amount of the Global Securities may from time to time be increased or decreased,
as appropriate, by adjustments made on the records of the Trustee, as custodian
for the Depositary, in consequence of the issue of Definitive Securities, as
hereinafter provided, or to reflect redemptions, repurchases and conversions.
(b) Definitive Securities. Except as provided in this Section 2.1 or
---------------------
Section 3.5, owners of beneficial interests in Global Securities will not be
entitled to receive physical delivery of
-16-
<PAGE>
certificated Securities. Purchasers of Securities who are Institutional
Accredited Investors and are not Qualified Institutional Buyers will receive
Definitive Securities; provided, however, that upon transfer of such
-------- -------
Definitive Securities to a Qualified Institutional Buyer, such Definitive
Securities will, unless the Global Security has previously been exchanged, be
exchanged for an interest in a Global Security pursuant to the provisions of
Section 3.5.
Section II.2 Form of Face of Security. FOR PURPOSES OF SECTIONS 1273
------------------------
AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT WITH RESPECT TO EACH $1,000 OF PRINCIPAL AMOUNT OF
THIS SECURITY IS $524.64, THE ISSUE DATE IS DECEMBER 28, 1998, AND THE YIELD
TO STATED MATURITY IS 4.00% PER ANNUM (COMPUTED ON A SEMIANNUAL BOND
EQUIVALENT BASIS).
[INCLUDE UNLESS PURSUANT TO SECTION 3.5(d) OF THE INDENTURE, THE ISSUER
DETERMINES THAT THE FOLLOWING LEGEND MAY BE REMOVED -- THIS SECURITY AND THE
SHARES OF SERIES A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY, THE
SHARES OF SERIES A COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY NOR
ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY, BY ITS ACCEPTANCE HEREOF, AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER SUCH SECURITY AND THE SERIES A COMMON STOCK ISSUABLE
UPON THE CONVERSION THEREOF, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE"), WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OR SUCCESSOR OF SUCH
SECURITY) ONLY (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) FOR SO LONG AS
THE SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHICH NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT
-17-
<PAGE>
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL "ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A
VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, (D) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, OR (E) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE
OR TRANSFER PURSUANT TO CLAUSE (C) OR (E) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO THE
COMPANY, AND IN EACH OF THE FOREGOING CASES, A CERTIFICATE OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED
BY THE TRANSFEROR TO THE TRUSTEE. THIS LEGEND WILL BE REMOVED UPON THE REQUEST
OF THE HOLDER AFTER THE RESALE RESTRICTION TERMINATION DATE.]
[INCLUDE IF SECURITY IS A GLOBAL SECURITY DEPOSITED WITH DTC -- UNLESS
THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY OR SUCH OTHER REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO., OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
ARTICLE THREE OF THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]
[INCLUDE IF SECURITY IS A DEFINITIVE SECURITY TO BE HELD BY AN
INSTITUTIONAL ACCREDITED INVESTOR--IN CONNECTION WITH ANY TRANSFER, THE HOLDER
WILL DELIVER TO THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATES AND OTHER
INFORMATION AS SUCH TRANSFER AGENT MAY
-18-
<PAGE>
REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING
RESTRICTIONS.]
At Home Corporation
Convertible Subordinated Debentures Due 2018
No. ____ Principal Amount:
Cusip No. _____________ $________________
Issue Date: December 28, 1998
Issue Price: $524.64
(for each $1,000 Principal Amount
at Stated Maturity)
Original Issue Discount: $475.36
(for each $1,000 Principal Amount
at Stated Maturity)
At Home Corporation, a corporation duly organized and existing under the
laws of Delaware (herein called the "Company", which term includes any successor
Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to __________, or registered assigns, the principal sum of
___________ Dollars [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 $437,000,000 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 28, 2018, and to pay cash
interest thereon as specified on the other side of this Security.
Original Issue Discount will accrue as specified on the other side of this
Security. This Security is convertible as specified on the other side of this
Security. All capitalized terms used herein without definition shall have the
respective meanings assigned thereto in the Indenture referred to on the other
side of this Security.
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 by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
-19-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _____________________
AT HOME CORPORATION,
By: __________________________________
Name:
Title:
[Seal]
Attest:
_______________________________________
Name:
Title:
Section II.3 Form of Reverse of Security.
---------------------------
1. Cash Interest; Original Issue Discount
--------------------------------------
The Company promises to pay interest in cash on the Principal Amount of
this Security at the rate per annum of 0.5246%. The Company will pay cash
interest semiannually on June 28, and December 28 of each year (each an
"Interest Payment Date") to holders of record at the close of business on each
June 13 or December 13 (whether or not a business day) (each a "Regular Record
Date") immediately preceding such Interest Payment Date. Cash interest on the
Securities will accrue from the most recent date to which interest has been paid
or duly provided or, if no interest has been paid, from the Issue Date. Cash
interest will be computed on the basis of a 360-day year of twelve 30-day
months. The Company shall pay cash interest on overdue principal, or if shares
of Series A Common Stock (or cash in lieu of fractional shares) in respect of a
conversion of this Security in accordance with the terms of Article XIII of the
Indenture are not delivered when due, at the rate borne by the Securities plus
1% per annum, and it shall pay interest in cash on overdue installments of cash
interest at the same rate to the extent lawful. All such overdue cash interest
shall be payable on demand.
Original Issue Discount shall accrue on this Security as set forth below so
long as this Security remains outstanding, calculated on a semiannual bond
equivalent basis using a 360-day year composed of twelve 30-day months, from the
Issue Date of this Security. As of any date (the "Specified Date"), the amount
of Original Issue Discount accrued on this Security per $1,000 Principal Amount
shall be:
-20-
<PAGE>
(i) If the Specified Date occurs on one of the Interest Payment Dates set
forth below, the amount of accumulated Original Issue Discount will equal the
amount set forth below for such Interest Payment Date:
<TABLE>
<CAPTION>
Date Accretion of Original Issue Accreted Amount
Discount (per $1,000 (per $1,000 Principal
Principal Amount) Amount)
- -------------------------------------------- ------------------------------ ---------------------
<S> <C> <C>
December 28, 1998 $524.64
June 28, 1999 7.87 532.51
December 28, 1999 8.03 540.54
June 28, 2000 8.18 548.72
December 28, 2000 8.36 557.08
June 28, 2001 8.52 565.60
December 28, 2001 8.68 574.28
June 28, 2002 8.87 583.15
December 28, 2002 9.04 592.19
June 28, 2003 9.22 601.41
December 28, 2003 9.40 610.81
June 28, 2004 9.60 620.41
December 28, 2004 9.78 630.19
June 28, 2005 9.98 640.17
December 28, 2005 10.18 650.35
June 28, 2006 10.39 660.74
December 28, 2006 10.59 671.33
June 28, 2007 10.80 682.13
December 28, 2007 11.02 693.15
June 28, 2008 11.24 704.39
December 28, 2008 11.47 715.86
June 28, 2009 11.69 727.55
December 28, 2009 11.93 739.48
June 28, 2010 12.17 751.65
December 28, 2010 12.41 764.06
June 28, 2011 12.66 776.72
December 28, 2011 12.91 789.63
June 28, 2012 13.17 802.80
December 28, 2012 13.43 816.23
June 28, 2013 13.70 829.93
December 28, 2013 13.98 843.91
June 28, 2014 14.25 858.16
December 28, 2014 14.54 872.70
June 28, 2015 14.83 887.53
December 28, 2015 15.13 902.66
June 28, 2016 15.43 918.09
December 28, 2016 15.74 933.83
</TABLE>
-21-
<PAGE>
<TABLE>
<CAPTION>
Date Accretion of Original Issue Accreted Amount
Discount (per $1,000 (per $1,000 Principal
Principal Amount) Amount)
- -------------------------------------------- ------------------------------ ---------------------
<S> <C> <C>
June 28, 2017 16.06 949.89
December 28, 2017 16.37 966.26
June 28, 2018 16.70 982.96
At Stated Maturity 17.04 1,000.00
</TABLE>
(ii) if the Specified Date occurs before the first Interest Payment Date,
the amount of accrued Original Issue Discount will equal the sum of (A) the
Issue Price of this Security and (B) an amount equal to the amount of accrued
Original Issue Discount for the first Interest Payment Date multiplied by a
fraction, the numerator of which is the number of days elapsed from the Issue
Date to the Specified Date, using a 360-day year of twelve 30-day months, and
the denominator of which is the number of days from the Issue Date to the first
Interest Payment Date, using a 360-day year of twelve 30-day months;
(iii) if the Specified Date occurs between two Interest Payment Dates, the
amount of accrued Original Issue Discount will equal the sum of (A) the amount
of accrued Original Issue Discount set forth in paragraph (i) for the Interest
Payment Date immediately preceding such Specified Date and (B) an amount equal
to the product of (1) the amount of accrued Original Issue Discount for the
immediately following Interest Payment Date less the amount of accrued Original
Issue Discount for the immediately preceding Interest Payment Date multiplied by
(2) a fraction, the numerator of which is the number of days elapsed from the
immediately preceding Interest Payment Date to the Specified Date, using a 360-
day year of twelve 30-day months, and the denominator of which is 180; or
(iv) if the Specified Date occurs after the Stated Maturity of this
Security, the amount of accrued Original Issue Discount will equal the amount of
accrued Original Issue Discount as of such Stated Maturity.
2. Special Tax Event Conversion. From and after the date (the "Tax Event
----------------------------
Date") of the occurrence of a Tax Event, at the option of the Company, interest
in lieu of future Original Issue Discount and regular cash interest shall accrue
at 4.00% per annum on a principal amount per Security (the "Restated Principal
Amount") equal to the Issue Price plus Original Issue Discount accrued to the
date immediately prior to the Tax Event Date or the date on which the Company
exercises the option described in this paragraph, whichever is later (such date
hereunder referred to as the "Option Exercise Date"), and shall be payable
semiannually on each Interest Payment Date to holders of record at the close of
business on the Regular Record Date immediately preceding such Interest Payment
Date. In the event the Company exercises such option upon a Tax Event, interest
will be computed on the basis of a 360-day year comprised of twelve 30-day
months and will accrue
-22-
<PAGE>
from the most recent date to which interest has been paid or, if no interest has
been paid, from the Option Exercise Date.
3. Method of Payment. Subject to the terms and conditions of the
-----------------
Indenture, the Company will make payments in respect of the principal of,
premium, if any, and interest payable in cash on this Security, and in respect
of Redemption Prices to Holders who surrender Securities to a Paying Agent to
collect such payments in respect of the Securities. The Company will pay cash
amounts in money of the United States of America that at the time of payment is
legal tender for payment of public and private debts. However, the Company may
make such cash payments by check payable in such money.
4. Paying Agent; Registrar; Exchange Agent. Initially, State Street Bank
---------------------------------------
and Trust Company of California, N.A. (the "Trustee"), will act as Paying Agent,
Registrar and Exchange Agent. The Company may appoint and change any Paying
Agent, Registrar or co-registrar without notice, other than notice to the
Trustee, except that the Company will maintain at least one Paying Agent in the
State of New York, City of New York, Borough of Manhattan. The Company or any
of its Subsidiaries or Affiliates incorporated in the United States may act as
Paying Agent, Registrar or co-registrar.
5. Indenture. The Company issued the Securities under an Indenture dated
---------
as of December 28, 1998 (the "Indenture"), between the Company and the Trustee.
The terms of the Securities include those stated in the Indenture and those made
part of the Indenture by reference to the Indenture and those made part of the
Indenture by reference to the Trust Indenture Act of 1939, as in effect from
time to time (the "TIA"). Capitalized terms used herein and not defined herein
have the meanings ascribed thereto in the Indenture. The Securities are subject
to all such terms, and Holders are referred to the Indenture and the TIA for a
statement of those terms.
The Securities are unsecured subordinated obligations of the Company
limited to the aggregate Principal Amount specified in Section 3.1 of the
Indenture.
6. Redemption at the Option of the Company. No sinking fund is provided
---------------------------------------
for this Security. On and after December 28, 2003, this Security is redeemable
for cash as a whole, or from time to time in part, at any time at the option of
the Company at the prices set forth below (each a "Redemption Price") (equal to
its Issue Price plus accrued Original Issue Discount, together with accrued and
unpaid cash interest, to the Redemption Date).
The table below shows Redemption Prices of a Security per $1,000 Principal
Amount at maturity on December 28, 2003, at each December 28 thereafter prior to
maturity, and at maturity on December 28, 2018, which prices reflect the accrued
Original Issue Discount calculated to each such date. The Redemption Price of a
Security redeemed between such dates would include an additional
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<PAGE>
amount reflecting the additional Original Issue Discount accrued since the next
preceding date in the table to, but excluding, the Redemption Date, calculated
as set forth under paragraph 1(iii) (except that the reference therein to "180"
shall instead be deemed to refer to "360" for purposes of this paragraph).
<TABLE>
<CAPTION>
Redemption Date (1) (2) (3)
Issue Price Accrued Original Redemption Price
Issue Discount (1)+(2)
<S> <C> <C> <C>
December 28, 2003 $524.64 $ 86.17 $610.81
December 28, 2004 524.64 105.55 630.19
December 28, 2005 524.64 125.71 650.35
December 28, 2006 524.64 146.69 671.33
December 28, 2007 524.64 168.51 693.15
December 28, 2008 524.64 191.22 715.86
December 28, 2009 524.64 214.84 739.48
December 28, 2010 524.64 239.42 764.06
December 28, 2011 524.64 264.99 789.63
December 28, 2012 524.64 291.59 816.23
December 28, 2013 524.64 319.27 843.91
December 28, 2014 524.64 348.06 872.70
December 28, 2015 524.64 378.02 902.66
December 28, 2016 524.64 409.19 933.83
December 28, 2017 524.64 441.62 966.26
At Stated Maturity 524.64 475.36 1,000.00
</TABLE>
If converted to a semiannual coupon debenture following the occurrence of a
Tax Event, this Security will be redeemable at the Restated Principal Amount
plus accrued and unpaid interest from the date of such conversion to, but
excluding, the Redemption Date; provided, however, that in no event may this
-------- -------
Security be redeemed prior to December 28, 2003.
7. Notice of Redemption. Notice of Redemption will be mailed at least 30
--------------------
days but not more than 60 days before the Redemption Date to each Holder of
Securities to be redeemed at the Holder's registered address. If money
sufficient to pay the Redemption Price of all Securities (or portions thereof
which are in an integral multiple of $1,000 in Principal Amount) to be redeemed
on the Redemption Date is deposited with the Paying Agent prior to or on the
Redemption Date, immediately after such Redemption Date cash interest and
Original Issue Discount shall cease to accrue on such Securities or portions
thereof.
8. Purchase by the Company at the Option of the Holder. Subject to the
---------------------------------------------------
terms and conditions of the Indenture, the Company shall become obligated to
purchase, at the option of the Holder, this Security on the following Purchase
Dates at the following Purchase Prices per $1,000 in Principal Amount (equal to
the Issue Price plus accrued Original Issue Discount to such Purchase Date),
plus accrued and unpaid cash interest to the Purchase Date, upon delivery by the
Holder of a
-24-
<PAGE>
Purchase Notice containing the information set forth in the Indenture, at any
time from the opening of business on the date that is 20 Business Days prior to
such Purchase Date until the close of business on such Purchase Date and upon
delivery of this Security to the Paying Agent by the Holders as set forth in the
Indenture. Such Purchase Prices may be paid, at the option of the Company, in
cash or by the delivery of Series A Common Stock, or in any combination thereof.
Purchase Date Purchase Price
- ------------------------------------------------- --------------
December 10, 2003................................ $610.81
December 10, 2008................................ $715.86
December 10, 2013................................ $843.91
Notwithstanding anything herein to the contrary, if prior to the Purchase
Date this Security has been converted to a semiannual coupon debenture following
the occurrence of a Tax Event, the Purchase Price will be equal to the Restated
Principal Amount plus accrued and unpaid cash interest from the date of
conversion to, but excluding, the Purchase Date.
At the option of the Holder and subject to the terms and conditions of the
Indenture, the Company shall become obligated to purchase this Security held by
such Holder 30 Business Days after the occurrence of a Change in Control for a
Change in Control Purchase Price equal to the Issue Price plus accrued Original
Issue Discount and accrued and unpaid cash interest to the Change in Control
Purchase Date, which shall be paid in cash.
The Holder has the right to withdraw any Purchase Notice or Change in
Control Purchase Notice, as the case may be, by delivering to the Paying Agent
prior to the close of business on the Purchase Date a written notice of
withdrawal in accordance with the provisions of the Indenture.
If cash (or, if applicable, shares of Series A Common Stock) sufficient to
pay the Purchase Price or Change in Control Purchase Price, as the case may be,
of all Securities (or any portion thereof which is in an integral multiple of
$1,000 in Principal Amount) to be purchased prior to or on the Purchase Date or
the Change in Control Purchase Date, as the case may be, is deposited with the
Paying Agent on the Purchase Date or the Change in Control Purchase Date, as the
case may be, this Security shall cease to be outstanding and cash interest and
Original Issue Discount shall cease to accrue on this Security (or such portions
thereof) and will be deemed paid, whether or not this Security is delivered to
the Paying Agent, immediately after such Purchase Date or Change in Control
Purchase Date, as the case may be, and the Holder shall have no other rights as
such (other than the right to receive the Purchase Price or Change in Control
Purchase Price, as the case may be, upon surrender of this Security or portion
hereof).
9. Conversion Rights. At the option of the Holder and subject to the
-----------------
terms and conditions of the Indenture, this Security (or any portion hereof
which is an integral multiple of
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<PAGE>
$1,000 in Principal Amount) may be surrendered for conversion into shares of
Series A Common Stock at an initial conversion rate (the "Conversion Rate") of
6.55 shares of Series A Common Stock per $1,000 Principal Amount of this
Security. The Conversion Rate is subject to adjustment as set forth in the
Indenture. The right to surrender this Security for conversion pursuant to
Article XIII of the Indenture shall terminate on the close of business on
December 28, 2018, or, if this Security or any portion hereof shall be called
for redemption pursuant to the terms hereof, then in respect of any portion so
called for redemption, at the close of business on the Redemption Date (unless
in the case of any such redemption the Company shall default in the payment due
upon the redemption hereof).
Except as otherwise expressly provided in the Indenture, no payment or
adjustment shall be made on account of any dividends or distributions on Series
A Common Stock delivered upon such conversion. The Conversion Rate will not be
adjusted at any time during the term of this Security for accrued Original Issue
Discount or cash interest. Upon conversion of this Security, that portion of
accrued Original Issue Discount or (except as provided below) accrued and unpaid
cash interest thereon attributable to the period from the Issue Date through the
Conversion Date with respect to this Security shall not be canceled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through the delivery of the Series A Common Stock (together with
the cash payment in lieu of fractional interests therein) in exchange for this
Security; and the fair market value of such Series A Common Stock (together with
any cash payment for fractional shares), if any, shall be treated as delivered
or paid, to the extent thereof, first in exchange for accrued Original Issue
Discount and accrued and unpaid cash interest through the Conversion Date, and
the balance, if any, of such fair market value of such Series A Common Stock
(and any cash payment for fractional shares) shall be treated as delivered or
paid in exchange for the Issue Price of this Security, to the extent of such
Issue Price. Notwithstanding the foregoing, accrued but unpaid cash interest
will be payable upon conversion of this Security if such conversion is made
concurrently with or after acceleration of the indebtedness represented by this
Security following an Event of Default.
No fractional shares of Series A Common Stock shall be delivered upon
exchanges but the Conversion Agent on behalf of the Company shall make a cash
payment in lieu thereof equal to the product of such fractional share and the
Sale Price on the Trading Day immediately preceding the Conversion Date.
To convert this Security the Holder must (1) complete and manually sign the
conversion notice hereon (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent (initially the Trustee)
or, if applicable, complete and deliver to the Depository Trust Company ("DTC")
the appropriate instruction form for conversion pursuant to DTC's book entry
conversion program, (2) surrender (or arrange for book-entry delivery of) this
Security to the Conversion Agent (which is not necessary in the case of
conversion pursuant to DTC's book entry conversion program), (3) furnish
appropriate endorsements and transfer documents if required by the Conversion
Agent, the Company or the Trustee and (4) pay any transfer or similar tax if
required.
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<PAGE>
Book entry delivery of a Security to the Conversion Agent may be made by any
financial institution that is a participant in DTC; conversion through DTC's
book entry conversion program is available for any security that is held in an
account maintained at DTC by any such Participant. A conversion shall be deemed
to have been effected at the close of business on the date all such requirements
have been satisfied (the "Conversion Date"). A Holder may convert a portion of
this Security only if the portion is $1,000 Principal Amount or an integral
multiple of $1,000.
In the event the Company exercises its option pursuant to Section 15.1 of
the Indenture to have interest in lieu of Original Issue Discount accrue on this
Security following a Tax Event, the Holder will be entitled on conversion to
receive the same number of shares of Series A Common Stock such Holder would
have received if the Company had not exercised such option.
Securities surrendered for conversion 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 Securities to be
redeemed on a date within such period) must be accompanied by payment of an
amount equal to the interest thereon that registered Holder is to receive.
Except where Securities surrendered for conversion must be accompanied by
payment as described above, no interest on converted Securities will be payable
by the Company on any Interest Payment Date subsequent to the date of
conversion.
The Conversion Rate shall be adjusted as provided in Article XIII of the
Indenture.
10. Arrangement on Call for Redemption. Any Securities called for
----------------------------------
redemption, unless surrendered for exchange before the close of business on the
Redemption Date, may be deemed to be purchased from the Holders of such
Securities at an amount not less than the Redemption Price plus accrued and
unpaid cash interest to the Redemption Date, by one or more third parties who
may agree with the Company to purchase such Securities from the Holders, to
exchange them for Series A Common Stock and to make payment for such Securities
to the Trustee in trust for such Holders.
11. Subordination. The Securities are subordinated to Senior Indebtedness
-------------
of the Company. To the extent provided in the Indenture, Senior Indebtedness of
the Company must be paid before the Securities may be paid. The Company and
each Holder of Securities, by accepting a Security, agrees to the subordination
provisions contained in the Indenture and authorizes the Trustee to give it
effect and appoints the Trustee as attorney-in-fact for such purpose.
12. Denominations; Transfer; Exchange. The Securities are in fully
---------------------------------
registered form, without coupons, in denominations of $1,000 of Principal Amount
and integral multiples of $1,000 in excess thereof. The Holder may transfer or
exchange this Security in accordance with the Indenture. The Registrar may
require the Holder, among other things, to furnish appropriate
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<PAGE>
endorsements and transfer documents. The Registrar need not transfer or exchange
any Securities selected for redemption (except, in the case of a Security to be
redeemed in part, the portion of the Security not to be redeemed) or any
Securities in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given and not withdrawn (except, in the case of a Security to be
purchased in part, the portion of the Security not to be purchased) or any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
13. Persons Deemed Owners. The registered Holder of this Security may be
---------------------
treated as the owner of this Security for all purposes.
14. Unclaimed Money for Securities. The Trustee and the Paying Agent
------------------------------
shall return to the Company upon written request any money or securities held by
them for the payment of any amount with respect to this Security that remain
unclaimed for two years. After return to the Company, the Holder must look
solely to the Company for payment.
15. Amendment; Waiver. Subject to certain exceptions set forth in the
-----------------
Indenture, (i) the Indenture or the Securities may be amended with the written
consent of the Holders of at least a majority in aggregate Principal Amount of
the Securities at the time Outstanding and (ii) certain Defaults may be waived
with the written consent of the Holders of a majority in the aggregate Principal
Amount of the Securities at the time outstanding. Subject to certain exceptions
set forth in the Indenture, without the consent of any Holder, the Company and
the Trustee may amend the Indenture or the Securities to cure any ambiguity,
omission, defect, or inconsistency, or to comply with Article VIII or Section
13.14 of the Indenture, to provide for uncertificated Securities in addition to
or in place of certificated Securities, to make any change that does not
adversely affect the rights of any Holder, to comply with any requirement of the
Commission in connection with the qualification of the Indenture under the TIA
or to add to the covenants or obligations of the Company under the Indenture or
surrender any right, power or option conferred by the Indenture on the Company.
16. Defaults and Remedies. Under the Indenture, Events of Default
---------------------
include, among other things (i) default by the Company in (A) payment of the
Principal Amount (or, if the Securities have been converted to semiannual coupon
debentures following a Tax Event, the Restated Principal Amount), Issue Price,
accrued Original Issue Discount, the Redemption Price, the Purchase Price or the
Change in Control Purchase Price, as the case may be, in respect of the
Securities when the same becomes due and payable, (B) cash interest when due (if
such default in payment of any such interest shall continue for 31 days) or (C)
the delivery of shares of Series A Common Stock (including cash in lieu of
fractional shares of Series A Common Stock) in accordance with the terms of the
Indenture when such are required to be delivered upon conversion of a Security
(if such default shall continue for 10 days); (ii) failure by the Company to
comply with any other agreements in the Indenture or the Securities upon the
receipt by the Company of notice of such default from the Trustee or Holders of
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<PAGE>
not less than 25% in aggregate Principal Amount of the Securities then
Outstanding and the Company's failure to cure such default within 90 days after
receipt by the Company of such notice; (iii) default under any bond, debenture,
note or other evidence of indebtedness for money borrowed of the Company having
an aggregate outstanding principal amount of in excess of $10,000,000, which
default shall have resulted in such indebtedness being accelerated, without such
indebtedness being discharged or such acceleration having been rescinded or
annulled within 20 days after receipt of notice thereof by the Company from the
Trustee or the Company and the Trustee from the Holders of not less than 25% in
aggregate principal amount at maturity of the Securities then outstanding
(unless such default has been cured or waived); and (iv) certain events of
bankruptcy or insolvency. If an Event of Default occurs and is continuing, the
Trustee, or the Holders of at least 25% in aggregate Principal Amount of the
Securities at the time outstanding, may by notice to the Company declare the
Issue Price of, plus accrued Original Issue Discount and accrued and unpaid cash
interest through the date of such declaration on, all the Securities to be
immediately due and payable. Certain events of bankruptcy or insolvency are
Events of Default which will result in the Issue Price plus accrued Original
Issue Discount and accrued and unpaid cash interest through the occurrence of
such Event of Default on the Securities becoming due and payable immediately
upon the occurrence of such Event of Default.
Holders may not enforce the Indenture or the Securities except as provided
in the Indenture. The Trustee may refuse to enforce the Indenture or the
Securities unless it receives reasonable indemnity or security. Subject to
certain limitations, Holders of a majority in aggregate Principal Amount of the
Securities at the time outstanding may direct the Trustee in its exercise of any
trust or power. The Trustee may withheld from Holders notice of any continuing
Default (except a Default in payment of amounts specified in clause (i) above)
if it in good faith determines that withholding notice is in their interests.
17. Registration Rights Agreement. The Holder of this Security and the
-----------------------------
Common Stock issuable upon conversion thereof is entitled to the benefits of a
Registration Rights Agreement (subject to the provisions thereof), dated as of
December 28, 1998, between the Company and the Initial Purchasers.
18. Trustee Dealings with the Company. Subject to certain limitations
---------------------------------
imposed by the TIA, the Trustee under the Indenture, in its individual or any
other capacity, may become the owner or pledgee of Securities and may otherwise
deal with and collect obligations owed to it by the Company or its Affiliates
with the same rights it would have if it were not Trustee.
19. No Recourse Against Others. A director, officer, employee, agent or
--------------------------
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under this Security or the 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 waives and releases all such liability. The
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<PAGE>
waiver and release are part of the consideration for the issue of the
Securities.
20. Authentication. This Security shall not be valid until an authorized
--------------
officer of the Trustee manually signs the Trustee's Certificate of
Authentication on the other side of this Security.
21. Abbreviations. Customary abbreviations may be used in the name of a
-------------
Holder or an assignee, such as TEN COM (-tenants in common), TEN ENT (-tenants
by the entireties), JT TEN (-joint tenants with right of survivorship and not as
tenants in common), CUST (-custodian), and U/G/M/A (-Uniform Gift to Minors
Act).
22. Governing Law. THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY
-------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
Section II.4 Form of Trustee's Certificate of Authentication. This is
-----------------------------------------------
one of the Securities referred to in the within-mentioned Indenture.
Dated: _______________ State Street Bank and Trust Company of California,
N.A., as Trustee
By: __________________________________
Authorized Signatory
Section II.5 Form of Conversion Notice.
-------------------------
CONVERSION NOTICE
To: At Home Corporation
The undersigned registered owner of this Security hereby irrevocably
exercises the option to convert this Security, or the portion hereof (which is
$1,000 Principal Amount or an integral multiple thereof), below designated into
shares of Series A Common Stock (in the form of a Share Certificate) in
accordance with the terms of the Indenture referred to in this Security, and
directs that the shares issuable and deliverable upon conversion, together with
any check in payment for a fractional share and any Security representing any
unconverted Principal Amount hereof, be issued and delivered to the registered
owner hereof unless a different name has been provided below. If shares or any
portion of this Security not converted are to be issued in the name of a person
other than the undersigned, the undersigned will pay all transfer taxes payable
with respect thereto and is delivering herewith a certificate in proper form
certifying that the applicable restrictions on transfer have been complied with.
Any amount required to be paid by the undersigned on account of interest
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<PAGE>
accompanies this Security.
DATE: _______________
__________________________________
Signature(s)
(If a corporation, partnership or fiduciary,
the title of the Person signing must be
stated.)
Signature(s) must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers,
savings and loan associations and credit unions)
with membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission
Rule 17Ad-15 if shares of Series A Common
Stock are to be issued, or Securities to be
delivered, other than to and in the name of the
required holder.
____________________________________
Signature Guarantee
Fill in for registration of shares if they are to be delivered, or
unconverted Securities if they are to be issued, other than to
and in the name of the registered owner:
____________________________________
(Name)
____________________________________
(Street Address)
____________________________________
(City, State and zip code)
(Please print name and address)
Register: __ Series A Common Stock
__ Securities
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<PAGE>
(Check appropriate line(s))
Principal Amount to be converted
(if less than all):
$_____,000
__________________________________
Social Security or other Taxpayer
Identification Number of owner
Section II.6 Form of Certification.
---------------------
TRANSFER CERTIFICATE
In connection with any transfer of any of the Securities within the period
prior to the expiration of the holding period applicable to the sales thereof
under Rule 144(k) under the Securities Act of 1933, as amended (the "Securities
Act") (or any successor provision), the undersigned registered owner of this
Security hereby certifies with respect to $________ Principal Amount of the
above-captioned securities presented or surrendered on the date hereof (the
"Surrendered Securities") for registration of transfer, or for exchange or
conversion where the securities issuable upon such exchange or conversion are to
be registered in a name other than that of the undersigned registered owner
(each such transaction being a "transfer"), that such transfer complies with the
restrictive legend set forth on the face of the Surrendered Securities for the
reason checked below:
[_] The transfer of the Surrendered Securities complies with Rule 144 under
the U.S. Securities Act of 1933, as amended (the "Securities Act"); or
[_] The transfer of the Surrendered Securities complies with Rule 144A
under the Securities Act; or
[_] The transfer of the Surrendered Securities is to an institutional
accredited investor, as described in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act; or
[_] The transfer of the Surrendered Securities is pursuant to an effective
registration statement under the Securities Act.
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<PAGE>
and unless the box below is checked, the undersigned confirms that, to the
undersigned's knowledge, such Securities are not being transferred to an
"affiliate" of the Company as defined in Rule 144 under the Securities Act (an
"Affiliate").
[_] The transferee is an Affiliate of the Company.
DATE: ___________________
_______________________________
Signature(s)
(If the registered owner is a corporation, partnership or fiduciary,
the title of the Person signing on behalf of such registered owner
must be stated.)
Section II.7 Form of Option of Holder to Elect Purchase.
------------------------------------------
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 14.1 or Section 14.2 of the Indenture, check the appropriate
box:
Section 14.1 [_]
Section 14.2 [_]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 14.1 or Section 14.2 of the Indenture, state the
amount you elect to have purchased:
$
--------------------------------
Dated:
---------------
NOTICE: The signature on this assignment must correspond with the name as it
appears upon the face of the within Security in every particular without
alteration or enlargement or any change whatsoever and be guaranteed.
Signature Guarantee:
------------------------------
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<PAGE>
Signature(s) must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers,
savings and loan associations and credit unions)
with membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission
Rule 17Ad-15 if shares of Series A Common
Stock are to be issued, or Securities to be
delivered, other than to and in the name of the
required holder.
Section II.8 Form of Assignment.
------------------
For value received ______________ hereby sell(s), assign(s) and transfer(s)
unto _______ (Please insert social security or Taxpayer Identification number
of assignee) the within Security, and hereby irrevocably constitutes and
appoints ___________ attorney to transfer the said Security on the books of the
Company, with full power of substitution in the premises.
Dated:
------------------------
Signature(s)
Signature(s) must be guaranteed by an eligible
Guarantor Institution (banks, stock brokers,
savings and loan associations and credit unions)
with membership in an approved signature
guarantee medallion program pursuant to
Securities and Exchange Commission
Rule 17Ad-15 if shares of Series A Common
Stock are to be issued, or Securities to be
delivered, other than to and in the name of the
required holder.
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<PAGE>
Signature Guarantee:
---------------------
ARTICLE III
THE SECURITIES
--------------
Section III.1 Title and Terms. The aggregate Principal
---------------
Amount of Securities which may be authenticated and delivered for original issue
under this Indenture is $380,000,000 upon a Company Order without any further
action by the Company (except for Securities authenticated and delivered for
exchange for, or in lieu of, other Securities pursuant to Sections 3.4, 3.5,
3.6, 9.5, 11.6, 13.2 or 14.5); provided, however, that if the Company sells any
Securities pursuant to the over-allotment option granted pursuant to Section 2
of the Purchase Agreement between the Company and the Initial Purchasers dated
December 21, 1998, then the Trustee shall authenticate and deliver Securities
for original issue in an aggregate Principal Amount of $380,000,000 plus up to
$57,000,000 aggregate Principal Amount upon receipt by the Trustee of a Company
Order, except as aforesaid.
The principal of (and premium, if any) and cash interest on the Securities
shall be payable at the Corporate Trust Office and at any other office or agency
maintained by the Company for such purpose; provided, however, that upon
-------- -------
application by the Holder to the Security Registrar not later than the June 13
or December 13 immediately preceding the relevant Interest Payment Date, such
Holder may receive payment by wire transfer to a U.S. Dollar account (such
transfers to be made only to Holders of an aggregate Principal Amount in excess
of U.S. $5,000,000 in Principal Amount) maintained by the payee with a bank in
the United States upon compliance with the reasonable regulations of the
Trustee.
The Securities shall be redeemable by the Company as provided in Article
XI.
The Securities shall be subordinated in right of payment to the prior
payment in full of Senior Indebtedness as provided in Article XII.
The Securities shall be convertible as provided in Article XIII.
The Securities shall be subject to purchase by the Company at the option of
the Holder as provided in Article XIV.
Section III.2 Denominations. The Securities shall be issuable only in
-------------
registered form
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<PAGE>
without coupons and only in denominations of $1,000 in Principal Amount and any
integral multiple thereof.
Section III.3 Execution, Authentication, Delivery and Dating. The
----------------------------------------------
Securities shall be executed on behalf of the Company by any of its Chairman of
the Board, its President or one of its Vice Presidents, under its corporate seal
reproduced thereon and attested by its Treasurer or one of its Assistant
Treasurers or Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures 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 or an
Authenticating Agent in accordance with such Company Order shall authenticate
and make available for delivery such Securities as in this Indenture provided
and not otherwise. In connection with any Company Order for authentication, an
Officers' Certificate and Opinion of Counsel pursuant to Section 1.2 shall be
required.
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, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
Each security shall be dated the date of its authentication.
Section III.4 Temporary Securities. Pending the preparation of
--------------------
definitive Securities, the Company may execute, and upon Company Order the
Trustee shall authenticate and deliver, 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
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<PAGE>
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 10.2, 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 deliver 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 III.5 Registration; Registration of Transfer and Exchange.
---------------------------------------------------
(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 designated pursuant to Section 10.2 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 and exchanges thereof. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers and exchanges thereof as herein provided. Upon
surrender for registration of transfer or exchange of any Security at an office
or agency of the Company designated pursuant to Section 10.2 for such purpose,
accompanied by a written instrument of transfer or exchange in the form provided
by the Company, the Company shall execute, and the Trustee shall authenticate
and deliver, in the name of the designated transferee or transferees (in the
case of a transfer) or to the Holder (in the case of an exchange), one or more
new Securities, of any authorized denominations and of a like aggregate
Principal Amount and tenor bearing such restrictive legends as may be required
by this Indenture.
(b) Notwithstanding any other provisions of this Indenture or the
Securities, (A) transfers of a Global Security, in whole or in part, shall be
made only in accordance with Section 3.5(b)(i), (B) transfer of a beneficial
interest in a Global Security for a Definitive Security shall comply with
Section 3.5(b)(ii) below, and (C) transfers of a Definitive Security shall
comply with Section 3.5(b)(iii) and (iv) below.
(i) Transfer of Global Security. A Global Security may not be
---------------------------
transferred, in whole or in part, to any Person other than the Depositary
or a nominee or any successor thereof, and no such transfer to any such
other Person may be registered; provided that this clause (i) shall not
--------
prohibit any transfer of a Security that is issued in exchange for a Global
Security but is not itself a Global Security. No transfer of a Security to
any Person shall be effective under this Indenture or the Securities unless
and until such Security has been registered in the name of such Person.
Nothing in this Section 3.5(b)(i) shall prohibit or render ineffective any
transfer of a beneficial interest in a Global Security effected in
accordance with the other provisions of this Section 3.5(b).
(ii) Restrictions on Transfer of a Beneficial Interest in a Global
-------------------------------------------------------------
Security for a
--------------
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<PAGE>
Definitive Security. A beneficial interest in a Global Security may not be
-------------------
exchanged for a Definitive Security except upon satisfaction of the
requirements set forth below. Upon receipt by the Trustee of a transfer of
a beneficial interest in a Global Security in accordance with Applicable
Procedures for a Definitive Security in the form satisfactory to the
Trustee, together with:
(i) so long as the Securities are Restricted Securities,
certification, in the form set forth in Section 2.6, that such
beneficial interest in the Global Security is being transferred
to an Institutional Accredited Investor in accordance with
Sections 501(a)(1), (2), (3) or (7) of the Securities Act; and
(ii) written instructions to the Trustee to make, or direct the
Securities Registrar to make, an adjustment on its books and
records with respect to such Global Security to reflect a
decrease in the aggregate Principal Amount of the Securities
represented by the Global Security, such instructions to contain
information regarding the Depositary account to be credited with
such decrease,
then the Trustee shall cause, or direct the Securities Registrar to cause, in
accordance with the standing instructions and procedures existing between the
Depository and the Securities Registrar, the aggregate Principal Amount of
Securities represented by the Global Security to be decreased by the aggregate
Principal Amount of the Definitive Security to be issued, shall issue such
Definitive Security and shall debit or cause to be debited to the account of the
Person specified in such instructions a beneficial interest in the Global
Security equal to the Principal Amount of the Definitive Security so issued.
(iii) Transfer and Exchange of Definitive Securities. When
----------------------------------------------
Definitive Securities are presented to the Security Registrar with a
request:
(x) to register the transfer of such Definitive Securities; or
(y) to exchange such Definitive Securities for an equal Principal
Amount of Definitive Securities of other authorized denominations,
the Security Registrar shall register the transfer or make the exchange as
requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Securities surrendered for transfer
-------- -------
or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Company and the Security
Registrar, duly executed by the
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<PAGE>
Holder thereof or his attorney duly authorized in writing; and
(ii) so long as such Securities are Restricted Securities, such
Securities are being transferred or exchanged pursuant to an effective
registration statement under the Securities Act or pursuant to clause (A),
(B) or (C) below, and are accompanied by the following additional
information and documents, as applicable:
(A) if such Definitive Securities are being delivered to the
Security Registrar by a Holder for registration in the name of such
Holder, without transfer, a certification from such Holder to that
effect (in the form set forth in Section 2.6); or
(B) if such Definitive Securities are being transferred to the
Company, a certification to that effect; or
(C) if such Definitive Securities are being transferred pursuant
to an exemption from registration in accordance with Rule 144, (i) a
certification to that effect (in the form set forth in Section 2.6)
and (ii) if the Company or Security Registrar so requests, an opinion
of counsel or other evidence reasonably satisfactory to them as to the
compliance with the restrictions set forth in the legend set forth in
Section 2.2.
(iv) Restrictions on Transfer of a Definitive Security for a
-------------------------------------------------------
Beneficial Interest in a Global Security. A Definitive Security may not be
----------------------------------------
exchanged for a beneficial interest in a Global Security except upon
satisfaction of the requirements set forth below. Upon receipt by the
Trustee of a Definitive Security, duly endorsed or accompanied by
appropriate instruments of transfer, in form satisfactory to the Trustee,
together with:
(i) certification, in the form set forth on the reverse of the
Security, that such Definitive Security is being transferred to a Qualified
Institutional Buyer in accordance with Rule 144A; and
(ii) written instructions directing the Trustee to make, or to direct
the Securities Registrar to make, an adjustment on its books and records
with respect to such Global Security to reflect an increase in the
aggregate Principal Amount of the Securities represented by the Global
Security, such instructions to contain information regarding the Depositary
account to be credited with such increase,
then the Trustee shall cancel such Definitive Security and cause, or direct the
Securities Registrar to cause, in accordance with the standing instructions and
procedures existing between the Depository and the Securities Registrar, the
aggregate Principal Amount of Securities represented by the Global
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Security to be increased by the aggregate Principal Amount of the Definitive
Security to be exchanged and shall credit or cause to be credited to the account
of the Person specified in such instructions a beneficial interest in the Global
Security equal to the Principal Amount of the Definitive Security so cancelled.
If no Global Securities are then Outstanding, the Company shall issue and the
Trustee shall authenticate, upon written order of the Company in the form of an
Officers' Certificate, a new Global Security in the appropriate Principal
Amount.
(c) Subject to the succeeding paragraph, every Security shall be subject to
the restrictions on transfer provided in the legend set forth in the first
paragraph of Section 2.2. Whenever any Restricted Security is presented or
surrendered for registration of transfer or for exchange for a Security
registered in a name other than that of the Holder, such Security must be
accompanied by a certificate in substantially the form set forth in Section 2.6,
dated the date of such surrender and signed by the Holder of such Security, as
to compliance with such restrictions on transfer. The Security Registrar shall
not be required to accept for such registration of transfer or exchange any
Security not so accompanied by a properly completed certificate.
(d) The restrictions imposed by the legend set forth in the first paragraph
of Section 2.2 upon the transferability of any Security shall cease and
terminate when such Security has been sold pursuant to an effective registration
statement under the Securities Act or transferred in compliance with Rule 144
under the Securities Act (or any successor provision thereto) or, if earlier,
upon the expiration of the holiday period applicable to sales thereof under Rule
144(K) under the Securities Act (or any successor provision). Any Security as to
which such restrictions on transfer shall have expired in accordance with their
terms or shall have terminated may, upon surrender of such Security for exchange
to the Security Registrar in accordance with the provisions of this Section 3.5
(accompanied, in the event that such restrictions on transfer have terminated by
reason of a transfer in compliance with Rule 144 or any successor provision, by
an opinion of counsel having substantial experience in practice under the
Securities Act and otherwise reasonably acceptable to the Company, addressed to
the Company and in form acceptable to the Company, to the effect that the
transfer of such Security has been made in compliance with Rule 144 or such
successor provision), be exchanged for a new Security, of like tenor and
aggregate Principal Amount, which shall not bear the restrictive legend set
forth in the first paragraph of Section 2.2. The Company shall inform the
Trustee of the effective date of any registration statement registering the
Securities under the Securities Act. The Trustee shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
aforementioned opinion of counsel or registration statement.
(e) As used in the preceding two paragraphs of this Section 3.5, the term
"transfer" encompasses any sale, pledge, transfer, hypothecation or other
disposition of any Security.
(f) No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax, assessment or
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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, 9.6, 11.6, 13.2 or 14.1 not involving any transfer.
(g) The Company shall not be required (i) to issue, register the transfer
of or exchange any Security during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemption of Securities
selected for redemption under Section 11.2 and ending at the close of business
on the day of such mailing, (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part or (iii) to register the transfer
of or exchange any Securities in respect of which a Purchase Notice or a Change
of Control Purchase Notice has been given and not withdrawn by the Holder
thereof in accordance with the terms of this Indenture and such Securities
(except, in the case of Securities to be purchased in part, the portion thereof
not be purchased).
(h) The provisions of clauses (1), (2), (3) and (4) below shall apply only
to Global Securities:
(1) Notwithstanding any other provisions of this Indenture or the
Securities, except as provided in Section 3.5(b)(ii) a Global Security
shall not be exchanged in whole or in part for a Security registered in the
name of any Person other than the Depositary or one or more nominees
thereof, provided that a Global Security may be exchanged for Securities
--------
registered in the names of any person designated by the Depositary in the
event that (i) the Depositary has notified the Company that it is unwilling
or unable to continue as Depositary for such Global Security or such
Depositary has ceased to be a "clearing agency" registered under Exchange
Act, and a successor Depositary is not appointed by the Company within 90
days or (ii) an Event of Default has occurred and is continuing with
respect to the Securities. Any Global Security exchanged pursuant to
clause (i) above shall be so exchanged in whole and not in part and any
Global Security exchanged pursuant to clause (ii) or (iii) above may be
exchanged in whole or from time to time in part as directed by the
Depositary. Any Security issued in exchange for a Global Security or any
portion thereof shall be a Global Security; provided that any such Security
--------
so issued that is registered in the name of a Person other than the
Depositary or a nominee thereof shall not be a Global Security.
(2) Securities issued in exchange for a Global Security or any portion
thereof shall be issued in definitive, fully registered form, without
interest coupons, shall have an aggregate Principal Amount equal to that of
such Global Security or portion thereof to be so exchanged, shall be
registered in such names and be in such authorized denominations as the
Depositary shall designate and shall bear the applicable legends provided
for herein. Any Global Security to be exchanged in whole shall be
surrendered by the Depositary to the Trustee, as Security Registrar. With
regard to any Global Security to be exchanged in part,
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either such Global Security shall be so surrendered for exchange or, if the
Trustee is acting as custodian for the Depositary or its nominee with
respect to such Global Security, the Principal Amount thereof shall be
reduced, by an amount equal to the portion thereof to be so exchanged, by
means of an appropriate adjustment made on the records of the Trustee. Upon
any such surrender or adjustment, the Trustee shall authenticate and
deliver the Security issuable on such exchange to or upon the order of the
Depositary or an authorized representative thereof.
(3) Subject to the provisions of clause (5) below, the registered
Holder may grant proxies and otherwise authorize any Person, including
Agent Members and persons that may hold interests through Agent Members, to
take any action which a holder is entitled to take under this Indenture or
the Securities.
(4) In the event of the occurrence of any of the events specified in
clause (1) above, the Company will promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully
registered form, without interest coupons.
(5) Neither any members of, or participants in, the Depositary ("Agent
Members") nor any other Persons on whose behalf Agent Members may act shall
have any rights under this Indenture with respect to any Global Security
registered in the name of the Depositary or any nominee thereof, or under
any such Global Security, and the Depositary or such nominee, as the case
may be, may be treated by the Company, the Trustee and any agent of the
Company or the Trustee as the absolute owner and holder of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depositary or such nominee,
as the case may be, or impair, as between the Depositary, its Agent Members
and any other person on whose behalf an Agent Member may act, the operation
of customary practices of such Persons governing the exercise of the rights
of a holder of any Security.
Section III.6 Mutilated, Destroyed, Lost and Stolen Securities. If (i)
------------------------------------------------
any mutilated Security is surrendered to the Trustee, or if there shall be
delivered to the Company and the Trustee evidence to their satisfaction of the
destruction, loss or theft of any Security and (ii) such security or indemnity
as may be required by them to save each of them and any agent of either of them
harmless, then, in the absence of 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 deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Security, a new Security of like
tenor and Principal Amount and bearing a number not contemporaneously
Outstanding.
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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 the issuance, authentication and delivery by the Trustee of any new
Security under this Section, the Company may require the payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every new Security issued, authenticated and delivered by the Trustee
pursuant to this Section in lieu of any destroyed, lost or stolen Security shall
constitute an original additional contractual obligation of the Company, whether
or not the destroyed, lost or stolen Security shall be at any time enforceable
by anyone, and 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 are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section III.7 Payment of Cash Interest; Interest Rights Preserved. Cash
---------------------------------------------------
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 registered at the
close of business on the Regular Record Date for payment of such cash interest.
If the Company shall be required by law to deduct any taxes from any sum of
cash interest payable hereunder to a Holder, (i) the Company shall make such
deductions and shall pay the full amount deducted to the relevant taxing
authority in accordance with applicable law and (ii) the amount of such
deduction shall be treated for purposes hereof as a payment of cash interest.
Any cash 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 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
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Security and the date of the proposed payment, 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 (1) provided. Thereupon, the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which 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 shall promptly notify
the Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears in
the 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 (2),
such manner of payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, 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.
In the case of any Security which is converted after any Regular Record
Date and on or prior to the corresponding Interest Payment Date, cash interest
on such Security whose Stated Maturity is on such Interest Payment Date shall be
deemed to continue to accrue and shall be payable on such Interest Payment Date
notwithstanding such conversion and notwithstanding that such Security may have
been called for redemption on a Redemption Date within such period, and such
interest (whether or not punctually paid or duly provided for) shall be paid to
the Person in whose name that Security (or one or more Predecessor Securities)
is registered at the close of business on such Regular Record Date. Except as
otherwise expressly provided in the immediately preceding sentence, in the case
of any Security which is converted, cash interest whose Stated Maturity is after
the date of conversion of such Security shall not be payable (although such
accrued and unpaid
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interest will be deemed paid by the appropriate portion of the Series A Common
Stock received by the holders upon such conversion).
Section III.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.
None of the Company, the Trustee, any Paying Agent or the Security
Registrar will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests of a Global Security or from maintaining, supervising or reviewing any
records relating to such beneficial ownership interests and they shall be
protected in acting on any such information provided by the Depositary.
Section III.9 Cancellation. All Securities surrendered for
------------
payment, redemption, registration of transfer or exchange or conversion shall,
if surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and all Securities so delivered shall be promptly cancelled by the
Trustee. No Securities shall be authenticated in lieu of or in exchange for any
Securities cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Securities held by the Trustee shall be
disposed of as directed by a Company Order.
Section III.10 Computation of Interest. Interest on the Securities
-----------------------
of each series shall be computed on the basis of a 360-day year of twelve 30-day
months.
ARTICLE IV
SATISFACTION AND DISCHARGE
--------------------------
Section IV.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, registration of transfer or exchange of
Securities herein expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
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(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 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 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the Trustee
for cancellation have become due and payable and the Company has
deposited or caused to be deposited irrevocably with the Trustee as
trust cash or, if expressly permitted by the terms hereof, Series A
Common Stock in trust for the benefit of Holders of Outstanding
Securities in an amount sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest to the date of such deposit;
(2) the Company has paid or caused to be paid all other sums payable
hereunder by the Company;
(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; and
(4) no Event of Default which, with notice or lapse of time, or both,
would become an Event of Default with respect to the Securities shall have
occurred and be continuing on the date of such deposit.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.7, the obligations of
the Trustee to any Authenticating Agent under Section 6.14 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.2 and the last
paragraph of Section 10.3 shall survive.
Section IV.2 Application of Trust Money. Subject to the
--------------------------
provisions of the last paragraph of Section 10.3, 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) as the Trustee may determine, to the Persons
entitled thereto, of the principal (and premium, if any)
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and interest for whose payment such money has been deposited with the Trustee.
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 V
REMEDIES
--------
Section V.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
XII 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 any cash interest or Liquidated Damages,
if any, upon any Security when it becomes due and payable, and continuance
of such default for a period of 31 days; or
(2) the Company defaults in the payment of the Principal Amount (or,
if the Securities have been converted to semiannual coupon debentures
following a Tax Event, the Restated Principal Amount), Issue Price, accrued
Original Issue Discount, Redemption Price, Purchase Price or Change in
Control Purchase Price on any Security, when the same becomes due and
payable at its Stated Maturity, upon redemption, upon declaration, when due
for purchase by the Company or otherwise, whether or not such payment shall
be prohibited by this Indenture;
(3) the Company fails to comply with any of its agreements in the
Securities or this Indenture and such failure continues for 90 days after
receipt by the Company of a Notice of Default;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case;
(B) consents to the entry of an order for relief against it in an
involuntary case or the commencement of any case against it;
(C) consents to the appointment of a Custodian of it or for any
substantial part of its property;
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(D) makes a general assignment for the benefit of its creditors;
(E) files a petition in bankruptcy or answer or consent seeking
reorganization or relief; or
(F) consents to the filing of such petition or the appointment of
or taking possession by a Custodian;
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case, or
adjudicates the Company insolvent or bankrupt;
(B) appoints a Custodian of the Company or for any substantial
part of its property; or
(C) orders the winding up or liquidation of the Company;
and the order or decree remains unstayed and in effect for 60 days;
(6) the Company fails to deliver shares of Series A Common Stock
(including cash in lieu of fractional shares) when such Series A Common
Stock (and cash in lieu of fractional shares) is required to be delivered,
upon conversion of a Security and such failure is not remedied for a period
of 10 days; or
(7) default under any bond, debenture, note or other evidence of
indebtedness for money borrowed of the Company having an aggregate
outstanding principal amount of in excess of $10,000,000, which default
shall have resulted in such indebtedness being accelerated, without such
indebtedness being discharged or such acceleration having been rescinded or
annulled within 20 days after receipt of notice thereof by the Company from
the Trustee or the Company and the Trustee from the Holders of not less
than 25% in aggregate Principal Amount of the Securities then Outstanding
(unless such default has been cured or waived) specifying such default and
requiring the Company to cause such indebtedness to be discharged or such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder.
A Default under clause (3) above is not an Event of Default until the
Trustee notifies the Company, or the Holders of at least 25% in aggregate
Principal Amount of the Securities at the time Outstanding notify the Company
and the Trustee, of the Default and the Company does not cure
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such Default within the time specified in clause (3) above after receipt of such
notice. Any such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".
The Company shall deliver to the Trustee, within 90 days after it becomes
aware of the occurrence thereof, written notice of any event which with the
giving of notice and the lapse of time or both would become an Event of Default
under clause (3) or clause (6), its status and what action the Company is taking
or proposes to take with respect thereto.
Section V.2 Acceleration of Stated Maturity; Rescission and Annulment.
---------------------------------------------------------
If an Event of Default (other than an Event of Default specified in Section
5.1(4) or 5.1(5)) 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 Issue Price, accrued Original Issue Discount and
accrued and unpaid cash interest (or if the Securities have been converted to a
semiannual coupon debenture following a Tax Event, the Restated Principal
Amount, plus accrued interest) through the date of declaration on all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such Issue Price, accrued Original Issue Discount and accrued and unpaid cash
interest (or if the Securities have been converted to a semiannual coupon
debenture following a Tax Event, the Restated Principal Amount, plus accrued
interest) shall become immediately due and payable. If an Event of Default
specified in Section 5.1(4) or 5.1(5) occurs, the Issue Price, accrued Original
Issue Discount and accrued and unpaid cash interest (or if the Securities have
been converted to a semiannual coupon debenture following a Tax Event, the
Restated Principal Amount, plus accrued interest) through the date of
declaration on all the Securities shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable.
At any time after such a 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 Article V 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) the Issue Price, accrued Original Issue Discount and accrued
and unpaid cash interest (or if the Securities have been converted to
a semiannual coupon debenture following a Tax Event, the Restated
Principal Amount, plus accrued interest) through the date of
declaration on the Securities,
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(B) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate borne by the Securities,
and
(C) 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 non-payment of the principal
of Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
Section V.3 Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Trustee. If
- -------
(1) default is made in the payment of any cash interest on any
Security when such interest becomes due and payable and such default
continues for a period of 31 days, or
(2) default is made in the payment of the Issue Price on accrued
Original Issue Discount (or if the Securities have been converted to a
semiannual coupon debenture following a Tax Event, the Restated Principal
Amount, plus accrued interest),
the Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against the Company for the whole amount then due and payable
on such Securities, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
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 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 V.4 Trustee May File Proofs of Claim. In case of any
--------------------------------
judicial proceeding relative to the Company (or any other obligor upon the
Securities), its property or its creditors, the Trustee shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(1) to file and prove a claim for the whole amount owing and unpaid in
respect of the Securities and to file such other papers or documents as may
be necessary or advisable in
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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 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 to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due 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.
No provision of this Indenture shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
Section V.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 such judgment has been
recovered.
Section V.6 Application of Money Collected. Any money collected
------------------------------
by the Trustee pursuant to this Article V 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 (or 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: Subject to Article XII to the payment of all amounts due the
Trustee under Section 6.7;
SECOND: Subject to Article XII to the payment of the amounts then due
and unpaid
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for first, interest on, and, second, for principal of (and premium, if any,
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
interest and principal (and premium, if any) respectively; and
THIRD: The balance, if any, to the Company.
Section V.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 Securities, 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
a continuing Event of Default;
(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;
(3) such Holder or Holders have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs,
expenses, losses and liabilities to be incurred in compliance with such
request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
Principal Amount of the Outstanding Securities;
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 to 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 of such
Holders.
Section V.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 Issue Price, accrued
Original Issue Discount and accrued and unpaid cash interest (or if the
Securities have been converted to a semiannual coupon debenture following a Tax
Event, the Restated Principal Amount,
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<PAGE>
plus accrued interest) (subject to Section 3.7) on such Security on the
respective Stated Maturities expressed in such Security (or, in the case of
redemption or repurchase, on the Redemption Date, Change in Control Repurchase
Date or Repurchase Date, as the case may be) and to convert such Security in
accordance with Article XIII and to institute suit for the enforcement of any
such payment on or after such respective dates or the right to convert, and such
rights shall not be impaired without the consent of such Holder.
Section V.9 Restoration of Rights and Remedies. If the Trustee or any
----------------------------------
Holder 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 shall be restored severally and respectively to
their former positions hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section V.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 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.
Section V.11 Delay or Omission Not Waiver. No delay or omission
----------------------------
of the Trustee or of any Holder of any Securities 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 an acquiescence therein.
Every right and remedy given by this Article V or by law to the Trustee or to
the Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
Section V.12 Control by Holders. The Holders of a majority in
------------------
Principal Amount (or Restated Principal Amount, if applicable) 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
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not inconsistent with such direction.
Section V.13 Waiver of Past Defaults. The Holders of not less than
-----------------------
a majority in Principal Amount (or Restated Principal Amount, if applicable) of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except
(1) an Event of Default described in Section 5.1(1) or 5.1(2), or
(2) a Default in respect of a covenant or provision hereof which under
Article IX cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected, or
(3) a Default under Article XIII.
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 V.14 Undertaking for Costs. In any suit for the
---------------------
enforcement of any right or remedy under this Indenture, or in any suit against
the Trustee for any action taken, suffered or omitted by it as Trustee, a court
may require any party litigant in such suit to file an undertaking to pay the
costs of such suit, and may assess costs against any such party litigant, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; provided, that this Section 5.14 shall not be deemed to
authorize any court to require such an undertaking or to make such an assessment
in any suit instituted by the Company or in any suit for the enforcement of the
right to convert any Security in accordance with Article XIII.
Section V.15 Waiver of Usury, Stay or Extension Laws. The Company
---------------------------------------
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any usury, stay or extension law wherever enacted, now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE VI
THE TRUSTEE
-----------
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Section VI.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.
(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 person
would exercise or use under the circumstances in the conduct of his or her 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 wilful 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;
(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
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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 VI.2 Notice of Defaults. Within 90 days after the
------------------
occurrence of any default hereunder, the Trustee shall give the Holders, in the
manner provided in Section 1.6, notice of any default hereunder of which the
Trustee shall be aware, unless such default shall have been cured or waived
before the giving of such notice; 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 any Responsible Officer of the Trustee in good faith determines
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(3), no such notice to Holders shall be given until at least 30 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 VI.3 Certain Rights of Trustee. Subject to the provisions
-------------------------
of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note, 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;
(b) 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;
(c) 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;
(d) the Trustee may consult with counsel 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;
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<PAGE>
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) 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 VI.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 neither the Trustee nor any Authenticating Agent assumes any responsibility
for their correctness. The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities. Neither the Trustee nor
any Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
Section VI.5 May Hold Securities . The Trustee, any Authenticating Agent,
-------------------
any Paying Agent, any Security Registrar or any other agent of the Company, in
its individual or any other capacity, may become the owner or pledgee of
Securities and, subject to Section 6.8 and Section 6.13, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or such other agent.
Section VI.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 with the Company.
Section VI.7 Compensation and Reimbursement. The Company agrees:
------------------------------
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<PAGE>
(1) to pay to the Trustee from time to time reasonable compensation 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 for, and to hold it harmless against, any
loss, liability or expense incurred without negligence, willful misconduct or
bad faith on its part, arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The Trustee shall notify
the Company of any claim asserted against it for which it may seek indemnity.
The indemnity set forth in this Section 6.7 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.
Section VI.8 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 VI.9 Corporate Trustee Required; Eligibility. There shall at all
---------------------------------------
times be a Trustee hereunder which shall be a corporation organized and doing
business under the laws of the United States, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $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.
Section VI.10 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 6.11.
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(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 6.11 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 to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Company or by any such
Holder, or
(3) 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 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
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. If, within
one year after such resignation, removal or incapability, or the 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 6.11, become the successor Trustee and to
that extent supersede the successor Trustee appointed by the Company. If no
successor Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 6.11, any Holder 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.
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(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 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 VI.11 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 qualified and eligible under
this Article.
Section VI.12 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 the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and 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 VI.13 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).
Section VI.14 Appointment of Authenticating Agent. The Trustee may
-----------------------------------
appoint an Authenticating Agent or Agents which shall be authorized to act on
behalf of the Trustee to
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authenticate Securities issued upon original issue and upon exchange,
registration of transfer, partial conversion, partial redemption, or partial
repurchase or pursuant to Section 3.6, and Securities so authenticated 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. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference 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
acceptable to the Company and shall at all times be a corporation organized and
doing business under the laws of the United States, authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of not
less than $25,000,000 and subject to supervision or examination by Federal or
State authority. If such Authenticating Agent 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 Authenticating Agent 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 an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
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, 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, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders as their
names and addresses appear in the Security Register. 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.
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The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, subject to the provisions
of Section 6.7.
If an appointment is made pursuant to this Section, the Securities may have
endorsed thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities described in the within-mentioned Indenture.
As Trustee
by
----------------------------------------,
As Authenticating Agent
by
----------------------------------------,
Authorized Signatory
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
-------------------------------------------------
Section VII.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 each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may 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 VII.2 Preservation of Information; Communications to Holders.
------------------------------------------------------
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(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 7.1 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 as provided in
Section 7.1 upon receipt of a new list so furnished.
(b) 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 VII.3 Reports by Trustee.
------------------
(a) 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.
(b) 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, if applicable, and with the Company.
The Company will notify the Trustee when the Securities are listed on any stock
exchange.
Section VII.4 Reports by Company.
------------------
(a) The Company shall file with the Trustee and the Commission, if
applicable, and transmit to Holders, such information, documents and other
reports, and such summaries thereof, to the extent required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant to such
Act. Notwithstanding anything to the contrary contained herein, the Trustee
shall have no duty to review such documents for the purpose of determining
compliance with this Indenture.
(b) The Company shall provide the Trustee with at least 30 days prior
notice of any change in location of its principal executive offices or other
principal place of business.
ARTICLE VIII
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CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
----------------------------------------------------
Section VIII.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 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 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 formed by such consolidation or
into which the Company is merged or the Person that acquires by conveyance
or transfer, or that leases, the properties and assets of the Company
substantially as an entirety shall be a Person (other than an individual)
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 reasonably satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and interest on all
the Securities and the performance or observance of every covenant of this
Indenture on the part of the Company to be performed or observed and shall
have provided for conversion rights in accordance with Section 13.14;
(2) immediately after giving effect to such transaction, no Event of
Default (as defined in Article V), 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 Officer's 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 and if a supplemental
indenture is required that such supplemental indenture constitutes the
legal, valid and binding obligation of the Company in accordance with its
terms.
Section VIII.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 8.1, the successor
Person formed by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor
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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 IX
AMENDMENTS
----------
Section IX.1 Without Consent of Holders. The Company and the Trustee
--------------------------
may amend this Indenture or the Securities without the consent of any Holder of
Securities:
(1) to cure any ambiguity, omission, defect or inconsistency or to
make any other provision with respect to matters or questions arising under
the Indenture or the Securities; provided, however, that such amendment
-------- -------
does not materially adversely affect the rights of any Holder;
(2) to comply with Article VIII or Section 13.14;
(3) to provide for uncertificated Securities in addition to or in
place of certificated Securities so long as such uncertificated Securities
are in registered form for purposes of the Internal Revenue Code of 1986,
as amended;
(4) to make any change that does not adversely affect the rights of
any Holder;
(5) to make any change to comply with the TIA or any amendment of
the TIA, or any requirement by the Commission in connection with the
qualification of this Indenture under the TIA or any amendment thereof;
or
(6) to add to the covenants or obligations of the Company hereunder,
for the benefit of the Holders, or to surrender any right, power or option
herein conferred upon the Company.
Section IX.2 With Consent of Holders. With the written consent of the
-----------------------
Holders of at least a majority in aggregate Principal Amount (or Restated
Principal Amount, if applicable) of the Securities at the time outstanding,
the Company and the Trustee may amend this Indenture or the Securities.
However, without the consent of each Holder affected, an amendment or
supplement to this Indenture or the Securities may not:
(1) reduce the Principal Amount or Restated Principal Amount of
Securities whose Holders must consent to an amendment;
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(2) make any change to the rate of accrual in connection with
Original Issue Discount, reduce the rate of cash interest referred to in
paragraph 1 of the Securities, reduce the rate of interest referred to in
Section 17.1 upon the occurrence of a Tax Event or extend the time for
payment of accrued Original Issue Discount or cash interest on any
Security;
(3) reduce the Principal Amount or Restated Principal Amount or the
Issue Price of or extend the Stated Maturity of any Security;
(4) reduce the Redemption Price, Purchase Price or Change in Control
Purchase Price of any Security or extend the date on which the Purchase
Price or Change in Control Purchase Price of any Security is payable;
(5) make any Security payable in money or securities other than that
stated in the Security;
(6) make any change in Article XII that adversely affects the rights
of any Holder;
(7) make any change in Section 5.13 or this Section 9.2, except to
increase any percentage referred to therein, or make any change in Section
5.8;
(8) make any change that adversely affects the right to convert any
Security;
(9) make any change that adversely affects the right to require the
Company to purchase the Securities in accordance with the terms thereof and
this Indenture (including the right to receive cash if the Company has
elected to pay cash upon such purchase);
(10) make any change to the provisions of this Indenture relating to
the purchase of Securities at the option of the Holder pursuant to Section
14.1 or 14.2 which change would result in a violation of applicable federal
or state securities laws (including positions of the SEC under applicable
no-action letters), whether as a result of the exercise or performance of
any rights or obligations under such provisions or otherwise; or
(11) impair the right to institute suit for the enforcement of any
payment with respect to, or conversion of, the Securities.
It shall not be necessary for the consent of the Holders under this Section
9.2 to approve the particular form of any proposed amendment, but it shall be
sufficient if such consent approves the substance thereof.
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An amendment under this Section 9.2 or Section 9.1 may not make any change
that adversely affects the rights under Article XII of any holder of Senior
Indebtedness then outstanding unless the requisite holders of such Senior
Indebtedness consent to such change pursuant to the terms of such Senior
Indebtedness.
After an amendment under this Section 9.2 becomes effective, the Company
shall mail to each Holder a notice briefly describing the amendment.
Section IX.3 Compliance with Trust Indenture Act. Every supplemental
-----------------------------------
indenture executed pursuant to this Article IX shall comply with the TIA as
then in effect.
Section IX.4 Revocation and Effect of Consents, Waivers and Actions.
------------------------------------------------------
Until an amendment or waiver becomes effective, a consent to it or any other
action by a Holder of a Security hereunder is a continuing consent by the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same obligation as the consenting Holder's Security, even
if notation of the consent, waiver or action is not made on the Security.
However, any such Holder or subsequent Holder may revoke the consent, waiver
or action as to such Holder's Security or portion of the Security if the
Trustee receives the notice of revocation before the date the amendment,
waiver or action becomes effective. After an amendment, waiver or action
becomes effective, it shall bind every Holder, except as provided in Section
9.2.
Section IX.5 Notation on or Exchange of Securities. Securities
-------------------------------------
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX 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 Trustee and the Company, 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 IX.6 Trustee to Sign Supplemental Indentures. The Trustee shall
---------------------------------------
sign any supplemental indenture authorized pursuant to this Article IX if the
amendment does not adversely affect the rights, duties, liabilities or
immunities of the Trustee. If it does, the Trustee may, but need not, sign it.
In signing such amendment the Trustee shall be entitled to receive, and
(subject to the provisions of Section 6.3) shall be fully protected in relying
upon, an Officer's Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.
Section IX.7 Effect of Supplemental Indentures. Upon the execution of
---------------------------------
any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form
a part of this Indenture for all purposes; and every Holder of Securities
theretofore or thereafter authenticated and delivered hereunder shall be
bound thereby.
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ARTICLE X
COVENANTS
---------
Section X.1 Payment of Securities. The Company shall promptly make all
---------------------
payments in respect of the Securities on the dates and in the manner provided
in the Securities or pursuant to this Indenture. Principal Amount, Restated
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Purchase Price, Change in Control Purchase Price and cash interest and
Liquidated Damages, if any, shall be considered paid on the applicable date
due if on such date the Trustee or the Paying Agent holds, in accordance with
this Indenture, cash or securities, if expressly permitted hereunder,
sufficient to pay all such amounts then due.
The Company shall, to the extent permitted by law, pay cash interest on
overdue amounts at the per annum rate of interest set forth in paragraph 1 of
the Securities, compounded semiannually, which interest on overdue amounts (to
the extent payment of such interest shall be legally enforceable) shall accrue
from the date such overdue amounts were originally due and payable.
Section X.2 Maintenance of Office or Agency. 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, where Securities may
be surrendered for registration of transfer or exchange, where 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
office or agency in the Borough of Manhattan, the City of New York, shall
initially be State Street Bank and Trust Company, N.A., an Affiliate of the
Trustee located at 61 Broadway, 15th Floor, New York, New York 10006
(Attention: Corporate Trust Administration-At Home Corporation, Convertible
Subordinated Debentures Due 2018), and shall be the office or agency for all
of the aforesaid purposes unless the Company shall appoint some other office
or agency for such purposes and shall give prompt written notice to the
Trustee of the location, and any change in the location, of such other 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, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other offices
or agencies (in or outside the Borough of Manhattan, The City of New York) where
the Securities may be presented or surrendered for any or all such purposes and
may from time to time rescind such designations; provided, however, that no such
-------- -------
designation or rescission shall in any manner relieve the Company
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of its obligation to maintain an office or agency in the Borough of Manhattan,
The City of New York for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change
in the location of any such other office or agency.
Section X.3 Money for Security Payments To Be Held in Trust. If the
-----------------------------------------------
Company shall at any time act as its own Paying Agent, it will, on or before
each due date of the principal of (and 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 (and 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 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, prior
to each due date of the principal of (and premium, if any) or interest on any
Securities, deposit with a Paying Agent a sum sufficient to pay such amount,
such sum to be held in trust 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 its action or 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 10.3, 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 in trust 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
(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 in trust 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.
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Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of Principal Amount, Issue Price, accrued
Original Issue Discount Redemption Price, Purchase Price, Change in Control
Purchase Price or cash interest on the Securities and remaining unclaimed for
two years after such principal (and 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 a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in the Borough of Manhattan, The City of New York, 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 X.4 Statement by Officers as to Default. The Company will
-----------------------------------
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, 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 shall file with the Trustee written
notice of the occurrence of any Default or Event of Default within five
Business Days of its becoming aware of such Default or Event of Default.
Section X.5 Existence. Subject to Article VIII, 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 X.6 Calculation of Original Issue Discount. The Company shall
--------------------------------------
file with the Trustee promptly following the end of each calendar year a
written notice specifying the amount of Original Issue Discount (including
daily rates and accrual periods) accrued on Outstanding Securities as of the
end of such year.
Section X.7 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 or the holder of
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shares of Series A 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 or such holder of shares of Series A 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 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.
ARTICLE XI
REDEMPTION OF SECURITIES
------------------------
Section XI.1 Right to Redeem; Notices to Trustee. On or after December
-----------------------------------
28, 2003, the Company, at its option, may redeem the Securities as a whole at
any time, or from time to time in part, for cash in accordance with the
provisions set forth in paragraphs 6 and 7 of the Securities. If the Company
elects to redeem Securities pursuant to paragraph 6 of the Securities, it
shall notify the Trustee in writing of the Redemption Date, the Principal
Amount of Securities to be redeemed and the Redemption Price.
The Company shall give the notice to the Trustee provided for in this
Section 11.1 at least 30 days (or 35 days in the case of a redemption of less
than all of the Securities) but not more than 60 days before the Redemption Date
(unless a shorter notice shall be satisfactory to the Trustee). If fewer than
all the Securities are to be redeemed, the record date relating to such
redemption shall be selected by the Company and given to the Trustee.
Section XI.2 Selection of Securities to Be Redeemed. If less than all
--------------------------------------
the Securities are to be redeemed, the Trustee shall select the Securities to
be redeemed by lot, pro rata or by any other method the Trustee considers fair
and appropriate. The Trustee shall make the selection at least 30 but not more
than 60 days before the Redemption Date from Outstanding Securities not
previously called for redemption. Securities and portions of them the Trustee
selects shall be in Principal Amounts of $1,000 or an integral multiple of
$1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.
If any Security selected for partial redemption is thereafter surrendered
for conversion 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), solely for purposes of determining
the aggregate Principal Amount of Securities to be redeemed by the Company, to
be the
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portion selected for redemption. Securities that 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. Nothing in this Section 11.2
shall affect the right of any Holder to convert any Security pursuant to
Article XIII before the termination of the conversion right with respect
thereto.
Section XI.3 Notice of Redemption. At least 30 days but not more than
--------------------
60 days before a Redemption Date, the Trustee, in the name and at the expense
of the Company, shall cause notice of redemption to be mailed, first-class
postage prepaid, to each Holder of Securities to be redeemed at such Holder's
address as it appears on the list of Holders maintained pursuant to Section
7.1. At the Company's written request, the Trustee shall, in the name and at
the expense of the Company, cause a similar notice to be published at least
once in a newspaper of national circulation designated by the Company.
The notice shall identify the Securities to be redeemed and shall state:
(a) the Redemption Date (upon which the Redemption Price shall be
paid);
(b) the Redemption Price;
(c) the Conversion Rate;
(d) the name and address of the Paying Agent and Conversion Agent
and of the office or agency referred to in Section 10.2;
(e) that Securities called for redemption may be converted at any
time before the close of business on the Redemption Date;
(f) that Holders who want to convert Securities must satisfy the
requirements set forth in paragraph 9 of the Securities;
(g) that Securities called for redemption must be surrendered to the
Paying Agent or at the office or agency referred to in Section 10.2 to
collect the Redemption Price;
(h) the CUSIP number of the Securities called for redemption;
(i) if fewer than all the Outstanding Securities are to be redeemed,
the certificate numbers and Principal Amounts of the particular Securities
to be redeemed; and
(j) that, unless the Company defaults in payment of the Redemption
Price, Original Issue Discount and cash interest on Securities called for
redemption will cease to
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accrue on and after the Redemption Date.
Section XI.4 Effect of Notice of Redemption. Once notice of redemption
------------------------------
is given, Securities called for redemption become due and payable on the
Redemption Date stated in the notice and at the Redemption Price therefor
except for Securities that are converted in accordance with the terms of this
Indenture and after such date (unless the Company shall default in the payment
of the Redemption Price), such Securities shall cease to bear interest or
accrue Original Issue Discount. Upon the later of the Redemption Date and the
date such Securities are surrendered to the Paying Agent or at the office or
agency referred to in Section 10.2, such Securities called for redemption
shall be paid at the Redemption Price therefor.
Section XI.5 Deposit of Redemption Price. Prior to 11:00 a.m., New York
---------------------------
City time on the Redemption Date, the Company shall deposit with the Paying
Agent (or if the Company or a Subsidiary or an Affiliate of either of them is
the Paying Agent, shall segregate and hold in trust) money sufficient to pay
the Redemption Price of, and accrued and unpaid cash interest on, all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which prior thereto have been delivered by
the Company to the Trustee for cancellation. The Paying Agent shall as
promptly as practicable return to the Company any money, with interest, if
any, thereon not required for that purpose because of conversion of Securities
pursuant to Article XIII. If such money is then held by the Company or a
Subsidiary or an Affiliate of the Company in trust and is not required for
such purpose it shall be discharged from such trust.
Section XI.6 Securities Redeemed in Part. Upon surrender of a Security
---------------------------
that is redeemed in part, the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder, a new Security of the same tenor in an
authorized denomination equal in Principal Amount to the unredeemed portion of
the Security surrendered.
Section XI.7 Conversion Arrangement on Call for Redemption. In
---------------------------------------------
connection with any redemption of Securities, the Company may arrange, in lieu
of redemption, for the purchase and conversion of any Securities called for
redemption by an agreement with one or more investment bankers or other
purchasers to purchase all or a portion of such Securities by paying to the
Trustee in trust for the Holders whose Securities are to be so purchased, on
or before the close of business on the Redemption Date, an amount that,
together with any amounts deposited with the Trustee by the Company for
redemption of such Securities, is not less than the Redemption Price, together
with interest, if any, accrued to the Redemption Date, of such Securities.
Notwithstanding anything to the contrary contained in this Article XI, the
obligation of the Company to pay the Redemption Price of such Securities,
including all accrued interest, if any, shall be deemed to be satisfied and
discharged to the extent such amount is so paid by such purchasers, but no
such agreement shall relieve the Company of its obligation to pay such
Redemption Price and such accrued interest, if any. If such an agreement is
entered into, any Securities not duly surrendered for conversion by the
Holders thereof
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may, at the option of the Company, be deemed, to the fullest extent permitted
by law, acquired by such purchasers from such Holders and (notwithstanding
anything to the contrary contained in Article XIII) surrendered by such
purchasers for conversion, all as of immediately prior to the close of
business on the Redemption Date, subject to payment of the above amount as
aforesaid. The Trustee shall hold and pay to the Holders whose Securities are
selected for redemption any such amount paid to it for purchase and conversion
in the same manner as it would moneys 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 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 XII
SUBORDINATION OF SECURITIES
---------------------------
Section XII.1 Securities Subordinate to Senior Indebtedness. 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 XII, the indebtedness represented by the
Securities and the payment of the Principal Amount, Restated Principal Amount,
Issue Price, accrued Original Issue Discount, Redemption Price, cash in
respect of Purchase Price, Liquidated Damages, Change in Control Purchase
Price and cash interest on each and all of the Securities and all obligations
of the Company under this Indenture are hereby expressly made subordinate and
junior in right of payment to the prior payment in full in cash or other
payment satisfactory to the holders of Senior Indebtedness of all Senior
Indebtedness and that said subordination is for the benefit of the holders of
Senior Indebtedness and they and or each of them severally may enforce such
subordination.
Section XII.2 Payment Over of Proceeds upon Dissolution, Etc. In the
----------------------------------------------
event of (a) any insolvency or bankruptcy case or proceeding, or any
receivership, liquidation, reorganization or other similar case or proceeding
in connection therewith, relative to the Company or to its creditors, as such,
or to its assets, or (b) any liquidation, dissolution or other winding up of
the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors
or any other marshaling of assets and liabilities of the Company, then and in
any such event the holders of Senior Indebtedness shall be entitled to receive
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payment in full in cash or other payment satisfactory to the holders of Senior
Indebtedness of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made for such payment in cash or
other payment satisfactory to the holders of Senior Indebtedness, before the
Holders of the Securities are entitled to receive any payment on account of
principal of (or premium, if any) or interest on the Securities, and to that
end the holders of Senior Indebtedness shall be entitled to receive, for
application to the payment thereof, any payment or distribution of any kind or
character, whether in cash, property or securities, which may be payable or
deliverable in respect of the Securities in any such case, proceeding,
dissolution, liquidation or other winding up or event.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, before all Senior Indebtedness is paid
in full in cash or other payment satisfactory to the holders of Senior
Indebtedness or payment thereof provided for in a manner satisfactory to the
holders of Senior Indebtedness, then and in such event such payment or
distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full in cash or other payment
satisfactory to the holders of Senior Indebtedness, after giving effect to any
concurrent payment or distribution to or for the holders of Senior Indebtedness.
For purposes of this Article XII only, the words "cash, property or
securities" shall not be deemed to include shares of capital stock of the
Company as reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment which in
either case are subordinated in right of payment to all Senior Indebtedness
which may at the time be outstanding to substantially the same extent as, or to
a greater extent than, the Securities are so subordinated as provided in this
Article XII. The consolidation of the Company with, or the merger of the
Company into, another Person or the liquidation or dissolution of the Company
following the conveyance or transfer of its properties and assets substantially
as an entirety to another Person upon the terms and conditions set forth in
Article VIII shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets
and liabilities of the Company for the purposes of this Section 12.2 if the
Person formed by such consolidation or into which the Company is merged or which
acquires by conveyance or transfer such properties and assets substantially as
an entirety, as the case may be, shall, as a part of such consolidation, merger,
conveyance or transfer, comply with the conditions set forth in Article VIII.
Section XII.3 No Payment When Senior Indebtedness in Default.
----------------------------------------------
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(a) The Company may not make any payment of the Principal Amount,
Restated Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Change in Control Purchase Price, Liquidated Damages or cash
interest in respect of the Securities nor may the Company pay cash with
respect to the Purchase Price or acquire any Securities for cash or property
(except as otherwise provided in Article XI and other than for Common Stock of
the Company) if (a) a payment default on any Senior Indebtedness has occurred
and is continuing beyond any applicable grace period with respect thereto; or
(b) a default (other than a default referred to in the preceding clause (a))
on any Senior Indebtedness occurs and is continuing that permits holders of
such Senior Indebtedness to accelerate the Stated Maturity thereof and the
default is the subject of judicial proceedings or the Company receives a
notice of default thereof from any person who may give such notice pursuant to
the instrument evidencing or document governing such Senior Indebtedness. If
the Company receives any such notice, then a similar notice received within
nine months thereafter relating to the same default on the same issue of
Senior Indebtedness shall not be effective for purposes of the Section 12.3.
The Company may resume payment on the Securities and may acquire Securities
if and when (i) the default referred to above is cured or waived or ceases to
exist; or (ii) in the case of a default referred to in clause (b) of the
preceding paragraph, 179 or more days pass after the receipt by the Company of
the notice described in clause (b) above; and this Article XII otherwise permits
the payment or acquisition at that time.
Nothing contained in this Article XII or elsewhere in this Indenture or in
any of the Securities shall prevent the conversion by a Holder of any Securities
into Series A Common Stock in accordance with the provisions for conversion of
such Securities set forth in this Indenture, including the payment of cash in
lieu of fractional shares of Series A Common Stock in accordance with Article
XIII, or in any of such Securities in the event of an occurrence of the events
described in this Section 12.3.
(b) In the event that any Securities are declared due and payable
before their Stated Maturity pursuant to Section 5.2, then and in such event
the Company shall promptly notify holders of Senior Indebtedness of such
acceleration. The Company may not pay the Securities until the earlier of (i)
the passage of 120 or more days have passed after such acceleration occurs or
(ii) the payment in full in cash or other payment satisfactory to the holders
of Senior Indebtedness of all Senior Indebtedness, and may thereafter pay the
Securities if this Article XII permits the payment at that time.
In the event that, notwithstanding the foregoing provisions, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities (including, without limitation, by way of setoff or
otherwise), prohibited by the foregoing, shall be received by the Trustee or the
Holders of the Securities before all Senior Indebtedness of the Company is paid
in full in cash or other payment satisfactory to the holders of such Senior
Indebtedness of the Company,
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or provision is made for such payment thereof in accordance with its terms in
cash or other payment satisfactory to the holders of such Senior Indebtedness
of the Company, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness of the Company or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing any Senior Indebtedness of the Company may have been issued, as
their respective interests may appear for application to the payment of all
Senior Indebtedness of the Company remaining unpaid to the extent necessary to
pay all Senior Indebtedness of the Company in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness of the Company, after
giving effect to any concurrent payment or distribution, or provision
therefor, to or for the holders of such Senior Indebtedness of the Company.
The provisions of this Section 12.3 shall not apply to any payment with
respect to which Section 12.2 would be applicable.
Section XII.4 Payment Permitted If No Default. Nothing contained in
-------------------------------
this Article XII or elsewhere in this Indenture or in any of the Securities
shall prevent (a) the Company, at any time except during the pendency of any
case, proceeding, dissolution, liquidation or other winding up, assignment for
the benefit of creditors or other marshalling of assets and liabilities of the
Company referred to in Section 12.2 or under the conditions described in
Section 12.3, from making payments at any time of Principal Amount, Restated
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Liquidated Damages or cash interest, as the case may be, on the
Securities, or (b) the application by the Trustee of any money deposited with
it hereunder to the payment of or on account of the Principal Amount, Restated
Principal Amount, Issue Price, accrued Original Issue Discount, Redemption
Price, Liquidated Damages or cash interest, as the case may be, on the
Securities or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article XII.
Section XII.5 Subrogation to Rights of Holders of Senior Indebtedness.
-------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness, and until the
Securities are paid in full, the Holders of the Securities shall be subrogated
(equally and ratably with the holders of all indebtedness of the Company which
by its express terms is subordinated to indebtedness of the Company to
substantially the same extent as the Securities are subordinated and is entitled
to like rights of subrogation) to the rights of the holders of such Senior
Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness to the extent that payments and
distributions otherwise payable to Holders of Securities have been applied to
the payment of Senior Indebtedness as provided by this Article XII. For
purposes of such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled, except for the provisions of
this Article XII, and no payments over pursuant to the provisions of this
Article XII to
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the holders of Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, be deemed to be a
payment or distribution by the Company to or on account of the Senior
Indebtedness.
Section XII.6 Provisions Solely To Define Relative Rights. The
-------------------------------------------
provisions of this Article XII are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article XII or elsewhere in this Indenture or in the Securities is
intended to or shall (a) impair, as among the Company, its creditors other
than holders of Senior Indebtedness and the Holders of the Securities, the
obligation of the Company, which is absolute and unconditional (and which,
subject to the rights under this Article XII of the holders of Senior
Indebtedness, is intended to rank equally with all other general obligations
of the Company), to pay to the Holders of the Securities the Principal Amount,
Restated Principal Amount, Issue Price, accrued Original Issue Discount,
Redemption Price, Purchase Price, Liquidated Damages, Change in Capital
Purchase Price or cash interest, as the case may be, on the Securities as and
when the same shall become due and payable in accordance with their terms; or
(b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article XII of
the holders of Senior Indebtedness to receive cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder.
Section XII.7 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 XII and appoints the Trustee his
attorney-in-fact for any and all such purposes.
Section XII.8 No Waiver of Subordination Provisions. No right of any
-------------------------------------
present or future holder of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the part of the Company or by any act or failure
to act, in good faith, by any such holder, or by any 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.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness 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 XII or the
obligations hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more
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of the following: (i) change the manner, place or terms of payment or extend
the time of payment of, or renew or alter, Senior Indebtedness, or otherwise
amend or supplement in any manner Senior Indebtedness or any instrument
evidencing the same or any agreement under which Senior Indebtedness is
outstanding; (ii) sell, exchange, release or otherwise deal with any property
pledged, mortgaged or otherwise securing Senior Indebtedness; (iii) release
any Person liable in any manner for the collection of Senior Indebtedness;
(iv) exercise or refrain from exercising any rights against the Company and
any other Person; (v) apply any and all sums received from time to time to the
Senior Indebtedness.
Section XII.9 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 XII 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
Indebtedness or from any trustee 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 12.9 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose,
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.
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 Indebtedness (or a trustee therefor) to establish that
such notice has been given by a holder of Senior Indebtedness (or a trustee
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 Indebtedness to participate in any payment or distribution pursuant to
this Article XII, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article XII, 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.
Section XII.10 Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent. Upon any payment or distribution of assets of the Company referred to in
- -----
this Article XII, 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,
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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 Indebtedness and other indebtedness of
the Company, the amount thereof or payable thereon, the amount or amounts paid
or distributed thereon and all other facts pertinent thereto or to this
Article XII.
Section XII.11 Trustee Not Fiduciary for Holders of Senior Indebtedness.
--------------------------------------------------------
The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Senior Indebtedness and shall not be liable to any such holders if it shall in
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 Indebtedness shall
be entitled by virtue of this Article XII or otherwise.
Section XII.12 Rights of Trustee as Holder of Senior Indebtedness;
---------------------------------------------------
Preservation of Trustee's Rights. The Trustee in its individual capacity shall
- --------------------------------
be entitled to all the rights set forth in this Article XII with respect to
any Senior Indebtedness which may at any time be held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article XII shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.7.
Section XII.13 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 XII 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 XII in addition to or in place of the Trustee; provided, however,
-------- -------
that Section 12.12 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section XII.14 Certain Conversions Deemed Payment. For the purposes of
----------------------------------
this Article XII only, (1) the issuance and delivery of junior securities upon
conversion of Securities in accordance with Article XIII shall not be deemed
to constitute a payment or distribution on account of the principal of or
premium (if any) or cash interest on Securities or on account of the purchase
or other acquisition of Securities, and (2) the payment, issuance or delivery
of cash, property or securities (other than junior securities) upon conversion
of a Security shall be deemed to constitute payment on account of the
principal of such Security. For the purposes of this Section 12.14, the term
"junior securities" means (a) shares of any stock of any class of the Company
and (b) securities
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of the Company which are subordinated in right of payment to the prior payment
in full of all Senior Indebtedness which may be outstanding at the time of
issuance or delivery of such securities to substantially the same extent as,
or to a greater extent than, the Securities are so subordinated as provided in
this Article XII. Nothing contained in this Article XII or elsewhere in this
Indenture or in the Securities is intended to or shall impair, as among the
Company, its creditors other than holders of Senior Indebtedness and the
Holders of the Securities, the right, which is absolute and unconditional, of
the Holder of any Security to convert such Security in accordance with Article
XIII.
ARTICLE XIII
CONVERSION OF SECURITIES
------------------------
Section XIII.1 Conversion Privilege. A Holder of a Security may convert
--------------------
such Security into shares of Series A Common Stock at any time (subject to the
limitation described in Section 11.3(e)) during the period stated in paragraph
9 of the Securities. The number of shares of Series A Common Stock issuable
upon conversion of a Security per $1,000 of Principal Amount thereof (the
"Conversion Rate") shall be that set forth in paragraph 9 in the Securities,
subject to adjustment as herein set forth.
In the event the Company exercises its option pursuant to Section 15.1 to
have interest in lieu of Original Issue Discount accrue on the Security
following a Tax Event, the Holder will be entitled on conversion to receive the
same number of shares of Series A Common Stock such Holder would have received
if the Company had not exercised such option.
Securities surrendered for conversion during the period from the close of
business on any Regular Record Date next preceding any Interest Payment date to
the opening of business of such Interest Payment Date (except Securities to be
redeemed on a date within such period) must be accompanied by payment of an
amount equal to the interest thereon that the registered Holder is to receive.
Except where Securities surrendered for conversion must be accompanied by
payment as described above, no interest on converted Securities will be payable
by the Company on any Interest Payment Date subsequent to the date of
conversion.
"Average Sale Price" means the average of the Sale Prices of the Series A
Common Stock for the shorter of:
(i) 30 consecutive Trading Days ending on the last full Trading Day
prior to the Time of Determination with respect to the rights, options,
warrants or distribution in respect of which the Average Sale Price is
being calculated, or
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(ii) the period (x) commencing on the date next succeeding the first
public announcement of (a) the issuance of rights, options or warrants or
(b) the distribution, in each case, in respect of which the Average Sale
Price is being calculated and (y) proceeding through the last full Trading
Day prior to the Time of Determination with respect to the rights, warrants
or distribution in respect of which the Average Sale Price is being
calculated, or
(iii) the period, if any, (x) commencing on the date next succeeding
the Ex-Dividend Time with respect to the next preceding (a) issuance of
rights, warrants, or options or (b) distribution, in each case, for which
an adjustment is required by the provisions of Section 13.6(4), 13.7 or
13.8 and (y) proceeding through the last full Trading Day prior to the Time
of Determination with respect to the rights, warrants, or options or
distribution in respect of which the Average Sale Price is being
calculated.
If the Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section 13.6(l),
(2), (3) or (5) applies occurs during the period applicable for calculating
"Average Sale Price" pursuant to the definition in the preceding sentence,
"Average Sale Price" shall be calculated for such period in a manner determined
in good faith by the Board of Directors to reflect the impact of such dividend,
subdivision, combination or reclassification on the Sale Price of the Series A
Common Stock during such period.
"Time of Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants, or options
or a distribution, in each case, to which Sections 13.7 and 13.8 apply and (ii)
the time ("Ex-Dividend Time") immediately prior to the commencement of "ex-
dividend" trading for such rights, options, warrants or distribution on the
Nasdaq National Market or the New York Stock Exchange or such other national or
regional exchange or market on which the shares of the Series A Common Stock are
then listed or quoted.
Section XIII.2 Conversion Procedure. To convert a Security a Holder
--------------------
must satisfy the requirements in paragraph 9 of the Securities. The date on
which the Holder satisfies all those requirements is the conversion date (the
"Conversion Date"). The Company shall deliver to the Holder no later than the
seventh Business Day following the Conversion Date a certificate for the
number of full shares of Series A Common Stock issuable upon the conversion
and cash in lieu of any fractional share determined pursuant to Section 13.3.
The person in whose name the certificate is registered shall be treated as
a stockholder of record on and after the Conversion Date; provided, however,
-------- -------
that no surrender of a Security on any date when the stock transfer books of the
Company shall be closed shall be effective to constitute the
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person or persons entitled to receive the shares of Series A Common Stock upon
such conversion as the record holder or holders of such shares of Series A
Common Stock on such date, but such surrender shall be effective to constitute
the person or persons entitled to receive such shares of Series A Common Stock
as the record holder or holders thereof for all purposes at the close of
business on the next succeeding day on which such stock transfer books are
open; provided further that such conversion shall be at the Conversion Rate in
effect on the date that such Security shall have been surrendered for
conversion, as if the stock transfer books of the Company had not been closed.
Upon conversion of a Security, such person shall no longer be a Holder of such
Security.
Holders may surrender a Security for conversion by means of book entry
delivery in accordance with paragraph 9 of the Securities and the regulations of
the applicable book entry facility.
No payment or adjustment will be made for dividends on any Series A Common
Stock except as provided in this Article XIII. On conversion of a Security,
that portion of accrued Original Issue Discount or (except as provided below)
accrued and unpaid cash interest attributable to the period from the Issue Date
(or, the date on which interest was last paid) to the Conversion Date with
respect to the converted Security shall not be canceled, extinguished or
forfeited, but rather shall be deemed to be paid in full to the Holder thereof
through delivery of the Series A Common Stock in exchange for the Security being
converted pursuant to the terms hereof, and the fair market value of such Series
A Common Stock (together with any cash payment in lieu of fractional shares of
Series A Common Stock) shall be treated as issued, to the extent thereof, first
in exchange for the Original Issue Discount and cash interest accrued through
the Conversion Date, and the balance, if any, of such fair market value of such
shares of Series A Common Stock (and any such cash payment) shall be treated as
issued in exchange for the Issue Price of the Security being converted pursuant
to the provisions hereof. Notwithstanding the foregoing, accrued but unpaid
interest will be payable upon conversion of Securities made concurrently with or
after acceleration of the Securities following an Event of Default.
If the Holder converts more than one Security at the same time, the number
of shares of Series A Common Stock issuable upon the conversion shall be
computed based on the total Principal Amount of the Securities converted.
Upon surrender of a Security that is convened in part, the Company shall
execute, and the Trustee shall authenticate and deliver to the Holder, a new
Security in an authorized denomination equal in Principal Amount to the
unconverted portion of the Security surrendered.
If the last day on which a Security may be converted is a Legal Holiday in
a place where the Conversion Agent is located, the Security may be surrendered
to such Conversion Agent on the next succeeding day that is not a Legal Holiday.
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Section XIII.3 Fractional Shares. The Company will not issue a
-----------------
fractional share of Series A Common Stock upon conversion of a Security.
Instead, the Company will deliver cash for the current market value of the
fractional share. The current market value of a fractional share shall be
determined to the nearest 1/1,000th of a share by multiplying the Sale Price,
on the last Trading Day prior to the Conversion Date, of a full share by the
fractional amount and rounding the product to the nearest whole cent.
Section XIII.4 Taxes on Conversion. If a Holder converts a Security,
-------------------
the Company shall pay any documentary, stamp or similar issue or transfer tax
due on the issue of shares of Series A Common Stock upon such conversion. The
Holder, however, shall pay any such tax that is due because the Holder
requests the shares to be issued in a name other than the Holder's name. The
Conversion Agent may refuse to deliver the certificates representing the
Series A Common Stock being issued in a name other than the Holder's name
until the Conversion Agent receives a sum sufficient to pay any tax which will
be due because the shares are to be issued in a name other than the Holder's
name. Nothing herein shall preclude any tax withholding required by law or
regulations.
Section XIII.5 Company To Provide Stock. The Company shall, prior to
------------------------
issuance of any Securities hereunder, and from time to time as may be
necessary, reserve out of its authorized but unissued Series A Common Stock a
sufficient number of shares of Series A Common Stock to permit the conversion
of the Securities for shares of Series A Common Stock.
All shares of Series A Common Stock delivered upon conversion of the
Securities shall be newly issued shares or treasury shares, shall be duly and
validly issued and fully paid and nonassessable and shall be free from
preemptive rights and free of any lien or adverse claim.
The Company will endeavor promptly to comply with all Federal and state
securities laws regulating the offer and delivery of shares of Series A Common
Stock upon conversion of Securities, if any, and will cause to have quoted or
listed such shares of Series A Common Stock in the over-the-counter market or on
each national securities exchange or such other market on which the Series A
Common Stock is then quoted or listed.
Section XIII.6 Adjustment for Change in Common Stock. If, after the
-------------------------------------
Issue Date, the Company:
(1) pays a dividend or makes a distribution on its Series A Common
Stock in shares of its Series A Common Stock;
(2) subdivides its outstanding shares of Series A Common Stock
into a greater
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number of shares;
(3) combines its outstanding shares of Series A Common Stock into a
smaller number of shares;
(4) pays a dividend or makes a distribution on its Series A Common
Stock in shares of its Common Stock (other than Series A Common Stock or
rights, warrants or options for its Series A Common Stock); or
(5) issues by reclassification of its Series A Common Stock any
shares of its Common Stock (other than rights, warrants or options for
its Series A Common Stock),
then the conversion privilege and the Conversion Rate in effect immediately
prior to such action shall be adjusted so that the Holder of a Security
thereafter converted may receive the number of shares or other units of Common
Stock of the Company which such Holder would have owned immediately following
such action if such Holder had converted the Security immediately prior to such
action.
The adjustment shall become effective immediately after the record date in
the case of a dividend or distribution and immediately after the effective date
in the case of a subdivision, combination or reclassification.
If after an adjustment a Holder of a Security upon conversion of such
Security may receive shares or other units of two or more classes or series of
Common Stock of the Company, the Conversion Rate shall thereafter be subject to
adjustment upon the occurrence of an action taken with respect to any such class
or series of Common Stock as is contemplated by this Article XIII with respect
to the Series A Common Stock, on terms comparable to those applicable to Series
A Common Stock in this Article XIII.
Section XIII.7 Adjustment for Rights Issue. If, after the Issue Date,
---------------------------
the Company distributes any rights, warrants or options to all holders of its
Series A Common Stock entitling them, for a period expiring within 60 days
after the record date for such distribution, to purchase shares of Series A
Common Stock or securities convertible into Series A Common Stock at a price
per share less than the Sale Price as of the Time of Determination, the
Conversion Rate shall be adjusted in accordance with the formula:
(0 + N)
----------R' =
R x 0 + (N x P)
______
M
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where
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
0 = the number of shares of Series A Common Stock outstanding on
the close of business on the record date for the distribution
to which this Section 13.7 is being applied.
N = the number of additional shares of Series A Common Stock offered
pursuant to the distribution.
P = the offering price per share of such additional shares.
M = the Average Sale Price, minus, in the case of (i) a
distribution to which Section 13.6(4) applies or (ii) a
distribution to which Section 13.8 applies, for which, in each
case, (x) the record date shall occur on or before the record
date for the distribution to which this Section 13.7 applies
and (y) the Ex-Dividend Time shall occur on or after the date
of the Time of Determination for the distribution to which
this Section 13.7 applies, the fair market value (on the
record date for the distribution to which this Section 13.7
applies) of:
(1) the Common Stock of the Company distributed in respect of each
share of Series A Common Stock in such Section 13.6(4) distribution, and
(2) the assets of the Company or debt securities or any rights,
warrants or options to purchase securities of the Company distributed in
respect of each share of Series A Common Stock in such Section 13.8
distribution.
The Board of Directors shall determine fair market values in good faith for
the purposes of this Section 13.7.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the rights, warrants or
options to which this Section 13.7 applies.
No adjustment shall be made under this Section 13.7 if the application of
the formula stated above in this Section 13.7 would result in value of R' that
is equal to or less than the value of R.
Section XIII.8 Adjustment for Other Distributions. If, after the Issue
----------------------------------
Date, the Company
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distributes to all holders of its Series A Common Stock any of its assets or
debt securities or any rights, warrants or options to purchase securities of
the Company (including securities or cash, but excluding (x) distributions of
Common Stock referred to in Section 13.6 and distributions of rights, warrants
or options referred to in Section 13.7 and (y) cash dividends or other cash
distributions that are paid out of consolidated current net earnings or earned
surplus as shown on the books of the Company, unless such cash dividends or
other cash distributions are Extraordinary Cash Dividends), the Conversion
Rate shall be adjusted, subject to the provisions of the last paragraph of
Section 13.8, in accordance with the formula:
(M)
R' = ________
R x M-F
where
R' = the adjusted Conversion Rate.
R = the current Conversion Rate.
M = the Average Sale Price, minus, in the case of a distribution to
which Section 13.6(4) applies for which (i) the record date
shall occur on or before the record date for the distribution to
which this Section 13.8 applies and (ii) the Ex-Dividend Time
shall occur on or after the date of the Time of Determination
for the distribution to which this Section 13.8 applies, the
fair market value (on the record date for the distribution to
which this Section 13.8 applies) of any Common Stock of the
Company distributed in respect of each share of Series A Common
Stock in such Section 13.6(4) distribution.
F = the fair market value (on the record date for the distribution
to which this Section 13.8 applies) of the assets, securities,
rights, warrants or options to be distributed in respect of each
share of Series A Common Stock in the distribution to which this
Section 13.8 is being applied (including, in the case of cash
dividends or other cash distributions giving rise to an
adjustment, all such cash distributed concurrently).
The Board of Directors shall determine fair market values for the purpose of
this Section 13.8.
The adjustment shall become effective immediately after the record date for
the determination of shareholders entitled to receive the distribution to which
this Section 13.8 applies.
For purposes of this Section 13.8, the term "Extraordinary Cash Dividend"
shall mean any cash dividend with respect to the Common Stock the amount of
which, together with the aggregate amount of cash dividends on the Common Stock
to be aggregated with such cash dividend in accordance with the provisions of
this paragraph, equals or exceeds the threshold percentages set
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forth in items (i) or (ii) below:
(i) If, upon the date prior to the Ex-Dividend Time with respect
to a cash dividend on the Common Stock, the aggregate amount of such cash
dividend together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the 85 consecutive day period
ending on the date prior to the Ex-Dividend Time with respect to the cash
dividend to which this provision is being applied equals or exceed 12.5%
of the average of the Sale Prices during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the
date prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the period
for calculating the average of the Sale Prices shall be the period
commencing 85 days prior to the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied),
such cash dividend together with each other cash dividend with an Ex-
Dividend Time occurring in such 85-day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 13.8, the value of "F" shall be equal to (w)
the aggregate amount of such cash dividend together with the amounts of
the other cash dividends with Ex-Dividend Times occurring in such period
minus (x) the aggregate amount of such other cash dividends with Ex-
-----
Dividend Times occurring in such period for which a prior adjustment in
the Conversion Rate was previously made under this Section 13.8.
(ii) If upon the date prior to the Ex-Dividend Time with respect to
a cash dividend on the Common Stock, the aggregate amount of such cash
dividend, together with the amounts of all cash dividends on the Common
Stock with Ex-Dividend Times occurring in the 365-consecutive-day period
ending on the date prior to the Ex-Dividend Time with respect to the cash
dividend to which this provision is being applied equals or exceeds 25%
of the average of the Sale Prices during the period beginning on the date
after the first such Ex-Dividend Time in such period and ending on the
date prior to the Ex-Dividend Time with respect to the cash dividend to
which this provision is being applied (except that if no other cash
dividend has had an Ex-Dividend Time occurring in such period, the period
for calculating the average of the Sale Prices shall be the period
commencing 365 days prior to the date prior to the Ex-Dividend Time with
respect to the cash dividend to which this provision is being applied),
such cash dividend together with each other cash dividend with an Ex-
Dividend Time occurring in such 365-day period shall be deemed to be an
Extraordinary Cash Dividend and for purposes of applying the formula set
forth above in this Section 13.8, the value of "F" shall be equal to (y)
the aggregate amount of such cash dividend together with amounts of the
other cash dividends with Ex-Dividend Times occurring in such period
minus (z) the aggregate amount of such other cash dividends with Ex-
-----
Dividend Times occurring in such period for which a prior adjustment in
the Conversion
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Rate was previously made under this Section 13.8.
In the event that, with respect to any distribution to which this Section
13.8 would otherwise apply, the difference "M-F" as defined in the above formula
is less than $1.00 or "F" is greater than "M", then the adjustment provided by
this Section 13.8 shall not be made and in lieu thereof the provisions of
Section 13.14 shall apply to such distribution.
Section XIII.9 When Adjustment May Be Deferred. No adjustment in the
-------------------------------
Conversion Rate need be made unless the adjustment would require an increase
or decrease of at least 1% (e.g., if the Conversion Rate is 4, an increase or
decrease of .04 (1% of 4)) in the Conversion Rate. Any adjustments that are
not made shall be carried forward and taken into account in any subsequent
adjustment.
All calculations under this Article X shall be made to the nearest cent or
to the nearest 1/1,000th of a share, as the case may be, with one-half of a cent
and 5/10,000ths of a share being rounded upwards.
Section XIII.10 When No Adjustment Required. No adjustment need be made
---------------------------
for a transaction referred to in Section 13.6, 13.7, 13.8 or 13.14 if Holders
may participate in the transaction on a basis and with notice that the Board
of Directors determines to be fair and appropriate in light of the basis and
notice on which holders of Series A Common Stock participate in the
transaction.
No adjustment need be made for rights to purchase Series A Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.
No adjustment need be made for a change in the par value or no par value of
the Series A Common Stock.
To the extent the Securities become convertible into cash pursuant to the
terms of Section 13.6, 13.7, 13.8 or 13.14, no adjustment need be made
thereafter as to the cash. Interest will not accrue on the cash.
In cases where the fair market value of the portion of assets, debt
securities or rights, warrants or options to purchase securities of the Company
applicable to one share of Series A Common Stock distributed to shareholders
exceeds the Average Sale Price per share of Series A Common Stock, or such
Average Sale Price exceeds such fair market value of such portion of assets,
debt securities or rights, warrants or options so distributed by less than
$1.00, rather than being entitled to an adjustment in the Conversion Rate, the
Holder of a Security upon conversion thereof will be entitled to receive, in
addition to the shares of Series A Common Stock into which such
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Security is convertible, the kind and amounts of assets, debt securities or
rights, options or warrants comprising the distribution that such Holder would
have received if such Holder had converted such Security immediately prior to
the record date for determining the shareholders entitled to receive the
distribution.
Section XIII.11 Notice of Adjustment. Whenever the Conversion Rate is
adjusted, the Company shall file with the Trustee and the Conversion Agent a
notice of such adjustment and a certificate from the Company's independent
public accountants briefly stating the facts requiring the adjustment and the
manner of computing it. The Conversion Agent will promptly mail such notice to
Holders at the Company's expense. The certificate shall be conclusive evidence
that the adjustment is correct. Neither the Trustee nor any Conversion Agent
shall be under any duty or responsibility with respect to any such certificate
except to exhibit the same to any Holder desiring inspection thereof.
Section XIII.12 Voluntary Increase. The Company from time to time may
------------------
increase the Conversion Rate by any amount and for any period of time
(provided that such period is not less than 20 Business Days). Whenever the
Conversion Rate is increased, the Company shall mail to Holders and file with
the Trustee and the Conversion Agent a notice of the increase. The Company
shall mail the notice at least 15 days before the date the increased
Conversion Rate takes effect. The notice shall state the increased Conversion
Rate and the period it will be in effect.
A voluntary increase of the Conversion Rate does not change or adjust the
Conversion Rate otherwise in effect for purposes of Sections 13.6, 13.7 or 13.8.
Section XIII.13 Notice of Certain Transactions. If:
------------------------------
(1) the Company takes any action that would require an adjustment in
the Conversion Rate pursuant to Section 13.6, 13.7 or 13.8 (unless no
adjustment is to occur pursuant to Section 13.10); or
(2) the Company takes any action that would require a supplemental
indenture pursuant to Section 13.14; or
(3) there is a liquidation or dissolution of the Company;
then the Company shall mail to Holders and file with the Trustee and the
Conversion Agent a notice stating the proposed record date for a dividend or
distribution of the proposed effective date of a subdivision, combination,
reclassification, consolidation, merger, binding share exchange, transfer,
liquidation or dissolution. The Company shall file and mail the notice at least
15 days before such date. Failure to file or mail the notice or any defect in
it shall not affect the validity of the
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transaction.
Section XIII.14 Reorganization of Company Special Distributions. If the
-----------------------------------------------
Company is a parry to a transaction subject to Section 8.1 (other than a sale
of all or substantially all of the assets of the Company in a transaction in
which the holders of Series A Common Stock immediately prior to such
transaction do not receive securities, cash or other assets of the Company or
any other person) or a merger or binding share exchange which reclassifies or
changes its outstanding Series A Common Stock, the person obligated to deliver
securities, cash or other assets upon conversion of Securities shall enter
into a supplemental indenture. If the issuer of securities deliverable upon
conversion of Securities is an Affiliate of the successor Company, that issuer
shall join in the supplemental indenture.
The supplemental indenture shall provide that the Holder of a Security may
convert it into the kind and amount of securities, cash or other assets which
such Holder would have received immediately after the consolidation, merger,
binding share exchange or transfer if such Holder had converted the Security
immediately before the effective date of the transaction, assuming (to the
extent applicable) that such Holder (i) was not a constituent person or an
Affiliate of a constituent person to such transaction; (ii) made no election
with respect thereto; and (iii) was treated alike with the plurality of
nonelecting Holders. The supplemental indenture shall provide for adjustments
which shall be as nearly equivalent as may be practical to the adjustments
provided for in this Article XIII. The successor Company shall mail to Holders
a notice briefly describing the supplemental indenture.
If this Section 13.14 applies, neither Section 13.6 nor 13.7 shall apply.
If the Company makes a distribution to all holders of its Series A Common
Stock of any of its assets, or debt securities or any rights, warrants or
options to purchase securities of the Company that, but for the provisions of
the last paragraph of Section 13.8, would otherwise result in an adjustment in
the Conversion Rate pursuant to the provisions of Section 13.8, then, from and
after the record date for determining the holders of Series A Common Stock
entitled to receive the distribution, a Holder of a Security that converts such
Security in accordance with the provisions of this Indenture shall upon such
conversion be entitled to receive, in addition to the shares of Series A Common
Stock into which the Security is convertible, the kind and amount of securities,
cash or other assets comprising the distribution that such Holder would have
received if such Holder had converted the Security immediately prior to the
record date for determining the holders of Series A Common Stock entitled to
receive the distribution.
Section XIII.15 Company Determination Final. Any determination that the
---------------------------
Company or the Board of Directors must make pursuant to this Article XIII is
conclusive.
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Section XIII.16 Trustee's Adjustment Disclaimer. The Trustee has no
-------------------------------
duty to determine when an adjustment under this Article XIII should be made,
how it should be made or what it should be. The Trustee has no duty to
determine whether a supplemental indenture under Section 13.14 need be entered
into or whether any provisions of any supplemental indenture are correct. The
Trustee shall not be accountable for and makes no representation as to the
validity or value of any securities or assets issued upon conversion of
Securities. The Trustee shall not be responsible for the Company's failure to
comply with this Article XIII. Each Conversion Agent (other than the Company
or an Affiliate of the Company) shall have the same protection under this
Section 13.16 as the Trustee.
Section XIII.17 Simultaneous Adjustments. If this Article XIII requires
------------------------
adjustments to the Conversion Rate under more than one of Sections 13.6(4),
13.7 or 13.8, and the record dates for the distributions giving rise to such
adjustments shall occur on the same date, then such adjustments shall be made
by applying, first, the provisions of Section 13.6, second, the provisions of
Section 13.8 and, third, the provisions of Section 13.7.
Section XIII.18 Successive Adjustments. After an adjustment to the
----------------------
Conversion Rate under this Article XIII, any subsequent event requiring an
adjustment under this Article XIII shall cause an adjustment to the
Conversion Rate as so adjusted.
ARTICLE XIV
RIGHT TO REQUIRE REPURCHASE
---------------------------
Section XIV.1 Purchase of Securities at Option of the Holder upon Change
----------------------------------------------------------
in Control.
- ---------
(a) If on or prior to December 28, 2003, there shall have occurred a Change
in Control, Securities in aggregate Principal Amount of $1,000 or an integral
multiple thereof shall be purchased, at the option of the Holder thereof, by the
Company at the purchase price specified in paragraph 8 of the Securities (or, if
prior to a Change in Control Purchase Date, the Debentures have been converted
to semiannual debentures following a Tax Event pursuant to Article XV, at a
price equal to the Restated Principal Amount plus accrued and unpaid interest
from the date of such conversion to, but excluding, the Change in Control
Purchase Date) (the "Change in Control Purchase Price"), on the date that is 30
Business Days after the occurrence of the Change in Control (the "Change in
Control Purchase Date"), subject to satisfaction by or on behalf of the Holder
of the requirements set forth in Section 14.1(c).
A "Change in Control" shall be deemed to have occurred at such time as
either of the
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following events shall occur:
(i) There shall be consummated any consolidation or merger of the
Company to which the Series A Common Stock would be converted into cash, or
other property, in each case, other than a consolidation or merger of the
Company in which the Holders of Common Stock immediately prior to the
consolidation or merger have, directly or indirectly, at least a majority of
the total voting power in the aggregate of all classes of common stock of the
continuing or surviving corporation normally entitled to vote in elections of
directors immediately after such consolidation or merger; or
(ii) There is a report filed by any person, including its Affiliates and
Associates, on Schedule 13D or 14D-1 (or any successor schedule, form or report)
pursuant to the Exchange Act, disclosing that such person (for the purposes of
this Section 14.1 only, the term "person" shall include a "person" within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act or any
successor provision to either of the foregoing) has become the beneficial owner
(as the term "beneficial owner" is defined under Rule 13d-3 or any successor
rule or regulation promulgated under the Exchange Act) of 50% or more of the
total voting power in the aggregate of all classes of Common Stock then
outstanding of the Company normally entitled to vote in elections of directors;
provided, however, that a person shall not be deemed beneficial owner of, or to
- -------- -------
own beneficially, (A) any securities tendered pursuant to a tender or exchange
offer made by or on behalf of such person or any of such person's Affiliates or
Associates until such tendered securities are accepted for purchase or exchange
thereunder, or (B) any securities if such beneficial ownership (1) arises solely
as a result of a revocable proxy delivered in response to a proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (2) is not also then reportable on
Schedule 13D (or any successor schedule, form or report) under the Exchange Act;
or
(iii) The occurrence of any transaction or event in connection with which
all or substantially all Series A Common Stock shall be exchanged for, converted
into, acquired for or constitute solely the right to receive consideration
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification, recapitalization or
otherwise) all or substantially all of which consists of common stock which is
(or, upon consummation of or immediately following such transaction or event,
which will be) listed on a United States national securities exchange or
approved for quotation on the Nasdaq National Market or any similar United
States system of automated dissemination of quotations of securities prices.
Notwithstanding the foregoing provisions of this Section 14.1(a), a Change
in Control shall not be deemed to have occurred if at any time the Company, any
Subsidiary of the Company, any employee stock ownership plan or any other
employee benefit plan of either the Company or any Subsidiary of the Company, or
any person holding shares of Common Stock for or pursuant to the
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terms of any such employee benefit plan, or any Permitted Holder, files or
becomes obligated to file a report under or in response to Schedule 13D or
Schedule 14D-1 (or any successor schedule, form or report) under the Exchange
Act disclosing beneficial ownership by it of 50% or more of the total voting
power in the aggregate of all classes of Common Stock then outstanding of the
Company normally entitled to vote in elections of directors or if AT&T (or any
Affiliate thereof) files or becomes obligated to file any such report in
connection with the TCI Acquisition (whether or not the AT&T Acquisition shall
then have occurred).
"Associate" shall have the meaning ascribed to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
"Permitted Holder" means (i) Tele-Communications, Inc. a Delaware
corporation ("TCI"), any person or entity which owns, directly or indirectly, a
majority of the total voting power of TCI, and any business entity at least a
majority of the total voting power of which is owned, directly or indirectly, by
TCI or any person or entity which owns, directly or indirectly, a majority of
the total voting power of TCI (but, in each case, only so long as such voting
power is so owned), (ii) from and after the consummation of the acquisition of
TCI (however structured) by AT&T Corp., a New York corporation ("AT&T") (the
"TCI Acquisition"), AT&T, any person or entity which owns, directly or
indirectly, a majority of the total voting power of AT&T, and any business
entity at least a majority of the total voting power of which is owned, directly
or indirectly by AT&T, or any person or entity which owns, directly or
indirectly, a majority of the total voting power of AT&T (but, in each case,
only so long as such voting power is so owned), (iii) any person who is a member
of a "group" (as defined pursuant to Section 13(d)(3) of the Exchange Act) with
TCI or, following the TCI Acquisition, AT&T, and (iv) any person or entity, a
majority of the equity interests of which are distributed, directly or
indirectly, to the stockholders of TCI or, following the TCI Acquisition, AT&T,
as applicable, provided that TCI or, following the TCI Acquisition, AT&T own,
directly or indirectly, a majority of the equity interests and voting power of
such person or entity immediately prior to such distribution.
(b) Within 15 Business Days after the Change in Control, the Company shall
mail a written notice of such Change in Control by first-class mail to the
Trustee and to each Holder (and to beneficial owners if required by applicable
law). The Company will cause a copy of the notice to be published in The Wall
--------
Street Journal or another daily newspaper of national circulation. The notice
- --------------
shall include a form of Change in Control Purchase Notice to be completed by the
Holder and shall state:
(1) briefly the events causing a Change in Control and the date such
Change in Control is deemed to have occurred for purposes of this Section
14.1;
(2) the date by which the Change in Control Purchase Notice pursuant
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to this Section 14.1 must be given;
(3) the Change in Control Purchase Date;
(4) the Change in Control Purchase Price;
(5) the name and address of the Paying Agent and the Conversion Agent
and the office or agency referred to Section 10.2;
(6) the Conversion Rate and any adjustments thereto;
(7) that Securities as to which a Change in Control Purchase Notice
has been given may be converted into Series A Common Stock (or, in lieu
thereof, cash, if the Company shall so elect) at any time prior to the
close of business on the Change in Control Purchase Date only if the Change
in Control Purchase Notice has been withdrawn by the Holder in accordance
with the terms of this Indenture;
(8) that Securities must be surrendered to the Paying Agent or the
office or agency referred to in Section 10.2 to collect payment;
(9) that the Change in Control Purchase Price for any Security as to
which a Purchase Notice has been duly given and not withdrawn will be paid
promptly following the later of the Change in Control Purchase Date and the
time of surrender of such Security as described in clause (8) above;
(10) the procedures the Holder must follow to exercise rights under
this Section 14.1 and a brief description of those rights;
(11) briefly, the conversion rights of the Securities; and
(12) the procedures for withdrawing a Change in Control Purchase
Notice.
(c) A Holder may exercise its rights specified in Section 14.1(a) upon
delivery of a written notice of purchase (a "Change in Control Purchase Notice")
to the Paying Agent or to the office or agency referred to in Section 10.2 at
any time prior to the close of business on the Change in Control Purchase Date,
stating:
(1) the certificate number of the Security which the Holder will
deliver to be purchased;
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(2) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or an
integral multiple thereof; and
(3) that such Security shall be purchased on the Change in Control
Purchase Date, pursuant to the terms and conditions specified in paragraph
8 of the Securities.
Receipt of the Security by the Paying Agent prior to, on or after the
Change in Control Purchase Date (together with all necessary endorsements), at
the offices of the Paying Agent or to the office or agency referred to in
Section 10.2 shall be a condition to the receipt by the Holder of the Change in
Control Purchase Price therefor; provided, however, that such Change in Control
-------- -------
Purchase Price shall be so paid pursuant to this Section 14.1 only if the
Security so delivered to the Paying Agent or such office or agency shall conform
in all respects to the description thereof set forth in the related Change in
Control Purchase Notice.
The Company shall purchase from the Holder thereof, pursuant to this
Section 14.1, a portion of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all of a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions of this
Section 14.1 shall be consummated by the delivery of the consideration to be
received by the Holder promptly following the later of the Change in Control
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 10.2.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or to the office or agency referred to in Section 10.2 the
Change in Control Purchase Notice contemplated by this Section 14.1(c) shall
have the right to withdraw such Change in Control Purchase Notice at any time
prior to or on the Change in Control Purchase Date by delivery of a written
notice of withdrawal to the Paying Agent or to such office or agency in
accordance with Section 14.3.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Change in Control Purchase Notice or written withdrawal thereof.
Section XIV.2 Purchase of Securities at the Option of the Holder.
--------------------------------------------------
(a) General. Securities shall be purchased by the Company pursuant to
-------
paragraph 8 of the Securities as of December 28, 2003, December 28, 2008 and
December 28, 2013 (each, a "Purchase Date"), at the purchase prices specified
therein (the "Purchase Price"), at the option of the Holder thereof, upon:
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(1) delivery to the Paying Agent or to the office or agency referred
to in Section 10.2 by the Holder of a written notice of purchase (a
"Purchase Notice") at any time from the opening of business on the date
that is 20 Business Days prior to the Purchase Date until the close of
business on such Purchase Date stating:
(A) the certificate number of the Security that the Holder will
deliver to be purchased;
(B) the portion of the Principal Amount of the Security which the
Holder will deliver to be purchased, which portion must be $1,000 or
an integral multiple thereof;
(C) that such Security shall be purchased on the Purchase Date
pursuant to the terms and conditions specified in this Indenture and
in paragraph 6 of the Securities; and
(D) if the Company elects pursuant to Section 14.2(b) to pay the
Purchase Price on such Purchase Date, in whole or in part, in shares
of Series A Common Stock, but such portion of the Purchase Price to be
paid in Series A Common Stock is ultimately to be paid in cash because
any condition in Section 14.2(d) is not satisfied, such Holder elects
(i) to withdraw such Purchase Notice as to some or all of the
Securities to which it relates (stating the Principal Amount and
certificate numbers of the Securities as to which such withdrawal
shall relate), or (ii) to receive cash in respect of the Purchase
Price for all Securities subject to such Purchase Notice; and
(2) delivery of such Security prior to, on or after the Purchase Date
(together with all necessary endorsements) to the Paying Agent at the
offices of the Paying Agent or to the office or agency referred to in
Section 10.2, such delivery being a condition to receipt by the Holder of
the Purchase Price therefor; provided, however, that such Purchase Price
-------- -------
shall be so paid pursuant to this Section 14.2 only if the Security so
delivered conforms in all respects to the description thereof in the
related Purchase Notice.
If a Holder, in such Holder's Purchase Notice and in any written notice of
withdrawal delivered by such Holder pursuant to the terms of Section 14.3, fails
to indicate such Holder's choice with respect to the election set forth in
clause (D) of Section 14.2(a)(1) above, such Holder shall be deemed to have
elected to receive cash in respect of the Purchase Price otherwise payable in
Series A Common Stock.
The Company shall purchase from the Holder thereof, pursuant to this
Section 14.2, a portion
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of a Security if the Principal Amount of such portion is
$1,000 or an integral multiple of $1,000. Provisions of this Indenture that
apply to the purchase of all or a Security also apply to the purchase of such
portion of such Security.
Any purchase by the Company contemplated pursuant to the provisions hereof
shall be consummated by the delivery of the consideration to be received by the
Holder promptly following the later of the Purchase Date and the time of
delivery of the Security.
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent or the office or agency referred to in Section 10.2 the
Purchase Notice contemplated by this Section 14.2(a) shall have the right to
withdraw at any time prior to the close of business on the Purchase Date such
Purchase Notice by delivery of a written notice of withdrawal to the Paying
Agent or such office or agency in accordance with Section 14.3.
The Paying Agent shall promptly notify the Company of the receipt by it of
any Purchase Notice or written notice of withdrawal thereof.
(b) Company's Right to Elect Manner of Payment of Purchase Price. The
------------------------------------------------------------
Securities to be purchased pursuant to Section 14.2(a) may be paid for, at the
election of the Company, in cash or Series A Common Stock, or in any combination
of cash and Series A Common Stock, subject to the conditions set forth in this
Section 14.2. The Company shall designate, in the notice from the Company
delivered pursuant to Section 14.2(e), whether the Company will purchase the
Securities for cash or Series A Common Stock, and, if a combination thereof, the
percentages of the Purchase Price of Securities in respect of which it will pay
in cash or Series A Common Stock; provided that the Company will pay cash for
--------
fractional interests in Series A Common Stock. For purposes of determining the
existence of potential fractional interests, all Securities subject to purchase
by the Company held by a Holder shall be considered together (no matter how many
separate certificates are to be presented). Each Holder whose Securities are
purchased pursuant to this Section 14.2 shall receive the same percentage of
cash or Series A Common Stock in payment of the Purchase Price for such
Securities, except (i) as provided in Section 14.2(d) with regard to the payment
of cash in lieu of fractional shares of Series A Common Stock and (ii) in the
event that the Company is unable to purchase the Securities of a Holder or
Holders for Series A Common Stock because any necessary qualifications or
registrations of the Series A Common Stock under applicable state securities
laws cannot be obtained, the Company may purchase the Securities of such Holder
or Holders for cash. The Company may not change its election with respect to
the consideration (or components or percentages of components thereof) to be
paid once the Company has given notice thereof to Holders except pursuant to
this Section 14.2(b) or Section 14.2(d).
At least five Business Days before the Company Notice Date (as defined
below), the Company shall deliver an Officers' Certificate to the Trustee
specifying:
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(i) the manner of payment selected by the Company;
(ii) the information required by Section 14.2(e);
(iii) that the conditions to such manner of payment set forth in
Section 14.2(d) have or will be complied with; and
(iv) whether the Company desires the Trustee to give the notice
required by Section 14.2(e).
(c) Purchase with Cash. On each Purchase Date, at the option of the
------------------
Company, the Principal Amount of the Securities in respect of which a Purchase
Notice pursuant to Section 14.2(a) has been given, or a specified percentage
thereof, may be purchased by the Company with cash equal to the aggregate
Purchase Price of such Securities.
(d) Payment by Series A Common Stock. On each Purchase Date, at the option
--------------------------------
of the Company, the Principal Amount of the Securities in respect of which a
Purchase Notice pursuant to Section 14.2(a) has been given, or a specified
percentage thereof, may be purchased by the Company by the issuance of a number
of shares of Series A Common Stock equal to the quotient obtained by dividing
(i) the amount of cash to which the Holders would have been entitled had the
Company elected to pay all or such specified percentage, as the case may be, of
the Purchase Price of such Securities in cash by (ii) the Market Price (as
defined below) of a share of Series A Common Stock, subject to the next
succeeding paragraph.
The Company will not issue a fractional share of Series A Common Stock in
payment of the Purchase Price. Instead the Company will pay cash for the
current market value of the fractional share. The current market value of a
fraction of a share shall be determined by multiplying the Market Price by such
fraction and rounding the product to the nearest whole cent, with one-half cent
being rounded upward. It is understood that if a Holder elects to have more
than one Security purchased, the number of shares of Series A Common Stock shall
be based on the aggregate amount of Securities to be purchased.
The Company's right to exercise its election to purchase the Securities
pursuant to this Section through the issuance of shares of Series A Common Stock
shall be conditioned upon:
(i) the Company's not having given notice of an election to pay
entirely in cash and its giving of timely notice of election to purchase
all or a specified percentage of the Securities with Series A Common Stock
as provided herein;
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(ii) the registration of the shares of Series A Common Stock to be
issued in respect of the payment of the Purchase Price under the Securities
Act and the Exchange Act, in each case if required unless there exists an
applicable exemption to registration thereunder;
(iii) the listing of the Series A Common Stock on the relevant
Purchase Date on the Nasdaq National Market or the New York Stock Exchange
or other national securities exchange; and
(iv) the receipt by the Trustee of an Officers' Certificate and an
Opinion of Counsel each stating that (A) the terms of the issuance of the
Series A Common Stock are in conformity with this Indenture and (B) the
shares of Series A Common Stock to be issued by the Company in payment of
the Purchase Price in respect of Securities have been duly authorized and,
when issued and delivered pursuant to the terms of this Indenture in
payment of the Purchase Price in respect of the Securities, will be validly
issued, fully paid and nonassessable and shall be free of any preemptive
rights and any lien or adverse claim (provided that such Opinion of Counsel
may state that, insofar as it relates to the absence of such preemptive
rights, liens and adverse claims, it is given upon the best knowledge of
such counsel), and, in the case of such Officers' Certificate, that
conditions (i), (ii) and (iii) above have been satisfied and, in the case
of such Opinion of Counsel, that conditions (ii) and (iii) above have been
satisfied.
Such Officers' Certificate shall also set forth the number of shares of Series A
Common Stock to be issued for each $1,000 Principal Amount of Securities and the
Sale Price of a share of Series A Common Stock on each of the seven Business
Days prior to the Purchase Date. The Company may elect to pay in Common Stock
only if the information necessary to calculate the Market Price is reported in
The Wall Street Journal or another daily newspaper of national circulation. If
- -----------------------
such conditions are not satisfied prior to or on the Purchase Date and the
Company elected to purchase the Securities pursuant to this Section 14.2 through
the issuance of shares of Series A Common Stock, the Company shall pay the
Purchase Price in cash.
The "Market Price" means the average of the Sale Prices of the Series A
Common Stock for the five Trading Day period ending on the third Trading Day
prior to the related Purchase Date, appropriately adjusted to take into account
the actual occurrence, during the seven Trading Days preceding such Purchase
Date, of any event described in Section 13.6, 13.7 or 13.8; subject, however, to
------- -------
the conditions set forth in Sections 13.9 and 13.10.
(e) Notice of Election. The Company shall send notices of its election
------------------
(the "Company Notice") to purchase with cash or Series A Common Stock or any
combination thereof to the Holders (and to beneficial owners as required by
applicable law) in the manner provided in Section 15.2. The Company Notice
shall be sent to Holders (and to beneficial owners as required by
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applicable law) on a date not less than 20 Business Days prior to the Purchase
Date (such date not less than 20 Business Days prior to the Purchase Date
being herein referred to as the "Company Notice Date"). Such notices shall
state the manner of payment elected and shall contain the following
information:
In the event the Company has elected to pay the Purchase Price (or any
specified percentage thereof) with Series A Common Stock, the notice shall:
(1) state that each Holder will receive Series A Common Stock with a
Market Price determined as of a specified date prior to the Purchase Date
equal to such specified percentage of the Purchase Price of the Securities
held by such Holder (except for any cash amount to be paid in lieu of
fractional shares); and
(2) state that because the Market Price of Series A Common Stock
will be determined prior to the Purchase Date, Holders will bear the
market risk with respect to the value of the Series A Common Stock to be
received from the date such Market Price is determined to the Purchase
Date.
In any case, each notice shall include a form of Purchase Notice to be
completed by the Holder and shall state:
(i) the Purchase Price and Conversion Rate;
(ii) the name and address of the Paying Agent and the Conversion Agent
and of the office or agency referred to in Section 10.2;
(iii) that Securities as to which a Purchase Notice has been given
may be converted into Series A Common Stock at any time prior to the close
of business on the applicable Purchase Date only if the applicable Purchase
Notice has been withdrawn in accordance with the terms of this Indenture;
(iv) that Securities must be surrendered to the Paying Agent or to the
office or agency referred to in Section 10.2 to collect payment;
(v) that the Purchase Price for any security as to which a Purchase
Notice has been given and not with drawn will be paid promptly following
the later of the Purchase Date and the time of surrender of such Security
as described in (iv);
(vi) the procedures the Holder must follow to exercise rights under
Section 14.2 and a brief description of those rights;
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(vii) briefly, the conversion rights of the Securities and that
Holders who want to convert Securities must satisfy the requirements set
forth in paragraph 9 of the Securities; and
(viii) the procedures for withdrawing a Purchase Notice (including,
without limitation, for a conditional withdrawal pursuant to the terms of
Section 14.2(a)(1)(D) or Section 14.3).
At the Company's written request, the Trustee shall give such notice in the
Company's name and at the Company's expense; provided, however, that, in all
-------- -------
cases, the text of such notice shall be prepared by the Company.
Upon determination of the actual number of shares of Series A Common Stock
to be issued for each $1,000 Principal Amount of Securities, the Company will
publish such determination in The Wall Street Journal or another daily newspaper
-----------------------
of national circulation and furnish the Trustee with an affidavit of
publication.
(f) Covenants of the Company. All shares of Series A Common Stock
------------------------
delivered upon purchase of the Securities shall be newly issued shares or
treasury shares, shall be duly authorized, validly issued, fully paid and
nonassessable and shall be free from preemptive rights and free of any lien or
adverse claim.
The Company shall use its best efforts to list or cause to have quoted any
shares of Series A Common Stock to be issued to purchase Securities on the
principal national securities exchange or over-the-counter or other domestic
market on which any other shares of the Series A Common Stock are then listed or
quoted. The Company will promptly inform the Trustee in writing of any such
listing.
(g) Procedure Upon Purchase. The Company shall deposit cash (in respect of
-----------------------
a cash purchase under Section 14.2(c) or for fractional interests, as
applicable) or shares of Series A Common Stock, or any combination thereof, as
applicable, at the time and in the manner as provided in Section 14.4,
sufficient to pay the aggregate Purchase Price of all Securities to be purchased
pursuant to this Section 14.2. As soon as practicable after the later of the
Purchase Date and the date such Securities are surrendered to the Paying Agent
or at the office or agency referred to in Section 10.2, the Company shall
deliver to each Holder entitled to receive Series A Common Stock through the
Paying Agent a certificate for the number of full shares of Series A Common
Stock issuable in payment of the Purchase Price and cash in lieu of any
fractional interests. The person in whose name the certificate for Series A
Common Stock is registered shall be treated as a holder of record of such Series
A Common Stock on the Business Day following the related Purchase Date. Subject
to Section 14.2(d), no payment or adjustment will be made for dividends on the
Series A
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Common Stock the record date for which occurred prior to the Purchase Date.
(h) Taxes. If a Holder of a Security is paid in Series A Common Stock, the
-----
Company shall pay any documentary, stamp or similar issue or transfer tax due on
such issue of shares of Series A Common Stock. However, the Holder shall pay
any such tax which is due because the Holder requests the shares of Series A
Common Stock to be issued in a name other than the Holder's name. The Paying
Agent may refuse to deliver the certificates representing the Series A Common
Stock being issued in a name other than the Holder's name until the Paying Agent
receives a sum sufficient to pay any tax which will be due because the shares of
Series A Common Stock are to be issued in a name other than the Holder's name.
Nothing herein shall preclude any income tax withholding required by law or
regulations.
Section XIV.3 Effect of Purchase Notice or Change in Control Purchase
-------------------------------------------------------
Notice. Upon receipt by the Paying Agent of the Change in Control Purchase
- ------
Notice or Purchase Notice specified in Section 14.1(c) or Section 14.2(a), as
applicable, the Holder of the Security in respect of which such Purchase
Notice or Change in Control Purchase Notice, as the case may be, was given
shall (unless such Purchase Notice or Change in Control Purchase Notice is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or Change in Control Purchase Price, as
the case may be, with respect to such Security. Such Purchase Price or Change
in Control Purchase Price shall be paid to such Holder promptly following the
later of (x) the Business Day following the Purchase Date or the Change in
Control Purchase Date, as the case may be, with respect to such Security
(provided the conditions in Section 14.1(c) or Section 14.2(a), as applicable,
have been satisfied) and (y) the time of delivery of such Security to the
Paying Agent or to the office or agency referred to in Section 10.2 by the
Holder thereof in the manner required by Section 14.2(a) and (g) or Section
14.1(c), as applicable. Securities in respect of which a Purchase Notice or
Change in Control Purchase Notice, as the case may be, has been given by the
Holder thereof may not be converted into shares of Series A Common Stock on or
after the date of the delivery of such Purchase Notice or Change in Control
Purchase Notice, unless such Purchase Notice of Change in Control Purchase
Notice, as the case may be, has first been validly withdrawn as specified in
the following two paragraphs.
A Purchase Notice or Change in Control Purchase Notice, as the case may be,
may be withdrawn by means of a written notice of withdrawal delivered to the
office of the Paying Agent or to the office or agency referred to in Section
10.2 at any time on or prior to the close of business on the Purchase Date or
the Change in Control Purchase Date, as the case may be, specifying:
(1) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(2) the Principal Amount of the Security with respect to which such
notice of
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withdrawal is being submitted; and
(3) the Principal Amount, if any, of such Security which remains
subject to the original Purchase Notice or Change in Control Purchase
Notice, as the case may be, and which has been or will be delivered for
purchase by the Company.
A written notice of withdrawal of a Purchase Notice may be in the form set
forth in the preceding paragraph or may be in the form of (i) a conditional
withdrawal contained in a Purchase Notice pursuant to the terms of Section
14.2(a)(1)(D) or (ii) a conditional withdrawal containing the information set
forth in Section 14.2(a)(1)(D) and the preceding paragraph and contained in a
written notice of withdrawal delivered to the Paying Agent as set forth in the
preceding paragraph.
There shall be no purchase of any Securities pursuant to Section 14.2
(other than through the issuance of Series A Common Stock in payment of the
Purchase Price, including cash in lieu of fractional shares of Series A Common
Stock) or Section 14.1 if there has occurred (prior to, or on or after, as the
case may be, the giving, by the Holders of such Securities, of the required
Purchase Notice or Change in Control Purchase Notice, as the case may be) and is
continuing an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Securities). The Paying Agent will promptly return to the
respective Holders thereof any Securities (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Securities) in which case, upon such return, the Purchase Notice
or Change in Control Purchase Notice with respect thereto shall be deemed to
have been withdrawn.
Section XIV.4 Deposit of Purchase Price or Change in Control Purchase
-------------------------------------------------------
Price. Prior to 12:00 p.m. (noon), New York City time, on the Business Day
- -----
following the Purchase Date or the Change in Control Purchase Date, as the
case may be, the Company shall deposit with the Trustee or with the Paying
Agent (or, if the Company or a Subsidiary or an Affiliate of either of them is
acting as Paying Agent, shall segregate and hold in trust an amount of cash in
immediately available funds or securities, if expressly permitted hereunder),
sufficient to pay the aggregate Purchase Price or Change in Control Purchase
Price, as the case may be, of all the Securities or portions thereof which are
to be purchased as of the Purchase Date or Change in Control Purchase Date, as
the case may be and after the Purchase Date or Change in Control Purchase
Date, as the case may be, such Securities shall cease to bear interest or
accrue Original Issue Discount (unless the Company shall default in the
payment of the Purchase Price or Change of Control Purchase Price).
Section XIV.5 Securities Purchased in Part. Any Security which is to be
----------------------------
purchased only in part shall be surrendered at the office of the Paying Agent
or the office or agency referred to
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in Section 10.2 (with, if the Company or the Trustee so requires, due
endorsement, or a written instrument of transfer in form satisfactory to the
Company and the Trustee executed by the Holder or such Holder's attorney duly
authorized in writing) and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate Principal Amount equal to, and in
exchange for, the portion of the Principal Amount of the Security so
surrendered which is not purchased.
Section XIV.6 Covenant to Comply with Securities Laws upon Purchase of
--------------------------------------------------------
Securities. In connection with any offer to purchase or purchase of
- ----------
Securities under Section 14.1 or 14.2, the Company shall (i) comply with Rule
13e-4 and Rule 14e-1 under the Exchange Act, if applicable, (ii) file the
related Schedule 13E-4 (or any successor schedule, form or report) under the
Exchange Act, if applicable, and (iii) otherwise comply with all Federal and
state securities laws regulating the offer and delivery of shares of Series A
Common Stock upon purchase of the Securities (including positions of the SEC
under applicable no-action letters) so as to permit the rights and obligations
under Sections 14.1 and 14.2 to be exercised in the time and in the manner
specified in Sections 14.1 and 14.2 .
Section XIV.7 Repayment to the Company. The Trustee and the Paying
------------------------
Agent shall return to the Company, upon written request, any cash or shares of
Series A Common Stock, together with interest on such cash as hereinafter
provided and dividends on such shares of Series A Common Stock, if any, held
by them for the payment of a Purchase Price or Change in Control Purchase
Price, as the case may be, of the Securities that remain unclaimed as provided
in paragraph 14 of the Securities; provided, however, that to the extent that
-------- -------
the aggregate amount of cash or shares of Series A Common Stock deposited by
the Company pursuant to Section 14.4 exceeds the aggregate Purchase Price or
Change in Control Purchase Price, as the case may be, of the Securities or
portions thereof to be purchased, then promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case
may be, the Trustee shall return any such excess to the Company together with
interest as hereinafter provided or dividends, if any, thereon.
ARTICLE XV
SPECIAL TAX EVENT CONVERSION
----------------------------
Section XV.1 Optional Conversion to Semiannual Coupon Debenture Upon Tax
-----------------------------------------------------------
Event. From and after the date (the "Tax Event Date") of the occurrence of a
- -----
Tax Event, at the option of the Company, interest in lieu of future Original
Issue Discount and regular cash interest shall accrue at 4.00% per annum on a
principal amount per Security (the "Restated Principal Amount") equal to the
Issue Price plus Original Issue Discount and cash interest accrued to the date
immediately prior to
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the Tax Event Date or the date on which the Company exercises the option
described herein, whichever is later (such date, the "Option Exercise Date").
Such interest shall accrue from the Option Exercise Date and shall be payable
semiannually on each Interest Payment Date to holders of record at the close
of business on the Regular Record Date immediately preceding such Interest
Payment Date. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months and will accrue from the most recent date on
which interest has been paid or, if no interest has been paid, from the Option
Exercise Date. Within 15 days of the occurrence of a Tax Event, the Company
shall mail a written notice of such Tax Event by first-class mail to the
Trustee.
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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.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
AT HOME CORPORATION,
By: /s/ Kenneth A. Goldman
----------------------
Name: Kenneth A. Goldman
Title: Senior Vice President and Chief Financial Officer
STATE STREET BANK AND TRUST COMPANY OF CALIFORNIA, N.A.,
By: /s/ Mark Henson
---------------
Name: Mark Henson
Title: Assistant Vice President
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EXHIBIT 10.39
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of December
28, 1998 by and between At Home Corporation, a Delaware corporation ("the
Company"), and Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co. (the
"Purchasers") pursuant to the Purchase Agreement, dated as of December 28, 1998
(the "Purchase Agreement"), between the Company and the Purchasers. In order to
induce the Purchasers to enter into the Purchase Agreement, the Company has
agreed to provide the registration rights set forth in this Agreement. The
execution of this Agreement is a condition to the closing under the Purchase
Agreement.
The Company agrees with the Purchasers, (i) for their benefit as Purchasers
and (ii) for the benefit of the beneficial owners (including the Purchasers)
from time to time of the Debentures (as defined herein) and the beneficial
owners from time to time of the Underlying Common Stock (as defined herein)
issued upon conversion of the Debentures (each of the foregoing a "Holder" and
together the "Holders"), as follows:
Section 1. Definitions. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Affiliate: With respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.
Amendment Effectiveness Deadline Date: See Section 2(d) hereof.
Applicable Conversion Price: The Applicable Conversion Price as of any
date of determination means the Applicable Principal Amount per $1,000 principal
amount at maturity of Debentures as of such date of determination divided by the
Conversion Rate in effect as of such date of determination or, if no Debentures
are then outstanding, the Conversion Rate that would be in effect were
Debentures then outstanding.
Applicable Principal Amount: Applicable Principal Amount as of any date of
determination, with respect to each $1,000 principal amount at maturity of
Debentures means the sum of the initial issue price of such Debenture ($524.64)
plus accrued original issue discount with respect to such Debenture through such
date of determination or, if no Debentures are then outstanding, such sum
calculated as if such Debentures were then outstanding.
Business Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is
not a day on which banking institutions in The City of New York are authorized
or obligated by law or
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executive order to close.
Common Stock: The shares of Series A Common Stock, $0.01 par value, of the
Company and any other shares of common stock as may constitute "Series A Common
Stock" for purposes of the Indenture, including the Underlying Common Stock.
Conversion Rate: Conversion Rate shall have the meaning assigned such term
in the Indenture.
Damages Accrual Period: See Section 2(e) hereof.
Damages Payment Date: Each June 28 and December 28 in the case of
Debentures and the Underlying Common Stock.
Debentures: The Convertible Subordinated Debentures due 2018 of the
Company to be purchased pursuant to the Purchase Agreement.
Deferral Notice: See Section 3(i) hereof.
Deferral Period: See Section 3(i) hereof.
Effectiveness Deadline Date: See Section 2(a) hereof.
Effectiveness Period: The period of two years from the later of the (a)
Issue Date or (b) the last date of original issuance of the Debentures or such
shorter period ending on the date that all Registrable Securities have ceased to
be Registrable Securities.
Event: See Section 2(e) hereof.
Event Termination Date: See Section 2(e) hereof.
Event Date: See Section 2(e) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Filing Deadline Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture dated as of the date hereof between the Company
and State Street Bank and Trust Company of California, N.A., as trustee,
pursuant to which the Debentures are being issued.
Initial Shelf Registration Statement: See Section 2(a) hereof.
2
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Issue Date: December 28, 1998.
Liquidated Damages Amount: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Material Event: See Section 3(i) hereof.
Notice and Questionnaire: A written notice delivered to the Company
containing substantially the information called for by the Selling Security
holder Notice and Questionnaire attached as Appendix B to the Offering
Memorandum of the Company issued December 21, 1998 relating to the Debentures.
Notice Holder: On any date, any Holder that has delivered a Notice and
Questionnaire to the Company on or prior to such date.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement, including
post-effective amendments, and all materials incorporated by reference or
explicitly deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: See the first paragraph of this Agreement.
Purchasers: Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Morgan Stanley & Co. Incorporated and Goldman, Sachs & Co.
Record Holder: With respect to any Damages Payment Date relating to any
Debenture or Underlying Common Stock as to which any Liquidated Damages Amount
has accrued, the registered holder of such Debenture or Underlying Common Stock,
as the case may be, 15 days prior to the next succeeding Damages Payment Date.
Registrable Securities: The Debentures and the Underlying Common Stock,
until such securities have been converted or exchanged, and, at all times
subsequent to any such conversion or exchange, any securities into or for which
such securities have been converted or exchanged, and any security issued with
respect thereto upon any stock dividend, split or similar event until, in the
case of any such security, the earliest of (i) its effective registration under
the Securities Act and resale in accordance with the Registration Statement
covering it, (ii) expiration of the holding period that would be applicable
thereto under Rule 144(k) were it not held by an Affiliate of the Company or
(iii) its sale to the public pursuant to Rule 144.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the Company that
covers any of
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the Registrable Securities pursuant to the provisions of this Agreement,
including the Prospectus, amendments and supplements to such registration
statement, including post-effective amendments, all exhibits, and all materials
incorporated by reference or explicitly deemed to be incorporated by reference
in such registration statement.
Restricted Securities: As this term is defined in Rule 144.
Rule 144: Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and
regulations promulgated by the SEC thereunder.
Shelf Registration Statement: See Section 2(a) hereof.
Subsequent Shelf Registration Statement: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: State Street Bank and Trust Company of California, N.A. (or any
successor entity), the Trustee under the Indenture.
Underlying Common Stock: The Series A Common Stock into which the
Debentures are convertible or issued upon any such conversion.
Section 2. Shelf Registration. (a) The Company shall prepare and file or
cause to be prepared and filed with the SEC, as soon as practicable but in any
event by the date (the "Filing Deadline Date") ninety (90) days after the Issue
Date, a Registration Statement for an offering to be made on a delayed or
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration Statement") registering the resale from time to time by Holders
thereof of all of the Registrable Securities (the "Initial Shelf Registration
Statement"). The Initial Shelf Registration Statement shall be on Form S-3 or
another appropriate form permitting registration of such Registrable Securities
for resale by such Holders in accordance with the methods of distribution
elected by the Holders and set forth in the Initial Shelf Registration
Statement. The Company shall use all reasonable efforts to cause the Initial
Shelf Registration Statement to be declared effective under the Securities Act
as promptly as is practicable but in any event by the date (the "Effectiveness
Deadline Date") that is one hundred and eighty (180) days after the Issue Date,
and to keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement is declared effective,
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each Holder that became a Notice Holder on or prior to the date 10 Business Days
prior to such time of effectiveness shall be named as a selling Security holder
in the Initial Shelf Registration Statement and the related Prospectus in such a
manner as to permit such Holder to deliver such Prospectus to purchasers of
Registrable Securities in accordance with applicable law. None of the Company's
security holders (other than the Holders of Registrable Securities) shall have
the right to include any of the Company's securities in the Shelf Registration
Statement.
(b) If the Initial Shelf Registration Statement or any Subsequent Shelf
Registration Statement ceases to be effective for any reason at any time during
the Effectiveness Period (other than because all Registrable Securities
registered thereunder shall have been resold pursuant thereto or shall have
ceased to be Registrable Securities), the Company shall use all reasonable
efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a manner
reasonably expected to obtain the withdrawal of the order suspending the
effectiveness thereof, or file an additional Shelf Registration Statement
covering all of the securities that as of the date of such filing are
Registrable Securities (a "Subsequent Shelf Registration Statement"). If a
Subsequent Shelf Registration Statement is filed, the Company shall use all
reasonable efforts to cause the Subsequent Shelf Registration Statement to
become effective as promptly as is practicable after such filing and to keep
such Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.
(c) The Company shall supplement and amend the Shelf Registration
Statement if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration Statement,
if required by the Securities Act or, to the extent to which the Company does
not reasonably object, as reasonably requested by the Purchasers or by the
Trustee on behalf of the registered Holders.
(d) Each Holder of Registrable Securities agrees that if such Holder
wishes to sell Registrable Securities pursuant to a Shelf Registration Statement
and related Prospectus, it will do so only in accordance with this Section 2(d)
and Section 3(i). Each Holder of Registrable Securities wishing to sell
Registrable Securities pursuant to a Shelf Registration Statement and related
Prospectus agrees to deliver a Notice and Questionnaire to the Company at least
three (3) Business Days prior to any intended distribution of Registrable
Securities under the Shelf Registration Statement. From and after the date the
Initial Shelf Registration Statement is declared effective, the Company shall,
as promptly as is practicable after the date a Notice and Questionnaire is
delivered, and in any event within five (5) Business Days after such date, (i)
if required by applicable law, file with the SEC a post-effective amendment to
the Shelf Registration Statement or prepare and, if required by applicable law,
file a supplement to the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other required document
so that the Holder delivering such Notice and Questionnaire is named as a
selling Security holder in the Shelf Registration Statement and the related
Prospectus in such a manner as to permit such Holder to deliver such Prospectus
to
5
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purchasers of the Registrable Securities in accordance with applicable law
and, if the Company shall file a post-effective amendment to the Shelf
Registration Statement, use all reasonable efforts to cause such post-effective
amendment to be declared effective under the Securities Act as promptly as is
practicable, but in any event by the date (the "Amendment Effectiveness Deadline
Date") that is forty-five (45) days after the date such post-effective amendment
is required by this clause to be filed; (ii) provide such Holder copies of any
documents filed pursuant to Section 2(d)(i); and (iii) notify such Holder as
promptly as practicable after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(d)(i); provided, that if
such Notice and Questionnaire is delivered during a Deferral Period, the Company
shall so inform the Holder delivering such Notice and Questionnaire and shall
take the actions set forth in clauses (i), (ii) and (iii) above upon expiration
of the Deferral Period in accordance with Section 3(i), provided, further, that
if under applicable law the Company has more than one option as to the type or
manner of making any such filing, it will make the required filing or filings in
the manner or of a type that is reasonably expected to result in the earliest
availability of the Prospectus for effecting resales of Registrable Securities.
Notwithstanding anything contained herein to the contrary, the Company shall be
under no obligation to name any Holder that is not a Notice Holder as a selling
Security holder in any Registration Statement or related Prospectus; provided,
however, that any Holder that becomes a Notice Holder pursuant to the provisions
of Section 2(d) of this Agreement (whether or not such Holder was a Notice
Holder at the time the Registration Statement was declared effective) shall be
named as a selling Security holder in the Registration Statement or related
Prospectus in accordance with the requirements of this Section 2(d).
(e) The parties hereto agree that the Holders of Registrable Securities
will suffer damages, and that it would not be feasible to ascertain the extent
of such damages with precision, if (i) the Initial Shelf Registration Statement
has not been filed on or prior to the Filing Deadline Date, (ii) the Initial
Shelf Registration Statement has not been declared effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) the Company
has failed to perform its obligations set forth in Section 2(d) within the time
period required therein, (iv) the aggregate duration of Deferral Periods in any
period exceeds the number of days permitted in respect of such period pursuant
to Section 3(i) hereof or (v) the number of Deferral Periods in any period
exceeds the number permitted in respect of such period pursuant to Section 3(i)
(each of the events of a type described in any of the foregoing clauses (i)
through (v) are individually referred to herein as an "Event," and the Filing
Deadline Date in the case of clause (i), the Effectiveness Deadline Date in the
case of clause (ii), the date by which the Company is required to perform its
obligations set forth in Section 2(d) in the case of clause (iii) (including the
filing of any post-effective amendment prior to the Amendment Effectiveness
Deadline Date), the date on which the aggregate duration of Deferral Periods in
any period exceeds the number of days permitted by Section 3(i) hereof in the
case of clause (iv), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods in any period under Section
3(i) hereof to be exceeded in the case of clause (v), being referred to herein
as an "Event Date"). Events shall be deemed to continue until the "Event
Termination Date," which shall be the following dates with respect to the
respective types of Events: the date the Initial Shelf
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Registration Statement is filed in the case of an Event of the type described in
clause (i), the date the Initial Shelf Registration Statement is declared
effective under the Securities Act in the case of an Event of the type described
in clause (ii), the date the Company performs its obligations set forth in
Section 2(d) in the case of an Event of the type described in clause (iii)
(including, without limitation, the date the relevant post-effective amendment
to the Shelf Registration Statement is declared effective under the Securities
Act), termination of the Deferral Period that caused the limit on the aggregate
duration of Deferral Periods in a period set forth in Section 3(i) to be
exceeded in the case of the commencement of an Event of the type described in
clause (iv), and termination of the Deferral Period the commencement of which
caused the number of Deferral Periods in a period permitted by Section 3(i) to
be exceeded in the case of an Event of the type described in clause (v).
Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "Damages Accrual Period"), the Company agrees to pay, as
liquidated damages and not as a penalty, an amount (the "Liquidated Damages
Amount"), payable on the Damages Payment Dates to Record Holders of then
outstanding Debentures that are Registrable Securities and of then outstanding
shares of Underlying Common Stock issued upon conversion of Debentures that are
Registrable Securities, as the case may be, accruing, for each portion of such
Damages Accrual Period beginning on and including a Damages Payment Date (or, in
respect of the first time that the Liquidation Damages Amount is to be paid to
Holders on a Damages Payment Date as a result of the occurrence of any
particular Event, from the Event Date) and ending on but excluding the first to
occur of (A) the date of the end of the Damages Accrual Period or (B) the Next
Damages Payment Date, at a rate per annum equal to one-quarter of one percent
(.25%) for the first 90-day period from the Event Date and thereafter at a rate
per annum equal to one-half of one percent (.5%) of the aggregate Applicable
Principal Amount of such Debentures and the Applicable Conversion Price of such
shares of Underlying Common Stock, as the case may be, in each case determined
as of the Business Day immediately preceding the next Damages Payment Date;
provided, that in the case of a Damages Accrual Period that is in effect solely
as a result of an Event of the type described in clause (iii) of the immediately
preceding paragraph, such Liquidated Damages Amount shall be paid only to the
Holders that have delivered Notice and Questionnaires that caused the Company to
incur the obligations set forth in Section 2(d) the non-performance of which is
the basis of such Event; provided further, that any Liquidated Damages Amount
accrued with respect to any Debenture or portion thereof called for redemption
on a redemption date or converted into Underlying Common Stock on a conversion
date prior to the Damages Payment Date, shall, in any such event, be paid
instead to the Holder who submitted such Debenture or portion thereof for
redemption or conversion on the applicable redemption date or conversion date,
as the case may be, on such date (or promptly following the conversion date, in
the case of conversion). Notwithstanding the foregoing, no Liquidated Damages
Amounts shall accrue as to any Registrable Security from and after the earlier
of (x) the date such security is no longer a Registrable Security and (y)
expiration of the Effectiveness Period. The rate of accrual of the Liquidated
Damages Amount with respect to any period shall not exceed the rate provided for
in this paragraph notwithstanding the occurrence of multiple
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concurrent Events. Following the cure of all Events requiring the payment by the
Company of Liquidated Damages Amounts to the Holders of Registrable Securities
pursuant to this Section, the accrual of Liquidated Damages Amounts will cease
(without in any way limiting the effect of any subsequent Event requiring the
payment of Liquidated Damages Amount by the Company).
The Trustee shall be entitled, on behalf of Holders of Debentures or
Underlying Common Stock, to seek any available remedy for the enforcement of
this Agreement, including for the payment of any Liquidated Damages Amount.
Notwithstanding the foregoing, the parties agree that the sole damages payable
for a violation of the terms of this Agreement with respect to which liquidated
damages are expressly provided shall be such liquidated damages. Nothing shall
preclude a Notice Holder or Holder of Registrable Securities from pursuing or
obtaining specific performance or other equitable relief with respect to this
Agreement.
All of the Company's obligations set forth in this Section 2(e) that are
outstanding with respect to any Registrable Security at the time such security
ceases to be a Registrable Security shall survive until such time as all such
obligations with respect to such security have been satisfied in full
(notwithstanding termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the liquidated damages provided for in this
Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available for
effecting resales of Registrable Securities in accordance with the provisions
hereof.
Section 3. Registration Procedures. In connection with the registration
obligations of the Company under Section 2 hereof, the Company shall:
(a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to the Purchasers copies
of all such documents proposed to be filed and use all reasonable efforts to
reflect in each such document when so filed with the SEC such comments as the
Purchasers reasonably shall propose within two (2) Business Days of the delivery
of such copies to the Purchasers.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2(a); cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) under the Securities Act;
and use all reasonable efforts to comply with the provisions of the Securities
Act applicable to it with respect to the disposition of all securities covered
by such Registration Statement during the Effectiveness Period in accordance
with the intended methods of disposition by the sellers thereof set forth in
such Registration Statement as so amended or such Prospectus as so supplemented.
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(c) As promptly as practicable give notice to the Notice Holders and the
Purchasers (i) when any Prospectus, Prospectus supplement, Registration
Statement or post-effective amendment to a Registration Statement has been filed
with the SEC and, with respect to a Registration Statement or any post-effective
amendment, when the same has been declared effective, (ii) of any request,
following the effectiveness of the Initial Shelf Registration Statement under
the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to any Registration Statement or related
Prospectus or for additional information, (iii) of the issuance by the SEC or
any other federal or state governmental authority of any stop order suspending
the effectiveness of any Registration Statement or the initiation or threatening
of any proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, (v) of the occurrence of (but not the nature of or details concerning)
a Material Event (provided, however, that no notice by the Company shall be
-------- -------
required pursuant to this clause (v) in the event that the Company either
promptly files a Prospectus supplement to update the Prospectus or a Form 8-K or
other appropriate Exchange Act report that is incorporated by reference into the
Registration Statement, which, in either case, contains the requisite
information with respect to such Material Event that results in such
Registration Statement no longer containing any untrue statement of material
fact or omitting to state a material fact necessary to make the statements
contained therein not misleading) and (vi) of the determination by the Company
that a post-effective amendment to a Registration Statement will be filed with
the SEC, which notice may, at the discretion of the Company (or as required
pursuant to Section 3(i)), state that it constitutes a Deferral Notice, in which
event the provisions of Section 3(i) shall apply.
(d) Use all reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement or the lifting of any
suspension of the qualification (or exemption from qualification) of any of the
Registrable Securities for sale in any jurisdiction in which they have been
qualified for sale, in either case at the earliest possible moment.
(e) If reasonably requested by the Purchasers or any Notice Holder,
promptly as reasonably practicable incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Purchasers or such Notice Holder shall, on the basis of an opinion of
nationally-recognized counsel experienced in such matters, determine to be
required to be included therein by applicable law and make any required filings
of such Prospectus supplement or such post-effective amendment; provided, that
the Company shall not be required to take any actions under this Section 3(e)
that are not, in the reasonable opinion of counsel for the Company, in
compliance with applicable law.
(f) Promptly as reasonably practicable furnish to each Notice Holder and
the Purchasers, upon their request and without charge, at least one (1)
conformed copy of the Registration Statement and any amendment thereto,
including financial statements but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference and all
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<PAGE>
exhibits (unless requested in writing to the Company by such Notice Holder or
the Purchasers, as the case may be).
(g) During the Effectiveness Period, deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and the Company hereby consents (except during such periods that a
Deferral Notice is outstanding and has not been revoked) to the use of such
Prospectus or each amendment or supplement thereto by each Notice Holder in
connection with any offering and sale of the Registrable Securities covered by
such Prospectus or any amendment or supplement thereto in the manner set forth
therein.
(h) Prior to any public offering of the Registrable Securities pursuant
to the Shelf Registration Statement, use its reasonable efforts to register or
qualify or cooperate with the Notice Holders in connection with the registration
or qualification (or exemption from such registration or qualification) of such
Registrable Securities for offer and sale under the securities or Blue Sky laws
of such jurisdictions within the United States as any Notice Holder reasonably
requests in writing (which request may be included in the Notice and
Questionnaire); prior to any public offering of the Registrable Securities
pursuant to the Shelf Registration Statement, use its reasonably efforts to keep
each such registration or qualification (or exemption therefrom) effective
during the Effectiveness Period in connection with such Notice Holder's offer
and sale of Registrable Securities pursuant to such registration or
qualification (or exemption therefrom) and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdictions of such
Registrable Securities in the manner set forth in the relevant Registration
Statement and the related Prospectus; provided, that the Company will not be
required to (i) qualify as a foreign corporation or as a dealer in securities in
any jurisdiction where it would not otherwise be required to qualify but for
this Agreement or (ii) take any action that would subject it to general service
of process in suits or to taxation in any such jurisdiction where it is not then
so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) the occurrence of any event or the existence
of any fact (a "Material Event") as a result of which any Registration Statement
shall contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, or any Prospectus shall contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or (C) the occurrence or existence
of any pending corporate development that, in the discretion of the Company,
makes it appropriate to suspend the availability of the Shelf Registration
Statement and the related Prospectus, (i) in the case of clause (B) above,
subject to the next sentence, as promptly as practicable prepare and
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<PAGE>
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
such Prospectus does not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a post-
effective amendment to a Registration Statement, subject to the next sentence,
use all reasonable efforts to cause it to be declared effective as promptly as
is reasonably practicable, and (ii) give notice to the Notice Holders that the
availability of the Shelf Registration Statement is suspended (a "Deferral
Notice") and, upon receipt of any Deferral Notice, each Notice Holder agrees not
to sell any Registrable Securities pursuant to the Registration Statement until
such Notice Holder's receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by the
Company that the Prospectus may be used, and has received copies of any
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus. The Company will use all reasonable efforts to
ensure that the use of the Prospectus may be resumed (x) in the case of clause
(A) above, as promptly as is practicable, (y) in the case of clause (B) above,
as soon as, in the sole judgment of the Company, public disclosure of such
Material Event would not be prejudicial to or contrary to the interests of the
Company or, if necessary to avoid unreasonable burden or expense, as soon as
reasonably practicable thereafter and (z) in the case of clause (C) above, as
soon as, in the discretion of the Company, such suspension is no longer
appropriate. The period during which the availability of the Registration
Statement and any Prospectus is suspended (the "Deferral Period") shall, without
the Company incurring any obligation to pay liquidated damages pursuant to
Section 2(e), not exceed forty-five (45) days in any three (3) month period or
ninety (90) days in any twelve (12) month period.
(j) If reasonably requested in writing in connection with a disposition
of Registrable Securities pursuant to a Registration Statement, make reasonably
available for inspection during normal business hours by a representative for
the Notice Holders of such Registrable Securities and any broker-dealers,
attorneys and accountants retained by such Notice Holders, all relevant
financial and other records, pertinent corporate documents and properties of the
Company and its subsidiaries, and cause the appropriate executive officers,
directors and designated employees of the Company and its subsidiaries to make
reasonably available for inspection during normal business hours all relevant
information reasonably requested by such representative for the Notice Holders
or any such broker-dealers, attorneys or accountants in connection with such
disposition, in each case as is customary for similar "due diligence"
examinations; provided, however, that such persons shall first agree in writing
with the Company that any information that is reasonably and in good faith
designated by the Company in writing as confidential at the time of delivery of
such information shall be kept confidential by such persons and shall be used
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solely for the purposes of exercising rights under this Agreement, unless (i)
disclosure of such information is required by court or administrative order or
is necessary to respond to inquiries of regulatory authorities, (ii) disclosure
of such information is required by law (including any disclosure requirements
pursuant to federal securities laws in connection with the filing of any
Registration Statement or the use of any Prospectus referred to in this
Agreement), (iii) such information becomes generally available to the public
other than as a result of a disclosure or failure to safeguard by any such
person or (iv) such information becomes available to any such person from a
source other than the Company and such source is not bound by a confidentiality
agreement; and provided further, that the foregoing inspection and information
gathering shall, to the greatest extent possible, be coordinated on behalf of
all the Notice Holders and the other parties entitled thereto by the counsel
referred to in Section 5.
(k) Use all reasonable efforts to comply with all applicable rules and
regulations of the SEC and make generally available to its securityholders
earning statements (which need not be audited) satisfying the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) commencing on the first day of the first fiscal quarter of the
Company commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(l) Cooperate with each Notice Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities
sold pursuant to a Registration Statement, and cause such Registrable Securities
to be in such denominations as are permitted by the Indenture and registered in
such names as such Notice Holder may request in writing at least two Business
Days prior to any sale of such Registrable Securities.
(m) Provide a CUSIP number for all Registrable Securities covered by
each Registration Statement not later than the effective date of such
Registration Statement and provide the Trustee and the transfer agent for the
Common Stock with printed certificates for the Registrable Securities that are
in a form eligible for deposit with The Depository Trust Company.
(n) Make a reasonable effort to provide such information as is required
for any filings required to be made with the National Association of Securities
Dealers, Inc.
(o) Upon (i) the filing of the Initial Shelf Registration Statement and
(ii) the effectiveness of the Initial Shelf Registration Statement, announce the
same, in each case by release to Reuters Economic Services and Bloomberg
Business News.
Section 4. Holder's Obligations. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished the Company with a Notice and Questionnaire as
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required pursuant to Section 2(d) hereof (including the information required to
be included in such Notice and Questionnaire) and the information set forth in
the next sentence. Each Notice Holder agrees promptly to furnish to the Company
all information required to be disclosed in order to make the information
previously furnished to the Company by such Notice Holder not misleading and any
other information regarding such Notice Holder and the distribution of such
Registrable Securities as may be required to be disclosed in the Registration
Statement or that the Company may from time to time reasonably request. Any sale
of any Registrable Securities by any Holder shall constitute a representation
and warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating to
or provided by such Holder or its plan of distribution necessary to make the
statements in such Prospectus, in the light of the circumstances under which
they were made, not misleading.
Section 5. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance by the Company of its
obligations under Sections 2 and 3 of this Agreement whether or not any of the
Registration Statements are declared effective. Such fees and expenses shall
include, without limitation, (i) all registration and filing fees (including,
without limitation, fees and expenses (x) with respect to filings required to be
made with the National Association of Securities Dealers, Inc. and (y) of
compliance with federal and state securities or Blue Sky laws (including,
without limitation, reasonable fees and disbursements of the counsel specified
in the next sentence in connection with Blue Sky qualifications of the
Registrable Securities under the laws of such jurisdictions as the Notice
Holders of a majority of the Registrable Securities being sold pursuant to a
Registration Statement may designate), (ii) printing expenses (including,
without limitation, expenses of printing certificates for Registrable Securities
in a form eligible for deposit with The Depository Trust Company), (iii)
duplication expenses relating to copies of any Registration Statement or
Prospectus delivered to any Holders hereunder, (iv) fees and disbursements of
counsel for the Company in connection with the Shelf Registration Statement, and
(v) reasonable fees and disbursements of the Trustee and its counsel and of the
registrar and transfer agent for the Common Stock. In addition, the Company
shall bear or reimburse the Notice Holders for the reasonable fees and
disbursements (not to exceed $15,000) of one firm of legal counsel for the
Holders, which shall initially be Wilson Sonsini Goodrich & Rosati, P.C., but
which may, with the written consent of the Purchasers (which shall not be
unreasonably withheld), be another nationally recognized law firm experienced in
securities law matters designated by the Company. In addition, the Company shall
pay the internal expenses of the Company (including, without limitation, all
salaries and expenses of officers and employees performing legal or accounting
duties), the expense of any annual audit, the fees and expenses incurred in
connection with the listing of the Registrable Securities on any securities
exchange on which similar securities of the Company are then listed and the fees
and expenses of any person, including special experts, retained by the Company.
Notwithstanding the provisions of this Section 5, each seller of
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Registrable Securities shall pay all registration expenses to the extent
required by applicable law.
Section 6. Indemnification.
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each Notice Holder and each person, if any, who controls any
Notice Holder (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act) from and against all losses, liabilities,
claims, damages and expenses (including, without limitation, any legal or other
expenses reasonably incurred in connection with defending or investigating any
such action or claim) (collectively, "Losses"), arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in any
Registration Statement or Prospectus or in any amendment or supplement thereto
or in any preliminary prospectus, or arising out of or based upon any omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided,
however, that the Company shall not be liable in any such case to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement contained in or omission or alleged omission from any
of such documents in reliance upon and conformity with any of the information
relating to such Holder furnished to the Company in writing by such Holder
expressly for use therein; provided further, that the indemnification contained
in this paragraph shall not inure to the benefit of any Holder of Registrable
Securities (or to the benefit of any person controlling such Holder) on account
of any such Losses arising out of or based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any preliminary
prospectus if either (A) (i) such Holder failed to send or deliver a copy of the
Prospectus with or prior to the delivery of written confirmation of the sale by
such Holder to the person asserting the claim from which such Losses arise and
(ii) the Prospectus would have corrected such untrue statement or alleged untrue
statement or such omission or alleged omission, or (B) (x) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in an
amendment or supplement to the Prospectus and (y) having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such Prospectus
as so amended or supplemented, with or prior to the delivery of written
confirmation of the sale of a Registrable Security to the person asserting the
claim from which such Losses arise.
(b) Indemnification by Holders of Registrable Securities. Each Holder
agrees severally and not jointly to indemnify and hold harmless the Company and
its respective directors and officers, and each person, if any, who controls the
Company (within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act), from and against all Losses arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement or Prospectus or in any amendment or
supplement thereto or in any preliminary prospectus, or arising out of or based
upon any omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
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
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conformity with information furnished to the Company by such Holder expressly
for use in such Registration Statement or Prospectus or amendment or supplement
thereto. In no event shall the liability of any selling Holder of Registrable
Securities hereunder be greater in amount than the dollar amount of the proceeds
received by such Holder upon the sale of the Registrable Securities pursuant to
the Registration Statement giving rise to such indemnification obligation.
(c) Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "indemnified party") shall promptly
notify the person against whom such indemnity may be sought (the "indemnifying
party") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the reasonable fees and disbursements
of such counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such indemnified party
unless (i) the indemnifying party and the indemnified party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the indemnifying party
and the indemnified party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that the indemnifying party shall not, in respect of the
legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for
all indemnified parties, and that all such fees and expenses shall be reimbursed
as they are incurred. Such separate firm shall be designated in writing by, in
the case of parties indemnified pursuant to Section 6(a), the Holders of a
majority (with Holders of Debentures deemed to be the Holders, for purposes of
determining such majority, of the number of shares of Underlying Common Stock
into which such Debentures are or would be convertible or exchangeable as of the
date on which such designation is made) of the Registrable Securities covered by
the Registration Statement held by Holders that are indemnified parties pursuant
to Section 6(a) and, in the case of parties indemnified pursuant to Section
6(b), the Company. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding (and in the event of a settlement
that involves an unconditional release of such indemnified party, the
indemnifying party will send prompt written notice of such settlement to the
indemnified party).
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(d) Contribution. To the extent that the indemnification provided for
in this Section 6 is unavailable to an indemnified party under Section 6(a) or
6(b) hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the initial placement pursuant to the Purchase Agreement (before
deducting expenses) of the Registrable Securities to which such Losses relate.
Benefits received by any Holder shall be deemed to be equal to the value of
receiving Registrable Securities that are registered under the Securities Act.
The relative fault of the Holders on the one hand and the Company on the other
hand shall be determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Holders
or by the Company, and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Holders' respective obligations to contribute pursuant to this paragraph are
several in proportion to the respective number of Registrable Securities they
have sold pursuant to a Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by pro rata
--- ----
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. 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.
(e) The indemnity, contribution and expense reimbursement obligations of
the parties hereunder shall be in addition to any liability any indemnified
party may otherwise have hereunder, under the Purchase Agreement or otherwise.
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(f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or the Company, or the
Company's officers or directors or any person controlling the Company and (iii)
the sale of any Registrable Securities by any Holder.
Section 7. Information Requirements. (a) The Company covenants that, if
at any time before the end of the Effectiveness Period the Company is not
subject to the reporting requirements of the Exchange Act, it will cooperate
with any Holder of Registrable Securities and take such further reasonable
action as any Holder of Registrable Securities may reasonably request in writing
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such Holder to sell Registrable Securities without registration
under the Securities Act within the limitation of the exemptions provided by
Rule 144 and Rule 144A under the Securities Act and customarily taken in
connection with sales pursuant to such exemptions. Upon the written request of
any Holder of Registrable Securities, the Company shall deliver to such Holder a
written statement as to whether it has complied with such filing requirements,
unless such a statement has been included in the Company's most recent report
required to be filed and filed pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require the Company to register any of its securities (other than the
Common Stock) under any section of the Exchange Act.
Section 8. Miscellaneous.
(a) No Conflicting Agreements. The Company is not, as of the date
hereof, a party to, nor shall it, on or after the date of this Agreement, enter
into, any agreement with respect to its securities that conflicts with the
rights granted to the Holders of Registrable Securities in this Agreement. The
Company represents and warrants that the rights granted to the Holders of
Registrable Securities hereunder do not in any way conflict with the rights
granted to the holders of the Company's securities under any other agreements.
(b) Amendments and Waivers. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless the Company has obtained the written consent of Holders of a
majority of the then outstanding Underlying Common Stock constituting
Registrable Securities (with Holders of Debentures deemed to be the Holders, for
purposes of this Section, of the number of outstanding shares of Underlying
Common Stock into which such Debentures are or would be convertible or
exchangeable as of the date on which such consent is requested).
Notwithstanding the foregoing, a waiver or consent to depart from the provisions
hereof with respect to a matter that relates exclusively to the rights of
Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other Holders
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of Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; provided, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence. Each Holder of Registrable Securities
outstanding at the time of any such amendment, modification, supplement, waiver
or consent or thereafter shall be bound by any such amendment, modification,
supplement, waiver or consent effected pursuant to this Section 8(b), whether or
not any notice, writing or marking indicating such amendment, modification,
supplement, 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, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(w) if to a Holder of Registrable Securities, at the most current
address given by such Holder to the Company in a Notice and
Questionnaire or any amendment thereto;
(x) if to the Company, to:
At Home Corporation
425 Broadway Street
Redwood City, CA 94063
Attention: General Counsel
Telecopy No.: (650) 569-5100
and
(y) if to the Purchasers, to:
Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
Attention: Syndicate Department
Telecopy No.: (212) 449-1000
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
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(d) Approval of Holders. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by the Company or its affiliates (as such term is
defined in Rule 405 under the Securities Act) (other than the Purchasers or
subsequent Holders of Registrable Securities if such subsequent Holders are
deemed to be such affiliates solely by reason of their holdings of such
Registrable Securities) shall not be counted in determining whether such consent
or approval was given by the Holders of such required percentage.
(e) Successors and Assigns. Any person who purchases any Registrable
Securities from the Purchasers shall be deemed, for purposes of this Agreement,
to be an assignee of the Purchasers. This Agreement shall inure to the benefit
of and be binding upon the successors and assigns of each of the parties and
shall inure to the benefit of and be binding upon each Holder of any Registrable
Securities.
(f) 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 original and all of which taken together
shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.
(j) Entire Agreement. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by the Company with respect to the Registrable Securities. Except as
provided in the Purchase Agreement, there are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein,
with respect to the registration rights granted by the Company with respect to
the Registrable Securities. This Agreement supersedes all prior agreements and
undertakings among the parties with respect to such registration rights. No
party hereto shall have any rights, duties or obligations other than those
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specifically set forth in this Agreement. Without limiting the generality of
the foregoing, the Company shall have no obligation to participate in "road
show" or, except as specifically provided in this Agreement, "due diligence"
activities in connection with any underwritten public offering of Registrable
Securities, and the Company shall have no obligation to enter into underwriting
or indemnification agreements with respect to, or deliver opinions, comfort
letters or closing certificates in connection with, any such underwritten public
offering.
(k) Termination. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
its terms.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as of the date first written above.
AT HOME CORPORATION
By: /s/ Kenneth A. Goldman
----------------------------------
Name: Kenneth A. Goldman
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date first
above written:
MERRILL LYNCH & CO., MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
(for the benefit of the Purchasers and for the benefit of the Holders)
By: MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Matt Pendro
----------------------------
Name: Matt Pendo
Title: Managing Director
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EXHIBIT 21.01
SUBSIDIARIES OF REGISTRANT
athome.net, a California corporation
At Home NL Holdings, L.P., a Cayman Islands Limited Partnership
Countdown Acquisition Corp., a Delaware corporation
Full Force Systems, Inc., a California corporation
Narrative Communications Corp., a Delaware corporation
