As filed with the Securities and Exchange Commission on June 27, 1997
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
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DATA GENERAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-2436397
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4400 Computer Drive
Westboro, Massachusetts 01580
(508) 898-5000
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Ronald L. Skates
Data General Corporation
4400 Computer Drive
Westboro, Massachusetts 01580
(508) 898-5000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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Copy to:
Carl E. Kaplan, Esq.
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, New York 10103
(212) 318-3000
fax (212) 752-5958
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Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _____________
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] _____________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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Title of each Amount to be Proposed Maximum Proposed Maximum Amount of
class of registered Offering Price Aggregate Registration
securities to Per Unit Offering Fee (1)
be registered Price
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6% Convertible $212,750,000 100% $212,750,000 $64,470
Subordinated
Notes
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Common Stock,
par value 8,122,089(2) N/A N/A N/A
$.01 per share
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(1) Pursuant to Rule 457(i) there is no filing fee with respect to the
shares of Common Stock issuable upon conversion of the Notes because no
additional consideration will be received in connection with the
exercise of the conversion privilege.
(2) Plus such additional indeterminate number of shares as may become
issuable upon conversion of the Notes being registered hereunder by
means of adjustment of the conversion price.
----------------------------------------
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of any offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JUNE 27, 1997
DATA GENERAL CORPORATION
$212,750,000 Principal Amount of 6% Convertible Subordinated Notes due 2004
(Interest Payable May 15 and November 15)
8,122,089 Shares of Common Stock
This Prospectus relates to (i) $212,750,000 aggregate principal
amount of 6% Convertible Subordinated Notes due 2004 (the "Notes") of Data
General Corporation, a Delaware corporation ("Data General" or the "Company"),
and (ii) 8,122,089 shares of common stock, par value $.01 per share (the "Common
Stock"), of the Company which are initially issuable upon conversion of the
Notes plus such additional indeterminate number of shares of Common Stock as may
become issuable upon conversion of the Notes as a result of adjustments to the
conversion price (the "Shares"). The Notes and the Shares that are being
registered hereby are to be offered for the account of the holders thereof (the
"Selling Securityholders"). The Notes were initially acquired from the Company
by Morgan Stanley & Co. Incorporated and Dillon, Read & Co. Inc. (the "Initial
Purchasers") in May 1997 in connection with a private offering. See "Description
of the Notes."
The Notes are convertible into Common Stock of the Company at any
time after 90 days following the original issuance thereof and prior to
maturity, unless previously redeemed, at a conversion price of $26.194 per
share, subject to adjustment in certain events. The reported last sale price of
the Common Stock on the New York Stock Exchange on June 26, 1997, was $25.875
per share. The Common Stock is traded under the symbol "DGN."
The Notes are not redeemable by the Company prior to May 18, 2000.
Subject to the foregoing, the Notes will be redeemable on at least 30 days'
prior notice at the option of the Company, in whole or in part, at any time, at
the redemption prices set forth in this Prospectus, in each case together with
accrued interest. The Notes may also be redeemed at the option of the holder if
there is a Fundamental Change (as defined herein) at declining redemption
prices, subject to adjustment in certain events as defined herein, together with
accrued interest. See "Description of Notes -- Optional Redemption by the
Company" and "Description of Notes -- Redemption at Option of the Holder."
The Notes are unsecured obligations of the Company, are
subordinated to the extent provided in the Indenture (as defined herein) to the
payment in full of all Senior Indebtedness (as defined herein) and are pari
passu in right of payment with the Company's 7 3/4% Convertible Subordinated
Debentures due 2001. There are no restrictions in the Indenture on the creation
of additional Senior Indebtedness or other indebtedness. The Notes are
structurally subordinated to the liabilities, including trade payables, of the
Company's subsidiaries. At March 29, 1997, the Company's subsidiaries had other
indebtedness and liabilities of approximately $89 million (excluding
intercompany obligations). See "Description of Notes -- Subordination of Notes"
and "Risk Factors."
The Notes are eligible for trading in the Private Offerings,
Resales and Trading through Automated Linkages ("PORTAL") Market. The Initial
Purchasers have advised the Company that they are currently making a market in
the Notes. The Initial Purchasers, however, are not obligated to do so and any
such market making may be discontinued at any time without notice, in the sole
discretion of the Initial Purchasers. No assurance can be given that any market
for the Notes will be maintained.
The Notes and the Shares are being registered to permit public
secondary trading of the Notes and, upon conversion, the underlying Common
Stock, by the holders thereof from time to time after the date of this
Prospectus. For a description of certain income tax consequences to holders of
the Notes, see "Certain Federal Income Tax Considerations." The Company has
agreed, among other things, to bear all expenses in connection with this
registration statement.
The Company will not receive any of the proceeds from sales of
Notes or the Shares by the Selling Securityholders. The Notes and the Shares may
be offered from time to time by the Selling Securityholders (and their donees
and pledgees) in negotiated transactions or otherwise, at market prices
prevailing at the time of sale or at negotiated prices. See "Plan of
Distribution." The Selling Securityholders may be deemed to be "underwriters" as
defined in the Securities Act of 1933, as amended (the "Securities Act"). If any
broker-dealers are used by the Selling Securityholders, any commissions paid to
broker-dealers and, if broker-dealers purchase any Notes or Shares as
principals, any profits received by such broker-dealers on the resale of the
Notes or Shares may be deemed to be underwriting discounts or commissions under
the Securities Act. In addition, any profits realized by the Selling
Securityholders may be deemed to be underwriting commissions.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR A DESCRIPTION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June , 1997
<PAGE>
AVAILABLE INFORMATION
Data General is subject to the reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission") under File No. 1-7352.
Such reports, proxy statements and other information can be inspected and copied
at the public reference facilities maintained by the Commission at Judiciary
Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Regional Offices of the Commission located at 7 World Trade Center, 13th Floor,
New York, New York 10048-1102 and Citicorp Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. Copies of the above
reports, proxy statements and other information may also be inspected at the
offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005. The Commission maintains a World Wide Web site on the Internet at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission.
This Prospectus constitutes a part of a Registration Statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all the information set forth
in the Registration Statement and the exhibits and schedules thereto. For
further information with respect to the Company and the Notes and the Shares
offered hereby, reference is made to the Registration Statement and to the
exhibits and schedules filed therewith. Statements contained in this Prospectus
as to the contents of any contract or other document are not necessarily
complete and in each instance reference is made to the copy of such contract or
other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Commission, are
incorporated in this Prospectus by reference and made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal
year ended September 28, 1996;
(b) The Company's Quarterly Report on Form 10-Q for the
quarter ended December 28, 1996;
(c) The Company's Quarterly Report on Form 10-Q for the
quarter ended March 29, 1997;
(d) The description of the Company's Common Stock contained in
its Registration Statement on Form 8-A dated November 7, 1973, as
amended on February 28, 1985 and April 12, 1985; and
(e) The description of the Company's Preferred Stock Purchase
Rights contained in its Registration Statement on Form 8-A dated
October 15, 1986, as amended on June 9, 1988, as renewed and restated
as of October 19, 1996 in the Rights Agreement filed as an exhibit to
Form 8-A/A on June 27, 1996.
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<PAGE>
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 or 15(d) of the Exchange Act after the date of this Prospectus and prior to
termination of the offering being made hereby shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the respective
dates of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus to the extent that a
statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company hereby undertakes to provide without charge to each person
to whom a copy of this Prospectus has been delivered, on the written or oral
request of such person, a copy of any or all of the documents referred to above
which have been incorporated in this Prospectus by reference, other than
exhibits to such documents. Written or telephone requests for such copies should
be directed to David P. Roy, Investor Relations, Data General Corporation, 4400
Computer Drive, Westboro, Massachusetts 01580; telephone number (508) 898-6544.
AViiON, CLARiiON and DG/UX are registered trademarks, and NUMALiiNE and
THiiN are trademarks of Data General Corporation. All other brand and product
names appearing on this publication are trademarks or registered trademarks of
their respective holders.
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<PAGE>
THE COMPANY
Data General designs, manufactures, markets and supports a family of
open computer systems including servers and mass storage products. The Company's
products provide solutions for high-performance customer applications such as
database management, transaction processing, decision support, accounting and
finance, healthcare information systems, telecommunications and video storage,
manufacturing planning and control, human resources management and data
warehousing. The Company focuses on providing enterprise-level solutions for
businesses of all sizes, healthcare providers and government agencies, and has a
worldwide sales, service and support network.
The Company has two main product lines, AViiON(R) and CLARiiON(R),
which accounted in the aggregate for approximately 89% of product revenues in
the six-month period ended March 29, 1997. AViiON computers function as servers
and multi-user systems for a wide variety of applications, providing solutions
for businesses ranging from departments and small businesses to large commercial
enterprises that need high availability systems to support large numbers of
users, handle large volumes of transactions and support large databases.
Approximately 40,000 AViiON systems have been shipped since 1989. The Company's
CLARiiON mass storage devices support a wide range of open systems commuting
platforms with a broad family of storage products ranging from disk arrays for
the PC/local area network market to high-capacity, high-availability arrays for
enterprise storage applications. CLARiiON mass storage disk arrays support the
UNIX operating system, Windows NT Server, SCO UnixWare and OS/2, as well as
Novell NetWare. CLARiiON products operate on a wide range of open systems
computing platforms, including systems from IBM, Digital Equipment, Sun, Hewlett
Packard, Sequent and Silicon Graphics.
Data General was incorporated on April 15, 1968, under the laws of the
State of Delaware. Unless the context otherwise requires, references in this
Prospectus to "Data General" and the "Company" refer to Data General Corporation
and its wholly owned subsidiaries. The Company's principal offices are located
at 4400 Computer Drive, Westboro, Massachusetts 01580, and its telephone number
is (508) 898-5000.
RISK FACTORS
This Prospectus contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. Actual results could differ materially from those projected or contemplated
in the forward-looking statements as a result of certain of the risk factors set
forth below and incorporated by reference in this Prospectus. In addition to the
other information contained and incorporated by reference in this Prospectus,
the following risk factors should be considered carefully in evaluating the
Company and its business before purchasing the Notes or the Shares.
Changing Technologies
To compete effectively in the server and mass storage markets, the
Company must continue to introduce new products and features that address the
needs and preferences of its target markets. The server and storage markets are
characterized by short development cycles that are driven by rapidly changing
technology as well as declining product prices. There can be no assurance that
the Company will be able to continue to introduce new competitively priced
products, that the market will be receptive to its products or features, or that
competitors will not introduce advancements ahead of Data General. Furthermore,
there can be no assurance that the Company will develop or have access to new
competitive technology to permit it to introduce new products and features for
its target markets. In addition, the Company must make strategic decisions from
time to time as to which new technologies will result in products for sale to
markets that will experience future growth, and must form and maintain strategic
alliances for the design and marketing of its products. If the Company is
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<PAGE>
not successful in continuing to introduce new products in the growing segments
of the market or in forming and maintaining critical strategic relationships,
there could be a material adverse effect on the Company's business, financial
condition and results of operations.
Dependence on Suppliers
Certain components and products that meet the Company's requirements
are available only from a single supplier or a limited number of suppliers.
Among those components are disk drives, microprocessors and certain proprietary
integrated circuits. The rapid rate of technological change, and the necessity
of developing and manufacturing products with short life-cycles may intensify
these risks. The inability to obtain components and products as required, or to
develop alternative sources if and as required in the future, could result in
delays or reductions in product shipments, which in turn could have a material
adverse effect on the Company's business, financial condition and results of
operations.
Indirect Channels of Distribution
Substantially all of the Company's CLARiiON sales, and a significant
portion of the Company's AViiON sales, are derived from reseller and OEM
channels. A single CLARiiON OEM channel customer during fiscal 1996 accounted
for approximately 15% of the Company's consolidated revenues. The Company's
business, financial condition and results of operations could be adversely
affected if this customer or any other material reseller or OEM were to
substantially decrease its orders or terminate its relationship with the
Company. Further, the utilization of indirect channels of distribution tends to
limit the Company's ability to predict customer orders.
Concentrated Manufacturing Operations
Over the last several years, the Company has consolidated its various
manufacturing operations into three facilities. As a result of this
consolidation, most of the Company's assembly, test and systems integration
operations are performed at its Apex, North Carolina facility. The Company's
ability to ship products and the Company's business, financial condition and
results of operations could be adversely affected were the Apex facility not
able to operate at required levels.
Capitalization of Software Development Costs
The Company has made and continues to make significant investments in
software development efforts. The amount of expenditures that qualify for
capitalization under Statement of Financial Accounting Standards No. 86
"Accounting for the Costs of Computer Software to Be Sold, Leased, or Otherwise
Marketed" may vary from period to period as software projects progress through
the development life-cycle. These variations could impact the Company's
operating results in any given period. Unamortized software development costs
were approximately $67 million at March 29, 1997. If technological developments
or other factors were to jeopardize the realizability of such assets, the
Company could be required to write off all or a substantial portion of such
capitalized values, which would have a material adverse effect on the Company's
results of operations for the period in which the write-off occurred.
Subordination
The Notes are unsecured and subordinated in right of payment in full to all
existing and future Senior Indebtedness of the Company. As a result of such
subordination, in the event of bankruptcy, liquidation or reorganization of the
Company or upon acceleration of the Notes due to an event of default, the assets
of the Company would be available to pay obligations on the Notes only after all
Senior Indebtedness had been paid in full, and there
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<PAGE>
might not be sufficient assets remaining to pay amounts due on any or all of the
Notes then outstanding. The Notes are structurally subordinated to the
liabilities, including trade payables, of the Company's subsidiaries. The
Indenture does not prohibit or limit the incurrence of Senior Indebtedness or
the incurrence of other indebtedness and other liabilities by the Company or its
subsidiaries, and the incurrence of additional indebtedness and other
liabilities by the Company or its subsidiaries could adversely affect the
Company's ability to pay its obligations on the Notes. At March 29, 1997, the
Company had approximately $28 million of outstanding Senior Indebtedness
consisting of approximately $23 million of the Company's 8 3/8% Sinking Fund
Debentures due 2002 and approximately $5 million of contingent reimbursement
obligations under outstanding letters of credit. Subsequent to March 29, 1997,
the Company retired the outstanding 8 3/8% Sinking Fund Debentures by using a
portion of the proceeds of the sale of the Notes to the Initial Purchasers. At
March 29, 1997, the Company's subsidiaries had other indebtedness and
liabilities of approximately $89 million (excluding intercompany obligations).
The Company anticipates that from time to time it will incur additional
indebtedness, including Senior Indebtedness, and that it and its subsidiaries
will from time to time incur other additional indebtedness and liabilities. See
"Description of Notes -- Subordination of Notes" and "Use of Proceeds."
Limitations on Redemption of Notes
Upon a Fundamental Change, each holder of Notes will have certain
rights, at the holder's option, to require the Company to redeem all or a
portion of such holder's Notes. If a Fundamental Change were to occur, there can
be no assurance that the Company would have sufficient funds to pay the
redemption price for all Notes tendered. Any future credit agreements or other
agreements (including those relating to Senior Indebtedness) may contain
provisions restricting the purchase or redemption of the Notes. In the event a
Fundamental Change occurs at a time when the Company is prohibited from
purchasing or redeeming the Notes, the Company could seek the consent of its
lenders to the purchase of the Notes or could attempt to refinance the
borrowings that contain such prohibition. If the Company does not obtain such a
consent or repay such borrowings, the Company would remain prohibited from
purchasing or redeeming Notes. In such case, the Company's failure to redeem
tendered Notes would constitute an Event of Default under the Indenture, which
might, in turn, constitute a default under the terms of agreements relating to
other indebtedness that the company may enter into from time to time. In such
circumstances, the subordination provisions in the Indenture would likely
restrict payments to the holders of the Notes. See "Description of Notes --
Redemption at Option of the Holder."
Absence of Public Market for the Notes and Restrictions on Resale
The Notes are eligible for trading through the PORTAL market. Although
the Initial Purchasers are currently making a market in the Notes, they are not
obligated to do so and may discontinue such market making at any time without
notice. In addition, such market making activity is subject to the limits
imposed by the Securities Act and the Exchange Act. Accordingly, there can be no
assurance that any market for the Notes will be maintained. If an active market
for the Notes fails to be sustained, the trading price of such Notes could be
materially adversely affected. The Company does not intend to apply for listing
of the Notes on any securities exchange.
Other Risks
Without limitation of the foregoing, the Company makes further
reference to those risks and cautions stated on Pages 9 through 11 of its Annual
Report on Form 10-K for the fiscal year ended September 28, 1996, as filed with
the Commission, which is incorporated herein by reference.
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges
of the Company for the periods indicated:
<TABLE>
<CAPTION>
Six Months
Year Ended Ended
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September 26, September 25, September 24, September 30, September 28, March 29,
1992 1993 1994 1995 1996 1997
<S> <C> <C> <C> <C> <C> <C>
Ratio of
earnings to (a) (a) (a) (a) 2.3 3.2
fixed charges
<FN>
(a) Income (loss) before income taxes, extraordinary items, and fixed charges as
computed above were inadequate to cover fixed charges.
</FN>
</TABLE>
The ratio of earnings to fixed charges is computed by dividing fixed
charges into earnings before income taxes plus fixed charges. Fixed charges
consist of interest on all indebtedness, including amortization of original
issue discount and issue costs related to outstanding long-term debt, and
one-third of all rental expense (being deemed by management to be a reasonable
approximation of the interest factor in rental expense).
USE OF PROCEEDS
The Company will not receive any of the proceeds from sales of the
Notes or the Shares by the Selling Securityholders.
SELLING SECURITYHOLDERS
The Notes were originally acquired from the Company by the Initial
Purchasers on May 21, 1997. The Initial Purchasers have advised the Company that
the Initial Purchasers resold the Notes in transactions exempt from the
registration requirements of the Securities Act to "qualified institutional
buyers" (as defined in Rule 144A of the Securities Act). These subsequent
purchasers, or their transferees, pledgees, donees or successors, may from time
to time offer and sell any or all of the Notes and/or Shares pursuant to this
Prospectus.
The Notes and the Shares are being registered pursuant to the
Registration Rights Agreement, dated May 21, 1997, between the Company and the
Initial Purchasers (the "Registration Rights Agreement") which provides that the
Company file the Registration Statement with regard to the Notes and the Shares
within 60 days of the date of original issuance of the Notes and keep such
Registration Statement effective until the earlier of (i) the sale pursuant to
the Registration Statement of all the securities registered thereunder and (ii)
the expiration of the holding period applicable to such securities under Rule
144(k) under the Securities Act or any successor provision. Although none of the
Selling Securityholders has advised the Company that it currently intends to
sell all or any of the Notes or Shares pursuant to this Prospectus, the Selling
Securityholders may choose to sell the Notes and/or Shares from time to time
upon notice to the Company. See "Plan of Distribution."
Prior to any use of this Prospectus in connection with an offering of
the Notes and/or Shares, this Prospectus will be supplemented to set forth the
name and number of shares beneficially owned by the Selling Securityholder
intending to sell such Notes and/or Shares and the number of Notes and/or Shares
to be offered. The Prospectus Supplement will also disclose whether any Selling
Securityholder selling in connection with such Prospectus Supplement has held
any position or office with, been employed by or otherwise has had a material
relationship with, the Company or any of its affiliates during the three years
prior to the date of the Prospectus Supplement.
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<PAGE>
PLAN OF DISTRIBUTION
The Notes and the Shares are being registered to permit public
secondary trading of such securities by the holders thereof from time to time
after the date of this Prospectus. The Company has agreed, among other things,
to bear all expenses in connection with the registration and sale of the Notes
and the Shares covered by this Prospectus.
The Company will not receive any of the proceeds from the offering of
Notes and the Shares by the Selling Securityholders. The Selling Securityholders
(and their donees and pledgees) may sell all or a portion of the Notes and
Shares beneficially owned by them and offered hereby from time to time on any
exchange on which the securities are listed on terms to be determined at the
times of such sales. The Selling Securityholders may also make private sales
directly or through a broker or brokers. Alternatively, any of the Selling
Securityholders may from time to time offer the Notes or Shares beneficially
owned by them through underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts, commissions or concessions
from the Selling Securityholders and the purchasers of the Notes or Shares for
whom they may act as agent. The aggregate proceeds to the Selling
Securityholders from the sale of the Notes or Shares offered by them hereby will
be the purchase price of such Notes or Shares less discounts and commissions, if
any.
The Notes and the Shares may be sold from time to time in one or more
transactions at fixed offering prices, which may be changed, or at varying
prices determined at the time of sale or at negotiated prices. Such prices will
be determined by the holders of such securities or by agreement between such
holders and underwriters or dealers who may receive fees or commissions in
connection therewith.
The outstanding Common Stock is publicly traded on the New York Stock
Exchange (the "Exchange"), and the Shares have been approved for listing upon
official notice of issuance. The Initial Purchasers are making a market in the
Notes; however, they are not obligated to do so and any such market-making may
be discontinued at any time without notice, in the sole discretion of the
Initial Purchasers. The Company does not intend to apply for listing of the
Notes on any securities exchange. Accordingly, no assurance can be given as to
the development or liquidity of any trading market that may develop for the
Notes.
The Selling Securityholders and any broker-dealers, agents or
underwriters that participate with the Selling Securityholders in the
distribution of the Notes or the Shares may be deemed to be "underwriters"
within the meaning of the Securities Act, in which event any commissions
received by such broker-dealer, agents or underwriters and any profits realized
by the Selling Securityholders on the resales of the Notes or the shares
purchased by them may be deemed to be underwriting commissions or discount under
the Securities Act.
In addition, any securities covered by this Prospectus which qualify
for sale pursuant to Rule 144, Rule 144A or any other available exemption from
registration under the Securities Act may be sold under Rule 144, Rule 144A or
such other available exemption rather than pursuant to this Prospectus. There is
no assurance that any Selling Securityholder will sell any or all of the Notes
or Shares described herein, and any Selling Securityholder may transfer, devise
or gift such securities by other means not described herein.
The Notes were originally sold by the Company to the Initial Purchasers
in May 1997 in a private placement. The Company agreed to indemnify and hold the
Initial Purchasers harmless against certain liabilities under the Securities Act
that could arise in connection with the sale of the Notes by the Initial
Purchasers. The Registration Rights Agreement provides for the Company and the
Selling Securityholders to indemnify each other against certain liabilities
arising under the Securities Act.
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<PAGE>
The Company has agreed to use reasonable efforts to keep the
Registration Statement to which this Prospectus relates effective until the
earlier of (i) the sale pursuant to the Registration Statement of all the
securities registered thereunder and (ii) the expiration of the holding period
applicable to such securities under Rule 144(k) under the Securities Act or any
successor provision. The Registration Rights Agreement provides that the Company
may suspend the use of this Prospectus in connection with the sales of Notes and
Shares by holders for a period not to exceed 30 days in any three-month period,
or not to exceed an aggregate of 60 days in any 12-month period, under certain
circumstances relating to pending corporate developments, public filings with
the Commission and similar events. The Company has agreed to pay predetermined
liquidated damages to those Selling Securityholders who have requested to sell
pursuant to the Registration Statement if the Registration Statement is not
timely filed or if this Prospectus is unavailable for periods in excess of those
permitted above. The Company has further agreed, if such failure to file or
unavailability continues for an additional thirty-day period, to pay
predetermined liquidated damages to all Selling Securityholders, whether or not
such holder has requested to sell pursuant to the Registration Statement.
Expenses of preparing and filing the Registration Statement and all
post-effective amendments will be borne by the Company.
DESCRIPTION OF NOTES
The Notes were issued under an indenture, dated as of May 21, 1997 (the
"Indenture"), between the Company and The Bank of New York, as trustee (the
"Trustee"). Copies of the Indenture and Registration Rights Agreement are
available from the Trustee upon request by a registered holder of the Notes. The
following summaries of certain provisions of the Notes, the Indenture and the
Registration Rights Agreement (which have been filed with the Commission as
Exhibits 4.3, 4.2 and 4.4, respectively, to the Registration Statement of which
this Prospectus is a part) do not purport to be complete and are subject to, and
are qualified in their entirety by reference to, all the provisions of the
Notes, the Indenture and the Registration Rights Agreement, including the
definitions therein of certain terms which are not otherwise defined in this
Prospectus. Wherever particular provisions or defined terms of the Indenture (or
of the Form of Notes which is a part thereof) or the Registration Rights
Agreement are referred to, such provisions or defined terms are incorporated
herein by reference.
General
The Notes represent unsecured general obligations of the Company
subordinate in right of payment to certain other obligations of the Company as
described under "Subordination of Notes" and convertible into Common Stock as
described under "Conversion of Notes." The Notes rank pari passu in right of
payment with the Company's 7 3/4% Convertible Subordinated Debentures due 2001.
The Notes are limited to $212,750,000 aggregate principal amount, are issuable
only in denominations of $1,000 or any multiple thereof and will mature on May
15, 2004, unless earlier redeemed at the option of the Company or at the option
of the holder upon a Fundamental Change (as defined below).
The Indenture does not contain any financial covenants or restrictions
on the payment of dividends, the incurrence of Senior Indebtedness (as defined
below under "Subordination of Notes") or the issuance or repurchase of
securities of the Company. The Indenture contains no covenants or other
provisions to afford protection to holders of the Notes in the event of a highly
leveraged transaction or a change in control of the Company except to the extent
described under "Redemption at Option of the Holder."
The Notes bear interest at the annual rate of 6% from May 21, 1997,
payable semi-annually on May 15 and November 15, commencing on November 15,
1997, to holders of record at the close of business on the preceding April 30
and October 31, respectively, except (i) that
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the interest payment upon redemption (unless the date of redemption is an
interest payment date) will be payable to the person to whom principal is
payable and (ii) as set forth in the next succeeding sentence. In the case of
any Note (or portion thereof) which is converted into Common Stock of the
Company during the period from (but excluding) a record date to (but excluding)
the next succeeding interest payment date either (i) if such Note (or portion
thereof) has been called for redemption on a redemption date which occurs during
such period, or is to be redeemed in connection with a Fundamental Change on a
Repurchase Date (as defined below) which occurs during such period, the Company
shall not be required to pay interest on such interest payment date in respect
of any such Note (or portion thereof) or (ii) if otherwise, any Note (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted (see "Conversion of Notes" below). Interest
may, at the Company's option, be paid either (i) by check mailed to the address
of the person entitled thereto as it appears in the Note register or (ii) by
transfer to an account maintained by such person located in the United States;
provided, however, that payments to The Depository Trust Company, New York, New
York ("DTC") will be made by wire transfer of immediately available funds to the
account of DTC or its nominee. Interest will be computed on the basis of a
360-day year composed of twelve 30-day months.
Form, Denomination and Registration
The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and multiples thereof.
Global Note, Book-Entry Form. The Notes offered hereby will be
evidenced by a global Note (the "Registered Global Note"), which will be
deposited with, or on behalf of, DTC, and registered in the name of Cede & Co.
("Cede") as DTC's nominee. Except as set forth below, the Registered Global Note
may be transferred, in whole or in part, only to another nominee of DTC or to a
successor of DTC or its nominee.
Purchasers of the Notes offered hereby may hold their interests in the
Registered Global Note directly through DTC or indirectly through organizations
which are participants in DTC (the "Participants"). Transfers between
Participants will be effected in the ordinary way in accordance with DTC rules
and will be settled in clearing house funds.
Persons who are not Participants may beneficially own interests in the
Registered Global Note held by DTC only through Participants or certain banks,
brokers, dealers, trust companies and other parties that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly ("Indirect Participants"). So long as Cede, as the nominee of DTC, is
the registered owner of the Registered Global Note, Cede for all purposes will
be considered the sole holder of the Registered Global Note. Except as provided
below, owners of beneficial interests in the Registered Global Note will not
have certificates registered in their names, will not receive physical delivery
of certificates in definitive form, and will not be considered the holders
thereof.
Payment of interest on and the redemption price of the Registered
Global Note will be made to Cede, the nominee for DTC, as the registered owner
of the Registered Global Note by wire transfer of immediately available funds on
each interest payment date or the redemption date, as the case may be. Neither
the Company, the Trustee nor any paying agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in the Registered Global Note or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The Company has been informed by DTC that, with respect to any payment
of interest on, or the redemption price of, the Registered Global Note, DTC's
practice is to credit Participants' accounts on the payment date therefor with
payments in amounts proportionate
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to their respective beneficial interests in the principal amount represented by
the Registered Global Note as shown on the records of DTC, unless DTC has reason
to believe that it will not receive payment on such date. Payments by
Participants to owners of beneficial interests in the principal amount
represented by the Registered Global Note held through such Participants will be
the responsibility of such Participants, as is now the case with securities held
for the accounts of customers registered in "street name."
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a person
having a beneficial interest in the principal amount represented by the
Registered Global Note to pledge such interest to persons or entities that do
not participate in the DTC system, or otherwise take actions in respect of such
interest, may be affected by the lack of a physical certificate evidencing such
interest.
Neither the Company nor the Trustee (or any registrar, paying agent or
conversion agent under the Indenture) will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of their
respective obligations under the rules and procedures governing their
operations. DTC has advised the Company that it will take any action permitted
to be taken by a holder of Notes (including, without limitation, the
presentation of Notes for exchange as described below), only at the direction of
one or more Participants to whose account with DTC interests in the Registered
Global Note are credited, and only in respect of the principal amount of the
Notes represented by the Registered Global Note as to which such Participant or
Participants has or have given such direction.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the New York Banking Law, a "banking organization"
within the meaning of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act. DTC holds securities that its Participants
deposit with DTC. DTC also facilitates the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes to the accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and may include
certain other organizations such as the Initial Purchasers. Certain of such
Participants (or their representatives), together with other entities, own DTC.
Indirect access to the DTC system is available to others such as banks, brokers,
dealers and trust companies that clear through, or maintain a custodial
relationship with, a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to
facilitate transfers of interests in the Registered Global Note among
Participants, it is under no obligation to perform or continue to perform such
procedures, and such procedures may be discontinued at any time. If DTC is at
any time unwilling or unable to continue as depositary and a successor
depositary is not appointed by the Company within 90 days, the Company will
cause Notes to be issued in definitive form in exchange for the Registered
Global Note.
Certificated Notes. Holders of Notes may request that certificated
Notes be issued in exchange for Notes represented by the Registered Global Note.
Furthermore, certificated Notes may be issued in exchange for Notes represented
by the Registered Global Note if no successor is appointed by the Company as set
forth above under "Global Note, Book-Entry Form."
Conversion of Notes
The holders of Notes are entitled at any time after 90 days following
the date of original issuance thereof through the close of business on the final
maturity date of the Notes, subject to prior redemption, to convert any Notes or
portions thereof (in denominations of $1,000 or
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multiples thereof) into Common Stock of the Company, at the conversion price of
$26.194. Except as described below, no payment or other adjustment will be made
on conversion of any Notes for interest accrued thereon or for dividends on any
Common Stock issued. If any Notes not called for redemption are converted after
a record date for the payment of interest and prior to the next succeeding
interest payment date, such Notes must be accompanied by funds equal to the
interest payable on such succeeding interest payment date on the principal
amount so converted. The Company is not required to issue fractional shares of
Common Stock upon conversion of Notes and, in lieu thereof, will pay a cash
adjustment based upon the market price of Common Stock on the last business day
prior to the date of conversion. In the case of Notes called for redemption,
conversion rights will expire at the close of business on the business day
preceding the day fixed for redemption unless the Company defaults in the
payment of the redemption price. A Note in respect of which a holder is
exercising its option to require redemption upon a Fundamental Change may be
converted only if such holder withdraws its election to exercise its option in
accordance with the terms of the Indenture.
The initial conversion price of $26.194 per share of Common Stock is
subject to adjustment under formulae as set forth in the Indenture in certain
events, including:
(i) the issuance of Common Stock of the Company as a dividend
or distribution on the Common Stock;
(ii) certain subdivisions and combinations of the Common
Stock;
(iii) the issuance to all holders of Common Stock of certain
rights or warrants to purchase Common Stock;
(iv) the distribution to all holders of Common Stock of
capital stock (other than Common Stock), of evidences of indebtedness
of the Company or of assets (including securities, but excluding those
rights, warrants, dividends and distributions referred to above or paid
in cash);
(v) distributions consisting of cash, excluding any quarterly
cash dividend on the Common Stock to the extent that the aggregate cash
dividend per share of Common Stock in any quarter does not exceed the
greater of (x) the amount per share of Common Stock of the next
preceding quarterly cash dividend on the Common Stock to the extent
that such preceding quarterly dividend did not require an adjustment of
the conversion price pursuant to this clause (v) (as adjusted to
reflect subdivisions or combinations of the Common Stock), and (y) 3.75
percent of the average of the last reported sales price of the Common
Stock during the ten trading days immediately prior to the date of
declaration of such dividend, and excluding any dividend or
distribution in connection with the liquidation, dissolution or winding
up of the Company. If an adjustment is required to be made as set forth
in this clause (v) as a result of a distribution that is a quarterly
dividend, such adjustment would be based upon the amount by which such
distribution exceeds the amount of the quarterly cash divided permitted
to be excluded pursuant to this clause (v). If an adjustment is
required to be made as set forth in this clause (v) as a result of a
distribution that is not a quarterly dividend, such adjustment would be
based upon the full amount of the distribution;
(vi) payment in respect of a tender offer or exchange offer by
the Company or any subsidiary of the Company for the Common Stock to
the extent that the cash and value of any other consideration included
in such payment per share of Common Stock exceeds the Current Market
Price (as defined in the Indenture) per share of Common Stock on the
trading day next succeeding the last date on which tenders or exchanges
may be made pursuant to such tender or exchange offer; and
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(vii) payment in respect of a tender offer or exchange offer
by a person other than the Company or any subsidiary of the Company in
which, as of the closing date of the offer, the Board of Directors is
not recommending rejection of the offer. The adjustment referred to in
this clause (vii) will only be made if the tender offer or exchange
offer is for an amount which increases the offeror's ownership of
Common Stock to more than 25% of the total shares of Common Stock
outstanding, and if the cash and value of any other consideration
included in such payment per share of Common Stock exceeds the Current
Market Price per share of Common Stock on the business day next
succeeding the last date on which tenders or exchanges may be made
pursuant to such tender or exchange offer. The adjustment referred to
in this clause (vii) will generally not be made, however, if, as of the
closing of the offer, the offering documents with respect to such offer
disclose a plan or an intention to cause the Company to engage in a
consolidation or merger of the Company or a sale of all or
substantially all of the Company's assets.
In the case of (i) any reclassification of the Common Stock, or (ii)
a consolidation, merger or combination involving the Company or a sale or
conveyance to another person of the property and assets of the Company as an
entirety or substantially as an entirety, in each case as a result of which
holders of Common Stock shall be entitled to receive stock, other securities,
other property or assets (including cash) with respect to or in exchange for
such Common Stock, the holders of the Notes then outstanding will generally be
entitled thereafter to convert such Notes into the kind and amount of shares of
stock, other securities or other property or assets which they would have owned
or been entitled to receive upon such reclassification, change, consolidation,
merger, combination, sale or conveyance had such Notes been converted into
Common Stock immediately prior to such reclassification, consolidation, merger,
combination, sale or conveyance assuming that a holder of Notes would not have
exercised any rights of election as to the stock, other securities or other
property or assets receivable in connection therewith.
In the event of a taxable distribution to holders of Common Stock or
in certain other circumstances requiring conversion price adjustments, the
holders of Notes may, in certain circumstances, be deemed to have received a
distribution subject to United States income tax as a dividend; in certain other
circumstances, the absence of such an adjustment may result in a taxable
dividend to the holders of Common Stock. See "Certain Federal Income Tax
Considerations" below.
The Company from time to time may to the extent permitted by law
reduce the conversion price by any amount for any period of at least 20 days, in
which case the Company shall give at least 15 days' notice of such reduction, if
the Board of Directors has made a determination that such reduction would be in
the best interests of the Company, which determination shall be conclusive. The
Company may, at its option, make such reductions in the conversion price, in
addition to those set forth above, as the Board of Directors deems advisable to
avoid or diminish any income tax to holder of Common Stock resulting from any
dividend or distribution of stock (or rights to acquire stock) or from any event
treated as such for income tax purposes. See "Certain Federal Income Tax
Considerations."
No adjustment in the conversion price will be required unless such
adjustment would require a change of at least 1% in the conversion price then in
effect; provided that any adjustment that would otherwise be required to be made
shall be carried forward and taken into account in any subsequent adjustment.
Except as stated above, the conversion price will not be adjusted for the
issuance of Common Stock or any securities convertible into or exchangeable for
Common Stock or carrying the right to purchase any of the foregoing.
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Optional Redemption by the Company
The Notes are not entitled to any sinking fund. At any time on or
after May 18, 2000, the Notes will be redeemable at the Company's option on at
least 30 days' notice as a whole or, from time to time, in part at the following
prices (expressed as percentages of the principal amount), together with accrued
interest to and including the date fixed for redemption:
If redeemed during the period beginning May 18, 2000 and ending on May
14, 2001 at a redemption price of 103.429%, and if redeemed during the
12-month period beginning May 15:
Redemption
Year Price
---- ----------
2001.................................................. 102.571%
2002.................................................. 101.714
2003.................................................. 100.857
and 100% at May 15, 2004; provided that any semi-annual payment of interest
becoming due on the date fixed for redemption shall be payable to the holders of
record on the relevant record date of the Notes being redeemed.
If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes to be redeemed in principal amounts of $1,000 or
multiples thereof by lot, pro rata or by another method the Trustee considers
fair and appropriate. If a portion of a holder's Notes is selected for partial
redemption and such holder converts a portion of such Notes, such converted
portion shall be deemed to be of the portion selected for redemption.
Redemption at Option of the Holder
If a Fundamental Change (as defined below) occurs at any time prior
to May 15, 2004, each holder of Notes shall have the right, at the holder's
option, to require the Company to redeem any or all of such holder's Notes on
the date (the "Repurchase Date") that is 30 days after the date of the Company's
notice of such Fundamental Change. The Notes will be redeemable in multiples of
$1,000 principal amount.
The Company shall redeem such Notes at a price (expressed as a
percentage of the principal amount) equal to (i) 106.000% if the Repurchase Date
is before May 15, 1998, (ii) 105.143% if the Repurchase Date is during the
12-month period beginning May 15, 1998, (iii) 104.286% if the Repurchase Date is
during the period beginning May 15, 1999 and ending on May 17, 2000 and (iv)
thereafter at the redemption price set forth under "Optional Redemption by the
Company" which would be applicable to a redemption at the option of the Company
on the Repurchase Date; provided that, if the Applicable Price (as defined) is
less than the Reference Market Price (as defined), the Company shall redeem such
Notes at a price equal to the foregoing redemption price multiplied by the
fraction obtained by dividing the Applicable Price by the Reference Market
Price. In each case, the Company shall also pay accrued interest on the redeemed
Notes to, but excluding, the Repurchase Date; provided that, if such Repurchase
Date is an interest payment date, then the interest payable on such date shall
be paid to the holder of record of the Notes on the relevant record date.
The Company is required to mail to all holders of record of the Notes
a notice of the occurrence of a Fundamental Change and of the redemption right
arising as a result thereof on or before the tenth day after the occurrence of
such Fundamental Change. The Company is also required to deliver the Trustee a
copy of such notice. To exercise the redemption right,
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a holder of Notes must deliver, on or before the 30th day after the date of the
Company's notice of a Fundamental Change (the "Fundamental Change Expiration
Time"), written notice of the holder's exercise of such right, together with the
Notes to be so redeemed, duly endorsed for transfer, to the Company (or an agent
designated by the Company for such purpose). Payment for Notes surrendered for
redemption (and not withdrawn) prior to the Fundamental Change Expiration Time
will be made promptly following the Repurchase Date.
The term "Fundamental Change" means the occurrence of any transaction
or event in connection with which all or substantially all Common Stock shall be
exchanged for, converted into, acquired for or constitute the right to receive
consideration which is not all or substantially all common stock listed (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 (whether by means of
an exchange offer, liquidation, tender offer, consolidation, merger,
combination, reclassification, recapitalization or otherwise). The term
"Applicable Price" means (i) in the event of a Fundamental Change in which the
holders of Common Stock receive only cash, the amount of cash received by the
holder of one share of Common Stock and (ii) in the event of any other
Fundamental Change, the average of the last reported sale price for the Common
Stock during the ten trading days prior to the record date for the determination
of the holders of Common Stock entitled to receive cash, securities, property or
other assets in connection with such Fundamental Change, or, if there is not
such record date, the date upon which the holders of the Common Stock shall have
the right to receive such cash, securities, property or other assets in
connection with the Fundamental Change. The term "Reference Market Price" shall
initially mean $13.75 and in the event of any adjustment to the conversion price
described above pursuant to the provisions of the Indenture the Reference Market
Price shall also be adjusted so that the ratio of the Reference Market Price to
the conversion price after giving effect to any such adjustment shall always be
the same as the ratio of $13.75 to the conversion price (without regard to any
adjustment thereto).
The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act which may then be applicable in
connection with the redemption rights of Note holders in the event of a
Fundamental Change. The redemption rights of the holders of Notes could
discourage a potential acquiror of the Company. The Fundamental Change
redemption feature, however, is not the result of management's knowledge of any
specific effort to obtain control of the Company by means of a merger, tender
offer, solicitation or otherwise, or part of a plan by management to adopt a
series of anti-takeover provisions.
The Company could, in the future, enter into certain transactions,
including certain recapitalizations of the Company, that would not constitute a
Fundamental Change, but that would increase the amount of Senior Indebtedness
outstanding at such time. Further, payment of the Fundamental Change redemption
price on the Notes may be subordinated to the prior payment of Senior
Indebtedness as described under "Subordination of Notes" below. There are no
restrictions in the Indenture on the creation of additional Senior Indebtedness
or other indebtedness. Under certain circumstances, the incurrence of additional
indebtedness could have an adverse effect on the Company's ability to service
its indebtedness, including the Notes. If a Fundamental Change were to occur,
there can be no assurance that the Company would have sufficient funds to pay
the Fundamental Change redemption price for all Notes tendered by the holders
thereof. A default by the Company on its obligations to pay the Fundamental
Change redemption price could result in acceleration of the payment of other
indebtedness of the Company at the time outstanding pursuant to cross-default
provisions.
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Subordination of Notes
The Indebtedness evidenced by the Notes is subordinated to the extent
provided in the Indenture to the prior payment in full of all Senior
Indebtedness and is pari passu in right of payment with the Company's 7 3/4%
Convertible Subordinated Debentures due 2001. The Notes also are effectively
subordinated to all indebtedness and liabilities of subsidiaries of the Company.
Upon any distribution of assets of the Company upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of, premium, if any,
and interest on the Notes is to be subordinated to the extent provided in the
Indenture in right of payment to the prior payment in full in cash of all Senior
Indebtedness. In the event of any acceleration of the Notes because of an Event
of Default (as defined in the Indenture), the holders of any Senior Indebtedness
then outstanding would be entitled to payment in full in cash of all obligations
in respect of such Senior Indebtedness before the holders of the Notes are
entitled to receive any payment or distribution in respect thereof. The
Indenture requires the Company to promptly notify holders of Senior Indebtedness
if payment of the Notes in accelerated because of an Event of Default.
The Company also may not make any payment upon or in respect of the
Notes if (i) a default in the payment of the principal of, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness occurs and
is continuing beyond any applicable period of grace or (ii) any other default
occurs and is continuing with respect to Designated Senior Indebtedness (as
defined) that permits holders of the Designated Senior Indebtedness as to which
such default relates to accelerate its maturity and the Trustee receives a
notice of such default (a "Payment Blockage Notice") from the Company or other
person permitted to give such notice under the Indenture. Payments on the Notes
may and shall be resumed (a) in case of a payment default, upon the date on
which such default is cured or waived and (b) in case of a nonpayment default,
the earlier of the date on which such nonpayment default is cured or waived or
179 days after the date on which the applicable Payment Blockage Notice is
received. No new period of payment blockage may be commenced to a Payment
Blockage Notice unless and until (i) 365 days have elapsed since the initial
effectiveness of the immediately prior Payment Blockage Notice and (ii) all
scheduled payments of principal, premium, if any, and interest on the Notes that
have come due have been paid in full in cash. During any period of payment
blockage, any payment that otherwise would have been made during such period
will accrue interest, to the extent legally permissible, at the annual rate set
forth on the cover page hereof from the date on which such payment was required
under the terms of the Indenture until the date of payment. No nonpayment
default that existed or was continuing on the date of delivery of any Payment
Blockage Notice to the Trustee shall be, or shall be made, the basis for a
subsequent Payment Blockage Notice.
By reason of the subordination provisions described above, in the
event of the Company's bankruptcy, dissolution or reorganization, holders of
Senior Indebtedness may receive more, ratably, and holders of the Notes may
receive less, ratably, than the other creditors of the Company. Such
subordination will not prevent the occurrence of any Event of Default under the
Indenture.
The term "Senior Indebtedness" means the principal of, premium, if
any, interest (including all interest accruing subsequent to the commencement of
any bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent payable on or
in connection with, and all fees, cost, expenses and other amounts accrued or
due on or in connection with, Indebtedness (as defined below) of the Company,
whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Company (including
all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing), unless in the case of any
particular Indebtedness the instrument creating or evidencing the same or the
assumption or guarantee thereof expressly provides that such Indebtedness shall
not be senior in right of payment to the Notes or expressly provides that such
Indebtedness
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is pari passu with or junior to the Notes. Notwithstanding the foregoing, the
term Senior Indebtedness does not include the Company's 7 3/4% Convertible
Subordinated Debentures due 2001 and any Indebtedness of the Company to any
subsidiary of the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company.
The term "Indebtedness" means, with respect to any Person (as defined
in the Indenture), and without duplication:
(a) all indebtedness, obligations and other liabilities
(contingent or otherwise) of such Person for borrowed money (including
obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection
agreements, and any loans or advances from banks, whether or not
evidenced by notes or similar instruments) or evidenced by bonds,
debentures, notes or similar instruments (whether or not the recourse
of the lender is to the whole of the assets of such Person or to only a
portion thereof) (other than any account payable or other accrued
current liability or obligation incurred in the ordinary course of
business in connection with the obtaining of materials or service),
(b) all reimbursement obligations and other liabilities
(contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances,
(c) all obligations and liabilities (contingent or otherwise)
in respect of leases of such Person required, in conformity with
generally accepted accounting principles, to be accounted for as
capitalized lease obligations on the balance sheet of such Person and
all obligations and other liabilities (contingent or otherwise) under
any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such
Person in contractually obligated to purchase or cause a third party to
purchase the leased property and thereby guarantee a minimum residual
value of the leased property to the lessor and the obligations of such
Person under such lease or related document to purchase or to cause a
third party to purchase such leased property,
(d) all obligations of such Person (contingent or otherwise)
with respect to an interest rate or other swap, cap or collar agreement
or other similar instrument or agreement or foreign currency hedge,
exchange, purchase or similar instrument or agreement,
(e) all direct or indirect guaranties or similar agreements by
such Person in respect of, and obligations or liabilities (contingent
or otherwise) or such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in
clauses (a) through (d),
(f) any indebtedness or other obligations described in clauses
(a) through (d) secured by any mortgage, pledge, lien or other
encumbrance existing on property which is owned or held by such Person,
regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person, and
(g) any and all deferrals, renewals, extensions and refundings
of, or amendments, modifications or supplements to, any indebtedness,
obligation or liability of the kind described in clauses (a) through
(f).
The term "Designated Senior Indebtedness" means any particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Company is a party) expressly provides that
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such Senior Indebtedness shall be "Designated Senior Indebtedness" for purposes
of the Indenture (provided that such instrument, agreement or other document may
place limitations and conditions on the right of such Senior Indebtedness to
exercise the rights of Designated Senior Indebtedness).
At March 29, 1997, the Company had approximately $28 million of
outstanding Senior Indebtedness consisting of approximately $23 million of the
Company's 8 3/8% Sinking Fund Debentures due 2002 and approximately $5 million
of contingent reimbursement obligations under outstanding letters of credit.
Subsequent to March 29, 1997, the Company retired the outstanding 8 3/8% Sinking
Fund Debentures by using a portion of the proceeds of the sale of the Notes to
the Initial Purchasers. At March 29, 1997, the Company's subsidiaries had other
indebtedness and liabilities of approximately $89 million (excluding
intercompany obligations). The Indenture will not limit the amount of additional
Indebtedness, including Senior Indebtedness, which the Company can create,
incur, assume or guarantee, nor will the Indenture limit the amount of
indebtedness or liabilities which any subsidiary can create, incur, assume or
guarantee.
In the event that, notwithstanding the foregoing, the Trustee or any
holder of the Notes receives any payment or distribution of assets of the
Company or any kind in contravention of any of the subordination provisions of
the Indenture, whether in cash, property or securities, including, without
limitation, by way of set-off or otherwise, in respect of the Notes before all
Senior Indebtedness is paid in full, then such payment or distribution will be
held by the recipient in trust for the benefit of holders of Senior Indebtedness
or their representatives to the extent necessary to make payment in full of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent
payment or distribution, or provision therefor, to or for the holders of Senior
Indebtedness.
The Company is obligated to pay reasonable compensation to the
Trustee and to indemnify the Trustee against certain losses, liabilities or
expenses incurred by it in connection with its duties relating to the Notes. The
Trustee's claims for such payments generally are senior to those of holders of
the Notes in respect of all funds collected or held by the Trustee.
Events of Default; Notice and Waiver
An Event of Default is defined in the Indenture as being: default in
payment of the principal of or premium, if any, on the Notes; default for 30
days in payment of any installment of interest on the Notes; default by the
Company for 60 days after notice in the observance or performance of any other
covenants in the Indenture; or certain events involving bankruptcy, insolvency
or reorganization of the Company. The Indenture provides that the Trustee may
withhold notice to the holders of the Notes of any default (except in payment of
principal of, premium, if any, or interest with respect to the Notes) if the
Trustee considers it in the interest of the holders of the Notes to do so.
The Indenture provides that if an Event of Default shall have
occurred and be continuing, the Trustee or the holders of not less than 25% in
principal amount of the Notes then outstanding may declare the principal of and
accrued interest on the Notes to be due and payable immediately. In the case of
certain events of bankruptcy or insolvency, the principal of, premium, if any,
and interest on the Notes shall automatically become and be immediately due and
payable. However, if the Company shall cure all defaults (except the nonpayment
of principal of, premium, if any, and interest on any of the Notes which shall
have become due by acceleration) and certain other conditions are met, with
certain exceptions, such declaration may be canceled and past defaults may be
waived by the holders of a majority of the principal amount of the Notes then
outstanding.
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The holders of a majority in principal amount of the Notes then
outstanding have the right to direct the time, method and place of conducting
any proceedings for any remedy available to the Trustee, subject to certain
limitations specified in the Indenture.
Modification of the Indenture
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
principal amount of the Notes at the time outstanding, to modify the Indenture
or any supplemental indenture or the rights of the holders of the Notes, except
that no such modification shall (i) extend the fixed maturity of any Note,
reduce the rate or extend the time for payment of interest thereon, reduce the
principal amount thereof or premium, if any, thereon, reduce any amount payable
upon redemption or repurchase thereof, change the obligation of the Company to
repurchase any Note upon the happening of any Fundamental Change in a manner
adverse to holders of Notes, impair the right of a holder to institute suit for
the payment thereof, change the currency in which the Notes are payable, impair
the right to convert the Notes into Common Stock subject to the terms set forth
in the Indenture, or modify the provisions of the Indenture with respect to the
subordination of the Notes in a manner adverse to the holders of the Notes in
any material respect, without the consent of each holder of a Note so affected,
or (ii) reduce the aforesaid percentage of Notes whose holders are required to
consent to any such supplemental indenture, without the consent of the holders
of all of the Notes then outstanding. The Indenture also provides for certain
modifications of its terms without the consent of holders of the Notes.
Registration Rights of the Noteholders
Pursuant to the Registration Rights Agreement, the Company has filed
with the Commission the Registration Statement, of which this Prospectus forms a
part, covering resales by holders of the Notes and the Common Stock issuable
upon conversion of the Notes within 60 days after the latest date of original
issuance of the Notes. The Company has agreed to use reasonable efforts to keep
the Registration Statement effective until the earlier of (i) the sale pursuant
to the Registration Statement of all the securities registered thereunder and
(ii) the expiration of the holding period applicable to such securities under
Rule 144(k) under the Securities Act, or any successor provision. The Company
will be permitted to suspend the use of this Prospectus for a period not to
exceed 30 days in any three-month period, or not to exceed an aggregate of 60
days in any 12-month period under certain circumstances relating to pending
corporate developments, public filings with the Commission and similar events.
The Company has agreed to pay predetermined liquidated damages to those Selling
Securityholders who have requested to sell pursuant to the Registration
Statement if the Registration Statement is not timely filed or if this
Prospectus is unavailable for periods in excess of those permitted above. The
Company has further agreed, if such failure to file or unavailability continues
for an additional thirty-day period, to pay predetermined liquidated damages to
all Selling Securityholders, whether or not such holder has requested to sell
pursuant to the Registration Statement. A Selling Securityholder who sells the
Notes or the Shares pursuant to the Registration Statement generally will be
required to be named as a selling stockholder in the Prospectus, deliver the
Prospectus to purchasers and be bound by those provisions of the Registration
Rights Agreement (the "Registration Rights Agreement") which are applicable to
the Selling Securityholders (including indemnification provisions). The Company
will pay all expenses of the Registration Statement, provide to each Selling
Securityholder copies of this Prospectus, notify each Selling Securityholder
when the Registration Statement has become effective and take certain other
actions as are required to permit, subject to the foregoing, unrestricted
resales of the Notes or the Common Stock.
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Information Concerning the Trustee
The Bank of New York, as the Trustee under the Indenture, has been
appointed by the Company as paying agent, conversion agent, registrar and
custodian with regard to the Notes.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized to issue 100,000,000 shares of Common
Stock, $.01 par value, and, 1,000,000 shares of Preferred Stock, $.01 par value.
The following brief description of the capital stock of the Company is qualified
in its entirety by reference to the Company's Restated Certificate of
Incorporation, as amended, copies of which are on file with the Commission and
the New York Stock Exchange.
Description of Common Stock
The Company had outstanding on May 13, 1997, 40,659,397 shares of
Common Stock. All issued and outstanding shares of Data General Common Stock are
fully paid and nonassessable. Each holder of Common Stock is entitled to one
vote per share. Subject to the rights of the holders of outstanding Preferred
Stock, if any, in the event of any liquidation, dissolution, or winding up, the
holders of Common Stock will be entitled to share ratably in the assets
available for distribution after payment of liabilities. The holders of Common
Stock have equal rights, share for share, to receive dividends when declared by
the Board of Directors out of funds legally available therefor. No cash
dividends have been paid to stockholders of Data General to date. No holder of
Common Stock has any preemptive right to subscribe for any securities of the
Company. The shares of Common Stock do not have cumulative voting rights.
The Company's Restated Certificate of Incorporation requires the
approval of at least two-thirds of the outstanding shares of the Company's
voting securities held by stockholders other than a holder of 20% or more of the
voting securities ("Acquiring Person") as a condition to mergers or other
business combinations involving the Company and the Acquiring Person unless
certain minimum price form of consideration and procedural requirements are met
or a majority of the Continuing Directors ("Continuing Directors" being defined
as a director who was a member of the Board of Directors on December 17, 1984,
together with each director who was a member of the Board of Directors
immediately prior to the time that the Acquiring Person became a 20%
stockholder, and any successor or nominee nominated or approved by a majority
vote of the then Continuing Directors) approved the transaction.
The Transfer Agent and Registrar for the Common Stock is The Bank of
New York.
The Common Stock is listed on the New York Stock Exchange and the
London Stock Exchange.
Description of Preferred Stock
The Board of Directors has authority to issue preferred stock from
time to time without stockholder approval, in one or more series. The Board of
Directors has created a series of preferred stock in connection with the
Company's Stockholders' Rights Plan described below. The Board of Directors is
authorized with respect to any series of preferred stock to fix the designation,
the number of shares, the voting powers, the conditions of the conversion
privilege, if any, the terms and conditions of the redemption rights, if any,
the rights upon liquidation, merger, consolidation, distribution or sale of
assets, dissolution or winding up, the dividend rate and whether dividends shall
be cumulative, and any other powers, preferences and relative, participating,
optional and other rights and the qualifications, limitations and
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restrictions of such series. These terms could adversely affect the interests of
the holders of the Common Stock. The authority of the Board of Directors to
issue preferred stock without further stockholder approval could be exercised in
a manner that might have the effect of delaying, deferring or preventing a
change of control of the Company.
Description of Rights Attached to Common Stock
Pursuant to the Company's Stockholders' Rights Plan, each share of
the Company's Common Stock now outstanding, or issued prior to the separation
referred to below, has attached to it one Right to Purchase Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company (a
"Right"). No separate certificates have been distributed with respect to the
Rights, and the Rights are not now exercisable. Ten days following certain
events involving the acquisition of, or attempts to acquire, 20% or more of the
Company's Common Stock or a determination that an "adverse person" has purchased
15% or more of the Common Stock, the Rights would separate from the Common Stock
and, if not redeemed by the Company, would become exercisable upon the
occurrence of certain further events. Notes converted prior to such separation
will receive one Right for each share of Common Stock received upon such
conversion; however, Notes converted after such separation will not receive
Rights. Each full Right, if it became exercisable, would entitle the holder to
purchase one hundredth of a share of the Company Series A Junior Participating
Preferred Stock for a purchase price of $100. The Rights also entitle holders to
purchase shares of the Company's or an acquiror's common stock at one-half of
market value under circumstances which include certain transactions by or with a
potential acquiror, including "adverse persons," mergers and certain assets
sales. The Rights may be redeemed by the Company under certain circumstances at
a redemption price of $.01. The Rights will expire on October 19, 2001 unless
previously redeemed. The Rights have certain anti-takeover effects, and may
cause substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors.
The rights are governed by the terms of the Rights Agreement dated as
of October 3, 1986, Renewed and Restated as of October 19, 1996, between the
Company and The Bank of New York, as Rights Agent, a copy of which is filed as
an exhibit to the form 8-A/A filed with the Commission by the Company on June
27, 1996, which exhibit is incorporated herein by reference. The foregoing
summary of the Stockholders' Rights Plan incorporates by reference the
applicable sections and paragraphs of the Rights Agreement and is qualified in
its entirety by such reference.
Description of 8 3/8% Sinking Fund Debentures due 2002
At March 29, 1997, the Company had outstanding approximately $23
million aggregate principal amount of its 8 3/8% Sinking Fund Debentures due
2002. Subsequent to March 29, 1997, the Company retired the 8 3/8% Sinking Fund
Debentures using a portion of the proceeds form the sale of the Notes to the
Initial Purchasers.
Description of 7 3/4% Convertible Subordinated Debentures due 2001
The Company has outstanding $125,000,000 principal amount of its 7
3/4% Convertible Subordinated Debentures due 2001 (the "1991 Debentures").
Interest on the 1991 Debentures is payable semi-annually on June 1 and December
1. The 1991 Debentures may be redeemed in whole or in part at the option of the
Company at any time, at a price, expressed as a percentage of the principal
amount, equal to 103.875% as of June 1, 1996 and declining to 100% on June 1,
2001, plus accrued interest thereon, and may be redeemed at the option of the
holder if there is a Fundamental Change (as defined in the indenture under which
the 1991 Debentures were issued) in the Company's operations. The 1991
Debentures are convertible into Common Stock at the option of the holer, at any
time prior to redemption or repurchase, at a conversion price of $19.20 per
share, subject to adjustment for certain events. The 1991
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Debentures are subordinated to all Senior Indebtedness (as defined in the
indenture). The indenture does not contain any financial covenants or any
restrictions on the payment of dividends or the repurchase of the Company's
securities.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following general discussion summarizes certain of the material
United States federal income tax consequences attribute to the acquisition,
ownership and disposition of Notes. The summary is based on the Internal Revenue
code of 1986, as amended (the "Code"), Treasury regulations, court decisions and
Internal Revenue Service ("Service") rulings now in effect, all of which are
subject to change, possibly with retroactive effect. This summary does not deal
with all aspects of United States federal income taxation, nor with the
particular United States federal income tax consequences that result from the
tax status or particular circumstances of holders subject to special tax rule,
such as banks, insurance companies, regulated investment companies, real estate
investment trusts, brokers and dealers in securities or currencies, persons that
hold Notes as a position in a "straddle," as part of a "hedge," as part of a
"conversion" transaction or as part of any other integrated investment, persons
that have a functional currency other than the U.S. dollar, personal holding
companies, corporations subject to the alternative minimum tax, tax-exempt
entities and investors in pass-through entities. This summary deals only with
Notes held as "capital assets" as defined in section 1221 of the Code. Moreover,
this discussion does not address the effect of any applicable state, local or
foreign tax laws.
The following discussion is limited to the United States federal
income tax consequences relevant to a holder that is a "U.S. Holder." A U.S.
Holder is a holder of Notes who is a citizen or resident of the United States
for federal income tax purposes, or which is a corporation, partnership or other
entity created or organized under the laws of the United States or any political
subdivision thereof, an estate the income of which is includible in its gross
income for United States federal income tax purposes without regard to its
source, or a trust if (i) a U.S. court is able to exercise primary supervision
over the administration of the trust and (ii) one or more U.S. fiduciaries have
the authority to control all the substantial decisions of the trust.
Prospective purchasers are advised to consult their own tax advisors
regarding the tax consequences of acquiring, holding or disposing of Notes in
light of their personal investment circumstances, and the consequences to them
under state, local and foreign tax laws.
Stated Interest
The stated interest on a Note will be taxable to a holder as ordinary
interest income either at the time it accrues or is received depending upon such
holders' method of accounting for federal income tax purposes.
Redemption or Sale of Notes
Generally a holder will recognize taxable gain or loss upon the
redemption, sale or other disposition of Notes equal to the difference between
(i) the amount of cash and the fair market value of any other property received
and (ii) such holder's tax basis in the Notes. To the extent that the amount
received is attributable to accrued but unpaid interest, however, that amount
will be taxed as ordinary income. A holder's tax basis in the notes generally
will be the price such holder paid for the Notes, increased by the amount of any
market discount previously taken into income by the holder, and reduced (but not
below zero) by the amount of any bond premium amortized by the holder. See
"Notes Purchased At A Market Discount" and "Notes Purchased At A Premium",
below. Gain or loss on the disposition of Notes generally will be capital gain
or loss and generally will be long-term capital gain or loss if the Notes have
been held for more than one year at the time of disposition. Subject to certain
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limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
Conversion of Notes Into Common Stock
No gain or loss will be recognized upon conversion of Notes into
Common Stock, except with respect to any cash paid in lieu of fractional shares
of Common Stock. The tax basis of the Common Stock received upon conversion will
be equal to the tax basis of the Notes converted, less any portion thereof
allocable to a fractional share for which cash is received. The holding period
of the Common Stock received upon conversion will include the holding period of
the Notes converted. Under the current ruling policy of the Service, cash
received in lieu of a fractional share of Common Stock should generally be
treated as payment in exchange for such fractional share rather than as a
dividend. Gain or loss recognized on the receipt of cash paid in lieu of a
fractional share generally will be capital gain or loss and will equal the
difference between the amount of cash received and the amount of tax basis
allocable to the fraction share.
Adjustment of Conversion Price
The conversion price of the Notes is subject to adjustment under
certain circumstances. Section 305 of the Code treats as a distribution taxable
as a dividend (to the extent of the Company's current or accumulated earnings
and profits) certain actual or constructive distributions of stock with respect
to stock or convertible securities. Under Treasury regulations, an adjustment
may, under certain circumstances, be treated as a constructive dividend.
Generally, a holder's tax basis in a Note will be increased by the amount of any
such constructive dividend. Similarly, a failure to adjust the conversion price
of the Notes to reflect a stock dividend or similar event could in some
circumstances give rise to constructive dividend income to holders of Common
Stock.
Dividends on the Common Stock
Dividends paid on the Common Stock generally will be includible in
the income of a holder as ordinary income to the extent of the Company's current
or accumulated earnings and profits. Subject to certain limitations, a corporate
taxpayer holding Common Stock that receives dividends thereon generally will be
eligible for a dividends-received deduction equal to 70 percent of the dividends
received. Under legislation proposed as part of the Clinton administration's
fiscal year 1998 budget proposal, the 70-percent dividends-received deduction
would be reduced to 50 percent for dividends paid or accrued more than 30 days
after the date of enactment of the legislation.
Sale, Exchange or Redemption of Common Stock
Upon the sale, exchange or redemption of shares of Common Stock, a
holder generally will recognize capital gain or loss equal to the difference
between (i) the amount of cash proceeds and the fair market value of any
property received on the sale, exchange or redemption and (ii) such holder's
adjusted basis in the Common Stock. Subject to the market discount rules
discussed below, such capital gain or loss will be long-term capital gain or
loss if the holder's holding period in the Common Stock was more than one year
at the time of sale, exchange or redemption.
Notes Purchased at a Market Discount
Subject to a de minimis exception, a holder of a Note acquired at a
market discount generally will be required to treat as ordinary income any gain
recognized on the disposition of the Note to the extent of the accrued market
discount on the Note at the time of disposition. For this purpose, the market
discount on a Note generally will be equal to the amount, if any,
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by which the stated redemption price at maturity of the Note immediately after
its acquisition exceeds the holder's tax basis in the Note. In general, market
discount on a Note will be treated as accruing on a ratable basis over the term
of the Note or, at the election of the holder, under a constant yield method. A
holder of a Note acquired at a market discount may also be required to defer the
deduction of a portion of the interest on any indebtedness incurred or
maintained to purchase or carry the note until the Note is disposed of in a
taxable transaction. The foregoing rules will not apply if the holder elects to
include accrued market discount in income currently. If a holder acquires a Note
at a market discount and receives Common Stock upon conversion of the note, the
amount of accrued market discount with respect to the Note through the date of
the conversion should be treated, under regulations to be issued by the Treasury
Department, as ordinary income on the disposition of the Common Stock.
Notes Purchased at a Premium
A holder that purchases a Note for an amount in excess of its
principal amount may be entitled to elect to treat a portion of such excess as
"amortizable bond premium," which will reduce the amount required to be included
in the holder's income each year as interest on the Note by the amount of such
premium allocable to that year based on the Note's yield to maturity. However,
under proposed Treasury Regulations, the present value of the conversion feature
of the Notes would be subtracted from the cost of the Note in determining the
amount of any amortizable bond premium. An election to amortize bond premium
would apply to all debt instruments held by the holder at the beginning of the
taxable year to which the election applies or thereafter acquired by the holder.
Backup Withholding
Under the backup withholding provisions of the Code and applicable
Treasury regulations, a holder of Notes or Common Stock may be subject to backup
withholding at the rate of 31% with respect to dividends or interest paid on, or
the proceeds of a sale, exchange or redemption of, Notes or Common Stock. These
backup withholding rules will apply if the holder, among other things, (i) fails
to furnish its taxpayer identification number ("TIN"), (ii) furnishes an
incorrect TIN, (iii) fails to properly report interest or dividends, or (iv)
under certain circumstances, fails to provide a certified statement signed under
penalties of perjury that the TIN furnished is the correct number and that such
holder is not subject to backup withholding. The amount of any backup
withholding from a payment to a holder will be allowed as a credit against the
holder's federal income tax liability and may entitle such holder to a refund
provided the required information is furnished to the Service.
LEGAL MATTERS
The validity of the issuance of the Notes and the Shares offered
hereby has been passed upon for the Company by Fulbright & Jaworski L.L.P., New
York, New York. Carl E. Kaplan, Secretary of the Company, is a partner in
Fulbright & Jaworski L.L.P., and Frederick R. Adler, a Director and Chairman of
the Executive Committee of the Board of Directors of the Company, is of counsel
to Fulbright & Jaworski L.L.P. Messrs. Kaplan and Adler and certain other
partners of Fulbright & Jaworski L.L.P. beneficially owned an aggregate of
418,981 shares of Common Stock of the Company as of May 12, 1997.
EXPERTS
The consolidated financial statements at September 28, 1996 and
September 30, 1995 and for each of the three years in the period ended September
28, 1996 incorporated in this Prospectus by reference to the Annual Report on
Form 10-K for the year ended September 28, 1996, have been so incorporated in
reliance on the report of Price Waterhouse LLP,
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independent accountants, given on the authority of said firm as experts in
auditing and accounting.
<PAGE>
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No dealer, salesperson or
other person has been authorized
by the Company or any Selling Securityholder
to give any information or to make any
representations other than those
contained or incorporated by
reference in this Prospectus in
connection with the offer made by
this Prospectus and, if given or
made, such information or DATA GENERAL CORPORATION
or representation must not be
relied upon as having been authorized.
Neither the delivery of this
Prospectus nor any sale made
hereunder shall under any circumstances $212,750,000 Principal Amount
create an implication that there of 6% Convertible Subordinated
has been no change in the affairs
of the Company since the date hereof. Notes due 2004
This Prospectus does not constitute
an offer or solicitation by anyone in 8,122,089 Shares,
any state in which such offer or of Common Stock
solicitation is not authorized or in which
the person making such offer or
solicitation is not qualified to
do so or to anyone to whom it is
unlawful to make such offer or
solicitation.
_________________
TABLE OF CONTENTS
_____________________
PROSPECTUS
_____________________
Page
Available Information.......................... 2
Incorporation of Certain Documents by
Reference.................................... 2
The Company.................................... 4 ,1997
Risk Factors................................... 4
Ratio of Earnings to Fixed Charges............. 7
Use of Proceeds................................ 7
Selling Securityholders........................ 7
Plan of Distribution........................... 8
Description of Notes........................... 9 ______________________
Description of Capital Stock................... 20
Certain Federal Income Tax Considerations...... 22
Legal Matters ................................. 24
Experts........................................ 24 ____________________________
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the Company's estimates (other than
the Securities and Exchange Commission registration fee and the New York Stock
Exchange additional listing fee) of the expenses in connection with the issuance
and distribution of Notes and the Shares being registered:
Securities and Exchange Commission registration fee.......... $ 64,470
New York Stock Exchange additional listing fee............... $ 1,500
Printing and engraving expenses.............................. $ 3,000
Legal fees and expenses...................................... $ 15,000
Accounting fees and expenses................................. $ 5,000
Transfer agent and registrar fees............................ $ 5,000
Miscellaneous expenses....................................... $ 3,000
-----------
Total............................................... $ 96,970
===========
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of Delaware permits
indemnification of directors, officers and employees of a corporation under
certain conditions and subject to certain limitations. Article TENTH of the
Company's Restated Certificate of Incorporation and Article VI of the Company's
By-Laws contain provisions for the indemnification of directors, officers and
employees within the limitations permitted by Section 145. The Company has also
entered into indemnification agreements with its directors and officers based on
the indemnification provisions in Section 145.
The Company carries a directors' and officers' liability insurance
policy which provides for payment of certain liability claims and the related
expenses of the Company's directors and officers in connection with threatened,
pending, or completed actions, suits or proceedings against them in their
capacities as directors and officers, in accordance with the Company's By-laws
and the General Corporation Law of Delaware.
Item 16. Exhibits.
EXHIBITS
4.1 Form of Common Stock certificate (1)
4.2 Indenture, dated as of May 21, 1997, between the Company and The Bank
of New York.
4.3 Form of Note (included in Exhibit 4.2)
4.4 Registration Rights Agreement dated as of May 15, 1997 by and among
the Company, Morgan Stanley & Co. Incorporated and Dillon, Read &
Co. Inc.
5. Opinion of Fulbright & Jaworski L.L.P. with respect to the legality of
the securities being registered.
12. Statement re: calculation of ratio of earnings to fixed charges
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23.1 Consent of independent accountants.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5 to this
Registration Statement).
24. Power of Attorney (included on signature page).
25. Statement of Eligibility of the Trustee on Form T-1
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(1) Filed as Exhibit 4 to the Company's Registration Statement on Form
S-1 (No. 2-34320) and incorporated herein by reference.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration
Statement:
(i) To include any prospectus required by section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change in the
information in the Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the
low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than 20 percent change in the
maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective Registration
Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3 or Form S-8, and the
information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall
be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the registrant's annual
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report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Securities
Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the foregoing
provisions, or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Securities Act of 1933 and
is, therefore, unenforceable. In the event a claim for indemnification
against such liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer, or controlling person
of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer, or controlling person
of the registrant in connection with the securities being registered,
the registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act of 1933 and will be
governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that is has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned hereunto duly
authorized, in Westboro, Massachusetts on the day of June 27,1997.
DATA GENERAL CORPORATION
By: /s/ Ronald L. Skates
----------------------------
Ronald L. Skates
President and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Ronald L. Skates and Robert C. McBride,
his true and lawful attorney-in-fact, each acting alone, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities to sign any and all amendments including post-effective
amendments to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorneys-in-fact or their substitutes, each acting alone, may lawfully do
or cause to be done by virtue thereof.
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated:
Signature Title Date
/s/Ronald L. Skates
- ------------------------------- President and Chief Executive June 27, 1997
Ronald L. Skates Officer; Director
/s/Frederick R. Adler
- ------------------------------- Chairman of Executive Committee June 27, 1997
Frederick R. Adler of Board of Directors; Director
/s/Arthur W. DeMelle
- ------------------------------- Senior Vice President; Chief June 27, 1997
Arthur W. DeMelle Financial Officer; Chief
Accounting Officer
/s/Ferdinand Colloredo-Mansfeld
- ------------------------------- Director June 27, 1997
Ferdinand Colloredo-Mansfeld
/s/Donald H. Trautlein
- ------------------------------- Director June 27, 1997
Donald H. Trautlein
/s/Richard L. Tucker
- ------------------------------- Director June 27, 1997
Richard L. Tucker
/s/W. Nicholas Thorndike
- ------------------------------- Director June 27, 1997
W. Nicholas Thorndike
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit
- ------- -------
4.1 Form of Common Stock certificate (1)
4.2 Indenture, dated as of May 21, 1997, between the Company and
The Bank of New York.
4.3 Form of Note (included in Exhibit 4.2)
4.4 Registration Rights Agreement dated as of May 15, 1997 by and
among the Company, Morgan Stanley & Co. Incorporated and
Dillon, Read & Co. Inc.
5. Opinion of Fulbright & Jaworski L.L.P. with respect to the
legality of the securities being registered.
12. Statement re: calculation of ratio of earnings to fixed
charges
23.1 Consent of independent accountants.
23.2 Consent of Fulbright & Jaworski L.L.P. (included in Exhibit 5
to this Registration Statement).
24. Power of Attorney (included on signature page).
25. Statement of Eligibility of the Trustee on Form T-1
- ---------------------------------
(1) Filed as Exhibit 4 to the Company's Registration Statement on Form S-1
(No. 2-34320) and incorporated herein by reference.
<PAGE>
Exhibit 4.2
================================================================================
DATA GENERAL CORPORATION
TO
THE BANK OF NEW YORK
Trustee
INDENTURE
Dated as of May 21, 1997
6% Convertible Subordinated Notes due 2004
================================================================================
<PAGE>
DATA GENERAL CORPORATION
Reconciliation and Tie Between the Trust Indenture Act
of 1939 and Indenture dated as of May 21, 1997
Trust Indenture
Act Section Indenture Section
- --------------- -----------------
ss.310(a)(1) .......................................... 8.9
ss.(a)(2) ............................................. 8.9
ss.(a)(3) ............................................. Not Applicable
ss.(a)(4) ............................................. Not Applicable
ss.(a)(5) ............................................. 8.9
ss.(b) ................................................ 8.8
8.10
8.11
ss.311(a)..............................................
(b) ................................................
(b) ................................................ 6.3(a)
ss.312(a) ............................................. 6.1
6.2(a)
(b) ................................................ 6.2(b)
(c) ................................................ 6.2(c)
ss.313(a) ............................................. 6.3(a)
(b) ................................................ 6.3(a)
(c) ................................................ 6.3(a)
(d) ................................................ 6.3(b)
ss.314(a)
(b) ................................................ Not Applicable
(c)(1) ............................................. 16.5
(c)(2) ............................................. 16.5
(c)(3) ............................................. Not Applicable
(d) ................................................ Not Applicable
(e) ................................................ 16.5
ss.315(a) ............................................. 8.1
(b) ................................................ 7.8
(c) ................................................ 8.1
(d) ................................................ 8.1
(d)(1) ............................................. 8.1(a)
(d)(2) ............................................. 8.1(b)
(d)(3) ............................................. 8.1(c)
(e) ................................................ 7.9
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<PAGE>
ss.316(a) ............................................. 7.7
(a)(1)(A) .......................................... 7.7
(a)(1)(B) .......................................... 7.7
(a)(2) ............................................. Not Applicable
(b) ................................................ 7.4
ss.317(a)(1) .......................................... 7.5
(a)(2) ............................................. 7.5
(b) ................................................ 5.4
ss.318(a) ............................................. 16.7
- ------------------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Indenture.
-ii-
<PAGE>
TABLE CONTENTS
Page
----
ARTICLE I
DEFINITIONS ............................................................ 1
Affiliate .............................................................. 2
Applicable Price ....................................................... 2
Board of Directors ..................................................... 2
Business Day ........................................................... 2
Closing Price .......................................................... 2
Commission ............................................................. 2
Common Stock ........................................................... 2
Company ................................................................ 3
Conversion Price ....................................................... 3
Corporate Trust Office ................................................. 3
Custodian .............................................................. 3
default ................................................................ 3
Depositary ............................................................. 3
Designated Senior Indebtedness ......................................... 3
DTC .................................................................... 4
Exchange Act ........................................................... 4
Event of Default ....................................................... 4
Fundamental Change ..................................................... 4
Indebtedness ........................................................... 4
Indenture .............................................................. 5
Initial Purchasers ..................................................... 5
Note or Notes .......................................................... 5
Noteholder or holder ................................................... 5
Note register .......................................................... 5
Officers' Certificate .................................................. 5
Opinion of Counsel ..................................................... 5
outstanding ............................................................ 6
Payment Blockage Notice ................................................ 6
Person ................................................................. 6
PORTAL Market .......................................................... 6
Predecessor Note ....................................................... 6
QIB .................................................................... 6
Reference Market Price ................................................. 7
Registration Rights Agreement .......................................... 7
Regulation S ........................................................... 7
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<PAGE>
Representative ......................................................... 7
Responsible Officer .................................................... 7
Restricted Securities .................................................. 7
Rule 144A .............................................................. 7
Securities Act ......................................................... 7
Senior Indebtedness .................................................... 7
Subsidiary ............................................................. 8
Trading Day ............................................................ 8
Trigger Event .......................................................... 8
Trust Indenture Act .................................................... 8
Trustee ................................................................ 8
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES ................................................. 9
Section 2.1. Designation Amount and Issue of Notes ................. 9
Section 2.2. Form of Notes ......................................... 9
Section 2.3. Date and Denomination of Notes; Payments of Interest... 10
Section 2.4. Execution of Notes .................................... 11
Section 2.5. Exchange and Registration of Transfer of Notes:
Restrictions on Transfer Depositary ................... 12
Section 2.6. Mutilated, Destroyed, Lost or Stolen Notes ............ 20
Section 2.7. Temporary Notes ....................................... 21
Section 2.8. Cancellation of Notes Paid, Etc ....................... 21
Section 2.9. CUSIP Numbers ......................................... 22
ARTICLE III
REDEMPTION OF NOTES ................................................... 22
Section 3.1. Redemption Prices ..................................... 22
Section 3.2. Notice of Redemption; Selection of Notes .............. 22
Section 3.3. Payment of Notes Called for Redemption ................ 23
Section 3.4. Conversion Arrangement on Call for Redemption ......... 24
Section 3.5. Redemption at Option of Holders ....................... 25
ARTICLE IV
SUBORDINATION OF NOTES ................................................ 27
Section 4.1. Agreement of Subordination............................. 27
Section 4.2. Payments to Noteholders ............................... 28
Section 4.3. Subrogation of Notes .................................. 30
Section 4.4. Authorization to Effect Subordination ................. 31
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<PAGE>
Section 4.5. Notice to Trustee...................................... 32
Section 4.6. Trustee's Relation to Senior Indebtedness ............. 33
Section 4.7. No Impairment of Subordination ........................ 33
Section 4.8. Certain Conversions Deemed Payment..................... 33
Section 4.9. Article Applicable to Paying Agents.................... 33
Section 4.10. Senior Indebtedness Entitled to Rely .................. 34
Section 4.11. Reliance on Judicial Order or Certificate of
Liquidating Agent ..................................... 34
Section 4.12. Trustee Not Fiduciary for Holders of
Senior Indebtedness ................................... 34
Section 4.13. Rights of Trustee as Holder of Senior
Indebtedness; Preservation of Trustee's Rights ........ 34
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY ................................... 35
Section 5.1. Payment of Principal Premium and Interest ............. 35
Section 5.2. Maintenance of Office or Agency ....................... 35
Section 5.3. Appointments to Fill Vacancies in Trustee's Office .... 36
Section 5.4. Provisions as to Paying Agent ......................... 36
Section 5.5. Corporate Existence ................................... 37
Section 5.6. Rule 144A Information Requirement ..................... 37
Section 5.7. Stay, Extension and Usury Laws ........................ 37
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE............................................ 38
Section 6.1. Noteholders' Lists .................................... 38
Section 6.2. Preservation and Disclosure of Lists .................. 38
Section 6.3. Reports by Trustee .................................... 38
Section 6.4. Reports by Company .................................... 39
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT ................................................ 39
Section 7.1. Events of Default...................................... 39
Section 7.2. Payments of Notes on Default; Suit Therefor............ 41
Section 7.3. Application of Monies Collected by Trustee............. 43
Section 7.4. Proceedings by Noteholder.............................. 43
Section 7.5. Proceedings by Trustee ................................ 44
Section 7.6. Remedies Cumulative and Continuing..................... 44
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<PAGE>
Section 7.7. Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders ............................... 45
Section 7.8. Statement by Officers as to Default ................... 45
Section 7.9. Notice of Defaults .................................... 45
Section 7.10. Undertaking to Pay Costs .............................. 46
ARTICLE VIII
CONCERNING THE TRUSTEE ................................................ 46
Section 8.1. Duties and Responsibilities of Trustee ................ 46
Section 8.2. Reliance on Documents, Opinions, Etc .................. 47
Section 8.3. No Responsibility for Recitals, Etc ................... 49
Section 8.4. Trustee, Paying Agents, Conversion Agents or Registrar
May Own Notes ......................................... 49
Section 8.5. Monies to Be Held in Trust ............................ 49
Section 8.6. Compensation and Expenses of Trustee .................. 49
Section 8.7. Officers Certificate as Evidence ...................... 50
Section 8.8. Conflicting Interests of Trustee ...................... 50
Section 8.9. Eligibility of Trustee ................................ 50
Section 8.10. Resignation or Removal of Trustee ..................... 50
Section 8.11. Acceptance by Successor Trustee ....................... 52
Section 8.12. Succession by Merger, Etc ............................. 52
Section 8.13. Limitation on Rights of Trustee as Creditor............ 53
ARTICLE IX
CONCERNING THE NOTEHOLDERS ............................................ 53
Section 9.1. Action by Noteholders ................................. 53
Section 9.2. Proof of Execution by Noteholders ..................... 53
Section 9.3. Who are Deemed Absolute Owners ........................ 54
Section 9.4. Company-Owned Notes Disregarded ....................... 54
Section 9.5. Revocation of Consents; Future Holders Bound .......... 54
ARTICLE X
NOTEHOLDERS' MEETINGS ................................................. 55
Section 10.1. Purpose of Meetings ................................... 55
Section 10.2. Call of Meetings by Trustee ........................... 55
Section 10.3. Call of Meetings by Company or Noteholders ............ 56
Section 10.4. Qualifications for Voting.............................. 56
Section 10.5. Regulations ........................................... 56
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<PAGE>
Section 10.6. Voting ................................................ 57
Section 10.7. No Delay of Rights by Meeting ......................... 57
ARTICLE XI
SUPPLEMENTAL INDENTURES ............................................... 57
Section 11.1. Supplemental Indentures Without Consent of
Noteholders ........................................... 57
Section 11.2. Supplemental Indentures with Consent of Noteholders.... 59
Section 11.3. Effect of Supplemental Indenture ...................... 59
Section 11.4. Notation on Notes ..................................... 60
Section 11.5. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee ..................................... 60
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE ..................... 60
Section 12.1. Company May Consolidate Etc. on Certain Terms ......... 60
Section 12.2. Successor Corporation to Be Substituted ............... 61
Section 12.3. Opinion of Counsel to Be Given Trustee ................ 61
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE ............................... 61
Section 13.1. Discharge of Indenture ................................ 61
Section 13.2. Deposited Monies to Be Held in Trust by Trustee ....... 62
Section 13.3. Paying Agent to Repay Monies Held ..................... 62
Section 13.4. Return of Unclaimed Monies ............................ 62
Section 13.5. Reinstatement ......................................... 63
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,OFFICERS AND DIRECTORS ........ 63
Section 14.1. Indenture and Notes Solely Corporate Obligations ...... 63
ARTICLE XV
CONVERSION OF NOTES ................................................... 63
Section 15.1. Right to Convert....................................... 63
Section 15.2. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest
or Dividends........................................... 64
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<PAGE>
Section 15.3. Cash Payments in Lieu of Fractional Shares ............ 66
Section 15.4. Conversion Price....................................... 66
Section 15.5. Adjustment of Conversion Price ........................ 66
Section 15.6. Effect of Reclassification, Consolidation, Merger or
Sale .................................................. 75
Section 15.7. Taxes on Shares Issued ................................ 76
Section 15.8. Reservation of Shares; Shares to Be Fully Paid,
Compliance with Governmental Requirements; Listing of
Common Stock .......................................... 77
Section 15.9. Responsibility of Trustee.............................. 77
Section 15.10.Notice to Holders Prior to Certain Actions ............ 78
ARTICLE XVI
MISCELLANEOUS PROVISIONS............................................... 79
Section 16.1. Provisions Binding on Company's Successors ............ 79
Section 16.2. Official Acts by Successor Corporation ................ 79
Section 16.3. Addresses for Notices, Etc ............................ 79
Section 16.4. Governing Law ......................................... 80
Section 16.5. Evidence of Compliance with Conditions
Precedent; Certificates to Trustee..................... 80
Section 16.6. Legal Holidays ........................................ 80
Section 16.7. Trust Indenture Act ................................... 80
Section 16.8. No Security Interest Created .......................... 81
Section 16.9. Benefits of Indenture ................................. 81
Section 16.10.Table of Contents, Headings, Etc ...................... 81
Section 16.11.Authenticating Agent................................... 81
Section 16.12.Execution in Counterparts ............................. 82
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<PAGE>
INDENTURE dated as of May 21, 1997, between Data General Corporation, a
Delaware corporation (hereinafter sometimes called the "Company," as more fully
set forth in Section 1.1), and The Bank of New York, a New York banking
corporation, as trustee hereunder (hereinafter sometimes called the "Trustee,"
as more fully set forth in Section 1.1).
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 6% Convertible Subordinated Notes due 2004
(hereinafter sometimes called the "Notes"), in an aggregate principal amount not
to exceed $212,750,000 and, to provide the terms and conditions upon which the
Notes are to be authenticated, issued and delivered, the Company has duly
authorized the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repayment upon a
Fundamental Change, a form of conversion notice and a certificate of transfer to
be borne by the Notes are to be substantially in the forms hereinafter provided
for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and made available for delivery by the Trustee
or a duly authorized authenticating agent in the manner provided in this
Indenture, the valid, binding and legal obligations of the Company, and to
constitute these presents a valid agreement according to its terms, have been
done and performed, and the execution of this Indenture and the issue hereunder
of the Notes have in all respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and made available for delivery, and
in consideration of the premises and of the purchase and acceptance of the Notes
by the holders thereof, the Company covenants and agrees with the Trustee for
the equal and proportionate benefit of the respective holders from time to time
of the Notes (except as otherwise provided below), as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. The terms defined in this Section 1.1 (except
as herein otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section 1.1. All other
terms used in this Indenture that are defined in the Trust Indenture Act or
which are by reference therein defined in the Securities Act (except as herein
otherwise expressly provided or unless the context otherwise requires) shall
have the
<PAGE>
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture. The
words "herein," "hereof," "hereunder," and words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
Subdivision. The terms defined in this Article include the plural as well as the
singular.
Affiliate : The term "Affiliate" of any specified Person shall mean any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For the purposes of this
definition, "control," when used with respect to any specified Person means the
power to direct or cause the direction of 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.
Applicable Price : The term "Applicable Price" shall mean (i) in the
event of a Fundamental Change in which the holders of the Common Stock receive
only cash, the amount of cash received by the holder of one share of Common
Stock and (ii) in the event of any other Fundamental Change, the arithmetic
average of the Closing Price for the Common Stock (determined as set forth in
Section 15.5(h)) during the ten (10) Trading Days (as defined in Section
15.5(h)) prior to the record date for the determination of the holders of Common
Stock entitled to receive cash, securities, property or other assets in
connection with such Fundamental Change, or, if there is no such record date,
the date upon which the holders of the Common Stock shall have the right to
receive such cash, securities, property or other assets in connection with the
Fundamental Change.
Board of Directors : The term "Board of Directors" shall mean the Board
of Directors of the Company or a committee of such Board duly authorized to act
for it hereunder.
Business Day : The term "Business Day" means each Monday, Tuesday,
Wednesday, Thursday and Friday which is not a day on which the banking
institutions in The City of New York or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close
or be closed.
Closing Price : The term "Closing Price" shall have the meaning
specified in Section 15.5(h)(1).
Commission : The term "Commission" shall mean the Securities and
Exchange Commission.
Common Stock : The term "Common Stock" shall mean any 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. Subject to the provisions of Section 15.6,
-2-
<PAGE>
however, shares issuable on conversion of Notes shall include only shares of the
class designated as common stock of the Company at 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; 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.
Company : The term "Company" shall mean Data General Corporation, a
Delaware corporation and, subject to the provisions of Article XII, shall
include its successors and assigns.
Conversion Price : The term "Conversion Price" shall have the meaning
specified in Section 15.4.
Corporate Trust Office : The term "Corporate Trust Office" or other
similar term, shall mean the principal office of the Trustee at which at any
particular time its corporate trust business shall be principally administered,
which office is, at the date as of which this Indenture is dated, located at 101
Barclay Street, Floor 21W, New York, New York 10286.
Custodian : The term "Custodian" shall mean The Bank of New York, as
custodian with respect to the Notes in global form, or any successor entity
thereto.
default : The term "default" shall mean any event that is, or after
notice or passage of time, or both, would be, an Event of Default.
Depositary : The term "Depositary" means, with respect to the Notes
issuable or issued in whole or in part in global form, the person specified in
Section 2.5(d) as the Depositary with respect to such Notes, until a successor
shall have been appointed and become such pursuant to the applicable provisions
of this Indenture, and thereafter, "Depositary" shall mean or include such
successor.
Designated Senior Indebtedness : The term "Designated Senior
Indebtedness" means any particular Senior Indebtedness in which the instrument
creating or evidencing the same or the assumption or guarantee thereof (or
related agreements or documents to which the Company is a party) expressly
provides that such Senior Indebtedness shall be "Designated Senior Indebtedness"
for purposes of the Indenture (provided that such instrument, agreement or other
document may place limitations and conditions on the right of such Senior
Indebtedness to exercise the rights of Designated Senior Indebtedness). If any
payment made to any holder of any Designated Senior Indebtedness or its
Representative with respect to such
-3-
<PAGE>
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Company or otherwise, the reinstated Indebtedness of the Company arising
as a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
DTC : The term "DTC" shall mean The Depositary Trust Company.
Exchange Act : The term "Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, as in effect from time to time.
Event of Default : The term "Event of Default" shall mean any event
specified in Section 7.1(a), (b), (c), (d) or (e).
Fundamental Change : The term "Fundamental Change" means the occurrence
of any transaction or event in connection with which all or substantially all
the Common Stock shall be exchanged for, converted into, acquired for or
constitute the right to receive consideration which is not all or substantially
all common stock which is (or, upon consummation of or immediately following
such transaction or event, will be) listed on a United States national
securities exchange or approved for quotation in the Nasdaq National Market or
any similar United States system of automated dissemination of quotations or
securities prices (whether by means of an exchange offer, liquidation, tender
offer, consolidation, merger, combination, reclassification, recapitalization or
otherwise).
Indebtedness : The term "Indebtedness" means, with respect to any
Person, and without duplication, (a) all indebtedness, obligations and other
liabilities (contingent or otherwise) of such Person for borrowed money
(including obligations of the Company in respect of overdrafts, foreign exchange
contracts, currency exchange agreements, interest rate protection agreements,
and any loans or advances from banks, whether or not evidenced by notes or
similar instruments) or evidenced by bonds, debentures, notes or similar
instruments (whether or not the recourse of the lender is to the whole of the
assets of such Person or to only a portion thereof) (other than any account
payable or other accrued current liability or obligation incurred in the
ordinary course of business in connection with the obtaining of materials or
services), (b) all reimbursement obligations and other liabilities (contingent
or otherwise) of such Person with respect to letters of credit, bank guarantees
or bankers' acceptances, (c) all obligations and liabilities (contingent or
otherwise) in respect of leases of such Person required, in conformity with
generally accepted accounting principles, to be accounted for as capitalized
lease obligations on the balance sheet of such Person and all obligations and
other liabilities (contingent or otherwise) under any lease or related document
(including a purchase agreement) in connection with the lease of real property
which provides that such Person is contractually obligated to purchase or cause
a third party to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the
-4-
<PAGE>
lessor and the obligations of such Person under such lease or related document
to purchase or to cause a third party to purchase such leased property, (d) all
obligations of such Person (contingent or otherwise) with respect to an interest
rate or other swap, cap or collar agreement or other similar instrument or
agreement or foreign currency hedge, exchange, purchase or similar instrument or
agreement, (e) all direct or indirect guaranties or similar agreements by such
Person in respect of, and obligations or liabilities (contingent or otherwise)
of such Person to purchase or otherwise acquire or otherwise assure a creditor
against loss in respect of, indebtedness, obligations or liabilities of another
Person of the kind described in clauses (a) through (d), (f) any indebtedness or
other obligations described in clauses (a) through (d) secured by any mortgage,
pledge, lien or other encumbrance existing on property which is owned or held by
such Person, regardless of whether the indebtedness or other obligation secured
thereby shall have been assumed by such Person and (g) any and all deferrals,
renewals, extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind described
in clauses (a) through (f).
Indenture : The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein provided, as so
amended or supplemented.
Initial Purchasers : The term "Initial Purchasers" means Morgan
Stanley & Co. Incorporated and Dillon, Read & Co. Inc.
Note or Notes : The term "Note" or "Notes" shall mean any Note or
Notes, as the case may be, authenticated and delivered under this Indenture,
including the 144A Global Note and the Regulation S Global Note.
Noteholder or holder : The terms "Noteholder" or "holder" as applied to
any Note, or other similar terms (but excluding the term "beneficial holder"),
shall mean any person in whose name at the time particular Note is registered on
the Note registrar's books.
Note register : The term "Note register" shall have the meaning
specified in Section 2.5.
Officers' Certificate : The term "Officers' Certificate", when used
with respect to the Company, shall mean a certificate signed by both (a) the
President, the Chief Executive Officer Executive or Senior Vice President or any
Vice President (whether or not designated by a number or numbers or word or
words added before or after the title "Vice President") and (b) by the Treasurer
or any Assistant Treasurer or Secretary or any Assistant Secretary of the
Company.
Opinion of Counsel : The term "Opinion of Counsel" shall mean an
opinion in writing signed by legal counsel, who may be an employee of or counsel
to the Company, or other counsel acceptable to the Trustee.
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outstanding : The term "outstanding", when used with reference to
Notes, shall, subject to the provisions of Section 9.4, mean, as of any
particular time, all Notes authenticated and made available for delivery by the
Trustee under this Indenture, except
(a) Notes theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Notes, or portions thereof, for the redemption of which
monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided, that if such
Notes are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as provided in Article III, or
provision satisfactory to the Trustee shall have been made for giving
such notice;
(c) Notes in lieu of which, or in substitution for which,
other Notes shall have been authenticated and delivered pursuant to the
terms of Section 2.6 unless proof satisfactory to the Trustee is
presented that any such Notes are held by bona fide holders in due
course; and
(d) Notes converted into Common Stock pursuant to Article XV
and Notes deemed not outstanding pursuant to Article III.
Payment Blockage Notice : The term "Payment Blockage Notice" has the
meaning specified in Section 4.2.
Person : The term "Person" shall mean a corporation, an association, a
partnership, an individual, a joint venture, a joint stock company, a trust, an
unincorporated organization or a government or an agency or a political
subdivision thereof.
PORTAL Market : The term "PORTAL Market" shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market operated by the
National Association of Securities Dealers, Inc. or any successor thereto.
Predecessor Note : The term "Predecessor Note" of any particular Note
shall mean every previous Note evidencing all or a portion of the same debt as
that evidenced by such particular Note; and, for the purposes of this
definition, any Note authenticated and delivered under Section 2.6 in lieu of a
lost, destroyed or stolen Note shall be deemed to evidence the same debt as the
lost, destroyed or stolen Note that is replaces.
QIB : The term "QIB" shall mean a "qualified institutional buyer" as
defined in Rule 144A.
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Reference Market Price : The term "Reference Market Price" shall
initially mean $13.75 and in the event of any adjustment to the Conversion Price
pursuant to Sections 15.5(a), (b), (c), (d), (e), (f) or (g) the Reference
Market Price shall also be adjusted so that the ratio of the Reference Market
Price to the Conversion Price after giving effect to any such adjustment shall
always be the same as the ratio of $13.75 to the initial Conversion Price
specified in the form of Note attached hereto (without regard to any adjustment
thereto).
Registration Rights Agreement : The term "Registration Rights
Agreement" means that certain Registration Rights Agreement, dated as of May 15,
1997, between the Company and the Initial Purchasers.
Regulation S : The term "Regulation S" shall mean Regulation S as
promulgated under the Securities Act.
Representative : The term "Representative" means the (a) indenture
trustee or other trustee, agent or representative for any Senior Indebtedness or
(b) with respect to any Senior Indebtedness that does not have any such trustee,
agent or other representative, (i) in the case of such Senior Indebtedness
issued pursuant to an agreement providing for voting arrangements as among the
holder or owners of such Senior Indebtedness, any holder or owner of such Senior
Indebtedness acting with the consent of the required persons necessary to bind
such holders or owners of such Senior Indebtedness and (ii) in the case of all
other such Senior Indebtedness, the holder or owner of such Senior Indebtedness.
Responsible Officer : The term "Responsible Officer", when used with
respect to the Trustee, shall mean an officer of the Trustee in the Corporate
Trust Office assigned and duly authorized by the Trustee to administer its
corporate trust matters.
Restricted Securities : The term "Restricted Securities" has the
meaning specified in Section 2.5.
Rule 144A : The term "Rule 144A" shall mean Rule 144A as promulgated
under the Securities Act.
Securities Act : The term "Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.
Senior Indebtedness : The term "Senior Indebtedness" means the
principal of, premium, if any, interest (including all interest accruing
subsequent to the commencement of any bankruptcy or similar proceeding, whether
or not a claim for post-petition interest is allowable as a claim in any such
proceeding) and rent payable on or in connection with, and all fees, costs,
expenses and other amounts accrued or due on or in connection with, Indebtedness
of the Company, whether outstanding on the date of this Indenture or thereafter
created, incurred, assumed, guaranteed or in effect guaranteed by the Company
(including all
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deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing), unless in the case of any particular
Indebtedness the instrument creating or evidencing the same or the assumption or
guarantee thereof expressly provides that such Indebtedness shall not be senior
in right of payment to the Notes or expressly provides that such Indebtedness is
"pari passu" with or "junior" to the Notes. Notwithstanding the foregoing, the
term Senior Indebtedness shall not include (i) the Company's 7 3/4% Convertible
Subordinated Debentures due 2001 or (ii) any Indebtedness of the Company to any
subsidiary of the Company, a majority of the voting stock of which is owned,
directly or indirectly, by the Company. If any payment made to any holder of any
Senior Indebtedness or its Representative with respect to such Senior
Indebtedness is rescinded or must otherwise be returned by such holder or
Representative upon the insolvency, bankruptcy or reorganization of the company
or otherwise, the reinstated Indebtedness of the Company arising as a result of
such rescission or return shall constitute Senior Indebtedness effective as of
the date of such rescission or return.
Subsidiary : The term "Subsidiary" means, with respect to any person,
(i) any corporation, association or other business entity of which more than 50%
of the total voting power of shares of capital stock entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by such person or one or more of the other subsidiaries of that
person (or a combination thereof) and (ii) any partnership (a) the sole general
partner or managing general partner of which is such person or a subsidiary of
such person or (b) the only general partners of which are such person or of one
or more subsidiaries of such person (or any combination thereof).
Trading Day : The term "Trading Day" shall have the meaning specified
in Section 15.5(i)(5).
Trigger Event : The term "Trigger Event" shall have the meaning
specified in Section 15.5(d).
Trust Indenture Act : The term "Trust Indenture Act" shall mean the
Trust Indenture Act of 1939, as amended, as it was in force at the date of
execution of this Indenture, except as provided in Sections 11.3 and 15.6;
provided, however, that in the event the Trust Indenture Act of 1939 is amended
after the date hereof, the term "Trust Indenture Act" shall mean, to the extent
required by such amendment, the Trust Indenture Act of 1939 as so amended.
Trustee : The term "Trustee" shall mean The Bank of New York and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee hereunder.
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The definitions of certain other terms are as specified in Section 2.5
and 3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1. Designation Amount and Issue of Notes . The Notes shall be
designated as "6% Convertible Subordinated Notes due 2004." Notes not to exceed
the aggregate principal amount of $185,000,000 (or $212,750,000 if the
over-allotment option set forth in Section 3 of the Placement Agreement dated
May 15, 1997 (as amended from time to time by the parties thereto) by and
between the Company and the Initial Purchasers is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 3.5 and 15.2 hereof) upon the execution of
this Indenture, or from time to time thereafter, may be executed by the Company
and delivered to the Trustee for authentication, and the Trustee shall thereupon
authenticate and make available for delivery said Notes to or upon the written
order of the Company, signed by its (a) President, Executive or Senior Vice
President or any Vice President (whether or not designated by a number or
numbers or word or words added before or after the title "Vice President") and
(b) Treasurer or Assistant Treasurer or its Secretary or any Assistant
Secretary, without any further action by the Company hereunder.
Section 2.2. Form of Notes . The Notes and the Trustee's certificate of
authentication to be borne by such Notes shall be substantially in the form set
forth in Exhibit A, which is incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture.
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Payment of principal of and interest and premium, if any, on any Note in global
form shall be made to the holder of such Note.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.3. Date and Denomination of Notes; Payments of Interest . The
Notes shall be issuable in registered form without coupons in denominations of
$1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve 30-day months.
The person in whose name any Note (or its Predecessor Note) is
registered at the close of business on any record date with respect to any
interest payment date shall be entitled to receive the interest payable on such
interest payment date, except (i) that the interest payable upon redemption
(unless the date of redemption is an interest payment date) will be payable to
the person to whom principal is payable and (ii) as set forth in the next
succeeding sentence. In the case of any Note (or portion thereof) which is
converted into Common Stock of the Company during the period from (but
excluding) a record date to (but excluding) the next succeeding interest payment
date either (i) if such Note (or portion thereof) has been called for redemption
on a redemption date which occurs during such period, or is to be redeemed in
connection with a Fundamental Change on a Repurchase Date (as defined in Section
3.5) which occurs during such period, the Company shall not be required to pay
interest on such interest payment date in respect of any such Note or portion
thereof pursuant to Section 3.3 or 3.5 hereof or (ii) if otherwise, any Note (or
portion thereof) submitted for conversion during such period shall be
accompanied by funds equal to the interest payable on such succeeding interest
payment date on the principal amount so converted. Interest may, at the option
of the Company, be paid either (i) by check mailed to the address of the person
entitled thereto as it appears in the Note register or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to DTC will be made by wire transfer of immediately
available funds to the account of DTC or its nominee. The term "record date"
with respect to any interest payment date shall mean the April 30 or October 31
preceding said May 15 or November 15, respectively.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any said May 15 or November 15 (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Noteholder on
the relevant record date by virtue of his having been such Noteholder; and such
Defaulted Interest shall be paid by the Company, at its election in each case,
as provided in clause (1) or (2) below;
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(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Notes (or their respective
Predecessor Notes) 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 to be paid on each Note and
the date of the payment (which shall be not less than twenty-five (25)
days after the receipt by the Trustee of such notice, unless the
Trustee shall consent to an earlier date), and at the same time the
Company shall deposit with the Trustee an amount of money equal to the
aggregate amount to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to
be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted
Interest which shall be not more than fifteen (15) days and not less
than ten (10) days prior to the date of the proposed payment and not
less than ten (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 Noteholder at this address as it appears in
the Note register, not less than ten (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
Notes (or their respective Predecessor Notes) were 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 and automated quotation system on which the Notes
may be listed or designated for issuance, and upon such notice as may
be required by such exchange and automated quotation system, if, after
notice given by the Company to the Trustee of the proposed payment
pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.4. Execution of Notes . The Notes shall be signed in the name
and on behalf of the Company by the manual or facsimile signature of its
President, any Executive or Senior Vice President or any Vice President (whether
or not designated by a number or numbers or word or words added before or after
the title "Vice President") and attested by the manual or facsimile signature of
its Secretary or any of its Assistant Secretaries (which may be printed,
engraved or otherwise reproduced thereon, by facsimile or otherwise). Only such
Notes as shall bear thereon a certificate of authentication substantially in the
form set forth on the form of Note attached as Exhibit A hereto, manually
executed by the Trustee (or an authenticating agent appointed by the Trustee as
provided by Section 16.11), shall be entitled
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to the benefits of this Indenture or be valid or obligatory for any purpose.
Such certificate by the Trustee (or such an authenticating agent) upon any Note
executed by the Company shall be conclusive evidence that the Note so
authenticated has been duly authenticated and delivered hereunder and that the
holder is entitled to the benefits of this Indenture
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company; and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.5. Exchange and Registration of Transfer of Notes:
Restrictions on Transfer Depositary .
(a) The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office and in any other
office or agency of the Company designated pursuant to Section 5.2 being herein
sometimes collectively referred to as the "Note register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of Notes and of transfers of Notes. The Note register shall be
in written form or in any form capable of being converted into written form
within a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.2.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set further in this Section 2.5, the Company shall execute, and the
Trustee shall authenticate and make available for delivery, in the name of the
designated transferee or transferees, one or more new Notes of any authorized
denominations and of a like aggregate principal amount and bearing such
restrictive legends as may be required by this Indenture.
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office of agency maintained by the Company pursuant to
Section 5.2. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the trustee shall authenticate and make available for
delivery, the Notes which the Noteholder making the exchange is entitled to
receive bearing registration numbers not contemporaneously outstanding.
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All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or his attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar or any
Company registrar shall be required to exchange or register a transfer of (a)
any Notes for a period of fifteen (15) days next preceding any selection of
Notes to be redeemed or (b) any Notes or portions thereof called for redemption
pursuant to Article III or (c) any Notes or portion thereof surrendered for
conversion pursuant to Article XV.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required by law, all Notes
that are so eligible may be represented by one or more Notes in global form
registered in the name of the Depositary or the nominee of the Depositary,
except as otherwise specified below. The transfer and exchange of beneficial
interests in any such Note in global form shall be effected through the
Depositary in accordance with this Indenture and the procedures of the
Depositary therefor.
Notes that upon initial issuance are beneficially owned by QIBs will be
represented by a global Note (the "144A Global Note"), and Notes that upon
initial issuance are beneficially owned by Non-U.S. Persons will be represented
by another global Note (the "Regulation S Global Note"). Transfers of interests
in the Notes between the 144A Global Note and the Regulation S Global Note will
be made in accordance with the standing instructions and procedures of the
Depositary and its participants. The Trustee shall make appropriate endorsements
to reflect increases or decreases in the principal amounts of such global Notes
as set forth on the face of the Note ("Principal Amount") to reflect any such
transfers.
Except as provided below, beneficial owners of a Note in global form
shall not be entitled to have certificates registered in their names, will not
receive or be entitled to receive physical delivery of certificates in
definitive form and will not be considered Holders of such Notes in global form.
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(c) So long as the Notes are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Note to a QIB in accordance with Rule 144A, and upon receipt of the
definitive Note or Notes being so transferred, together with a certification
from the transferor that the transfer is being made in compliance with Rule 144A
(or other evidence satisfactory to the Trustee), the Trustee shall make an
endorsement on the 144A Global Note to reflect an increase in the aggregate
Principal Amount of the Notes represented by such Note in global form, the
Trustee shall cancel such definitive Note or Notes in accordance with the
standing instructions and procedures of the Depositary, the aggregate Principal
Amount of Notes represented by such Note in global form to be increased
accordingly; provided, that no definitive Note, or portion thereof, in respect
of which the Company or an Affiliate of the Company held any beneficial interest
shall be included in such Note in global form until such definitive Note is
freely tradable in accordance with Rule 144(k); provided further that the
Trustee shall issue Notes in definitive form upon any transfer of a beneficial
interest in the Note in global form to the Company or any Affiliate of the
Company.
Any Note in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Notes to be tradeable on the PORTAL Market or as may be required for the Notes
to be tradeable on any other market developed for trading of securities pursuant
to Rule 144A or Regulation S or required to comply with any applicable law or
any regulation thereunder or with the rules and regulations of any securities
exchange or automated quotation system upon which the Notes may be listed or
traded or to conform with any usage with respect thereto, or to indicated any
special limitations or restrictions to which any particular Notes are subject.
(d) Every Note that bears or is required under this
Section 2.5(d) to bear the legend set forth in this Section 2.5(d) (together
with any Common Stock issued upon conversion of the Notes and required to bear
the legend set forth in Section 2.5(e), collectively, the "Restricted
Securities") shall be subject to the restrictions on transfer set forth in this
Section 2.5(d) (including those set forth in the legend set forth below) unless
such restrictions on transfer shall be waived by written consent of the Company
and the holder of each such Restricted Note, by such Noteholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.5(d) and 2.5(e), the term "transfer" encompasses any sale, pledge,
transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.5(e), if
applicable), shall bear a legend in substantially the following form, unless
such Note
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has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer), or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT
IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE
SECURITY EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE
SECURITIES ACT (OR ANY SUCCESSOR PROVISION), RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO DATA
GENERAL CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE), A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO
THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY (THE
FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A
SUCCESSOR TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED
STATES IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT,
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH
TRANSFER (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F)
ABOVE), IT WILL FURNISH TO THE
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BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS
APPLICABLE) ,SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO CONFIRM
THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND (4) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE NOTE EVIDENCED HEREBY UNDER RULE
144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE BANK OF NEW YORK, AS TRUSTEE
(OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A
PURCHASER WHO IS NOT A U.S. PERSON, THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE BANK OF NEW YORK, AS TRUSTEE (OR
A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE
EVIDENCED HEREBY PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION", "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
Any Note (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have expired
in accordance with their terms or as to the conditions for removal of
the foregoing legend set forth therein have been satisfied may, upon
surrender of such Note for exchange to the Note registrar in accordance
with the provisions of this Section 2.5, be exchanged for a new Note or
Notes, of like tenor and aggregate principal amount, which shall not
bear the restrictive legend required by this Section 2.5(d).
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Notwithstanding any other provisions of this Indenture (other
than the provisions set forth in the second paragraph of Section 2.5(b)
and in this Section 2.5(d)), a Note in global form may not be
transferred as a whole or in part except by the Depositary to a nominee
of the Depositary or by a nominee of the Depositary to the Depositary
or another nominee of the Depositary or by the Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary.
The Depositary shall be a clearing agency registered under the
Exchange Act. The Company initially appoints DTC to act as Depositary
with respect to the Notes in global form. Initially, the 144A Global
Note shall be issued to the Depositary, registered in the name of Cede
& Co., as the nominee of the Depositary, and deposited with the
Custodian for Cede & Co. Initially, the Regulation S Global Note, if
any, shall be issued to the Depositary, registered in the name of Cede
& Co., as nominee for the Depositary, for the accounts of Morgan
Guaranty Trust Company of New York, Brussels office, as operator of the
Euroclear System and Cedel, S.A., and deposited with the Custodian for
Cede & Co.
If at any time the Depositary for a Note in global form
notifies the Company that it is unwilling or unable to continue as
Depositary for such Note, the Company may appoint a successor
Depositary with respect to such Note. If a successor Depositary is not
appointed by the Company within ninety (90) days after the Company
receives such notice, the Company will execute, and the Trustee, upon
receipt of an Officers' Certificate for the authentication and delivery
of Notes, will authenticate and make available for delivery, Notes in
certificated form, in aggregate principal amount equal to the principal
amount of such Note in global form, in exchange for such Note in global
form.
If a Note in certificated form is issued in exchange for any
portion of a Note in global form after the close of business at the
office or agency where such exchange occurs on any record date and
before the opening of business at such office or agency on the next
succeeding interest payment date, interest will not be payable on such
interest payment date in respect of such Note, but will be payable on
such interest payment date, subject to the provisions of Section 2.3,
only to the person to whom interest in respect of such portion of such
Note in global form is payable in accordance with the provisions of
this Indenture.
Notes in certificated form issued in exchange for all or a
part of a Note in global form pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee. Upon execution
and authentication, the Trustee shall make available for delivery such
Notes in certificated form to the persons in whose names such Notes in
certificated form are so registered.
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At such time as all interests in a Note in global form have
been redeemed, converted, canceled, exchanged for Notes in certificated
form, or transferred to a transferee who receives Notes in certificated
form thereof, such Note in global form shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and
instructions existing between the Depositary and the Custodian. At any
time prior to such cancellation, if any interest in a global Note is
exchanged for Notes in certificated form, redeemed, converted,
repurchased or cancelled, exchanged for Notes in certified form or
transferred to a transferee who receives Notes in certificated form
therefor or any Note in certificated form is exchanged or transferred
for part of a Note in global form, the principal amount of such Note in
global form shall, in accordance with the standing procedures and
instructions existing between the Depositary and the Custodian, be
appropriately reduced or increased, as the case may be, and an
endorsement shall be made on such Note in global form, by the Trustee
or the Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until the expiration of the holding period
applicable to sales thereof under Rule 144(k) under the Securities Act (or any
successor provision), any stock certificate representing Common Stock issued
upon conversion of such Note shall bear a legend in substantially the following
form, unless such Common Stock has been sold pursuant to a registration
statement that has been declared effective under the Securities Act (and which
continues to be effective at the time of such transfer) or such Common Stock has
been issued upon conversion of Notes that have been transferred pursuant to a
registration statement that has been declared effective under the Securities
Act, or unless otherwise agreed by the Company in writing with written notice
thereof to the transfer agent:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN REGISTERED
UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. THE HOLDER
HEREOF AGREES THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD
APPLICABLE TO SALES OF THE SECURITY EVIDENCED HEREBY UNDER
RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), (1) IT WILL NOT RESELL OR OTHERWISE TRANSFER THE
COMMON STOCK EVIDENCED HEREBY EXCEPT (A) TO DATA GENERAL
CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE
144A, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3)
OR (7) UNDER THE SECURITIES ACT) THAT
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PRIOR TO SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS
TRANSFER AGENT (OR A SUCCESSOR TRANSFER AGENT, AS APPLICABLE),
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE
OBTAINED FROM SUCH TRANSFER AGENT OR A SUCCESSOR TRANSFER
AGENT, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT (IF AVAILABLE), OR (F) PURSUANT
TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER); (2) PRIOR TO SUCH TRANSFER
(OTHER THAN A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL
FURNISH TO THE BANK OF NEW YORK, AS TRANSFER AGENT (OR A
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT
TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
(3) IT WILL DELIVER TO EACH PERSON TO WHOM THE COMMON STOCK
EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER
PURSUANT TO CLAUSE 1(F) ABOVE) A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. THIS LEGEND WILL BE REMOVED UPON THE
EARLIER OF THE TRANSFER OF THE COMMON STOCK EVIDENCED HEREBY
PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY AFTER THE EXPIRATION OF THE
HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION). AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT.
Any such Common Stock as to which such restrictions on
transfer shall have expired in accordance with their terms or as to
which the conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of the certificates
representing such shares of Common Stock for exchange in accordance
with the procedures of the transfer agent for the Common Stock, be
exchanged for a new
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certificate or certificates for a like number of shares of Common
Stock, which shall not bear the restrictive legend required by this
Section 2.5(e).
(f) Any Note or Common Stock issued upon the
conversion or exchange of a Note that, prior to the expiration of the holding
period applicable to sales thereof under Rule 144(k) under the Securities Act
(or any successor provision), is purchased or owned by the Company or any
Affiliate thereof may not be resold by the Company or such Affiliate unless
registered under the Securities Act or resold pursuant to an exemption from the
registration requirements of the Securities Act in a transaction which results
in such Notes or Common Stock, as the case may be, no longer being "restricted
securities" (as defined under Rule 144).
Section 2.6. Mutilated, Destroyed, Lost or Stolen Notes . In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its request the Trustee or an authenticating
agent appointed by the Trustee shall authenticate and make available for
delivery, a new Note, bearing a number not contemporaneously outstanding, in
exchange and substitution for the mutilated Note, or in lieu of and in
substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
The Trustee or such authenticating agent may authenticate any such
substituted Note and deliver the same upon the receipt of such security or
indemnity as the Trustee, the Company and, if applicable, such authenticating
agent may require. Upon the issuance of any substituted Note, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or is about to be converted into Common Stock shall become
mutilated or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Note, pay or authorize the payment of or convert or authorize the
conversion of the same (without surrender thereof except in the case of a
mutilated Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if applicable, to
such authenticating agent such security or indemnity as may be required by them
to save each of them harmless for any loss, liability, cost or expense caused by
or connected with such substitution, and, in case of destruction, loss or theft,
evidence satisfactory to the Company, the Trustee and, if applicable, any paying
agent or conversion agent of the destruction, loss or theft or such Note and of
the ownership thereof.
Every substituted Note issued pursuant to the provisions of this
Section 2.6 by virtue of the fact that any Note is destroyed, lost or stolen
shall constitute an additional contractual
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obligation of the Company, whether or not the destroyed, lost or stolen Note
shall be found at any time, and shall be entitled to all the benefits of (but
shall be subject to all the limitations set forth in) this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. To the
extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment or conversion of mutilated, destroyed, lost or stolen
Notes and shall preclude any and all other rights or remedies notwithstanding
any law or statute existing or hereafter enacted to the contrary with respect to
the replacement or payment or conversion of negotiable instruments or other
securities without their surrender.
Section 2.7. Temporary Notes . Pending the preparation of Notes in
certificated forms, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and make available for delivery temporary Notes (printed or
lithographed). Temporary Notes shall be issuable in any authorized denomination,
and substantially in the form of the Notes in certificated form, but with such
omissions, insertions and variations as may be appropriate for temporary Notes,
all as may be determined by the Company. Every such temporary Note shall be
executed by the Company and authenticated by the Trustee or such authenticating
agent upon the same conditions and in substantially the same manner, and with
the same effect, as the Notes in certificated form. Without unreasonable delay
the Company will execute and deliver to the Trustee or such authenticating agent
Notes in certificated form (other than in the case of Notes in global form) and
thereupon any or all temporary Notes (other than any such Note in global form)
may be surrendered in exchange therefor, at each office or agency maintained by
the Company pursuant to Section 5.2 and the Trustee or such authenticating agent
shall authenticate and deliver in exchange for such temporary Notes an equal
aggregate principal amount of Notes in certificated form. Such exchange shall be
made by the Company at its own expense and without any charge therefor. Until so
exchanged, the temporary Notes shall in all respects be entitled to the same
benefits and subject to the same limitations under this Indenture as Notes in
certificated form authenticated and made available for delivery hereunder.
Section 2.8. Cancellation of Notes Paid, Etc. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer, shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. After such cancellation, the Trustee
shall, if requested by the Company, deliver such cancelled Notes to the Company.
If the Company shall acquire any of the Notes, such acquisition shall not
operate as a redemption or satisfaction of the indebtedness represented by such
Notes unless and until the same are delivered to the Trustee for cancellation.
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Section 2.9. CUSIP Numbers. The Company in issuing the Notes may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
CUSIP numbers in notices of redemption as a convenience to Holders; provided,
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Notes or as contained in
any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Notes, and any such redemption shall not
be affected by any defect in or omission of such numbers. The Company will
promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1. Redemption Prices . The Company may not redeem the Notes
prior to May 18, 2000. At any time on or after May 18, 2000, the Company may, at
its option, redeem all or from time to time any part of the Notes on any date
prior to maturity, upon notice as set forth in Section 3.2, and at the optional
redemption prices set forth in the form of Note attached as Exhibit A hereto,
together with accrued interest to, but excluding, the date fixed for redemption.
Section 3.2. Notice of Redemption; Selection of Notes . In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.1, it shall fix a date for
redemption and it or, at its request, the Trustee in the name of and at the
expense of the Company, shall mail or cause to be mailed a notice of such
redemption at least thirty (30) days prior to the date fixed for redemption to
the holders of Notes so to be redeemed as a whole or in part at their last
addresses as the same appear on the Note register (provided, that if the Company
shall give such notice, it shall also give written notice, and written notice of
the Notes to be redeemed (including CUSIP numbers, if any), to the Trustee).
Such mailing shall be by first class mail. The notice if mailed in the manner
herein provided shall be conclusively presumed to have been duly given, whether
or not the holder receives such notice. In any case, failure to give such notice
by mail or any defect in the notice to the holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the date fixed for redemption, the redemption
price at which Notes are to be redeemed, the place or places of payment, that
payment will be made upon presentation and surrender of such Notes, that
interest accrued to the date fixed for redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portion
thereof to be redeemed will cease to accrue. Such notice shall also state the
current Conversion Price and the date on which the right to convert such Notes
or portions thereof into Common Stock will expire. If fewer than all the Notes
are to be redeemed, the notice of redemption shall identify the Notes to be
redeemed (including CUSIP numbers, if any). In
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case any Note is to be redeemed in part only, the notice of redemption shall
state the portion of the principal amount thereof to be redeemed and shall state
that on and after the date fixed for redemption, upon surrender of such Note, a
new Note or Notes in principal amount equal to the unredeemed portion thereof
will be issued.
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.2, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to redeem on the redemption date all
the Notes (or portions thereof) so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the appropriate
redemption price, together with accrued interest to, but excluding, the date
fixed for redemption; provided, that if such payment is made on the redemption
date it must be received by the Trustee or paying agent, as the case may be, by
10:00 a.m. New York City time, on such date. If any Note called for redemption
is converted pursuant hereto, any money deposited with the Trustee or any paying
agent or so segregated and held in trust for the redemption of such Note shall
be paid to the Company upon its written request, or, if then held by the Company
shall be discharged from such trust. If fewer than all the Notes are to be
redeemed, the Company will give the Trustee written notice in the form of an
Officers' Certificate not fewer than forty-five (45) days (or such shorter
period of time as may be acceptable to the Trustee) prior to the redemption date
as to the aggregate principal amount of Notes to be redeemed.
If fewer than all the Notes are to be redeemed, the Trustee shall
select the Notes or portions thereof to be redeemed (in principal amounts of
$1,000 or integral multiples thereof), by lot or, in its discretion, on a pro
rata basis. If any Note selected for partial redemption is converted in part
after such selection, the converted portion of such Note shall be deemed (so far
as may be) to be the portion to be selected for redemption. The Notes (or
portions thereof) so selected shall be deemed duly selected for redemption for
all purposes hereof, notwithstanding that any such Note is converted as a whole
or in part before the mailing of the notice of redemption.
Upon any redemption of less than all Notes, the Company and the Trustee
may (but need not) treat as outstanding any Notes surrendered for conversion
during the period of fifteen (15) days next preceding the mailing of a notice of
redemption and may (but need not) treat as outstanding any Note authenticated
and delivered during such period in exchange for the unconverted portion of any
Note converted in part during such period.
Section 3.3. Payment of Notes Called for Redemption . If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but
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excluding) the date fixed for redemption, and on and after said date (unless the
Company shall default in the payment of such Notes at the redemption price,
together with interest accrued to said date) interest on the Notes or portion of
Notes so called for redemption shall cease to accrue and such Notes shall cease
after the close of business on the Business Day next preceding the date fixed
for redemption to be convertible into Common Stock and, except as provided in
Sections 8.5 and 13.4, to be entitled to any benefit or security under this
Indenture, and the holders thereof shall have no right in respect of such Notes
except the right to receive the redemption price thereof and unpaid interest to
(but excluding) the date fixed for redemption. On presentation and surrender of
such Notes at a place of payment in said notice specified, the said Notes or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to (but
excluding) the date fixed for redemption; provided, that, if the applicable
redemption date is an interest payment date, the semi-annual payment of interest
becoming due on such date shall be payable to the holders of such Notes
registered as such on the relevant record date instead of the holders
surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes
or mail any notice of optional redemption during the continuance of a default in
payment of interest or premium on the Notes or of any Event of Default of which,
in the case of any Event of Default other than under Sections 7.1(a) or 7.1(b),
a Responsible Officer of the Trustee has knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid or duly provided for, bear
interest from the date fixed for redemption at the rate borne by the Note and
such Note shall remain convertible into Common Stock until the principal and
premium, if any, shall have been paid or duly provided for.
Section 3.4. Conversion Arrangement on Call for Redemption . In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article III, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption, shall be deemed to be
satisfied and discharged to the extent such amount is so paid by such
purchasers. If such an agreement is entered into, any Notes not duly surrendered
for conversion by the holders thereof may, at the option of the Company, be
deemed, to the fullest extent permitted by law, acquired by such purchasers from
such holders and
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(notwithstanding anything to the contrary contained in Article XV) surrendered
by such purchasers for conversion, all as of immediately prior to the close of
business on the date fixed for redemption (and the right to convert any such
Notes shall be extended through such time), subject to payment of the above
amount as aforesaid. A copy of any such agreement will be filed with the Trustee
prior to the date fixed for redemption. At the direction of the Company, the
Trustee shall hold and dispose of any such amount paid to it in the same manner
as it would monies deposited with it by the Company for the redemption of Notes.
Without the Trustee's prior written consent, no arrangement between the Company
and such purchasers for the purchase and conversion of any Notes 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 Notes between the Company and such purchasers to
which the Trustee has not consented in writing, including the costs and
expenses, including reasonable legal fees, incurred by the Trustee in the
defense of any claim or liability arising out of or in connection with the
exercise or performance of any of its powers, duties, responsibilities or
obligations under this Indenture.
Section 3.5. Redemption at Option of Holders .
(a) If there shall occur a Fundamental Change, then
each Noteholder shall have the right, at such holder's option, to require the
Company to redeem all of such holder's Notes, or any portion thereof that is an
integral multiple of $1,000 principal amount, on the date (the "Repurchase
Date") that is thirty (30) days after the date of the Company Notice (as defined
in Section 3.5(b) below) of such Fundamental Change (or, if such 30th day is not
a Business Day, the next succeeding Business Day). Such repayment shall be made
at 106.000% from the date of initial issuance of the Notes until May 14, 1998;
105.143% from May 15, 1988 until May 14, 1999; 104.286% from May 15, 1999 until
May 17, 2000; 103.429% from May 18, 2000 until May 14, 2001 and thereafter at
the following prices (expressed as percentages of the principal amount) in the
event of a Fundamental Change occurring during the 12-month period beginning May
15:
Year Percentage
---- ----------
2001............................102.571%
2002............................101.714%
2003............................100.857%
and 100% at May 15, 2004; provided, that if the Applicable Price with respect to
the Fundamental Change is less than the Reference Market Price, the Company
shall redeem such Notes at a price
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equal to the foregoing redemption price multiplied by the fraction obtained by
dividing the Applicable Price by the Reference Market Price. In each case, the
Company shall also pay to such holders accrued interest to, but excluding, the
Repurchase Date on the redeemed Notes; provided, that if such repayment date is
May 15 or November 15, then the interest payable on such date shall be paid to
the holder of record of the Note on the next preceding April 30 or October 31,
respectively.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and deliver to the holder thereof, at
the expense of the Company, a new Note or Notes, of authorized denominations, in
principal amount equal to the unredeemed portion of the Notes so presented.
(b) On or before the tenth day after the
occurrence of a Fundamental Change, the Company, or, at its request (which must
be received by the Trustee at least five (5) Business Days prior to the date the
Trustee is requested to give notice as described below), the Trustee in the name
of and at the expense of the Company, shall mail or cause to be mailed to all
holders of record on the date of the Fundamental Change a notice (the "Company
Notice") of the occurrence of such Fundamental Change and of the redemption
right at the option of the holders arising as a result thereof. Such notice
shall be mailed in the manner and with the effect set forth in the first
paragraph of Section 3.2. The Company shall also deliver a copy of the Company
Notice to the Trustee at such time as it is mailed to Noteholders.
Each Company Notice shall specify the circumstances constituting the
Fundamental Change, the Repurchase Date, the price at which the Company shall be
obligated to redeem Notes, the latest time on the Repurchase Date by which the
holder must exercise the redemption right (the "Fundamental Change Expiration
Time"), that the holder shall have the right to withdraw any Notes surrendered
prior to the Fundamental Change Expiration Time, a description of the procedure
which a Noteholder must follow to exercise such redemption right and to withdraw
any surrendered Notes, the place or places where the holder is to surrender such
holder's Notes, and the amount of interest accrued on each Note to the
Repurchase Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.5.
(c) For a Note to be so repaid at the option of
the holder, the Company must receive at the office or agency of the Company
maintained for that purpose in the Borough of Manhattan, The City of New York
or, at the option of such holder, the Corporate Trust Office, such Note with the
form entitled "Option to Elect Repayment Upon A Fundamental Change" on the
reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Fundamental Change Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
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(d) On or prior to the Repurchase Date, the
Company will deposit with the Trustee or with one or more paying agents (or, if
the Company is acting as its own paying agent, set aside, segregate and hold in
trust as provided in Section 5.4) an amount of money sufficient to repay on the
Repurchase Date all the Notes to be repaid on such date at the appropriate
redemption price, together with accrued interest to (but excluding) the
Repurchase Date; provided, that if such payment is made on the Repurchase Date
it must be received by the Trustee or paying agent, as the case may be, by 10:00
a.m. New York City time, on such date. Payment for Notes surrendered for
redemption (and not withdrawn) prior to the Fundamental Change Expiration Time
will be made promptly (but in no event more than three Business Days) following
the Repurchase Date by mailing checks for the amount payable to the holders of
such Notes entitled thereto as they shall appear on the registry books of the
Company.
(e) In the case of consolidation, merger,
conveyance, transfer or lease to which Section 15.6 applies, in which the Common
Stock of the Company is changed or exchanged as a result into the right to
receive securities, cash or other property which includes shares of Common Stock
of the Company or another Person that are, or upon issuance will be, traded on a
United States national securities exchange or approved for trading on an
established automated over-the-counter trading market in the United States and
such shares constitute at the time such change or exchange becomes effective in
excess of 50% of the aggregate fair market value of such securities, cash and
other property (as determined by the Company, which determination shall be
conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (which shall
comply with the Trust Indenture Act as in force at the date of execution of such
supplemental indenture) modifying the provisions of this Indenture relating to
the right of holders of the Notes to cause the Company to repurchase the Notes
following a Fundamental Change, including without limitation the applicable
provisions of this Section 3.5 and the definitions of the Applicable Price,
Common Stock, Fundamental Change and Reference Market Price, as appropriate, as
determined in good faith by the Company (which determination shall be conclusive
and binding), to make such provisions apply to the common stock and the issuer
thereof if different from the Company and Common Stock of the Company (in lieu
of the Company and the Common Stock of the Company).
ARTICLE IV
SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination . The Company covenants and
agrees, and each holder of Notes issued hereunder by his acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article IV; and each Person holding any Note, whether upon
original issue or upon transfer, assignment or exchange thereof, accepts and
agrees to be bound by such provisions. The Notes will be "pari passu" with the
Company's 7 3/4% Convertible Subordinated Debentures due 2001.
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The payment of the principal of, premium, if any, and interest on all
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
the Indenture) issued hereunder shall, to the extent and in the manner
hereinafter set forth, be subordinated and subject in right of payment to the
prior payment in full of all Senior Indebtedness, whether outstanding at the
date of this Indenture or thereafter incurred.
No provision of this Article IV shall prevent the occurrence of any
default or Event of Default hereunder.
Section 4.2. Payments to Noteholders . No payment shall be made with
respect to the principal of, or premium, if any, or interest on the Notes
(including, but not limited to, the redemption price with respect to the Notes
to be called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Senior Indebtedness
occurs and is continuing (or, in the case of Senior Indebtedness for
which there is a period of grace, in the event of such a default that
continues beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior Indebtedness), unless and
until such default shall have been cured or waived or shall have ceased
to exist; or
(ii) a default, other than a payment default, on Designated
Senior Indebtedness occurs and is continuing that then permits holders
of such Designated Senior Indebtedness to accelerate its maturity and
the Trustee receives a notice of the default (a "Payment Blockage
Notice") from a Representative or the Company.
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section unless and until (A) at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice, and (B) all scheduled payments of principal, premium, if any,
and interest on the Notes that have come due have been paid in full in cash. No
nonpayment default that existed or was continuing on the date of delivery of any
Payment Blockage Notice to the Trustee shall be, or be made, the basis for a
subsequent Payment Blockage Notice.
The Company may and shall resume payments on and distributions in
respect of the Notes upon the earlier of:
(1) the date upon which the default is cured or waived or ceases to
exist, or
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(2) in the case of a default referred to in clause (ii) above, 179 days
after the Payment Blockage Notice is received if the maturity of such Designated
Senior Indebtedness has not been accelerated, unless this Article IV otherwise
prohibits the payment or distribution at the time of such payment or
distribution.
Upon any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
creditors upon any dissolution or winding-up or liquidation or reorganization of
the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness, or payment thereof in
accordance with its terms provided for in cash or other payment satisfactory to
the holders of such Senior Indebtedness before any payment is made on account of
the principal of, premium, if any, or interest on the Notes (except payments
made pursuant to Article XIII from monies deposited with the Trustee pursuant
thereto prior to commencement of proceedings for such dissolution, winding-up,
liquidation or reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization of the Company or bankruptcy, insolvency,
receivership or other proceeding, any payment by the Company, or distribution of
assets of the Company of any kind or character, whether in cash, property or
securities, to which the holders of the Notes or the Trustee would be entitled,
except for the provisions of this Article IV, shall (except as aforesaid) be
paid by the Company or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
holders of the Notes or by the Trustee under this Indenture if received by them
or it, directly to the holders of Senior Indebtedness (pro rata to such holders
on the basis of the respective amounts of Senior Indebtedness held by such
holders, or as otherwise required by law or a court order) or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Senior Indebtedness
may have been issued, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness, before any payment or distribution is made to the holders of the
Notes or to the Trustee.
For purposes of this Article IV, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article IV with respect
to the Notes to the payment of all Senior Indebtedness which may at the time be
outstanding; provided, that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Company or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its
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property as an entirety, or substantially as an entirety, to another corporation
upon the terms and conditions provided for in Article XII shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 4.2 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
XII.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest on the
Notes (including, but not limited to, the redemption price with respect to the
Notes called for redemption in accordance with Section 3.2 or submitted for
redemption in accordance with Section 3.5, as the case may be, as provided in
the Indenture), except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 4.5, until all Senior
Indebtedness has been paid in full in cash or other payment satisfactory to the
holders of Senior Indebtedness or such acceleration is rescinded in accordance
with the terms of this Indenture. If payment of the Notes is accelerated because
of an Event of Default, the Company shall promptly notify holders of Senior
Indebtedness of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company or 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 Notes before all Senior Indebtedness is paid in
full in cash or other payment satisfactory to the holders of such Senior
Indebtedness, 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, such payment or distribution shall be held in trust for the
benefit of and shall be paid over or delivered to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Senior Indebtedness may have been issued, as their respective interests may
appear, as calculated by the Company, for application to the payment of a 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
such Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of such Senior Indebtedness.
Nothing in this Section 4.2 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.6. This Section 4.2 shall be subject
to the further provisions of Section 4.5.
Section 4.3. Subrogation of Notes. Subject to the payment in full of
all Senior Indebtedness, the rights of the holders of the Notes shall be
subrogated to the extent of the payments or distributions made to the holders of
such Senior Indebtedness pursuant to the provisions of this Article IV (equally
and ratably with the holders of all indebtedness of the Company which by its
express terms is subordinated to other indebtedness of the Company to
substantially the same extent as the Notes are subordinated and is entitled to
like rights of subrogation) to the rights of the holders of Senior Indebtedness
to receive payments or
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distributions of cash, property or securities of the Company applicable to the
Senior Indebtedness until the principal, premium, if any, and interest on the
Notes shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of the Senior Indebtedness of any cash,
property or securities to which the holders of the Notes or the Trustee would be
entitled except for the provisions of this Article IV, and no payment over
pursuant to the provisions of this Article IV, to or for the benefit of the
holders of Senior Indebtedness by holders of the Notes or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness,
and the holders of the Notes, be deemed to be a payment by the Company to or on
account of the Senior Indebtedness; and no payments or distributions of cash,
property or securities to or for the benefit of the holders of the Notes
pursuant to the subrogation provisions of this Article IV, which would otherwise
have been paid to the holders of Senior Indebtedness, shall be deemed to be a
payment by the Company to or for the account of the Notes. It is understood that
the provisions of this Article IV are and are intended solely for the purposes
of defining the relative rights of the holders of the Notes, on the one hand,
and the holders of the Senior Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Indebtedness, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of (and premium, if any) and interest on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the holders of
the Notes and creditors of the Company other than the holders of the Senior
Indebtedness, nor shall anything herein or therein prevent the Trustee or the
holder of any Note from exercising all remedies otherwise permitted by
applicable law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in respect of cash,
property or securities of the Company received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article IV, the Trustee, subject to the provisions of Section 8.1, and
the holders of the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such bankruptcy, dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the persons
entitled to participate in such distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon and all other facts pertinent thereto or to this Article IV.
Section 4.4. Authorization to Effect Subordination. Each holder of a
Note by the holder's acceptance thereof authorizes and directs the Trustee on
the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article IV and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form
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required in any proceeding referred to in the third paragraph of Section
7.2 hereof at least 30 days before the expiration of the time to file such
claim, the holders of any Senior Indebtedness or their representatives are
hereby authorized to file an appropriate claim for and on behalf of the holders
of the Notes.
Section 4.5. Notice to Trustee . The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company which would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article IV,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Indebtedness or from any trustee thereof; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Section 8.1,
shall be entitled in all respects to assume that no such facts exist; provided,
that if on a date not fewer than one Business Day prior to the date upon which
by the terms hereof any such monies may become payable for any purpose
(including, without limitation, the payment of the principal of, or premium, if
any, or interest on any Note) the Trustee shall not have received, with respect
to such monies, the notice provided for in this Section 4.5, then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the purpose
for which they were received, and shall not be affected by any notice to the
contrary which may be received by it on or after such prior date.
Notwithstanding anything in this Article IV to the contrary, nothing
shall prevent any payment by the Trustee to the Noteholders of monies deposited
with it pursuant to Section 13.1, and any such payment shall not be subject to
the provisions of Section 4.1 or 4.2.
The Trustee, subject to the provisions of Section 8.1, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. In the event that the Trustee determines in good
faith that further evidence is required with respect to the right of any person
as a holder of Senior Indebtedness to participate in any payment or distribution
pursuant to this Article IV, 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 IV, 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.
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Section 4.6. Trustee's Relation to Senior Indebtedness . The Trustee in
its individual capacity shall be entitled to all the rights set forth in this
Article IV in respect of any Senior Indebtedness at any time held by it, to the
same extent as any other holder of Senior Indebtedness, and nothing in Section
8.13 or elsewhere in this Indenture shall deprive the Trustee of any of its
rights as such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article IV, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 8.1, the Trustee shall not be liable to any holder of
Senior Indebtedness if it shall pay over or deliver to holders of Notes, the
Company or any other person money or assets to which any holder of Senior
Indebtedness shall be entitled by virtue of this Article IV or otherwise.
Section 4.7. No Impairment of Subordination . No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with.
Section 4.8. Certain Conversions Deemed Payment . For the purposes of
this Article IV only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article XV shall not be deemed to
constitute a payment or distribution on account of the principal of (or premium,
if any) or interest on Notes or on account of the purchase or other acquisition
of Notes, and (2) the payment, issuance or delivery of cash (except in
satisfaction of fractional shares pursuant to Section 15.3), property or
securities (other than junior securities) upon conversion of a Note shall be
deemed to constitute payment on account of the principal of such Note. For the
purposes of this Section 4.8, the term "junior securities" means (a) shares of
any stock of any class of the Company, or (b) securities of the Company which
are subordinated in right of payment to all Senior Indebtedness which may be
outstanding at the time of issuance or delivery of such securities to
substantially the same extent as, or to a greater extent than, the Notes are so
subordinated as provided in this Article. Nothing contained in this Article IV
or elsewhere in this Indenture or in the Notes is intended to or shall impair,
as among the Company, its creditors other than holders of Senior Indebtedness
and the Noteholders, the right, which is absolute and unconditional, of the
Holder of any Note to convert such Note in accordance with Article XV.
Section 4.9. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
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purposes as if such paying agent were named in this Article in addition to or in
place of the Trustee; provided, however, that the first paragraph of Section 4.5
shall not apply to the Company or any Affiliate of the Company if it or such
Affiliate acts as paying agent.
Section 4.10. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article IV, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Section 7.1, and the
Holders of the Notes shall be entitled to rely upon any order or decree entered
by any court of competent jurisdiction in which such insolvency, bankruptcy,
receivership, liquidation, reorganization, dissolution, winding up or similar
case or proceeding is pending, or a certificate of the trustee in bankruptcy,
liquidating trustee, custodian, receiver, assignee for the benefit of creditors,
agent or other person making such payment or distribution, delivered to the
Trustee or to the Holders of the Notes, for the purpose of ascertaining the
persons entitled to participate in such payment or distribution, the holders of
Senior Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
Section 4.12. 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 the Trustee
shall in good faith mistakenly pay over or distribute to Holders of the Notes 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 or
otherwise. The Trustee shall not be charged with knowledge of the existence of
Senior Indebtedness or of any facts that would prohibit any payment hereunder
unless a Trust Officer of the Trustee shall have received notice to that effect
at the address of the Trustee set forth herein. With respect to the holders of
Senior Indebtedness, the Trustee undertakes to perform or to observe only such
of its covenants or obligations as are specifically set forth in this Article
and no implied covenants or obligations with respect to holders of Senior
Indebtedness shall be read into this Indenture against the Trustee.
Section 4.13. Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights. The Trustee or any authenticating agent in its
individual capacity shall be entitled to all the rights set forth in this
Article 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 or any authenticating agent of any
of its rights as such holder.
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Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 8.6.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
Section 5.1. Payment of Principal Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any, and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. Each installment of interest on the Notes due on any semi-annual interest
payment date may be paid either (i) by check mailed to the address of the person
entitled thereto as it appears in the Note register or (ii) by transfer to an
account maintained by such person located in the United States; provided,
however, that payments to DTC will be made by wire transfer of immediately
available funds to the account of DTC or its nominee.
Section 5.2. Maintenance of Office or Agency . The Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion or redemption and where notices
and demands to or upon the Company in respect of the Notes and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency not
designated or appointed by the Trustee. 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 or the office or agency of
the Trustee in the Borough of Manhattan, The City of New York.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
that no such designation or rescission shall in any manner relieve the Company
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 any such designation or rescission and of any change in the location
of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent, and each of the Corporate Trust
Office of the Trustee and the office of the Trustee in the Borough of Manhattan,
The City of New York (which shall initially be 101 Barclay Street, New York, New
York 10286.
So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11.
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Section 5.3. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
Section 5.4. Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the
Trustee, or if the Trustee shall appoint such a paying agent, it will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.4:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any,
or interest on the Notes (whether such sums have been paid to
it by the Company or by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Notes)
to make any payment of the principal of and premium, if any,
or interest on the Notes when the same shall be due and
payable; and
(3) that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will
forthwith pay to the Trustee all sums so held in trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided, that if such deposit is made on the due
date, such deposit shall be received by the paying agent by 10:00 a.m. New York
City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest on the
Notes, set aside, segregate and hold in trust for the benefit of the holders of
the Notes a sum sufficient to pay such principal, premium, if any, or interest
so becoming due and will notify the Trustee of any failure to take such action
and of any failure by the Company (or any other obligor under the Notes) to make
any payment of the principal of, premium, if any, or interest on the Notes when
the same shall become due and payable.
(c) Anything in this Section 5.4 to the contrary notwithstanding,
the Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.4, such sums to be held by the
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Trustee upon the trusts herein contained and upon such payment by the Company or
any paying agent to the Trustee, the Company or such paying agent shall be
released from all further liability with respect to such sums.
(d) Anything in this Section 5.4 to the contrary notwithstanding,
the agreement to hold sums in trust as provided in this Section 5.4 is subject
to Sections 13.3 and 13.4.
Section 5.5. Corporate Existence. Subject to Article XII, the Company
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence.
Section 5.6. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock from such holder or
beneficial holder, the information required pursuant to Rule 144A(d)(4) under
the Securities Act upon the request of any holder or beneficial holder of the
Notes or such Common Stock and it will take such further action as any holder or
beneficial holder of such Notes or such Common Stock may reasonably request, all
to the extent required from time to time to enable such holder or beneficial
holder to sell its Notes or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by Rule 144A, as
such Rule may be amended from time to time. Upon the request of any holder or
any beneficial holder of the Notes or such Common Stock, the Company will
deliver to such holder a written statement as to whether it has complied with
such requirements.
Section 5.7. Stay, Extension and Usury Laws . The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of or
interest on the Notes as contemplated herein, wherever enacted, now or at any
time hereafter in force, or which may affect the covenants or the performance of
this Indenture and the Company (to the extent it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not, by resort to any such law, hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law has been enacted.
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ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1. Noteholders' Lists . The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each April 30 and October 31 in each year beginning
with November 15, 1997, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished so long as the Trustee is acting as Note registrar.
Section 6.2. Preservation and Disclosure of Lists .
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses of the
holders of Notes contained in the most recent list furnished to is as provided
in Section 6.1 or maintained by the Trustee in its capacity as note registrar,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 6.1 upon receipt of a new list so furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, 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 of Notes made pursuant to the
Trust Indenture Act.
Section 6.3. Reports by Trustee .
(a) Within sixty (60) days after May 21 of each year commencing with
the year 1998, the Trustee shall transmit to holders of Notes such reports dated
as of May 21 of the year in which such reports are made 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 such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon
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which the Notes are listed and with the Company. The Company will notify the
Trustee within a reasonable time when the Notes are listed on any stock exchange
and automated quotation system.
Section 6.4. Reports by Company .
(a) The Company shall file with the Trustee (and the Commission if
at any time after the Indenture becomes qualified under the Trust Indenture
Act), and transmit to holders of Notes, such information, documents and other
reports and such summaries thereof, as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant to such Act;
provided, that any such information, documents or reports required to be filed
with the Commission pursuant to Section 13 or 15(d) of the Exchange Act will be
field with the Trustee within fifteen (15) days after the same is so required to
be filed with the Commission.
Delivery of such information, documents and reports to the Trustee is
for informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
(b) The Company will deliver to the Trustee annually, commencing May
21, 1998, a certificate, from its principal executive officer, principal
financial officer or prinicpal accounting officer, stating whether or not to the
knowledge of the signer thereof the Company is in compliance (without regard to
periods of grace or notice requirements) with all conditions and covenants under
this Indenture, and if the Company shall not be in compliance, specifying such
non-compliance and the nature and status thereof of which such signer may have
knowledge.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1. Events of Default . In case one or more of the following
Events of Default (whatever the reason for such Event of Default and whether it
shall 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) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest upon any
of the Notes as and when the same shall become due and payable, and continuance
of such default for a period of thirty (30) days, whether or not such payment is
permitted under Article IV hereof; or
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(b) default in the payment of the principal of and premium, if any,
on any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption pursuant to Article III, by
acceleration or otherwise, whether or not such payment is permitted under
Article IV hereof; or
(c) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the Company in the Notes
or in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or to the Company and a Responsible
Officer of the Trustee by the holders of at least 25 percent in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4; or
(d) the Company shall commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of its
property, or shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for the benefit of
creditors, or shall fail generally to pay its debts as they become due; or
(e) an involuntary case or other proceeding shall be commenced
against the Company seeking liquidation, reorganization or other relief with
respect to it or its debts under any bankruptcy, insolvency or other similar law
now or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstated for a period of ninety (90) consecutive days;
then, and in each and every such case (other than an Event of Default specified
in Section 7.1(d) or (e)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than 25 percent in aggregate principal amount of the Notes then outstanding
hereunder determined in accordance with Section 9.4, by notice in writing to the
Company (and to the Trustee if given by Noteholders), may declare the principal
of all the Notes and the interest accrued thereon to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.1(d) or (e) occurs, the principal of all the Notes and the interest
accrued thereon shall be immediately and automatically due and payable without
necessity of further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes shall have been
so declared due and payable, and before any judgment or decree for the payment
of the monies due shall have been obtained or entered as hereinafter provided,
the Company shall
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pay or shall deposit with the Trustee a sum sufficient to pay all matured
installments of interest upon all Notes and the principal of and premium, if
any, on any and all Notes which shall have become due otherwise than by
acceleration (with interest on overdue installments of interest (to the extent
that payment of such interest is enforceable under applicable law) and on such
principal and premium, if any, at the rate borne by the Notes, to the date of
such payment or deposit) and amounts due to the Trustee pursuant to Section 8.6,
and if any and all defaults under this Indenture, other than the nonpayment of
principal of and premium, if any, and accrued interest on Notes which shall have
become due by acceleration, shall have been cured or waived pursuant to Section
7.7 -- then and in every such case the holders of a majority in aggregate
principal amount of the Notes then outstanding, by written notice to the Company
and to the Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; but no such waiver or rescission
and annulment shall extend to or shall affect any subsequent default or Event of
Default, or shall impair any right consequent thereon. The Company shall notify
a Responsible Officer of the Trustee, promptly upon becoming aware thereof, of
any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of the Notes, and the Trustee
shall continue as though no such proceeding had been taken.
Section 7.2. Payments of Notes on Default; Suit Therefor . The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon any of the Notes as and when the same shall become
due and payment, and such default shall have continued for a period of thirty
(30) days, or (b) in case default shall be made in the payment of the principal
of or premium, if any, on any of the Notes as and when the same shall have
become due and payable, whether at maturity of the Notes or in connection with
any redemption, by or under this Indenture declaration or otherwise -- then,
upon demand of the Trustee, the Company will pay to the Trustee, for the benefit
of the holders of the Notes, the whole amount that then shall have become due
and payable on all such Notes for principal and premium, if any, or interest, or
both, as the case may be, with interest upon the overdue principal and premium,
if any and (to the extent that payment of such interest is enforceable under
applicable law) upon the overdue installments of interest at the rate borne by
the Notes; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including reasonable compensation
to the Trustee, its agents, attorneys and counsel, and any expenses or
liabilities incurred by the Trustee hereunder other than through its negligence
or bad faith. Until such demand by the Trustee, the Company may pay the
principal of and premium, if any, and interest on the Notes to the registered
holders, whether or not the Notes are overdue.
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In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In the case there shall be pending proceedings for the bankruptcy or
for the reorganization of the Company or any other obligor on the Notes under
Title 11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.2, shall
be entitled and empowered, by intervention in such proceedings or otherwise, to
file and prove a claim or claims for the whole amount of principal, premium, if
any, and interest owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.6; and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including counsel fees incurred by it up to the date of such distribution. To
the extent that such payment of reasonable compensation, expenses, advances and
disbursements out of the estate in any such proceedings shall be denied for any
reason, payment of the same shall be secured by a lien on, and shall be paid out
of, any and all distributions, dividends, monies, securities and other property
which the holders of the Notes may be entitled to receive in such proceedings,
whether in liquidation or under any plan of reorganization or arrangement or
otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or 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,
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disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
Section 7.3. Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article VII shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon the
payment, if only partially paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee under
Section 8.6;
Second: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on the Notes in default in the order
of the maturity of the installments of such interest, with interest (to
the extent that such interest has been collected by the Trustee) upon
the overdue installments of interest at the rate borne by the Notes,
such payments to be made ratably to the persons entitled thereto;
Third: Subject to the provisions of Article IV, in case the
principal of the outstanding Notes shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for principal and premium,
if any, and interest, with interest on the overdue principal and
premium, if any, and (to the extent that such interest has been
collected by the Trustee) upon overdue installments of interest at the
rate borne by the Notes; and in case such monies shall be insufficient
to pay in full the whole amounts so due and unpaid upon the Notes, then
to the payment of such principal and premium, if any, and interest
without preference or priority of principal and premium, if any, over
interest, or of interest over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the
payment of the remainder, if any, to the Company or any other person
lawfully entitled thereto.
Section 7.4. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by availing of any provision of this Indenture to
institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice
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of an Event of Default and of the continuance thereof, as hereinbefore provided,
and unless also the holders of not less than 25 percent in aggregate principal
amount of the Notes then outstanding shall have made written request upon the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee for sixty (60) days after its receipt of such
notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding and no direction inconsistent with
such written request shall have been given to the Trustee pursuant to Section
7.7; it being understood and intended, and being expressly covenanted, by the
taker and holder of every Note with every other taker and holder and the
Trustee, that no one or more holders of Notes 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 holder of Notes, or to
obtain or seek to obtain priority over or preference to any other such holder,
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all holders of Notes
(except as otherwise provided herein). For the protection and enforcement of
this Section 7.4, each and every Noteholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any, and interest on such Note, on or after the
respective due dates expressed in such Note, or to institute suit for the
enforcement of any such payment on or after such respective dates against the
Company shall not be impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in his own behalf and for his own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, his rights of conversion as provided herein.
Section 7.5. Proceedings by Trustee. In case of an Event of Default the
Trustee may in its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings as the Trustee
shall deem most effectual to protect and enforce any of such rights, either by
suit in equity or by action at law or by proceeding in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement contained in
this Indenture or in aid of the exercise of any power granted in this Indenture,
or to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Section 7.6. Remedies Cumulative and Continuing . Except as provided in
Section 2.6, all powers and remedies given by this Article VII to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder
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of any of the Notes to exercise any right or power accruing upon any default or
Event of Default occurring and continuing as aforesaid shall impair any such
right or power, or shall be construed to be a waiver of any such default or any
acquiescence therein; and, subject to the provisions of Section 7.4, every power
and remedy given by this Article VII or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
Section 7.7. Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders . The holders of a majority in aggregate principal
amount of the Notes at the time outstanding determined in accordance with
Section 9.4 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, however, that (a) such
direction shall not be in conflict with any rule of law or with this Indenture,
and (b) the Trustee may take any other action deemed proper by the Trustee which
is not inconsistent with such direction. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.4 may on behalf of the holders of all of the Notes waive any past
default or Event of Default hereunder and its consequences except (i) a default
in the payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company to convert any Notes into Common Stock,
(iii) a default in the payment of redemption price pursuant to Article III or
(iv) a default in respect of a covenant or provisions hereof which under Article
XI cannot be modified or amended without the consent of the holders of all Notes
then outstanding. Upon any such waiver the Company, the Trustee and the holders
of the Notes shall be restored to their former positions and rights hereunder;
but no such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon. Whenever any default or Event of
Default hereunder shall have been waived as permitted by this Section 7.7, said
default or Event of Default shall for all purposes of the Notes and this
Indenture be deemed to have been cured and to be not continuing; but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
Section 7.8. Statement by Officers as to Default. The Company shall
deliver to the Trustee, as soon as possible and in any event within five days
after the Company becomes aware of the occurrence of any Event of Default or an
event which, with notice or the lapse of time or both, would constitute an Event
of Default, an Officers' Certificate setting forth the details of such Event of
Default or default and the action which the Company proposes to take with
respect thereto.
Section 7.9. Notice of Defaults . The Trustee shall, within ninety (90)
days after it has knowledge of the occurrence of a default, mail to all
Noteholders, as the names and addresses of such holders appear upon the Note
register, notice of all defaults known to a Responsible Officer, unless such
defaults shall have been cured or waived before the giving of such notice; and
provided, that, except in the case of default in the payment of the principal
of, or premium, if any, or interest on any of the Notes, the Trustee shall be
protected in withholding such notice if
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and so long as a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determine that the withholding of such notice is in the
interests of the Noteholders.
Section 7.10. Undertaking to Pay Costs . All parties to this Indenture
agree, and each holder of any Note by such holder's acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided, that the provisions of this Section 7.9 (to the
extent permitted by law) shall not apply to any suit instituted by the Trustee,
to any suit instituted by any Noteholder, or group of Noteholders, holding in
the aggregate more than ten percent in principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4, or to any suit instituted
by any Noteholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Note on or after the due date expressed in
such Note or to any suit for the enforcement of the right to convert any Note in
accordance with the provision of Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1. Duties and Responsibilities of Trustee . The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived) the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, expect that
(a) prior to the occurrence of an Event of Default and
after the curing or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and the Trust Indenture Act, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into
this Indenture and the Trust Indenture Act against the
Trustee; and
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(2) in the absence of bad faith and willful
misconduct on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
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
provisions hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein);
(b) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) 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 not less than a majority in principal amount of the Notes at the
time outstanding determined as provided in Section 9.4 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
(d) whether or not therein 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.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
Section 8.2. Reliance on Documents, Opinions, Etc. Except as
otherwise provided in Section 8.1:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced
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to the Trustee by a copy thereof certified by the Secretary or an Assistant
Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(e) 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 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; provided, however, that if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liability as a condition to so
proceeding; the reasonable expenses of every such examination shall be paid by
the Company or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Company upon demand;
(f) 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 by it with due care
hereunder;
(g) the Trustee shall not be deemed to have notice of any Event of
Default unless a Responsible Officer of the Trustee has actual knowledge thereof
or unless written notice of any event which is in fact such a default is
received by the Trustee at the Corporate Trust Office of the Trustee, and such
notice references the Notes and this Indenture;
(h) 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,
conclusively rely upon an Officers' Certificate; and
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(i) The Trustee, any authenticating agent, any paying agent, any
Note registrar or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of the Notes, may otherwise deal with
the Company with the same rights it would have if it were not Trustee,
authenticating agent, paying agent, Note registrar or such other agent.
Section 8.3. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
Section 8.4. Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
Section 8.5. Monies to Be Held in Trust. Subject to the provisions of
Section 13.4, all monies received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received.
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 may be
agreed from time to time by the Company and the Trustee.
Section 8.6. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, such compensation as shall be agreed to in writing by the
Company and the Trustee for all services rendered by it hereunder in any
capacity (which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), and the Company will pay or
reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances reasonably incurred or made by the Trustee in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee in any capacity
under this Indenture and its agents and any authenticating agent for, and to
hold them harmless against, any loss, liability or expense, including taxes
(other than taxes based upon, measured by or determined by the income of the
Trustee) incurred without negligence, willful misconduct, recklessness, or bad
faith on the part of the Trustee or such agent or authenticating agent, as the
case may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
costs and expenses of defending themselves against any claim of liability in the
premises. The obligations of the Company under this Section 8.6 to compensate or
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indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that of the Notes
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the holders of particular Notes. The
obligation of the Company under this Section shall survive the satisfaction and
discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.1(d) or (e) occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under any bankruptcy,
insolvency or similar laws.
The provisions of this Section shall survive the termination of this
Indenture.
Section 8.7. Officers Certificate as Evidence . Except as otherwise
provided in Section 8.1, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misconduct, recklessness,
or bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee.
Section 8.8. Conflicting Interests of Trustee . 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 Trustee
Indenture Act and this Indenture.
Section 8.9. Eligibility of Trustee . There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000. If such person publishes reports of condition at least annually,
pursuant to law or to the requirements of any supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such person 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 8.10. Resignation or Removal of Trustee .
(a) The Trustee may at any time resign by giving written notice of
such resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee
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shall have been so appointed and have accepted appointment thirty (30) days
after the mailing of such notice of resignation to the Noteholders, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Noteholder who has been a bona fide
holder of a Note or Notes for at least six (6) months may, subject to the
provisions of Section 7.9, on behalf of himself and all others similarly
situated, petition any such court for the appointment of a successor trustee.
Such court may thereupon, after such notice, if any, as it may deem proper and
prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section
8.8 after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes
for at least six (6) months; or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.9 and shall fail
to resign after written request therefor by the Company or
by any such Noteholder; 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, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) 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. If no
successor trustee shall have been so appointed and have accepted appointment
thirty (30) days after the mailing of such notice of removal to the Trustee, the
removed Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee. In either case, such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, remove the
Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate
principal amount of the Notes at the time outstanding may at any time remove the
Trustee and nominate a successor trustee which shall be deemed appointed as
successor trustee unless within ten (10) days after notice to the Company of
such nomination the Company objects thereto, in which case the Trustee so
removed or any Noteholder, upon the terms and conditions and otherwise as in
Section 8.10(a) provided, may petition any court of competent jurisdiction for
an appointment of a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee . Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amounts then due it pursuant to the provisions of Section
8.6, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.6.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless at the time of such acceptance such successor trustee shall
be qualified under the provisions of Section 8.8 and be eligible under the
provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger, Etc . Any corporation into which
the Trustee may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Trustee shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Trustee (including any
trust created by this Indenture), shall be the successor to the Trustee
hereunder without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided, that in the case of any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee such corporation shall be qualified under the provisions of Section 8.8
and eligible under the provisions of Section 8.9.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor
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to the Trustee may adopt the certificate of authentication of any predecessor
trustee or authenticating agent appointed by such predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Trustee or an
authenticating agent appointed by such successor trustee may authenticate such
Notes either in the name of any predecessor trustee hereunder or in the name of
the successor trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Notes in the name of any predecessor Trustee shall apply only to
its successor or successors by merger, conversion or consolidation.
Section 8.13. Limitation on Rights of Trustee as Creditor . If and when
the Trustee shall be or become a creditor of the Company (or any other obligor
upon the Notes), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of the claims against the Company (or any
such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1. Action by Noteholders . Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request, the giving of any notice, consent or waiver or the taking of any other
action), the fact that at the time of taking any such action, the holders of
such specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by Noteholders
in person or by agent or proxy appointed in writing, or (b) by the record of the
holders of Notes voting in favor thereof at any meeting of Noteholders duly
called and held in accordance with the provisions of Article X, or (c) by a
combination of such instrument or instruments and any such record of such a
meeting of Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.2. Proof of Execution by Noteholders . Subject to the
provisions of Section 8.1, 8.2 and 10.5, proof of the execution of any
instrument by a Noteholder or his agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.6.
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Section 9.3. Who are Deemed Absolute Owners . The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
person in whose name such Note shall be registered upon the Note register to be,
and may treat him as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of, premium, if any, and interest on such Note, for conversion of such Note and
for all other purposes; and neither the Company nor the Trustee nor any paying
agent nor any conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being, or upon his order, shall be valid, and, to the extent of the sum or sums
so paid, effectual to satisfy and discharge the liability for monies payable
upon any such Note.
Section 9.4. Company-Owned Notes Disregarded . In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or by any
person directly or indirectly controlling or controlled by or under direct or
indirect common control with the Company or any other obligor on the Notes shall
be disregarded and deemed not to be outstanding for the purpose of any such
determination; provided, that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction, consent, waiver or
other action only Notes which a Responsible Officer knows are so owned shall be
so disregarded. Notes so owned which have been pledged in good faith may be
regarded as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's right to vote
such Notes and that the pledgee is not the Company, any other obligor on the
Notes or a person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor. In
the case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee. Upon request of
the Trustee, the Company shall furnish to the Trustee promptly an Officers'
Certificate listing and identifying all Notes, if any, known by the Company to
be owned or held by or for the account of any of the above described persons;
and, subject to Section 8.1, the Trustee shall be entitled to accept such
Officers' Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the purposes
of any such determination.
Section 9.5. Revocation of Consents; Future Holders Bound . At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.1, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.2, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
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therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE X
NOTEHOLDERS' MEETINGS
Section 10.1. Purpose of Meetings . A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article X for any of the following purposes:
(1) to give any notice to the Company or to the
Trustee or to give any directions to the Trustee permitted
under this Indenture, or to consent to the waiving of any
default or Event of Default hereunder and its consequences, or
to take any other action authorized to be taken by Noteholders
pursuant to any of the provisions of Article VII;
(2) to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VIII.
(3) to consent to the execution of an indenture
or indentures supplemental hereto pursuant to the provisions
of Section 11.2; or
(4) to take any other action authorized to be taken
by or on behalf of the holders of any specified aggregate
principal amount of the Notes under any other provision of
this Indenture or under applicable law.
Section 10.2. Call of Meetings by Trustee . The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.1, to
be held at such time and at such place at a location within 10 miles of the
Corporate Trust Office or the Borough of Manhattan, The City of New York, as the
Trustee shall determine. Notice of every meeting of the Noteholders, setting
forth the time and the place of such meeting and in general terms the action
proposed to be taken at such meeting and the establishment of any record date
pursuant to Section 9.1, shall be mailed to holders of Notes at their addresses
as they shall appear on the Note register. Such notice shall also be mailed to
the Company. Such notices shall be mailed not less than twenty (20) nor more
than ninety (90) days prior to the date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
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Section 10.3. Call of Meetings by Company or Noteholders . In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent in aggregate principal amount of the Notes then
outstanding, shall have requested the Trustee to call a meeting of Noteholders,
by written request setting forth in reasonable detail the action proposed to be
taken at the meeting, and the Trustee shall not have mailed the notice of such
meeting within twenty (20) days after receipt of such request, then the Company
or such Noteholders may determine the time and the place at any location within
10 miles of the Corporate Trust Office or the Borough of Manhattan, The City of
New York for such meeting and may call such meeting to take any action
authorized in Section 10.1, by mailing notice thereof as provided in Section
10.2.
Section 10.4. Qualifications for Voting . To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes. The only
persons who shall be entitled to be present or to speak at any meeting of
Noteholders shall be the persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.5. Regulations . Notwithstanding any other provisions of
this Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.3, in which case the Company
or the Noteholders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by vote of the holders of a majority in principal
amount of the Notes represented at the meeting and entitled to vote at the
meeting.
Subject to the provisions of Section 9.4, at any meeting each
Noteholder or proxy holder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Note challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Notes held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Noteholders. Any meeting
of Noteholders duly called pursuant to the provisions of Section 10.2 or 10.3
may be adjourned from time to time by the holders of majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.
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Section 10.6. Voting . The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the principal amount of the Notes held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
duplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Noteholders shall be prepared by the secretary of
the meeting and there shall be attached to said record the original reports of
the inspectors of votes on any vote by ballot taken thereat and affidavits by
one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in
Section 10.2. The record shall show the principal amount of the Notes voting in
favor of or against any resolution. The record shall be signed and verified by
the affidavits of the permanent chairman and secretary of the meeting and one of
the duplicates shall be delivered to the Company and the other to the Trustee to
be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.7. No Delay of Rights by Meeting . Noting in this Article X
contained shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.1. Supplemental Indentures Without Consent of Noteholders .
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) to make provision with respect to the conversion rights of the
holders of Notes pursuant to the requirements of Section 15.6 and the redemption
obligations of the Company pursuant to the requirements of Section 3.5(e).
(b) subject to Article IV, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
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(c) to evidence the succession of another corporation to the
Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company pursuant
to Article XII.
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default.
(e) to provide for the issuance under this Indenture of Notes in
coupon form (including Notes registrable as to principal only) and to provide
for exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make such other provisions in regard to matters or questions
arising under this Indenture which shall not materially adversely affect the
interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Notes; or
(h) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualifications of this
Indenture under the Trust Indenture Act, or under any similar federal statute
hereafter enacted.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer and assignment of any property thereunder, but the Trustee
shall not be obligated to, but may in its discretion, enter into any
supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.1 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.2.
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Section 11.2. Supplemental Indentures with Consent of Noteholders .
With the consent (evidenced as provided in Article IX) of the holders of not
less than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may from time to time and at any time enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
or repurchase thereof, or impair the right of any Noteholder to institute suit
for the payment thereof, or make the principal thereof or interest or premium,
if any, thereon payable in any coin or currency other than that provided in the
Notes, or modify the provisions of this Indenture with respect to the
subordination of the Notes in a manner adverse to the Noteholders in any
material respect, or change the obligation of the Company to redeem any Note
upon the happening of a Fundamental Change in a manner adverse to the holder of
Notes, or impair the right to convert the Notes into Common Stock subject to the
terms set forth herein, including Section 15.6, without the consent of the
holder of each Note so affected, or (ii) reduce the aforesaid percentage of
Notes, the holders of which are required to consent to any such supplemental
indenture, without the consent of the holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.2 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.3. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article XI shall comply
with the Trust Indenture Act, as then in effect; provided, that this Section
11.3 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the
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execution of any supplemental indenture pursuant to the provisions of this
Article XI, this Indenture shall be and be deemed to be modified and amended in
accordance therewith and the respective rights, limitation of rights,
obligations, duties and immunities under this Indenture of the Trustee, the
Company and the holders of Notes shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 11.4. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article XI may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating agent duly appointed by the Trustee pursuant to Section 16.11)
and delivered in exchange for the Notes then outstanding, upon surrender of such
Notes then outstanding.
Section 11.5. Evidence of Compliance of Supplemental Indenture to Be
Furnished Trustee . The Trustee, subject to the provisions of Sections 8.1 and
8.2, may receive an Officers' Certificate and an Opinion of counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1. Company May Consolidate Etc. on Certain Terms . Subject
to the provisions of Section 12.2, nothing contained in this Indenture or in any
of the Notes shall prevent any consolidation or merger of the Company with or
into any other corporation or corporations (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other corporation
(whether or not affiliated with the Company), authorized to acquire and operate
the same and which shall be organized under the laws of the United States of
America, any state thereof or the District of Columbia; provided, that upon any
such consolidation, merger, sale, conveyance or lease, the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes, according to their tenor, and the due and punctual performance and
observance of all of the covenants and conditions of this Indenture to be
performed by the Company, shall be expressly assumed, by supplemental indenture
satisfactory in form to the Trustee, executed and delivered to the Trustee by
the corporation (if other than the Company) formed by such consolidation, or
into which the Company shall have been merged, or by the corporation
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which shall be acquired or leased such property, and such supplemental indenture
shall provide for the applicable conversion rights set forth in Section 15.6.
Section 12.2. Successor Corporation to Be Substituted . In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor corporation, by supplemental indenture, executed and delivered to
the Trustee and satisfactory in form to the Trustee, of the due and punctual
payment of the principal of and premium, if any, and interest on all of the
Notes and due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Company, such successor corporation shall
succeed to and be substituted for the Company, with the same effect as if it had
been named herein as the party of the first part. Such successor corporation
thereupon may cause to be signed, and may issue either in its own name or in the
name of Data General Corporation any or all of the Notes issuable hereunder
which theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor corporation instead of the
Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall deliver, or cause
to be authenticated and delivered, any Notes which previously shall have been
signed and delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the Notes
so issued shall in all respects have the same legal rank and benefit under this
Indenture as the Notes theretofore or thereafter issued in accordance with the
terms of this Indenture as though all of such Notes had been issued at the date
of the execution hereof. In the event of any such consolidation, merger, sale,
conveyance or lease, the person named as the"Company" in the first paragraph of
this Indenture or any successor which shall thereafter have become such in the
manner prescribed in this Article XII may be dissolved, wound up and liquidated
at any time thereafter and such person shall be released from its liabilities as
obligor and maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
Section 12.3. Opinion of Counsel to Be Given Trustee. The Trustee,
subject to Sections 8.1 and 8.2, shall receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any such consolidation, merger,
sale, conveyance or lease and any such assumption complies with the provisions
of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1. Discharge of Indenture . When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes which have
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been destroyed, lost or stolen and in lieu of or in substitution for which other
Notes shall have been authenticated and delivered) and not theretofore canceled,
or (b) all the Notes not theretofore canceled or delivered to the Trustee for
cancellation shall have become due and payable, or are by their terms to become
due and payable within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the giving of notice of
redemption, and the Company shall deposit with the Trustee, in trust, funds
sufficient to pay at maturity or upon redemption of all the Notes (other than
any Notes which shall have been mutilated, destroyed, lost or stolen and in lieu
of or in substitution for which other Notes shall have been authenticated and
delivered) not theretofore canceled or delivered to the Trustee for
cancellation, including principal and premium, if any, and interest due or to
become due to such date of maturity or redemption date, as the case may be, and
if in either case the Company shall also pay or cause to be paid all other sums
payable hereunder by the Company, then this Indenture shall cease to be of
further effect (except as to (i) remaining rights of registration of transfer,
substitution and exchange and conversion of Notes, (ii) rights hereunder of
Noteholders to receive payments of principal of and premium, if any, and
interest on, the Notes and the other rights, duties and obligations of
Noteholders, as beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and immunities of
the Trustee hereunder), and the Trustee, on demand of the Company accompanied by
an Officers' Certificate and an Opinion of Counsel as required by Section 16.5
and at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture; the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to compensate the
Trustee for any services thereafter reasonably and properly rendered by the
Trustee in connection with this Indenture or the Notes.
Section 13.2. Deposited Monies to Be Held in Trust by Trustee . Subject
to Section 13.4, all monies deposited with the Trustee pursuant to Section 13.1
and not in violation of Article IV shall be held in trust for the sole benefit
of the Noteholders and not to be subject to the subordination provisions of
Article IV, and such monies shall be applied by the Trustee to the payment,
either directly or through any paying agent (including the Company if acting as
its own paying agent), to the holders of the particular Notes for the payment or
redemption of which such monies have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest and premium, if
any.
Section 13.3. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.4. Return of Unclaimed Monies . Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders
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of Notes for two years after the date upon which the principal of, premium, if
any, or interest on such Notes, as the case may be, shall have become due and
payable, shall be repaid to the Company by the Trustee on demand and all
liability of the Trustee shall thereupon cease with respect to such monies; and
the holder of any of the Notes shall thereafter look only to the Company for any
payment which such holder may be entitled to collect unless an applicable
abandoned property law designates another Person.
Section 13.5. Reinstatement . If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.2 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.1 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.2;
provided, however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE XIV
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1. Indenture and Notes Solely Corporate Obligations . No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, 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 Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, or director or subsidiary,
as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or 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 expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1. Right to Convert . Subject to and upon compliance with
the provisions of this Indenture, the holder of any Note shall have the right,
at his or her option, at any time
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after ninety (90) days following the latest date of original issuance of the
Notes (without taking into account any over-allotment option exercised pursuant
to Section 3 of the Placement Memorandum dated May 15, 1997) and prior to the
close of business on May 15, 2004 (except that, with respect to any Note or
portion of a Note which shall be called for redemption, such right shall
terminate, except as provided in Section 15.2 or Section 3.4, at the close of
business on the Business Day next preceding the date fixed for redemption of
such Note or portion of a Note unless the Company shall default in payment due
upon redemption thereof) to convert the principal amount of any such Note, or
any portion of such principal amount which is $1,000 or an integral multiple
thereof, into that number of fully paid and non-assessable shares of Common
Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part in the manner provided, together with any required
funds, in Section 15.2. A holder of Notes is not entitled to any rights of a
holder of Common Stock until such holder has converted his Notes to Common
Stock, and only to the extent such Notes are deemed to have been converted to
Common Stock under this Article XV.
Section 15.2. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends . In order to
exercise the conversion privilege with respect to any Note in certificated form,
the holder of any such Note to be converted in whole or in part shall surrender
such Note, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.2, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.2, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 15.7. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the beneficial holder must complete the
appropriate instruction form for conversion pursuant to the Depository's
book-entry conversion program, deliver by book-entry delivery an interest in
such Note in global form, furnish appropriate endorsements and transfer
documents if required by the Company or the Trustee or conversion agent, and pay
the funds, if any, required by this Section 15.2 and any transfer taxes if
required pursuant to Section 15.7.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on
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conversion are to be issued in a name other than that of the Noteholder (as if
such transfer were a transfer of the Note or Notes (or portion thereof) so
converted), the Company shall issue and shall deliver to such holder at the
office or agency maintained by the Company for such purpose pursuant to Section
5.2, a certificate or certificates for the number of full shares of Common Stock
issuable upon such conversion of such Note or portion thereof in accordance with
the provisions of this Article and a check or cash in respect of any fractional
interest in respect of a share of Common Stock arising upon such conversion, as
provided in Section 15.3. In case any Note of a denomination greater than $1,000
shall be surrendered for partial conversion, and subject to Section 2.3, the
Company shall execute and the Trustee shall authenticate and deliver to the
holder of the Note so surrendered, without charge to him, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such
Note (or portion thereof) on the date on which the requirements set forth above
in this Section 15.2 have been satisfied as to such Note (or portion thereof),
and the person in whose name any certificate or certificates for shares of
Common Stock shall be issuable upon such conversion shall be deemed to have
become on said date the holder of record of the shares represented thereby;
provided, however, that any such surrender on any date when the stock transfer
books of the Company shall be closed shall constitute the person in whose name
the certificates are to be issued as the record holder thereof for all purposes
on the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
Any Note or portion thereof surrendered for conversion during the
period from the close of business on the record date for any interest payment
date to the close of business on the Business Day next preceding the following
interest payment date shall (unless such Note or portion thereof being converted
shall have been called for redemption during the period from the close of
business on such record date to the close of business on the Business Day next
preceding the following interest payment date) be accompanied by payment, in New
York Clearing House funds or other funds acceptable to the Company, of an amount
equal to the interest otherwise payable on such interest payment date on the
principal amount being converted; provided, however, that no such payment need
be made if there shall exist at the time of conversion a default in the payment
of interest on the Notes. Except as provided above in this Section 15.2, no
payment or other adjustment shall be made for interest accrued on any Note
converted or for dividends on any shares issued upon the conversion of such Note
as provided in this Article.
Upon the conversion of an interest in a Note in global form, the
Trustee, or the Custodian at the direction of the Trustee, shall make a notation
on such Note in global form as to the reduction in the principal amount
represented thereby.
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Section 15.3. Cash Payments in Lieu of Fractional Shares . No
fractional shares of Common Stock or scrip representing fractional shares shall
be issued upon conversion of Notes. If more than one Note shall be surrendered
for conversion at one time by the same holder, the number of full shares which
shall be issuable upon conversion shall be computed on the basis of the
aggregate principal amount of the Notes (or specified portions thereof to the
extent permitted hereby) so surrendered. If any fractional share of stock would
be issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market value thereof to
the holder of Notes. The current market value of a share of Common Stock shall
be the Closing Price on the first Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 15.4. Conversion Price . The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article XV.
Section 15.5. Adjustment of Conversion Price. The Conversion Price
shall be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price in effect at the opening of business on the date
following the date fixed for the determination of stockholders entitled to
receive such dividend or other distribution shall be reduced by multiplying such
Conversion Price by a fraction of which the numerator shall be the number of
shares of Common Stock outstanding at the close of business on the date fixed
for such determination and the denominator shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the day fixed for such determination. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.5(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price which would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them (for a period
expiring within 45 days after the date fixed for determination of stockholders
entitled to receive such rights or warrants) to subscribe for or purchase shares
of Common Stock at a price per share less than the Current Market Price (as
defined below) on the date fixed for determination of stockholders entitled to
receive such rights or warrants, the Conversion Price shall be adjusted so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the date fixed for determination of stockholders
entitled to receive such rights or warrants by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding at
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the close of business on the date fixed for determination of stockholders
entitled to receive such rights and warrants plus the number of shares which the
aggregate offering price of the total number of shares so offered would purchase
at such Current Market Price, and of which the denominator shall be the number
of shares of Common Stock outstanding on the date fixed for determination of
stockholders entitled to receive such rights and warrants plus the total number
of additional shares of Common Stock offered for subscription or purchase. Such
adjustment shall be successively made whenever any such rights and warrants are
issued, and shall become effective immediately after the opening of business on
the day following the date fixed for determination of stockholders entitled to
receive such rights or warrants. To the extent that shares of Common Stock are
not delivered after the expiration of such rights or warrants, the Conversion
Price shall be readjusted to the Conversion Price which would then be in effect
had the adjustments made upon the issuance of such rights or warrants been made
on the basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants, the value of such consideration, if other than cash, to be
determined by the Board of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in effect
at the opening of business on the day following the day upon which such
subdivision becomes effective shall be proportionately reduced, and conversely,
in case outstanding shares of Common Stock shall be combined into a smaller
number of shares of Common Stock, the Conversion Price in effect at the opening
of business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute
to all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.5(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.5(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.5(a) (any of the foregoing hereinafter in this Section 15.5(d) called
the "Securities")), then, in each such case (unless the Company elects to
reserve such Securities for distribution to the Noteholders upon the conversion
of the Notes so that any such holder converting Notes will receive upon such
conversion, in addition to the shares of Common Stock to which such holder is
entitled, the amount and kind of such Securities which such holder would have
received if such holder had converted its Notes into Common Stock
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immediately prior to the Record Date (as defined in Section 15.5(i) for such
distribution of the Securities)), the Conversion Price shall be reduced so that
the same shall be equal to the price determined by multiplying the Conversion
Price in effect on the Record Date with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price per share of
the Common Stock on such Record Date less the fair market value (as determined
by the Board of Directors, whose determination shall be conclusive, and
described in a resolution of the Board of Directors) on the Record Date of the
portion of the Securities so distributed applicable to one share of Common Stock
and the denominator shall be the Current Market Price per share of the Common
Stock, such reduction to become effective immediately prior to the opening of
business on the day following such Record Date; provided, however, that from and
after the first occurrence of a Section 11a(ii) Event, (as such term is defined
in the Renewed and Restated Rights Agreement, dated as of October 19, 1996,
between the Company and The Bank of New York, as in effect from time to time
(the "Rights Plan")), the Conversion Price with respect to Notes beneficially
owned by
(i) an Acquiring Person, an Adverse Person or an Associate or Affiliate
of an Acquiring Person or an Adverse Person (as each of such terms are
defined in the Rights Plan), (ii) a transferee of an Acquiring Person
or an Adverse Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person or the Adverse Person
becomes such, or (iii) a transferee of an Acquiring Person or an
Adverse Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person or the
Adverse Person becoming such and receives rights to purchase Series A
Junior Participating Stock, par value $.01 per share, of the Company
(the "Rights") pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person or the Adverse Person to
holders of equity interests in such Acquiring Person or Adverse Person
or to any Person with whom the Acquiring Person or the Adverse Person
has any continuing agreement, arrangement or understanding regarding
the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
the Rights Plan,
shall not be adjusted in accordance with this paragraph (d) in connection with
the distribution (or deemed distribution) of the Rights; and provided, further,
that in the event the then fair market value (as so determined) of the portion
of the Securities so distributed applicable to one share of Common Stock is
equal to or greater than the Current Market Price of the Common Stock on the
Record Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each Noteholder shall have the right to receive upon conversion the
amount of Securities such holder would have received had such holder converted
each Note on the Record Date. In the event that such dividend or distribution is
not so paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or distribution
had not been declared. If the Board of Directors determines the fair market
value of any distribution for purposes of this Section 15.5(d) by
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reference to the actual or when issued trading market for any securities, it
must in doing so consider the prices in such market over the same period used in
computing the Current Market Price of the Common Stock.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.5 (and no adjustment to the Conversion Price under
this Section 15.5 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.5(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.5 was made, (1) in the case of any such
rights or warrants which shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants
(assuming such holder had retained such rights or warrants), made to all
holders of Common Stock as of the date of such redemption or repurchase, and (2)
in the case of such rights or warrants which shall have expired or been
terminated without exercise by any holders thereof, the Conversion Price shall
be readjusted as if such rights and warrants had not been issued.
For purposes of this Section 15.5(d) and Sections 15.5(a) and (b), any
dividend or distribution to which this Section 15.5(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 15.5(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further
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Conversion Price reduction required by Sections 15.5(a) and (b) with respect to
such dividend or distribution shall then be made), except (A) the Record Date of
such dividend or distribution shall be substituted as "the date fixed for the
determination of stockholders entitled to receive such dividend or other
distribution" and "the date fixed for such determination" within the meaning of
Sections 15.5(a) and (b) and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of Section
15.5(a).
(e) In case the Company shall, by dividend or otherwise,
distribute to all holders of its Common Stock cash (excluding (x) any quarterly
cash dividend on the Common Stock to the extent the aggregate cash dividend per
share of Common Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding quarterly cash
dividend on the Common Stock to the extent that such preceding quarterly
dividend did not require any adjustment of the Conversion Price pursuant to this
Section 15.5(e) (as adjusted to reflect subdivisions or combinations of the
Common Stock), and (B) 3.75% of the arithmetic average of the Closing Price
(determined as set forth in Section 15.5(h)) during the ten Trading Days (as
defined in Section 15.5(h)) immediately prior to the date of declaration of such
dividend, and (y) any dividend or distribution in connection with the
liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary), then, in such case, the Conversion Price shall be reduced so that
the same shall equal the price determined by multiplying the Conversion Price in
effect immediately prior to the close of business on such Record Date by a
fraction of which the numerator shall be the Current Market Price of the Common
Stock on the Record Date less the amount of cash so distributed (and not
excluded as provided above) applicable to one share of Common Stock and the
denominator shall be such Current Market Price of the Common Stock, such
reduction to be effective immediately prior to the opening of business on the
day following the Record Date; provided, however, that in the event the portion
of the cash so distributed applicable to one share of Common Stock is equal to
or greater than the Current Market Price of the Common Stock on the Record Date,
in lieu of the foregoing adjustment, adequate provision shall be made so that
each Noteholder shall have the right to receive upon conversion the amount of
cash such holder would have received had such holder converted each Note on the
Record Date. In the event that such dividend or distribution is not so paid or
made, the Conversation Price shall again be adjusted to be the Conversion Price
which would then be in effect if such dividend or distribution had not been
declared. If any adjustment is required to be made as set forth in this Section
15.5(e) as a result of a distribution that is a quarterly dividend, such
adjustment shall be based upon the amount by which such distribution exceeds the
amount of the quarterly cash dividend permitted to be excluded pursuant hereto.
If an adjustment is required to be made as set forth in this Section 15.5(e)
above as a result of a distribution that is not a quarterly dividend, such
adjustment shall be based upon the full amount of the distribution.
(f) In case a tender or exchange offer made by the Company or
any subsidiary of the Company for all or any portion of the Common Stock shall
expire and such
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tender or exchange offer (as amended upon the expiration thereof) shall require
the payment to stockholders of consideration per share of Common Stock having a
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of Directors) as
of the last time (the "Expiration Time") tenders or exchanges may be made
pursuant to such tender or exchange offer (as it may be amended) that exceeds
the Closing Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price in effect
immediately prior to the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered or exchanged shares) on the Expiration Time multiplied by the Current
Market Price of the Common Stock on the Trading Day next succeeding the
Expiration Time and the denominator shall be the sum of (x) the fair market
value (determined as aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum specified in the terms
of the tender or exchange offer) of all shares validly tendered or exchanged and
not withdrawn as of the Expiration Time (the shares deemed so accepted, up to
any such maximum, being referred to as the "Purchased Shares") and (y) the
product of the number of shares of Common Stock outstanding (less any Purchased
Shares) on the Expiration Time and the Closing Price of the Common Stock on the
Trading Day next succeeding the Expiration Time, such reduction to become
effective immediately prior to the opening of business on the day following the
Expiration Time. In the event that the Company is obligated to purchase shares
pursuant to any such tender or exchange offer, but the Company is permanently
prevented by applicable law from effecting any such purchases or all such
purchases are rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender or exchange offer
had not been made.
(g) In case of a tender or exchange offer made by a person
other than the Company or any Subsidiary for an amount which increases the
offeror's ownership of Common Stock to more than 25% of the Common Stock
outstanding and shall involve the payment by such person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) at the last time (the "Expiration Time")
tenders or exchanges may be made pursuant to such tender or exchange offer (as
it shall have been amended) that exceeds the Closing Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, and in which, as of the
Expiration Time the Board of Directors is not recommending rejection of the
offer, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect immediately prior
to the Expiration Time by a fraction of which the numerator shall be the number
of shares of Common Stock outstanding (including any tendered or exchanged
shares) on the Expiration Time multiplied by the Closing Price of the Common
Stock on the Trading Day next succeeding the Expiration Time and the denominator
shall be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange
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offer) of all shares validly tendered or exchanged and not withdrawn as of the
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Purchased Shares") and (y) the product of the number of
shares of Common Stock outstanding (less any Purchased Shares) on the Expiration
Time and the Closing Price of the Common Stock on the Trading Day next
succeeding the Expiration Time, such reduction to become effective immediately
prior to the opening of business on the day following the Expiration Time. In
the event that such person is obligated to purchase shares pursuant to any such
tender or exchange offer, but such person is permanently prevented by applicable
law from effecting any such purchases or all such purchases are rescinded, the
Conversion Price shall again be adjusted to be the Conversion Price which would
then be in effect if such tender or exchange offer had not been made.
Notwithstanding the foregoing, the adjustment described in this Section 15.5(g)
shall not be made if, as of the Expiration Time, the offering documents with
respect to such offer disclose a plan or intention to cause the Company to
engage in any transaction described in Article XII.
(h) For purposes of this Section 15.5, the following
terms shall have the meaning indicated:
(1) "Closing Price" with respect to any securities on
any day shall mean the closing sale price regular way on such
day or, in case no such sale takes place on such day, the
average of the reported closing bid and asked prices, regular
way, in each case on the New York Stock Exchange, or, if such
security is not listed or admitted to trading on such
Exchange, on the principal national security exchange or
quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation
system, the average of the closing bid and asked prices of
such security on the over-the-counter market on the day in
question as reported by the National Quotation Bureau
Incorporated, or a similar generally accepted reporting
service, if not so available, in such manner as furnished by
any New York Stock Exchange member firm selected from time to
time by the Board of Directors for that purpose, or a price
determined in good faith by the Board of Directors or, to the
extent permitted by applicable law, a duly authorized
committee thereof, whose determination shall be conclusive.
(2) "Current Market Price" shall mean the average of
the daily Closing Prices per share of Common Stock for the ten
(10) consecutive Trading Days immediately prior to the date in
question; provided, however, that (1) if the "ex" date (as
hereinafter defined) for any event (other than the issuance or
distribution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pursuant
to Section 15.5(a), (b), (c), (d), (e), (f) or (g) occurs
during such ten consecutive Trading Days, the Closing Price
for each Trading Day prior to the "ex" date for such other
event shall be
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adjusted by multiplying such Closing Price by the same
fraction by which the Conversion Price is so required to be
adjusted as a result of such other event, (2) if the "ex" date
for any event (other than the issuance, distribution or
Fundamental Change requiring such computation) that required
an adjustment to the Conversion Price pursuant to Section
15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
"ex" date for the issuance or distribution requiring such
computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of
such other event, and (3) if the "ex" date for the issuance,
distribution or Fundamental Change requiring such computation
is prior to the day in question, after taking into account any
adjustment required pursuant to clause (1) or (2) of this
proviso, the Closing Price for each Trading Day on or after
such "ex" date shall be adjusted by adding thereto the amount
of any cash and the fair market value (as determined by the
Board of Directors or, to the extent permitted by applicable
law, a duly authorized committee thereof in a manner
consistent with any determination of such value for purposes
of Section 15.5(d), (f) or (g) whose determination shall be
conclusive and described in a resolution of the Board of
Directors or such duly authorized committee thereof, as the
case may be) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one
share of Common Stock as of the close of business on the day
before such "ex" date. For purposes of any computation under
Section 15.5(f) or (g), the Current Market Price of the Common
Stock on any date shall be deemed to be the average of the
daily Closing Prices per share of Common Stock for such day
and the next two succeeding Trading Days; provided, however,
that if the "ex" date for any event (other than the tender or
exchange offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section
15.5(a), (b), (c), (d), (e), (f) or (g) occurs on or after the
Expiration Time for the tender or exchange offer requiring
such computation and prior to the day in question, the Closing
Price for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a result of
such other event. For purposes of this paragraph, the term
"ex" date, (1) when used with respect to any issuance or
distribution, means the first date on which the Common Stock
trades regular way on the relevant exchange or in the relevant
market from which the Closing Price was obtained without the
right to receive such issuance or distribution, (2) when used
with respect to any subdivision or combination of shares of
Common Stock, means the first date on which the Common Stock
trades regular way on such exchange or in such market after
the time at which such subdivision or combination becomes
effective, and (3) when used with respect to any tender or
exchange offer means the first date on which
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the Common Stock trades regular way on such exchange or in
such market after the Expiration Time of such offer.
(3) "fair market value" shall mean the amount which a
willing buyer would pay a willing seller in an arm's length
transaction.
(4) "Record Date" shall mean, with respect to any
dividend, distribution or other transaction or event in which
the holders of Common Stock have the right to receive any
cash, securities or other property or in which the Common
Stock (or other applicable security) is exchanged for or
converted into any combination of cash, securities or other
property, the date fixed for determination of shareholders
entitled to receive such cash, securities or other property
(whether such date is fixed by the Board of Directors or by
statute, contract or otherwise).
(5) "Trading Day" shall mean (x) if the applicable
security is listed or admitted for trading on the New York
Stock Exchange or another national security exchange, a day on
which the New York Stock Exchange or another national security
exchange is open for business or (y) if the applicable
security is quoted on the Nasdaq National Market, a day on
which trades may be made on thereon or (z) if the applicable
security is not so listed, admitted for trading or quoted, any
day other than a Saturday or Sunday or a day on which banking
institutions in the State of New York are authorized or
obligated by law or executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.5 (a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to
time may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least 1% in
such price; provided,
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however, that any adjustments which by reason of this Section 15.5(j) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Article XV shall be made by
the Company and shall be made to the nearest cent or to the nearest one
hundredth of a share, as the case may be. No adjustment need be made for rights
to purchase Common Stock pursuant to a Company plan for reinvestment of
dividends or interest. To the extent the Notes become convertible into cash,
assets, property or securities (other than capital stock of the Company), no
adjustment need be made thereafter as to the cash, assets, property or such
securities. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein
provided, the Company shall promptly file with the Trustee and any conversion
agent other than the Trustee an Officers' Certificate setting forth the
Conversion Price after such adjustment and setting forth a brief statement of
the facts requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such adjustment of the
Conversion Price setting forth the adjusted Conversion Price and the date on
which each adjustment becomes effective and shall mail such notice of such
adjustment of the Conversion Price to the holder of each Note at his last
address appearing on the Note register provided for in Section 2.5 of this
Indenture, within twenty (20) days after execution thereof. Failure to deliver
such notice shall not affect the legality or validity of any such adjustment.
(l) In any case in which this Section 15.5 provides that an
adjustment shall become effective immediately after a record date for an event,
the Company may defer until the occurrence of such event (i) issuing to the
holder of any Note converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon such conversion
by reason of the adjustment required by such event over and above the Common
Stock issuable upon such conversion before giving effect to such adjustment and
(ii) paying to such holder any amount in cash in lieu of any fraction pursuant
to Section 15.3.
(m) For purposes of this Section 15.5, the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
Section 15.16. Effect of Reclassification, Consolidation, Merger or
Sale . If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.5(c) applies), (ii) any consolidation, merger or
combination of the Company with another corporation as a result of which holders
of Common Stock shall be entitled to receive stock, securities or other property
or assets (including cash) with respect to or in exchange for such Common Stock,
or (iii) any sale or conveyance of the properties and assets of the Company as,
or substantially as, an entirety to any other corporation as a result of which
holders of Common Stock shall be
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entitled to receive stock, securities or other property or assets (including
cash) with respect to or in exchange for such Common Stock, then the Company or
the successor or purchasing corporation, as the case may be, shall execute with
the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that such Note shall be convertible into the kind and
amount of shares of stock and other securities or property or assets (including
cash) receivable upon such reclassification, change, consolidation, merger,
combination, sale or conveyance by a holder of a number of shares of Common
Stock issuable upon conversion of such Notes (assuming, for such purposes, a
sufficient number of authorized shares of Common Stock available to convert all
such Notes) immediately prior to such reclassification, change, consolidation,
merger, combination, sale or conveyance assuming such holder of Common Stock did
not exercise his rights of election, if any, as to the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance (provided, that, if the kind or amount of
securities, cash or other property receivable upon such consolidation, merger,
statutory exchange, sale or conveyance is not the same for each share of Common
Stock in respect of which such rights of election shall not have been exercised
("nonelecting-share")), then for the purposes of this Section 15.6 the kind and
amount of securities, cash or other property receivable upon such consolidation,
merger, statutory exchange, sale or conveyance for each non-electing share shall
be deemed to be the kind and amount so receivable per share by a plurality of
the non-electing shares. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at his address appearing on the
Note register provided for in Section 2.5 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to
successive reclassifications, changes, consolidations, mergers, combinations,
sales and conveyances.
If this Section 15.6 applies to any event or occurrence, Section 15.5
shall not apply.
Section 15.17. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the person or
persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
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Section 15.18. Reservation of Shares; Shares to Be Fully Paid,
Compliance with Governmental Requirements; Listing of Common Stock . The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible endeavor to secure such registration or
approval, as the case may be.
The Company further covenants that if at any time the Common Stock
shall be listed on the New York Stock Exchange or any other national securities
exchange or automated quotation system the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that if rules of such exchange or automated quotation system
permit the Company to defer the listing of such Common Stock until the first
conversion of the Notes into Common Stock in accordance with the provisions of
this Indenture, the Company covenants to list such Common Stock issuable upon
conversion of the Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
Section 15.19. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature or extent or
calculation of any such adjustment when made, or with respect to the method
employed, or herein or in any supplemental indenture provided to be employed, in
making the same. The Trustee and any other conversion agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any
shares of Common Stock, or of any securities or property, which may at any time
be issued or delivered upon the conversion of any Note; and the Trustee and any
other conversion agent make no representations with respect thereto. Subject to
the provisions of Section 8.1, neither the
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Trustee nor any conversion agent shall be responsible for any failure of the
Company to issue, transfer or deliver any shares of Common Stock or stock
certificates or other securities or property or cash upon the surrender of any
Note for the purpose of conversion or to comply with any of the duties,
responsibilities or covenants of the Company contained in this Article. Without
limiting the generality of the foregoing, neither the Trustee nor any conversion
agent shall be under any responsibility to determine the correctness of any
provisions contained in any supplemental indenture entered into pursuant to
Section 15.6 relating either to the kind or amount of shares of stock or
securities or property (including cash) receivable by Noteholders upon the
conversion of their Notes after any event referred to in such Section 15.6 or to
any adjustment to be made with respect thereto, but, subject to the provisions
of Section 8.1, may accept as conclusive evidence of the correctness of any such
provisions, and shall be protected in relying upon, the Officers' Certificate
(which the Company shall be obligated to file with the Trustee prior to the
execution of any such supplemental indenture) with respect thereto.
Section 15.10. Notice to Holders Prior to Certain Actions . In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the holders of its
Common Stock of rights or warrants to subscribe for or purchase any share of any
class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of
the Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any shareholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
- -up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed to each
holder of Notes at his address appearing on the Note register provided for in
Section 2.5 of this Indenture, as promptly as possible but in any event at least
fifteen (15) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
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property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding-up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding-up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 16.2. Official Acts by Successor Corporation . Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any corporation that shall at the time be the lawful sole successor
of the Company.
Section 16.3. Addresses for Notices, Etc . Any notice or demand which
by any Indenture is required or permitted to be given or served by the Trustee
or by the holders of Notes on the Company shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Data General Corporation, 4400 Computer Drive, Westboro,
Massachusetts 01580, Attention: Treasurer. Any notice, direction, request or
demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, 101 Barclay Street, Floor 21 West, New
York, New York 10286.
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
him by first class mail, postage prepaid, at his address as it appears on the
Note register and shall be sufficiently given to him if so mailed within the
time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
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Section 16.4. Governing Law . This Indenture and each Note shall be
deemed to be a contract made under the laws of New York, and for all purposes
shall be construed in accordance with the laws of New York, without regard to
principles of conflicts of laws.
Section 16.5. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee . Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and an Opinion of Counsel stating that,
in the opinion of such counsel, all such conditions precedent have been complied
with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (1) a statement that the person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, 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 or not, in the opinion of such
person, such condition or covenant has been complied with.
Section 16.6. Legal Holidays . In any case where the date of maturity
of interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes 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 date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
Section 16.7. Trust Indenture Act . This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that, unless otherwise required by law,
notwithstanding the foregoing, this Indenture and the Notes issued hereunder
shall not be subject to the provisions of subsections (a)(1), (a)(2), and (a)(3)
of Section 314 of the Trust Indenture Act as now in effect or as hereafter
amended or modified; provided, further, that this Section 16.7 shall not require
this Indenture or the Trustee to be qualified under the Trust Indenture Act
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act, nor shall it constitute any admission or acknowledgment by
any party to such supplemental indenture that any such qualification is required
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.
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Section 16.8. No Security Interest Created . Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction where property of
the Company or its subsidiaries is located.
Section 16.9. Benefits of Indenture . Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the
parties hereto, any paying agent, any authenticating agent, any Note registrar
and their successors hereunder, the holders of Notes and the holders of Senior
Indebtedness, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 16.10. Table of Contents, Headings, Etc . The table of contents
and the titles and headings of the articles and sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.11. Authenticating Agent . The Trustee may appoint an
authenticating agent which shall be authorized to act on its behalf and subject
to its direction in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a person
eligible to serve as trustee hereunder pursuant to Section 8.9.
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written
notice of resignation to the Trustee and to the Company. The Trustee may at any
time terminate the agency of any authenticating agent by giving written notice
of termination 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
any authenticating agent shall cease to be eligible under this Section, the
Trustee shall either promptly appoint a successor authenticating agent or itself
assume the
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duties and obligations of the former authenticating agent under this Indenture,
and upon such appointment of a successor authenticating agent, if made, shall
give written notice of such appointment of a successor authenticating agent to
the Company and shall mail notice of such appointment of a successor
authenticating agent to all holders of Notes as the names and addresses of such
holders appear on the Note register.
The Trustee agrees to pay to the authenticating agent from time to time
reasonable compensation for its services (to the extent pre-approved by the
Company in writing), and the Trustee shall be entitled to be reimbursed for such
pre-approved payments, subject to Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this Section 16.11
shall be applicable to any authenticating agent.
Section 16.12. Execution in Counterparts . This Indenture may be
executed in any number of counterparts, each of which shall be an original, but
such counterparts shall together constitute but one and the same instrument.
The Bank of New York hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions hereinabove set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly signed, and their respective corporate seals to be hereunto affixed and
attested, all as of the date first written above.
DATA GENERAL CORPORATION
By: /s/ Robert C. McBride
----------------------
Robert C. McBride
Title: Vice President and
Treasurer
-------------------
THE BANK OF NEW YORK, as
Trustee
By: /s/Mary Jane Morrissey
-----------------------
Mary Jane Morrissey
Title: Vice President
--------------------
<PAGE>
EXHIBIT A
[For global Note only:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS, AND,
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE NOTE EVIDENCED
HEREBY IN AN OFFSHORE TRANSACTION; (2) AGREES THAT IT WILL NOT, PRIOR TO
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE SECURITY EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON STOCK
ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO DATA GENERAL CORPORATION OR
ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE BANK OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH TRUSTEE OR A SUCCESSOR
TRUSTEE, AS APPLICABLE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE
904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE
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SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT (AND WHICH CONTINUES TO BE
EFFECTIVE AT THE TIME OF SUCH TRANSFER); (3) PRIOR TO SUCH TRANSFER (OTHER THAN
A TRANSFER PURSUANT TO CLAUSE 1(F) ABOVE), IT WILL FURNISH TO THE BANK OF NEW
YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS THE TRUSTEE MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED
HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY PRIOR TO THE
EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO SALES OF THE NOTE EVIDENCED
HEREBY UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION),
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF
RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE BANK
OF NEW YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE). IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A
U.S. PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE BANK OF NEW
YORK, AS TRUSTEE (OR A SUCCESSOR TRUSTEE, AS APPLICABLE), SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED UPON THE EARLIER OF THE TRANSFER OF THE NOTE EVIDENCED HEREBY
PURSUANT TO CLAUSE 1(F) ABOVE OR UPON ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION). AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
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DATA GENERAL CORPORATION
6% CONVERTIBLE SUBORDINATED NOTE DUE 2004
No. ____ CUSIP
Data General Corporation, a corporation duly organized and validly
existing under the laws of the State of Delaware (herein called the "Company"),
which term includes any successor corporation under the Indenture referred to on
the reverse hereof, for value received hereby promises to pay to CEDE & CO. or
registered assigns, the principal sum of _________ ($_____) on May 15, 2004, at
the office or agency of the Company maintained for that purpose in the Borough
of Manhattan, The City of New York, or, at the option of the holder of this
Note, at the Corporate Trust Office, in such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts, and to pay interest, semi-annually on May
15 and November 15 of each year, commencing November 15, 1997, on said principal
sum at said office or agency, in like coin or currency, at the rate per annum of
6%, from May 15 or November 15, as the case may be, next preceding the date of
this Note to which interest has been paid or duly provided for, unless the date
hereof is a date to which interest has been paid or duly provided for, in which
case from the date of this Note, or unless no interest has been paid or duly
provided for on the Notes, in which case from May 21, 1997, until payment of
said principal sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any April 30 or October 31, as the case
may be, and before the following May 15 or November 15, this Note shall bear
interest from such May 15 or November 15; provided, however, that if the Company
shall default in the payment of interest due on such May 15 or November 15, then
this Note shall bear interest from the next preceding May 15 or November 15 to
which interest has been paid or duly provided for or, if no interest has been
paid or duly provided for on such Note, from May 21, 1997. The interest payable
on the Note pursuant to the Indenture on any May 15 or November 15 will be paid
to the person entitled thereto as it appears in the Note register at the close
of business on the record date, which shall be the April 30 or October 31
(whether or not a Business Day) next preceding such May 15 or November 15, as
provided in the Indenture; provided that any such interest not punctually paid
or duly provided for shall be payable as provided in the Indenture. Interest
may, at the option of the Company, be paid by check mailed to the registered
address of such person.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Indebtedness, as defined in the Indenture,
and provisions giving the holder of this Note the right to convert this Note
into Common Stock of the Company on the terms and subject to the limitations
referred to on the reverse hereof and as more fully specified in the Indenture.
Such
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further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with and governed by
the laws of New York, without regard to principles of conflicts of laws.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed under its corporate seal.
DATA GENERAL CORPORATION
By:______________________________
Attest:____________________________
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the
within-named Indenture.
Dated:
__________________________, as Trustee
By:______________________________
Authorized Signatory
By:______________________________
As Authenticating Agent (if different
from Trustee)
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<PAGE>
[FORM OF REVERSE OF NOTE]
DATA GENERAL CORPORATION
6% CONVERTIBLE SUBORDINATED NOTE DUE 2004
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 6% Convertible Subordinated Notes due 2004 (herein called the
"Notes"), limited to the aggregate principal amount of $212,750,000 all issued
or to be issued under and pursuant to an indenture dated as of May 21, 1997
(herein called the "Indenture"), between the Company and The Bank of New York,
as trustee (herein called the "Trustee"), to which Indenture and all indentures
supplemental thereto reference is hereby made for a description of the rights,
limitations of rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Notes.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of and accrued interest on all Notes
may be declared, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a majority in
aggregate principal amount of the Notes at the time outstanding, evidenced as in
the Indenture provided, to execute supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the
Indenture or of any supplemental indenture or modifying in any manner the rights
of the holders of the Notes; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Note, or reduce the rate or
extend the time of payment of interest thereon, or reduce the principal amount
thereof or premium, if any, thereon, or reduce any amount payable on redemption
thereof, or impair the right of any Noteholder to institute suit for the payment
thereof, or make the principal thereof or interest or premium, if any, thereon
payable in any coin or currency other than that provided in the Note, or modify
the provisions of the Indenture with respect to the subordination of the Notes
in a manner adverse to the Noteholders in any material respect, or change the
obligation of the Company to make redemption of any Note upon the happening of a
Fundamental Change in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set forth in
the Indenture, including Section 15.6 thereof, without the consent of the holder
of each Note so affected or (ii) reduce the aforesaid percentage of Notes, the
holders of which are required to consent to any such supplemental indenture,
without the consent of the holders of all Notes then outstanding. It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate principal amount
of the Notes at the time outstanding may on behalf of the holders of all of the
Notes waive any past default or Event of Default under
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the Indenture and its consequences except a default in the payment of interest
or any premium on or the principal of any of the Notes, a default in the payment
of redemption price pursuant to Article III or a failure by the Company to
convert any Notes into Common Stock of the Company. Any such consent or waiver
by the holder of this Note (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such holder and upon all future holders and
owners of this Note and any Notes which may be issued in exchange or substitute
hereof, irrespective of whether or not any notation thereof is made upon this
Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinate and subject in right of
payment to the prior payment in full of all Senior Indebtedness of the Company,
as defined in the Indenture, whether outstanding at the date of the Indenture or
thereafter incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this Note, by
accepting the same, agrees to and shall be bound by such provisions and
authorizes the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination so provided and appoints the Trustee
his attorney-in-fact for such purpose.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and any premium and interest
on this Note at the place, at the respective times, at the rate and in the coin
or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a year of
twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any integral multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the manner and
subject to the limitations provided in the Indenture, without payment of any
service charge but with payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any registration or
exchange of Notes, Notes may be exchanged for a like aggregate principal amount
of Notes of other authorized denominations.
The Notes will not be redeemable at the option of the Company prior to
May 18, 2000. At any time on or after May 18, 2000, and prior to maturity, the
Notes may be redeemed at the option of the Company as a whole, or from time to
time in part, upon mailing a notice of such redemption not less than 30 days
before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued interest to, but excluding, the date fixed
for redemption:
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If redeemed during the 12-month period beginning May 18, 2000 and ending May 14,
2001, at a redemption price of 103.429%, and if redeemed during the 12-month
period beginning May 15:
Year Percentage
---- ----------
2001............................................... 102.571%
2002............................................... 101.714%
2003............................................... 100.857%
and 100% at May 15, 2004; provided, that if the date fixed for redemption is on
May 15 or November 15, then the interest payable on such date shall be paid to
the holder of record on the next preceding April 30 or October 31, respectively.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at any
time prior to May 15, 2004, the Notes will be redeemable on the 30th day after
notice thereof at the option of the holder. Such payment shall be made at
106.000% from the date of initial issuance of the Notes until May 14, 1998; at
105.143% from May 15, 1998 until May 14, 1999; at 104.286% from May 15, 1999
through May 17, 2000; at 103.429% from May 18, 2000 until May 14, 2001, and at
the following prices (expressed as percentages of the principal amount) in the
event of a Fundamental Change occurring during the 12-month period beginning May
15:
Year Percentage
---- ----------
2001.............................................. 102.571%
2002.............................................. 101.714%
2003.............................................. 100.857%
and 100% at May 15, 2004; provided in each case that if the Applicable Price (as
defined in the Indenture) is less than the Reference Market Price (as defined in
the Indenture), the Company shall redeem such Notes at a price equal to the
foregoing repayment price multiplied by the fraction obtained by dividing the
Applicable Price by the Reference Market Price. In each case, the Company shall
also pay accrued interest, if any, on such Notes to, but excluding, the
repayment date; provided, that if such repayment date is May 15 or November 15,
then the interest payable on such date shall be paid to the holder of record of
the Note on the next preceding April 30 or October 31. The Company shall mail to
all holders of record of the Notes a notice of the occurrence of a Fundamental
Change and of the redemption right arising as a result thereof on or before the
10th day after the occurrence of such Fundamental Change. For a Note to be so
repaid at the option of the holder, the Company must receive at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
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The City of New York, such Note with the form entitled "Option to Elect
Repayment Upon a Fundamental Change" on the reverse thereof duly completed,
together with such Notes duly endorsed for transfer, on or before the 30th day
after the date of such notice (or if such 30th day is not a Business Day, the
immediately preceding Business Day).
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after 90 days following the latest date of
original issuance of the Notes and prior to the close of business on May 15,
2004, or, as to all or any portion hereof called for redemption, prior to the
close of business on the Business Day immediately preceding the date fixed for
redemption (unless the Company shall default in payment due upon redemption
thereof), to convert the principal hereof or any portion of such principal which
is $1,000 or an integral multiple thereof, into that number of shares of
Company's Common Stock, as said shares shall be constituted at the date of
conversion, obtained by dividing the principal amount of this Note or portion
thereof to be converted by the Conversion Price of $26.194 or such Conversion
Price as adjusted from time to time as provided in the Indenture, upon surrender
of this Note, together with a conversion notice as provided in the Indenture, to
the Company at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, or at the option of such
holder, the Corporate Trust Office, and, unless the shares issuable on
conversion are to be issued in the same name as this Note, duly endorsed by, or
accompanied by instruments of transfer in form satisfactory to the Company duly
executed by, the holder or by his duly authorized attorney. No adjustment in
respect of interest or dividends will be made upon any conversion; provided,
however, that if this Note shall be surrendered for conversion during the period
from the close of business on any record date for the payment of interest to the
close of business on the Business Day preceding the interest payment date, this
Note (unless it or the portion being converted shall have been called for
redemption during the period from the close of business on any record date for
the payment of interest to the close of business on the Business Day preceding
the interest payment date) must be accompanied by an amount, in New York
Clearing House funds or other funds acceptable to the Company, equal to the
interest payable on such interest payment date on the principal amount being
converted. No fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in respect of any
fraction of a share which would otherwise be issuable upon the surrender of any
Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for conversion on
or before the close of business on the date fixed for redemption, may be deemed
to be purchased from the holder of such Notes at an amount equal to the
applicable redemption price, together with accrued interest to the date fixed
for redemption, by one or more investment bankers or other purchasers who may
agree with the Company to purchase such Notes from the holders thereof and
convert them into Common Stock of the Company and to make payment for such Notes
as aforesaid to the Trustee in trust for such holders.
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Upon due presentment for registration of transfer of this Note at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, or at the option of the holder of this Note, at the Corporate Trust
Office, a new Note or Notes of authorized denominations for an equal aggregate
principal amount will be issued to the transferee in exchange thereof, subject
to the limitations provided in the Indenture, without charge except for any tax
or other governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent,
any conversion agent and any Note registrar may deem and treat the registered
holder hereof as the absolute owner of this Note (whether or not this Note shall
be overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar), for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor any other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any indenture supplemental thereto or in any
Note, or because of the creation of any indebtedness represented thereby, shall
be had against any incorporator, stockholder, employee, agent, officer or
director or subsidiary, as such, past, present or future, of the Company or of
any successor corporation, either directly or through the Company or 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, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York, without regard to principles of conflicts of laws.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
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ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -_______ Custodian _______
TEN ENT - as tenants by the (Cust) (Minor)
entireties
JT TEN - as joint tenants with under Uniform Gifts to Minors Act
right of survivorship
and not as tenants in
common ____________________________
(State)
Additional abbreviations may also be used
though not in the above list.
-93-
<PAGE>
CONVERSION NOTICE
To: DATA GENERAL CORPORATION
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion hereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Data General Corporation in accordance with the terms of the Indenture
referred to in this Note, and directs that the shares issuable and deliverable
upon such conversion, together with any check in payment for fractional shares
and any Notes representing any unconverted principal amount hereof, be issued
and delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Note not converted are to be
issued in the name of a person other than the undersigned, the undersigned will
check the appropriate box below and pay all transfer taxes payable with respect
thereto. Any amount required to be paid to the undersigned on account of
interest accompanies this Note.
Dated:
____________________
____________________
Signature(s)
____________________
Signature Guarantee
Fill in for registration
of shares of Common Stock
if to be issued, and Notes if
to be delivered, other than
to and in the name of the
registered holder:
_______________________
(Name)
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<PAGE>
________________________
(Street Address)
_________________________
(City, State and Zip Code)
Please print name and address
Principal amount to be converted
(if less than all): $___________
_________________________________
Social Security or Other Taxpayer
Identification Number
-95-
<PAGE>
ASSIGNMENT
For value received_______ hereby sell(s), assign(s) and transfer(s) unto_______
(Please insert social security or other Taxpayer Identification Number of
assignee) the within Note, and hereby irrevocably constitutes and
appoints_________ attorney to transfer the said Note on the books of the
Company, with full power of substitution in the premises.
In connection with any transfer of the Note within the period prior to
the expiration of the holding period applicable to sales thereof under Rule
144(k), under the Securities Act (or any successor provision), the undersigned
confirms that such Note is being transferred:
To Data General Corporation or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under the Securities Act
of 1933, as amended; or
To an Institutional Accredited Investor pursuant to and in compliance
with the Securities Act of 1933, as amended; or
Pursuant to and in compliance with Regulation S under the Securities
Act of 1933, as amended; or
Pursuant to and in compliance with Rule 144 under the Securities Act of
1933, as amended;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
-96-
<PAGE>
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
TO: DATA GENERAL CORPORATION
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Data General Corporation (the "Company")
as to the occurrence of a Fundamental Change with respect to the Company and
requests and instructs the Company to repay the entire principal amount of this
Note, or the portion thereof (which is $1,000 or an integral multiple thereof)
below designated, in accordance with the terms of the Indenture referred to in
this Note at the redemption price, together with accrued interest to, but
excluding, such date, to the registered holder hereof.
Dated:_______________ __________________________
__________________________
Signature(s)
NOTICE: The above signatures of
the holder(s) hereof must
correspond with the name as
written upon the face of the
Note in every particular without
alteration or enlargement or
any change whatever.
Principal amount to be
converted (if less than
all):
$_______________
_________________________________
Social Security or Other Taxpayer
Identification Number
-97-
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and
entered into as of May 15, 1997, by and among Data General Corporation, a
Delaware corporation (the "Company") and Morgan Stanley & Co. Incorporated and
Dillon, Read & Co. Inc. (the "Initial Purchasers") pursuant to the Placement
Agreement, dated as of May 15, 1997 (the "Placement Agreement"), between the
Company and the Initial Purchasers. In order to induce the Initial Purchasers to
enter into the Placement 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 Placement Agreement.
The Company agrees with the Initial Purchasers, (i) for their benefit
as Initial Purchasers and (ii) for the benefit of the holders from time to time
of the Notes (including the Initial Purchasers) and the holders from time to
time of the Common Stock issued upon conversion of the Notes (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Definition. Capitalized terms used herein without definition
shall have their respective meanings set forth in the Placement Agreement. As
used in this Agreement, the following terms shall have the following meanings:
Affiliate: "Affiliate" means, with respect to any specified
person, (i) any other person directly or indirectly controlling or controlled
by, or under direct or indirect common control with, such specified person or
(ii) any officer or director of such other person. For purposes of this
definition, the term "control" (including the terms "controlling," "controlled
by" and "under common control with") of a person means the possession, direct or
indirect, of the power (whether or not exercised) to direct or cause the
direction of the management and policies of a person, whether through the
ownership of voting securities, by contract, or otherwise.
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 executive order to close.
Common Stock: The shares of common stock, $.01 par value per
share, of the Company and any other shares of common stock as may constitute
"Common Stock" for purposes of the Indenture, in each case, as issuable or
issued upon conversion of the Notes.
Damages Accrual Period: See Section 2(e) hereof.
<PAGE>
Damages Payment Date: Each of the semi-annual interest
payment dates provided in the Indenture.
Deferral Period: See Section 2(d) hereof.
Effectiveness Period: The period commencing with the date
hereof and ending on the date that all Registrable Securities have ceased to be
Registrable Securities.
Event: 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 Date: See Section 2(a) hereof.
Holder: See the second paragraph of this Agreement.
Indenture: The Indenture, dated as of May 21, 1997, between
the Company and The Bank of New York, as Trustee, pursuant to which the Notes
are being issued, as amended or supplemented from time to time in accordance
with the terms hereof.
Initial Purchasers: Morgan Stanley & Co. Incorporated and
Dillon, Read & Co. Inc.
Initial Shelf Registration: See Section 2(a) hereof.
Liquidated Damages: See Section 2(e) hereof.
Losses: See Section 6 hereof.
Managing Underwriters: The investment banking firm or firms
that shall manage or co-manage an Underwritten Offering.
Notes: The 6% Convertible Subordinated Notes due 2004 of the
Company being issued and sold pursuant to the Placement Agreement and the
Indenture.
Notice Holder: See Section 2(d)(i) hereof.
Placement Agreement: See the first paragraph of this
Agreement.
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<PAGE>
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 material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
Record Holder: (i) With respect to any Damages Payment Date
relating to any Note as to which any such Liquidated Damages have accrued, the
registered holder of such Note on the record date with respect to the interest
payment date under the Indenture on which such Damages Payment Date shall occur
and (ii) with respect to any Damages Payment Date relating to any Common Stock
as to which any such Liquidated Damages have accrued, the registered holder of
such Common Stock 15 days prior to the next succeeding Damages Payment Date.
Registrable Securities: (A) The Common Stock of the Company
into which the Notes are convertible or converted, whether or not such Notes
have been converted, and at all times subsequent thereto, and any Common Stock
issued with respect thereto upon any stock dividend, split or similar event
until, in the case of any such Common Stock, (i) it is effectively registered
under the Securities Act and disposed of in accordance with the Registration
Statement covering it, (ii) it is saleable by the holder thereof pursuant to
Rule 144(k) (or any successor provision) or (iii) it is sold to the public
pursuant to Rule 144, and, as a result of the event or circumstance described in
any of the foregoing clauses (i) through (iii), the legends with respect to
transfer restrictions required under the Indenture (other than any such legends
required solely as the consequence of the fact that such Common Stock (or the
Notes, upon the conversion of which such Common Stock was issued or is issuable)
is owned by, or was previously owned by, the Company or an Affiliate of the
Company) are removed or removable in accordance with the terms of the Indenture;
and (B) the Notes, until, in the case of any such Note, (i) it is converted into
shares of Common Stock in accordance with the terms of the Indenture, (ii) it is
effectively registered under the Securities Act and disposed of in accordance
with the Registration Statement covering it, (iii) it is saleable by the holder
thereof pursuant to Rule 144(k) (or any successor provision) or (iv) it is sold
to the public pursuant to Rule 144, and, as a result of the event or
circumstance described in any of the foregoing clauses (ii) through (iv), the
legends with respect to transfer restrictions required under the Indenture
(other than any such legends required solely as the consequence of the fact that
such Note is owned by, or was previously owned by, the Company or an Affiliate
of the Company) are removed or removable in accordance with the terms of the
Indenture.
Registration Expenses: See Section 5 hereof.
Registration Statement: Any registration statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement,
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<PAGE>
including post-effective amendments, all exhibits, and all material incorporated
by reference or deemed to be incorporated by reference in such registration
statement.
Requisite Information: See Section 2(d) hereof.
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.
Selling Period: See Section 2(d)(i) hereof
Shelf Registration: See Section 2(a) hereof.
Special Counsel: Ropes & Gray or such successor counsel as
shall be specified by the Holders of a majority of the Registrable Securities,
the reasonable fees and expenses of which will be paid by the Company pursuant
to Section 5 hereof.
Subsequent Shelf Registration: See Section 2(b) hereof.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The Trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
2. Shelf Registration.
(a) Shelf Registration. The Company shall prepare and file
with the SEC, as soon as practicable but in any event on or prior to the date
sixty (60) days following the latest date of original issuance of the Notes (the
"Filing Date"), a Registration Statement for an offering to be made on a
continuous basis pursuant to Rule 415 of the Securities Act (a "Shelf
Registration") registering the resale from time to time by Holders thereof of
all of the Registrable Securities (the "Initial Shelf Registration"). The
Initial Shelf Registration shall be on Form S-3 or another appropriate form
permitting registration of such Registrable Securities for resale by the Holders
in the manner or manners designated by them. If the Holders of a
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<PAGE>
majority of Registrable Securities so elect, an offering of Registrable
Securities pursuant to the Shelf Registration Statement may be effected in the
form of an Underwritten Offering; provided that the Company shall not be
obligated to arrange for more than three such Underwritten Offerings. The
Company shall use its reasonable efforts to cause the Initial Shelf Registration
to be declared effective under the Securities Act as soon as practicable and to
keep the Initial Shelf Registration continuously effective under the Securities
Act until the earlier of the expiration of the Effectiveness Period or the date
a Subsequent Shelf Registration, as defined below, covering all of the
Registrable Securities has been declared effective under the Securities Act.
(b) If the Initial Shelf Registration or any Subsequent Shelf
Registration, as defined below, ceases to be effective for any reason as a
result of the issuance of a stop order by the SEC at any time during the
Effectiveness Period, the Company shall use its 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 in a manner reasonably expected to obtain the withdrawal of
the order suspending the effectiveness thereof, or file an additional Shelf
Registration covering all of the Registrable Securities (a "Subsequent Shelf
Registration"). If a Subsequent Shelf Registration is filed, the Company shall
use its reasonable efforts to cause the Subsequent Shelf Registration to be
declared effective as soon as practicable after such filing and to keep such
Registration Statement continuously effective until the end of the Effectiveness
Period.
(c) The Company shall supplement and amend the Shelf
Registration if required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration, if
required by the Securities Act, or if reasonably requested by the Initial
Purchasers or by the Trustee on behalf of the Holders of a majority of the
Registrable Securities covered by such Registration Statement or by any Managing
Underwriter of such Registrable Securities in the event of an Underwritten
Offering of the Registrable Securities.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell its Registrable Securities pursuant to a Shelf
Registration and related Prospectus, it will do so only in accordance with this
Section 2(d). Each Holder of Registrable Securities agrees to give written
notice to the Company at least five Business Days prior to any intended
distribution of Registrable Securities under the Shelf Registration, which
notice shall specify the date on which such Holder intends to begin such
distribution and any information with respect to such Holder and the intended
distribution of Registrable Securities by such Holder as may be required to
amend the Registration Statement or supplement the related Prospectus with
respect to such intended distribution of Registrable Securities by such Holder
(the "Requisite Information"). In the event the Holder fails to provide the
Requisite Information in its initial notice of its intention to distribute the
Registrable Securities pursuant to the Registration Statement, the Company will
promptly request such Holder to provide such Requisite Information. As soon as
practicable after the date such notice and Requisite
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<PAGE>
Information is provided, and in any event within four Business Days after such
date, the Company shall either:
i. (A) If necessary, prepare and file with the Commission a
post-effective amendment to the Shelf Registration or 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 such
Registration Statement will not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, and so that, as thereafter delivered
to purchasers of the Registrable Securities being sold thereunder, such
Prospectus will comply in all material respects with the rules and requirements
under the Securities Act and will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; (B) provide each Notice Holder (as defined below)
copies of any documents filed pursuant to Section 2(d)(i)(A); and (C) inform
each Notice Holder that the Company has complied with its obligations in Section
2(d)(i)(A) (or that, if the Company has filed a post-effective amendment to the
Shelf Registration which has not yet been declared effective, the Company will
notify the Notice Holder to that effect, will use its reasonable efforts to
secure the effectiveness of such post-effective amendment and will promptly
notify the Notice Holder when the amendment has become effective); each Holder
who has given notice of intention to distribute such Holder's Registrable
Securities in accordance with Section 2(d) hereof (a "Notice Holder") will sell
all or any of such Registrable Securities pursuant to the Shelf Registration and
related Prospectus only during the 45-day period commencing with the date on
which the Company gives notice, pursuant to Section 2(d)(i)(C), that the
Registration Statement and Prospectus may be used for such purpose (such 45-day
period is referred to as a "Selling Period"). The Notice Holders will not sell
any Registrable Securities pursuant to such Registration Statement or Prospectus
after such Selling Period without giving a new notice of intention to sell
pursuant to Section 2(d) hereof and receiving a further notice from the Company
pursuant to Section 2(d)(i)(C) hereof.
ii. In the event (A) of the happening of any event of the kind
described in Section 3(c)(ii), 3(c)(iii), 3(c)(iv), 3(c)(v), or 3(c)(vi) hereof
or (B) that, in the judgment of the Company, it is advisable to suspend use of
the Prospectus for a discrete period of time due to pending material corporate
developments or similar material events that have not yet been publicly
disclosed and as to which the Company believes that public disclosure would not
be in the best interests of the Company, the Company shall deliver a certificate
in writing, signed by an authorized executive officer of the Company, to each
Notice Holder, the Special Counsel and the Managing Underwriters, if any, that
the use of the Prospectus has been suspended and, upon receipt of such
certificate, each such Notice Holder's Selling Period will not commence or
resume, as the case may be, until such Notice Holder's receipt of copies of the
supplemented or amended Prospectus provided for in Section 2(d)(i)(A) hereof, 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
-6-
<PAGE>
by reference in such Prospectus. The Company will use its reasonable efforts to
ensure that the use of the Prospectus may be resumed, and the Selling Period
will commence or resume, as the case may be, as soon as practicable and, in the
case of a pending development or event referred to in Section 2(d)(ii)(B)
hereof, as soon as the earlier of (x) public disclosure of such pending material
corporate development or similar material event or (y) in the judgment of the
Company, public disclosure of such material corporate development or similar
material event would be in the best interests of the Company. Notwithstanding
the foregoing, the Company shall not under any circumstances be entitled to
exercise its right under this Section 2(d)(ii) to defer the commencement of a
Selling Period except as follows: the Company may defer the commencement of a
Selling Period in accordance with this Section 2(d)(ii) for a period not to
exceed 30 days in any three-month period, or not to exceed an aggregate of 60
days in any 12-month period, and the period for which a Selling Period is
suspended shall not exceed fifteen (15) days unless the Company shall deliver to
such Notice Holders a second notice to the effect set forth above, which shall
have the effect of extending the period during which such Selling Period is
deferred by up to an additional fifteen (15) days, or such shorter period of
time as is specified in such second notice. In no event shall the Company be
permitted to extend the period during which such Selling Period is deferred (a
"Deferral Period") beyond such thirty (30) day period from and after the date a
Notice Holder provides notice to the Company in accordance with this Section
2(d) of its intention to distribute Registrable Securities.
(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
has not been filed on or prior to the Filing Date, (ii) prior to the end of the
Effectiveness Period, the SEC shall have issued a stop order suspending the
effectiveness of the Shelf Registration or proceedings have been initiated with
respect to the Shelf Registration under Section 8(d) or 8(e) of the Securities
Act, (iii) the aggregate number of days in any one Deferral Period exceeds the
periods permitted pursuant to Section 2(d)(ii) hereof or (iv) the number of
Deferral Periods exceeds the number permitted pursuant to Section 2(d)(ii)
hereof (each of the events of a type described in any of the foregoing clauses
(i) through (iv) are individually referred to herein as an "Event," and the
Filing Date in the case of clause (i), the date on which the effectiveness of
the Shelf Registration has been suspended or proceedings with respect to the
Shelf Registration under Section 8(d) or 8(e) of the Securities Act have been
commenced in the case of clause (ii), the date on which the duration of a
Deferral Period exceeds the periods permitted by Section 2(d)(ii) hereof in the
case of clause (iii), and the date of the commencement of a Deferral Period that
causes the limit on the number of Deferral Periods under Section 2(d)(ii) hereof
to be exceeded in the case of clause (iv), being referred to herein as an "Event
Date"). Events shall be deemed to continue until the date of the termination of
such Event, which shall be the following dates with respect to the respective
types of Events: the date the Initial Registration Statement is filed in the
case of an Event of the type described in clause (i), the date that all stop
orders suspending effectiveness of the Shelf Registration have been removed and
the proceedings initiated with respect to the Shelf Registration under Section
8(d) or 8(e) of the
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<PAGE>
Securities Act have terminated, as the case may be, in the case of Events of the
types described in clause (ii), termination of the Deferral Period which caused
the aggregate number of days in any one Deferral Period to exceed the number
permitted by Section 2(d)(ii) to be exceeded in the case of Events of the type
described in clause (iii), and termination of the Deferral Period the
commencement of which caused the number of Deferral Periods permitted by Section
2(d)(ii) to be exceeded in the case of Events of the type described in clause
(iv).
Accordingly, upon the occurrence of any Event and until such time as
there are no Events which have occurred and are continuing (a "Damages Accrual
Period"), commencing on the Event Date on which such Damages Accrual Period
began, the Company agrees to pay, as liquidated damages, and not as a penalty,
an additional amount (the "Liquidated Damages"): (A)(i) to each holder of a Note
that is a Notice Holder, accruing at a rate equal to one-half of one percent per
annum (50 basis points) on the aggregate principal amount of Notes held by such
Notice Holder and (ii) to each holder of Common Stock that is a Notice Holder,
accruing at a rate equal to one-half of one percent per annum (50 basis points)
calculated on an amount equal to the product of (x) the then-applicable
Conversion Price (as defined in the Indenture), or, in the event that each Note
has been converted to Common Stock, the Conversion Price applicable to the Note
last converted, times (y) the number of shares of Common Stock held by such
holder; and (B) if the Damages Accrual Period continues for a period in excess
of thirty (30) days from the Event Date, from and after the end of such thirty
(30) days until such time as there are no Events which have occurred and are
continuing, (i) to each holder of a Note (whether or not a Notice Holder),
accruing at a rate equal to one-half of one percent per annum (50 basis points)
on the aggregate principal amount of Notes held by such holder and (ii) to each
holder of Common Stock (whether or not a Notice Holder), accruing at a rate
equal to one-half of one percent per annum (50 basis points) calculated on an
amount equal to the product of (x) the then applicable Conversion Price (as
defined in the Indenture), times (y) the number of shares of Common Stock held
by such holder. Notwithstanding the foregoing, no Liquidated Damages shall
accrue under clause (A) of the preceding sentence during any period for which
Liquidated Damages accrue under clause (B) of the preceding sentence or as to
any Registrable Securities from and after the expiration of the Effectiveness
Period. The rate of accrual of the Liquidated Damages with respect to any period
shall not exceed the rate provided for in this paragraph notwithstanding the
occurrence of multiple concurrent Events.
The Company shall pay the Liquidated Damages due on any Notes or Common
Stock by depositing with the Trustee under the Indenture, in trust, for the
benefit of the holders of Notes or Common Stock or Notice Holders, as the case
may be, entitled thereto, at least one Business Day prior to the applicable
Damages Payment Date, sums sufficient to pay the Liquidated Damages accrued or
accruing since the last preceding Damages Payment Date through such Damages
Payment Date. The Liquidated Damages shall be paid by the Trustee to the Record
Holders on each Damages Payment Date by wire transfer of immediate available
funds to the accounts specified by them or by mailing checks to their registered
addresses as they appear in the Note register (as defined in the Indenture), in
the case of the Notes, and in the register of the Company for the Common Stock,
in the case of the Common Stock, if no
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<PAGE>
such accounts have been specified on or before the Damage Payment Date;
provided, however, that any Liquidated Damages accrued with respect to any Note
or portion thereof called for redemption on a redemption date, redeemed or
repurchased in connection with a Fundamental Change (as defined in the
Indenture) on a repurchase date, or converted into 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 Note or portion thereof for redemption,
repurchase or conversion on the applicable redemption date, repurchase date or
conversion date, as the case may be, on such date (or promptly following the
conversion date, in the case of conversion of a Note). The Trustee shall be
entitled, on behalf of the holders of Notes, holders of Common Stock and Notice
Holders, to seek any available remedy for the enforcement of this Agreement,
including the payment of such Liquidated Damages. 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, in addition to the
payment of Liquidated Damages.
All of the Company's obligations set forth in this Section 2(e) which
are outstanding with respect to any Registrable Securities 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 the Agreement pursuant to Section 8(o)).
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 (other than the Initial
Purchasers) by reason of the failure of the Shelf Registration to be filed or
declared effective or unavailable (absolutely or as a practical matter) for
effecting resales of Registrable Securities, as the case may be, in accordance
with the provisions hereof.
3. Registration Procedures. In connection with the Company's
registration obligations under Section 2 hereof, the Company shall effect such
registrations to permit the sale of the Registrable Securities in accordance
with the intended method or methods of disposition thereof, and pursuant thereto
the Company shall as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the Holders thereof in
accordance with the intended method or methods of distribution thereof, and use
its reasonable efforts to cause each such Registration Statement to become
effective and remain effective as provided herein; provided, that before filing
any such Registration Statement or Prospectus or any amendments or supplements
thereto (other than documents that would be incorporated or deemed to be
incorporated therein by reference and that the Company is required by applicable
securities laws or stock exchange requirements to file) the Company shall
furnish to the Initial Purchasers, the Special Counsel
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<PAGE>
and the Managing Underwriters of such offering, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review of
the Initial Purchasers, the Special Counsel and such Managing Underwriters, and
the Company shall not file any such Registration Statement or amendment thereto
or any Prospectus or any supplement thereto (other than such documents which,
upon filing, would be incorporated or deemed to be incorporated by reference
therein and that the Company is required by applicable securities laws or stock
exchange requirements to file) to which the Holders of a majority of the
Registrable Securities covered by such Registration Statement, the Initial
Purchasers or the Special Counsel shall reasonably object in writing within two
full Business Days.
(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; 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 comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement and Prospectus during the applicable 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.
(c) Notify the Notice Holders, the Initial Purchasers, the
Special Counsel and the Managing Underwriters, if any, promptly, and (if
required by any such person) confirm such notice in writing, (i) when a
Prospectus, any Prospectus supplement, a Registration Statement or a
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 become effective, (ii) of any request by the SEC or
any other federal or state governmental authority for amendments or supplements
to a Registration statement or related Prospectus or for additional information,
(iii) of the suspension of the effectiveness of a 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 existence of any fact or happening of
any event which makes any statement of a material fact in such Registration
Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue or which would require the making of
any changes in the Registration Statement or prospectus in order that, in the
case of the Registration Statement, it will 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 that in the case
of the Prospectus, it will 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, and (vi) of the Company's determination that a
post-effective amendment to a Registration Statement would be appropriate.
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(d) Use its 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 for qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment.
(e) If reasonably requested by the Initial Purchasers or the
Managing Underwriters, if any, or the Holders of a majority of the Registrable
Securities being sold, (i) promptly incorporate in a Prospectus supplement or
post-effective amendment to a Registration Statement such information as the
Initial Purchasers, the Special Counsel, the Managing Underwriters, if any, or
such Holders, in connection with any offering of Registrable Securities, agree
should be included therein as required by applicable law, and (ii) make all
required filings of such Prospectus supplement or such post-effective amendment
as soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or 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) Furnish to each selling Holder, the Special Counsel and
the Initial Purchasers, and each Managing Underwriter, if any, without charge,
at least one conformed copy of the Registration Statement or Statements and any
amendment thereto, including financial statements but excluding schedules, all
documents incorporated or deemed to be incorporated therein by reference and all
exhibits (unless requested in writing by such selling Holder, Special Counsel,
the Initial Purchasers or the Managing Underwriters).
(g) Deliver to each selling Holder, the Special Counsel and
the Initial Purchasers and each Managing Underwriter, if any, in connection with
any offering of Registrable Securities, 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
persons may reasonably request; and the Company hereby consents to the use of
such Prospectus or each amendment or supplement thereto by each of the selling
Holders of Registrable Securities and the underwriters, if any, in connection
with any offering and sale of the Registrable Securities covered by such
Prospectus or any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify or cooperate with the selling Holders, the Managing
Underwriters, if any, and the Special Counsel 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 selling Holder or Managing Underwriter reasonably requests in writing; keep
each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective
and do any and all other acts or things necessary or advisable to
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enable the disposition in such jurisdictions of the Registrable Securities
covered by the applicable Registration Statement; provided, that the Company
will not be required to (i) qualify generally to do business in any jurisdiction
where it is not then so qualified 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) Cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities within the United States, except as may be
required solely as a consequence of the nature of any selling Holder, in which
case the Company will cooperate in all reasonable respects with the filing of
such Registration Statement and the granting of such approvals, as may be
necessary to enable the selling Holder or Holders thereof or the Managing
Underwriters, if any, to consummate the disposition of such Registrable
Securities.
(j) During any Selling Period (other than during a Deferral
Period) immediately upon the existence of any fact or the occurrence of any
event as a result of which a Registration Statement contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or a
Prospectus contains any untrue statement of a material fact or omits 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, promptly prepare and file (subject to the proviso in
Section 3(a)) a post-effective amendment to each Registration Statement or a
supplement to the related Prospectus or any document incorporated therein by
reference or file any other required document (such as a Current Report on Form
8-K) that would be incorporated by reference into the Registration Statement so
that the Registration Statement shall 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 so that the
Prospectus will 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, use its reasonable efforts
to cause it to become effective as soon as practicable.
(k) Enter into such agreements (including, in the event of an
Underwritten Offering, an underwriting agreement in form, scope and substance as
is customary in Underwritten Offerings) and take all such other actions in
connection therewith (including, in the event of an Underwritten Offering, those
reasonably requested by the Managing Underwriters, if any, or the Holders of a
majority of the Registrable Securities being sold) in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into, and if the
registration is an underwritten registration, (i) make such representations and
warranties, subject to the Company's ability to do so, to the Holders of such
Registrable Securities and the underwriters
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with respect to the business of the Company and its subsidiaries, the
Registration Statement, Prospectus and documents incorporated by reference or
deemed incorporated by reference, if any, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in underwritten
offerings and confirm the same if and when requested; (ii) use its reasonable
efforts to obtain opinions of counsel to the Company and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any, Special Counsel and the
Holders of a majority of the Registrable Securities being sold) addressed to
each of the underwriters covering the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such Special Counsel and Managing Underwriters; (iii) use its
reasonable efforts to obtain "cold comfort" letters and updates thereof from the
independent accountants of the Company (and, if necessary, any other independent
accountants of any business acquired or to be acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to the Board of Directors of the Company
and each of the Managing Underwriters, if any, such letters to be in customary
form and covering matters of the type customarily covered in "cold comfort"
letters in connection with the Underwritten Offerings; and (iv) deliver such
documents and certificates as may be reasonably requested by the Holders of a
majority of the Registrable Securities being sold, the Special Counsel and the
Managing Underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made pursuant
to clause (i) above and to evidence compliance with any customary conditions
contained in the underwriting agreement or other agreement entered into by the
Company. The above shall be done at each closing under such underwriting or
similar agreement as and to the extent required thereunder.
(l) If requested in connection with a disposition of
Registrable Securities pursuant to a Registration Statement, make available for
inspection by a representative of the Holders of Registrable Securities being
sold, any Managing Underwriter participating in any disposition of Registrable
Securities, if any, and any attorney or accountant retained by such selling
Holders or underwriter, financial and other records, pertinent corporate
documents and properties of the Company and its subsidiaries, and cause the
executive officers, directors and employees of the Company and its subsidiaries
to supply all information reasonably requested by any such representative,
Managing Underwriter, attorney or accountant in connection with such
disposition; subject to reasonable assurances by each such person that such
information will only be used in connection with matters relating to such
Registration Statement; 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, 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
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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.
(m) Comply with all applicable rules and regulations of the
SEC and make generally available to its security holders 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) (i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
commencing after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(n) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not bearing any restrictive
legends; and enable such Registrable Securities to be in such denominations and
registered in such names as such Holders may request.
(o) Provide the Trustee under the Indenture and the transfer
agent for the Common Stock with printed certificates for the Registrable
Securities which are in a form eligible for deposit with The Depository Trust
Company.
(p) Cause the Common Stock covered by the Registration
Statement to be listed on each securities exchange or quoted on each automated
quotation system on which any of the Company's "Common Stock," as that term is
defined in the Indenture, is then listed or quoted no later than the date the
Registration Statement is declared effective and, in connection therewith, to
the extent applicable, to make such filings under the Exchange Act (e.g., the
filing of a Registration Statement on Form 8-A) and to have such filings
declared effective thereunder.
(q) Cooperate and assist in any filings required to be made
with the National Association of Securities Dealers, Inc.
(r) Prior to any registration of the Notes pursuant to this
Agreement, or at such earlier time as may be so required, qualify the Indenture
under the Trust Indenture Act of 1939, as amended.
4. Holder's Obligations. Each Holder agrees, by acquisition of the
Notes and 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 the notice and Requisite
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<PAGE>
Information required pursuant to Section 2(d) hereof and such other information
regarding such Holder and the distribution of such Registrable Securities as the
Company may from time to time reasonably request. The Company may exclude from
such registration the Registrable Securities of any Holder who does not furnish
such information provided above for so long as such information is not so
furnished. Each Holder of Registrable Securities as to which any Registration
Statement is being effected 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 Holder not misleading. 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
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 such Holder or
its plan of distribution necessary to make the statements in such Prospectus, in
light of the circumstances under which they were made, not misleading.
5. Registration Expenses. All fees and expenses incident to the
Company's performance of or compliance with this Agreement shall be borne by the
Company whether or not any of the Registration Statements become 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 SEC or the National Association of
Securities Dealers, Inc. and (y) relating to compliance with federal securities
or Blue Sky laws (including, without limitation, fees and disbursements of
Special Counsel in connection with Blue Sky qualifications of the Registrable
Securities under the laws of such jurisdictions as the Managing Underwriters, if
any, or Holders of a majority of the Registrable Securities being sold may
reasonably 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 and of printing prospectuses if
the printing of prospectuses is requested by the Special Counsel or the Holders
of a majority of the Registrable Securities included in any Registration
Statement), (iii) the reasonable fees and disbursements of the Trustee and its
counsel and of the registrar and transfer agent for the Common Stock, (iv)
messenger, telephone and delivery expense relating to the performance of the
Company's obligations hereunder, (v) reasonable fees and disbursements of
counsel for the Company and the Special Counsel in connection with the Shelf
Registration (provided that the Company shall not be liable for the fees and
expenses of more than one separate firm, in addition to counsel for the Company,
for all parties participating in any transaction hereunder), (vi) fees and
disbursements of all independent accountants referred to in Section 3(k)(iii)
hereof (including the expenses of any special audit and "cold comfort" letters
required by or incident to such performance) and (vii) Securities Act liability
insurance, to the extent obtained by the Company in its sole discretion. In
addition, the Company shall pay its internal expenses (including, without
limitation, all salaries and expenses of its officers and employees performing
legal or accounting duties), the expense of any annual audit, the fees and
expenses
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incurred in connection with the listing of the securities to be registered on
any securities exchange on which similar securities issued by 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 Registrable Securities shall pay (a) all underwriting discounts and
commissions, all fees and expenses of its counsel in connection with any
Underwritten Offering and all other selling and registration expenses to the
extent that the Company is prohibited by applicable Blue Sky laws from paying
such other selling and registration expenses for or on behalf of such seller of
Registrable Securities; and (b) all fees and expenses in connection with any
Underwritten Offering occuring after the first Underwritten Offering to the
extent that such fees and expenses exceed the fees and expenses incurred in
connection with an offering of Registrable Securities that is not an
Underwritten Offering.
6. Indemnification.
(a) Indemnification by the Company. The Company shall
indemnify and hold harmless each Initial Purchaser, each Holder and each person,
if any, who controls either Initial Purchaser or any Holder (within the meaning
of either Section 15 of the Securities Act of Section 20(a) of the Exchange Act)
from and against all losses, liabilities, 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, except as to either
Initial Purchaser or any Holder insofar as such Losses arise out of or are based
upon the information relating to any Initial Purchaser or such Holder furnished
to the Company in writing by such Initial Purchaser or such Holder expressly for
use therein; provided, that the Company shall not be liable to any Holder of
Registrable Securities (or any person controlling such Holder) to the extent
that any such Losses arise out of or are 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 delivery of written confirmation of the sale by such
Holder to the person asserting the claims 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. The Company shall also indemnify each
underwriter and each person who controls such person (within the meaning of
Section 15 of the Securities Act
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or Section 20(a) of the Exchange Act) to the same extent and with the same
limitations as provided above with respect to the indemnification of the Initial
Purchasers or the Holders of Registrable Securities.
(b) Indemnification by Holder of Registrable Securities. Each
Holder agrees, and such agreement shall be evidenced by the Holder delivering
the notice described in Section 2(d) hereof, severally and not jointly, to
indemnify and hold harmless the Initial Purchasers, the other selling Holders,
the Company, its directors, its officers who sign a Registration Statement, and
each person, if any, who controls the Company, the Initial Purchasers and any
other selling Holder (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 of a material fact contained in any
Registration Statement, Prospectus or preliminary prospectus or arising out of
or based upon any omission of 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 omission is contained in any
information relating to such Holder so furnished in writing by such Holder to
the Company expressly for use in such Registration Statement or Prospectus. 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 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 (a) the fees and expenses of
more than one separate firm (in addition to any local counsel) for the Initial
Purchasers and all persons, if any, who control the Initial Purchasers within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, (b) the fees and expenses of more than one separate firm (in
addition to any
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local counsel) for all Holders and all persons, if any, who control any Holder
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act, and (c) the fees and expenses of more than one separate firm
(in addition to any local counsel) for the Company, its directors, its officers
who sign a Registration Statement and each person, if any, who controls the
Company within the meaning of either such Section, and that all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Company, and such directors, officers and control persons
of the Company, such firm shall be designated in writing by the Company. In such
case involving the Initial Purchasers and persons who control the Initial
Purchasers, such firm shall be designated in writing by Morgan Stanley & Co.
Incorporated. In such case involving the Holders and such persons who control
the Holders, such firm shall be designated in writing by the Holders of the
majority of Registrable Securities sold pursuant to the Registration Statement.
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. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement 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
or claims that are the subject matter of such proceeding.
(d) Contribution. If 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 (before deducting expenses) of the Notes
pursuant to the Placement Agreement. Benefits
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received by the Initial Purchasers shall be deemed to be equal to the total
purchase discounts and commissions received by them pursuant to the Placement
Agreement and benefits received by any other Holders shall be deemed to be equal
to the value of receiving Notes registered under the Securities Act. Benefits
received by any underwriter shall be deemed to be equal to the total
underwriting discounts and commissions, as set forth on the cover page of the
Prospectus forming a part of the Registration Statement which resulted in such
Losses. 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 which 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 form
any person who was not guilty of such fraudulent misrepresentations.
The indemnity, contribution and expense reimbursement obligations of
the Company hereunder shall be in addition to any liability the Company may
otherwise have hereunder, under the Placement Agreement or otherwise. The
provisions of this Section 6 shall survive so long as Registrable Securities
remain outstanding, notwithstanding any transfer of the Registrable Securities
by any Holder or any termination of this Agreement.
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
the Initial Purchasers, any Holder or any person controlling any Holder, or the
Company, its officers or directors or any person controlling the Company and
(iii) the sale of any Registrable Securities by any Holder.
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7. Information Requirements.
(a) The Company shall file the reports required to be filed by
it under the Securities Act and the Exchange Act, and if at any time the Company
is not required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information so long as
necessary to permit sales pursuant to Rule 144 and Rule 144A under the
Securities Act. The Company further covenants that it will cooperate with any
Holder of Registrable Securities and take such further reasonable action as any
Holder of Registrable Securities may reasonably request (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. Upon the 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. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Company to
register any of its securities under any section of the Exchange Act.
(b) The Company shall file the reports required to be filed by
it under the Exchange Act and shall comply with all other requirements set forth
in the General Instructions IA and B(4) to Form S-3 in order to allow the
Company to be eligible to file registration statements on Form S-3 in connection
with secondary offerings.
8. Miscellaneous.
(a) Remedies. In the event of a breach by the Company of its
obligations under this Agreement, each Holder of Registrable Securities, in
addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Agreement; provided that the sole damages payable for a violation of
the terms of this Agreement for which Liquidated Damages are expressly provided
pursuant to Section 2(e) hereof shall be such Liquidated Damages. The Company
agrees that monetary damages would not be adequate compensation for any loss
incurred by reason of a breach by it of any of the provisions of this Agreement
and hereby further agrees that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy
at law would be adequate.
(b) No Conflicting Agreements. The Company has not, as of the
date hereof, and shall not, on or after the date of this Agreement, enter into
any agreement with respect to its securities which 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.
-20-
<PAGE>
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Company has obtained the written consent of Holders
of a majority of the then outstanding Common Stock constituting Registrable
Securities (with Holders of Notes deemed to be the Holders, for purposes of this
Section, of the number of outstanding shares of Common Stock into which such
Notes are convertible). 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 of Registrable Securities may
be given by Holders of at least a majority of the Registrable Securities being
sold by such Holders; 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.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing and shall be deemed given (i)
when made, if made by hand delivery, (ii) upon confirmation, if made by
telecopier, or (iii) one business day after being deposited with a reputable
next-day courier, postage prepaid, to the parties as follows:
(x) if to a Holder of Registrable Securities, at
the most current address given by such Holder to the Company in
accordance with the provisions of Section 8(e);
(y) if to the Company, to:
Data General Corporation
4400 Computer Drive
Westboro, MA 01580
Attention: Treasurer
Telecopy No.: (508) 898-4584
(Confidential)
with a copy to:
Fulbright & Jaworski L.L.P.
666 Fifth Avenue
New York, NY 10103
Attention: Carl E. Kaplan
Telecopy No.: (212) 752-5958
and
-21-
<PAGE>
(z) if to the Initial Purchasers or Special Counsel to:
Ropes & Gray
One International Place
Boston, MA 02110
Attention: Keith F. Higgins
Telecopy No.: (617) 951-7050
or to such other address as such person may have furnished to the other persons
identified in this Section 8(d) in writing in accordance herewith.
(e) Owner of Registrable Securities. The Company will
maintain, or will cause its registrar and transfer agent to maintain, a register
with respect to the Registrable Securities in which all transfers of Registrable
Securities of which the Company has received notice will be recorded. The
Company may deem and treat the person in whose name Registrable Securities are
registered in such register of the Company as the owner thereof for all
purposes, including without limitation, the giving of notices under this
Agreement.
(f) Approval of Holders. Whenever the consent or approval of
Holders of a specified percentage of Registrable Securities is required
hereunder, (i) Holders of Notes shall be deemed to be Holders, for such
purposes, of the number of outstanding shares of Common Stock into which such
Notes are convertible and (ii) Registrable Securities held by the Company or its
Affiliates (other than the Initial 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.
(g) Successors and Assigns. Any person who purchases any
Registrable Securities from an Initial Purchaser shall be deemed, for purposes
of this Agreement, to be an assignee of such Initial 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.
(h) 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.
(i) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(j) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
-22-
<PAGE>
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK
WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS.
(k) 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 is hereby stipulated and declared to be
the intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such which may
be hereafter declared invalid, illegal, void or unenforceable.
(l) 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 Placement 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 understandings among the parties with respect to such
registration rights.
(m) Attorneys' Fees. In any action or proceeding brought to
enforce any provision of this Agreement, or where any provision hereof is
validly asserted as a defense, the prevailing party, as determined by the court,
shall be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
(n) Further Assurances. Each of the parties hereto shall use
all reasonable efforts to take, or cause to be taken, all appropriate action, do
or cause to be done all things reasonably necessary, proper or advisable under
applicable law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and the other
documents contemplated hereby and consummate and make effective the transactions
contemplated hereby.
(o) 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
their terms.
-23-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
DATA GENERAL CORPORATION
By: /s/ Arthur W. DeMelle
----------------------------
Arthur W. DeMelle
Name: --------------------------
Senior Vice President
Title: -------------------------
Chief Financial Officer
Accepted as of the date first above written:
MORGAN STANLEY & CO.
INCORPORATED
By: /s/ Jonathan G. Morphett
---------------------------
Name: Jonathan G. Morphett
--------------------------
Title: Principal
-------------------------
DILLON, READ & CO. INC.
By: /s/ Thomas L. Piper
---------------------------
Name: Thomas L. Piper
--------------------------
Title: Managing Director
-------------------------
-24-
FULBRIGHT & JAWORSKI
L.L.P.
A Registered Limited Liability Partnership
666 Fifth Avenue
New York, New York 10103-3198
telephone: 212/318-3000 Houston
facsimile: 212/752-5958 Washington, D.C.
Austin
writer's direct dial number: San Antonio
Dallas
New York
Los Angeles
London
Hong Kong
Exhibit 5
June 27, 1997
Data General Corporation
4400 Computer Drive
Westboro, Massachusetts 01580
Dear Sirs:
We refer to the Registration Statement on Form S-3 (the "Registration
Statement") to be filed by Data General Corporation (the "Company") with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to (i) $212,750,000 aggregate principal amount of the Company's 6%
Convertible Subordinated Notes due 2004 (the "Notes") and (ii) 8,122,089 shares
of common stock, par value $.01 per share (the "Common Stock"), of the Company
which are initially issuable upon conversion of the Notes, plus such additional
number of shares of Common Stock as may become issuable upon conversion of the
Notes as a result of adjustments to the conversion price.
We have examined and are familiar with originals or copies, certified
or otherwise identified to our satisfaction, of such documents, corporate
records, certificates of public officials and officers of the Company and such
other instruments as we have deemed necessary or appropriate as a basis for the
opinions expressed below, including the Registration Statement, the Indenture
under which the Notes were issued, the Restated Certificate of Incorporation of
the Company and the By-Laws of the Company.
Based on the foregoing, we advise you that in our opinion:
1. The Notes are valid, legal and binding obligations of the
Company, enforceable against the Company in accordance with their terms, except
as enforcement thereof may be limited by bankruptcy, insolvency, reorganization
or other similar laws affecting creditors' rights generally and by general
principles of equity, regardless of whether considered in equity or at law; and
2. The Common Stock issuable upon conversion of the Notes has
been validly authorized and reserved for issuance and, when duly issued and
delivered upon conversion of the Notes in accordance with the terms of the
Notes, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and the reference to this firm under the caption
"Legal Matters" in the Prospectus contained therein. This consent is not to be
construed as an admission that we are a person whose consent is required to be
filed with the Registration Statement under the provisions of the Securities Act
of 1933.
Very truly yours,
/s/Fulbright & Jaworski L.L.P.
Exhibit 12
<TABLE>
Computation of Ratio of Earnings to Fixed Charges
<CAPTION>
Quarter Ended Six Months Ended Fiscal Year Ended
------------------ ---------------- ----------------------------------------------------
Mar. 29, Mar. 30, Mar. 29, Mar.30, Sept. 28, Sept.30, Sept. 24, Sept. 25, Sept. 26,
1997 1996 1997 1996 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income (loss) before income taxes, $ 14,381 $ 7,334 $ 25,396 $ 13,043 $ 31,645 ($38,098) ($85,593) ($55,079) ($59,412)
and extraordinary items
Fixed charges:
Interest expense (a) ............ 3,141 3,365 6,344 6,815 13,072 13,826 14,049 14,766 14,470
Portion of rental expense
representative of interest
factor (b) ...................... 2,660 2,683 5,333 5,367 10,733 10,767 10,833 11,467 12,067
-------- -------- -------- -------- -------- -------- -------- -------- --------
Income (loss) before income taxes,
extraordinary items, and fixed
charges .......................... $ 20,182 $ 13,382 $ 37,073 $ 25,225 $ 55,450 ($13,505) ($60,711) ($28,846) ($32,875)
-------- -------- -------- -------- -------- --------- --------- --------- ---------
Fixed charges:
Interest expense (a) ........... 3,141 3,365 6,344 6,815 13,072 13,826 14,049 14,766 14,470
Portion of rental expense
representative and of interest
factor (b) ..................... 2,660 2,683 5,333 5,367 10,733 10,767 10,833 11,467 12,067
-------- -------- -------- -------- ------- -------- -------- -------- --------
Total fixed charges ............... $ 5,801 $ 6,048 $ 11,677 $ 12,182 $ 23,805 $ 24,593 $ 24,882 $ 26,233 $ 26,537
-------- -------- -------- -------- -------- -------- -------- -------- --------
Ratio of earnings to fixed charges 3.5 2.2 3.2 2.1 2.3 (c) (c) (c) (c)
--- --- --- --- --- --- --- --- ---
<FN>
(a) Interest expense includes amortization of original issue discount and
issue costs related to outstanding long-term debt. Capitalized interest
was immaterial for all periods presented.
(b) Management deems that one-third of all rental expense is a reasonable
approximation of the interest factor in rental expense.
(c) Income (loss) before income taxes, extraordinary items, and fixed charges
as computed above were inadequate to cover fixed charges. The amounts of
coverage deficiency were as follows: year ended Sept. 30, 1995 ---$38,098;
year ended Sept. 24, 1994 ---$85,593;year ended Sept. 25, 1993 ---$55,079;
and year ended Sept. 26, 1992 ---$59,412.
</FN>
</TABLE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
October 30, 1996, appearing in the 1996 Annual Report to Stockholders of Data
General Corporation, which is incorporated by reference in the Annual Report on
Form 10-K for the year ended September 28, 1996. We also consent to the
incorporation by reference of our report on the Financial Statement Schedules,
which appears on page 21 of such Annual Report on Form 10-K. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/PRICE WATERHOUSE LLP
Boston, Massachusetts
June 27, 1997
Exhibit 25
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
DATA GENERAL CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 04-2436397
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
3400 Computer Drive
Westboro, Massachusetts 01580
(Address of principal executive offices) (Zip code)
----------------------
6% Convertible Subordinated Notes
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to
the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
- ------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------
Superintendent of Banks of the State 2 Rector Street, New York,
of New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an exhibit
hereto, pursuant to Rule 7a-29 under the Trust Indenture Act
of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of
The Bank of New York (formerly Irving Trust
Company) as now in effect, which contains
the authority to commence business and a
grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1
filed with Registration Statement No.
33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No.33-31019.)
-2-
<PAGE>
6. The consent of the Trustee required by Section 321(b) of
the Act. (Exhibit 6 to Form T-1 filed with Registration
Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-3-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank
of New York, a corporation organized and existing under the laws of the State of
New York, has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in The City of New
York, and State of New York, on the 18th day of June, 1997.
THE BANK OF NEW YORK
By: /s/ THOMAS E. TABOR
-----------------------
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
<PAGE>
Consolidated Report of Condition of Exhibit 7
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business December 31,
1996, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 6,024,605
Interest-bearing balances .......... 808,821
Securities:
Held-to-maturity securities ........ 1,071,747
Available-for-sale securities ...... 3,105,207
Federal funds sold in domestic office
of the bank: .......................... 4,250,941
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................31,962,915
LESS: Allowance for loan and
lease losses ..............635,084
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 31,327,402
Assets held in trading accounts ...... 1,539,612
Premises and fixed assets (including
capitalized leases) ................ 692,317
Other real estate owned .............. 22,123
Investments in unconsolidated
subsidiaries and associated
companies .......................... 213,512
Customers' liability to this bank on
acceptances outstanding ............ 985,297
Intangible assets .................... 590,973
Other assets ......................... 1,487,903
-----------
Total assets ......................... $52,120,460
===========
LIABILITIES
Deposits:
In domestic offices ................ $25,929,642
Noninterest-bearing ......11,245,050
Interest-bearing .........14,684,592
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 12,852,809
Noninterest-bearing .........552,203
Interest-bearing .........12,300,606
Federal funds purchased and securities
sold under agreements to repurchase in
domestic offices of the bank and of its
Edge and Agreement subsidiaries, and in IBFs:
Federal funds purchased ............ 1,360,877
Securities sold under agreements
to repurchase....................... 226,158
Demand notes issued to the U.S.
Treasury ........................... 204,987
Trading liabilities .................. 1,437,445
Other borrowed money:
With original maturity of one year
or less .......................... 2,312,556
With original maturity of more than
one year ......................... 20,766
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,014,717
Subordinated notes and debentures .... 1,014,400
Other liabilities .................... 1,721,291
-----------
Total liabilities .................... 48,095,648
-----------
EQUITY CAPITAL
Common stock ........................ 942,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,354,095
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 7,030
Cumulative foreign currency transla-
tion adjustments .................. ( 9,916)
-----------
Total equity capital ................ 4,024,812
-----------
Total liabilities and equity
capital ........................... $52,120,460
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the best
of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
-
J. Carter Bacot |
Thomas A. Renyi | Directors
Alan R. Griffith |
-
