SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K / A
AMENDMENT NO. 1
ANNUAL REPORT
pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
1-12333
(Commission file number)
Iomega Corporation
(Exact name of registrant as specified in its charter)
Delaware 86-0385884
(State of Incorporation) (IRS employer identification number)
1821 West Iomega Way, Roy, UT 84067
(Address of principal executive offices) (ZIP Code)
(801) 778-1000
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
- ------------------------------- -----------------------------------------
Common Stock, par value
$.03-1/3 per share New York Stock Exchange
Rights to Purchase Series C
Junior Participating
Preferred Stock, $0.01 par
value per share New York Stock Exchange
6-3/4% Convertible Subordinated
Notes due 2001 New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes x No
----- -----
Indicate by check mark if disclosure of delinquent fliers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
-----
The aggregate market value of Common Stock held by non-affiliates of the
registrant at January 31, 1997 was $2,015,680,000, based upon the last
reported sales price of the Common Stock as reported by the New York Stock
Exchange. The number of shares of the registrant's Common Stock oustanding
at January 31, 1997 was 128,392,814.
Documents incorporated by reference:
- - Specifically identified portions of the Company's Annual Report to
Stockholders for the year ended December 31, 1996 into Part I and Part II of
Form 10-K.
- - Specifically identified portions of the Company's Definitive Proxy
Statement for its 1997 annual meeting of stockholders into Part III of Form
10-K .
<PAGE>
EXPLANATORY NOTE
This Form 10-K/A is being filed by Iomega Corporation for purposes of refiling
one exhibit.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K:
(a) The following documents are filed as part of or are included in this
Annual Report on Form 10-K:
1. The financial statements listed in the Index to Consolidated
Financial Statements and Consolidated Financial Statement Schedule,
filed as a part of this Annual Report on Form 10-K.
2. The financial statement schedule listed in the Index to
Consolidated Financial Statements and Consolidated Financial
Statement Schedule, filed as a part of this Annual Report on Form
10-K.
3. The exhibits listed in the Exhibit Index filed as a part of this
Annual Report on Form 10-K, as amended by this Form 10-K/A.
(b) Reports on Form 8-K: No reports on Form 8-K were filed by the Company
during the last quarter of the year ended December 31, 1996.
(c) Exhibits - See Item 14(a)3 above.
(d) Financial Statements Schedule - See Item 14(a)2 above.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
IOMEGA CORPORATION
By:
-----------------------
Leonard C. Purkis
Senior Vice President, Finance
and Chief Financial Officer
Date: May 14, 1997
<PAGE>
EXHIBIT INDEX
The following exhibits are filed as part of this Annual Report on
Form 10-K:
Exhibit
Number Description
3(i).1 (17) Restated Certificate of Incorporation of the Company, as
amended
3(ii).1 (1) By-Laws of the Company, as amended
4.1 Indenture, dated March 13, 1996, between the Company and
State Street Bank and Trust Company
4.2 (7) Rights Agreement dated as of July 28, 1989 between the
Company and The First National Bank of Boston, as Rights
Agent
4.2 (a) (8) Amendment No. 1 dated September 24, 1990 to Rights
Agreement dated as of July 28, 1989 between the Company
and The First National Bank of Boston
4.3 ++ Instruments with respect to other long-term debt of the
Company and its consolidated subsidiaries are omitted
pursuant to Item 601(b)(4)(iii) of Regulation S-K since
the total amount authorized under each such omitted
instrument does not exceed 10 percent of the total assets
of the Company and its subsidiaries on a consolidated
basis. The Company hereby agrees to furnish a copy of
any such instrument to the Securities and Exchange
Commission upon request.
10.1 (11) Lease dated January 6, 1993 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 1
10.1 (a) (19) Amendment to Lease dated August 14, 1995 between the
Company and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 1
10.2 (19) Lease dated August 14, 1995 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 2
10.3 (3) Lease dated November 9, 1992 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 3
10.3 (a) (19) Amendment to Lease dated August 14, 1995 between the
Company and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 3
10.4 (3) Lease dated November 9, 1992 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 4
10.4 (a) (19) Amendment to Lease dated August 14, 1995 between the
Company and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 4
10.5 (4) Lease Agreement dated October 29, 1984 between the Company
and Damson/Birtcher Realty Income Fund-II, Limited
Partnership (formerly with Western Mortgage Loan
Corporation)(including an Amendment thereto dated January
30, 1985) relating to Iomega Park Building (Parking Lot)
No. 5
10.6 (11) Lease dated January 6, 1993 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 6
10.6 (a) (19) Amendment to Lease dated August 14, 1995 between the
Company and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 6
10.7 (2) Lease dated June 21, 1991 between the Company and Damson/
Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 7
10.7 (a) (13) Amendment to Lease dated May 20, 1994 between the Company
and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 7
10.8 (3) Lease dated November 9, 1992 between the Company and
Damson/Birtcher Realty Income Fund-II, Limited Partnership
relating to Iomega Park Building No. 8
10.8 (a) (19) Amendment to Lease dated August 14, 1995 between the
Company and Damson/Birtcher Realty Income Fund-II, Limited
Partnership relating to Iomega Park Building No. 8
10.9 (19) Lease Agreement dated January 25, 1996 between the Company
and Boyer Iomega LLC, by the Boyer Company, L.C., its
Manager
** 10.10 (2) 1981 Stock Option Plan of the Company, as amended
** 10.11 (2) 1987 Stock Option Plan of the Company, as amended
** 10.12 (2) 1987 Director Stock Option Plan of the Company, as
amended
** 10.13 + 1995 Director Stock Option Plan of the Company, as
amended
** 10.14 (2) Employment Letter dated January 11, 1991 between the
Company and Srini Nageshwar
** 10.15 (13) Employment Letter dated November 29, 1993 between the
Company and Kim Edwards
** 10.16 (3) Expatriate Agreement dated January 1, 1992 between the
Company and Srini Nageshwar
10.17 (3) Form of Indemnification Agreement between the Company
and each of its directors
10.18 (7) Rights Agreement dated as of July 28, 1989 between the
Company and The First National Bank of Boston, as Rights
Agent
10.18 (a) (8) Amendment No. 1 dated September 24, 1990 to Rights
Agreement dated as of July 28, 1989 between the Company
and The First National Bank of Boston
10.19 (13) Indemnity Agreement, dated April 21, 1994 between the
Company and Srini Nageshwar
** 10.20 (11) Letter Agreement, dated April 13, 1993, between the
Company and Anton J. Radman, Jr.
10.21 (16) Iomega Incentive Plan for Kim B. Edwards
10.22 (16) Loan Agreement, dated July 1995, between the Company and
Wells Fargo Bank, N.A., Commercial Finance Division
10.22 (a) (16) Security Agreement, dated July 5, 1995, between the
Company and Wells Fargo Bank, N.A. Commercial Finance
Division
10.22 (b) (16) Wells Fargo Continuing Commercial Letter of Credit
Agreement, dated July 5, 1995
10.22 (c) (19) First Amendment to Loan Agreement, dated August 24, 1995,
between the Company and Wells Fargo Bank, N.A.,
Commercial Finance Division
10.22 (d) (19) Second Amendment to Loan Agreement, dated October 16,
1995, between the Company and Wells Fargo Bank, N.A.,
Commercial Finance Division
10.22 (e) (19) Third Amendment to Loan Agreement, dated November 30,
1995, between the Company and Wells Fargo Bank, N.A.,
Commercial Finance Division
10.22 (f) (19) Fourth Amendment to Loan Agreement, dated January 12,
1996, between the Company and Wells Fargo Bank, N.A.,
Commercial Finance Division
10.22 (g) (20) Fifth Amendment to Loan Agreement, dated March 12, 1996,
between the Company and Wells Fargo Bank, N.A., Commercial
Finance Division
10.22 (h) (20) Sixth Amendment to Loan Agreement, dated May 13, 1996,
between the Company and Wells Fargo Bank, N.A., Commercial
Finance Division
10.22 (i) (22) Seventh Amendment to Loan Agreement, dated July 31, 1996,
between the Company and Wells Fargo Bank, N.A., Commercial
Finance Division
10.23 (19) Master Lease Agreement, dated August 29, 1995, between the
Company and USL Capital Corporation
10.24 (19) Loan Commitment Agreement, dated October 23, 1995, between
the Company and Heller Financial, Inc., Commercial
Equipment Finance Division
10.25 (19) Factoring Agreement, dated November 10, 1995, between
Iomega Europe GmbH and Heller Bank, AG
10.26 (19) Revolving Loan Agreement, dated January 12, 1996, between
the Company and First Security Bank of Utah, N.A.
10.27 Indenture, dated March 13, 1996, between the Company and
State Street Bank and Trust Company
10.28 (20) Lease dated December 8, 1995, between the Company and John
Arrillaga, Trustee and Richard T. Peery, Trustee relating
to Milpitas Bldg. 8
10.29 (21) Lease dated April 9, 1996, between the Company and
Security Capital Industrial Trust
10.30 (22) Agreement for the Sale and Purchase of Assets in Malaysia,
dated September 13, 1996, between the Company and Quantum
Corporation.
10.30 (a) (22) Exhibit A to the Agreement for the Sale and Purchase of
Assets in Malaysia, dated September 13, 1996, between the
Company and Quantum Corporation - Preliminary Form of
Secured Promissory Note
10.30 (b) (22) Exhibit B to the Agreement for the Sale and Purchase of
Assets in Malaysia, dated September 13, 1996, between the
Company and Quantum Corporation - The Indemnification
Agreement
10.31 + 1996 Bonus Plan
13.1 + Portions of the Company's 1996 Annual Report (which is
not deemed to be "filed" except to the extent that
portions thereof are expressly incorporated by reference
in this Annual Report of Form 10-K)
21.1 + Subsidiaries of the Company
23.1 + Consent of Independent Public Accountants (appears on page
26 of this Annual Report on Form 10-K)
27.1 + Financial Data Schedule (only filed as part of electronic
copy)
- --------------------------
+ Previously filed.
++ Filed herewith.
** Management contract or compensation plan or arrangement
required to be filed as an exhibit pursuant to Item 14(c) of
Form 10-K
(1) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended July 4, 1993 (File
No. 0-11963).
(2) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the year ended December 31, 1991 (File
No. 0-11963)
(3) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the year ended December 31, 1992 (File
No. 0-11963).
(4) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the year ended December 31, 1990 (File
No. 0-11963).
(5) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the year ended December 31, 1989 (File
No. 0-11963).
(6) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-1 (File No. 2-96209).
(7) Incorporated herein by reference to the exhibits to the Company's
Current Report on Form 8-K filed on August 12, 1989 (File No. 0-11963).
(8) Incorporated herein by reference to the exhibits to the Company's
Amendment No. 1 to Current Report on Form 8-K filed on
September 25, 1990 (File No. 0-11963).
(9) Incorporated herein by reference to the exhibits to the Company's
Amendment No. 1 to Annual Report on Form 10-K for the year
ended December 31, 1992 (File No. 0-11963).
(10) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended October 3, 1993
(File No. 0-11963).
(11) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-K for the year ended December 31, 1993
(File No. 0-11963).
(12) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended October 2, 1994
(File No. 0-11963).
(13) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the period ended December 31, 1994
(File No. 0-11963).
(14) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended April 2, 1995 (File
No. 0-11963).
(15) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended July 2, 1995 (File
No. 0-11963).
(16) Incorporated herein by reference to the Exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended October 1, 1995
(File No. 0-11963).
(17) Incorporated herein by reference to the exhibits to the Company's
Registration Statement on Form S-3 (File No. 33-64995).
(18) Incorporated by reference to Appendix to the Company's definitive
Proxy Statement for the 1995 Annual Meeting of Stockholders (File No.
0-11963).
(19) Incorporated herein by reference to the exhibits to the Company's
Annual Report on Form 10-K for the period ended December 31, 1995
(File No. 0-11963).
(20) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended March 31, 1996 (File
No. 0-11963).
(21) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended June 30, 1996 (File
No. 0-11963).
(22) Incorporated herein by reference to the exhibits to the Company's
Quarterly Report on Form 10-Q for the period ended September 29, 1996
(File No. 0-11963).
EXHIBIT 10.27
IOMEGA CORPORATION
AND
STATE STREET BANK AND TRUST COMPANY
Trustee
INDENTURE
Dated as of March 13, 1996
6 3/4% Convertible Subordinated Notes due 2001
TABLE OF CONTENTS
PAGE
----
ARTICLE I DEFINITIONS....................................... 2
Section 1.1 DEFINITIONS ................................. 2
AFFILIATE ................................................ 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
CREDIT AGREEMENTS ........................................ 3
DEFAULT .................................................. 3
DEFAULTED INTEREST........................................ 3
DESIGNATED SENIOR INDEBTEDNESS............................ 4
EXCHANGE ACT.............................................. 4
EVENT OF DEFAULT.......................................... 4
INDEBTEDNESS.............................................. 4
INDENTURE ................................................ 5
MONEY INDEBTEDNESS........................................ 5
NEW RIGHTS PLAN .......................................... 5
NOTE or NOTES ............................................ 5
NOTEHOLDER or HOLDER...................................... 5
NOTE REGISTER ............................................ 5
OFFICERS' CERTIFICATE .................................... 5
OPINION OF COUNSEL........................................ 6
OUTSTANDING .............................................. 6
PAYMENT BLOCKAGE NOTICE .................................. 6
PERSON .................................................. 6
PREDECESSOR NOTE.......................................... 6
REPURCHASE EVENT.......................................... 7
REPURCHASE PRICE.......................................... 7
RESPONSIBLE OFFICER ...................................... 7
RIGHTS PLAN .............................................. 7
RIGHTS .................................................. 7
SECURITIES ACT............................................ 7
SENIOR INDEBTEDNESS ...................................... 7
SUBSIDIARY................................................ 7
TRADING DAY .............................................. 8
TRIGGER EVENT ............................................ 8
TRUST INDENTURE ACT ...................................... 8
TRUSTEE .................................................. 8
UNDERWRITER .............................................. 8
ARTICLE II ISSUE, DESCRIPTION, EXECUTION,
REGISTRATION AND EXCHANGE OF NOTES..................... 8
Section 2.1 DESIGNATION, AMOUNT AND ISSUE OF NOTES....... 8
Section 2.2 FORM OF NOTES ............................... 9
Section 2.3 DATE AND DENOMINATION OF NOTES; PAYMENTS OF
INTEREST............................................... 9
Section 2.4 EXECUTION OF NOTES........................... 11
Section 2.5 EXCHANGE AND REGISTRATION OF
TRANSFER OF NOTES...................................... 12
Section 2.6 MUTILATED, DESTROYED, LOST
OR STOLEN NOTES ....................................... 13
Section 2.7 TEMPORARY NOTES ............................. 14
Section 2.8 CANCELLATION OF NOTES PAID, ETC.............. 15
ARTICLE III REDEMPTION OF NOTES ........................... 15
Section 3.1 REDEMPTION PRICES ........................... 15
Section 3.2 NOTICE OF REDEMPTION: SELECTION
OF NOTES............................................... 16
Section 3.3 PAYMENT OF NOTES CALLED FOR REDEMPTION....... 17
Section 3.4 CONVERSION ARRANGEMENT ON CALL
FOR REDEMPTION ........................................ 18
ARTICLE IV SUBORDINATION OF NOTES ......................... 19
Section 4.1 AGREEMENT OF SUBORDINATION................... 19
Section 4.2 PAYMENTS TO NOTEHOLDERS ..................... 20
Section 4.3 SUBROGATION OF NOTES......................... 23
Section 4.4 AUTHORIZATION TO EFFECT SUBORDINATION ....... 24
Section 4.5 NOTICE TO TRUSTEE ........................... 25
Section 4.6 TRUSTEE'S RELATION TO SENIOR INDEBTEDNESS ... 26
Section 4.7 NO IMPAIRMENT OF SUBORDINATION............... 26
Section 4.8 CERTAIN CONVERSIONS DEEMED PAYMENT........... 26
Section 4.9 ARTICLE APPLICABLE TO PAYING AGENTS ......... 27
Section 4.10 SENIOR INDEBTEDNESS ENTITLED TO RELY......... 27
ARTICLE V PARTICULAR COVENANTS OF THE COMPANY ............. 27
Section 5.1 PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST... 27
Section 5.2 MAINTENANCE OF OFFICE OR AGENCY ............. 28
Section 5.3 APPOINTMENTS TO FILL VACANCIES IN
TRUSTEE'S OFFICE....................................... 28
Section 5.4 PROVISIONS AS TO PAYING AGENT ............... 29
Section 5.5 CORPORATE EXISTENCE ......................... 30
Section 5.6 STAY, EXTENSION AND USURY LAWS............... 30
Section 5.7 COMPLIANCE CERTIFICATE....................... 30
ARTICLE VI NOTEHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE................................ 30
Section 6.1 NOTEHOLDERS' LISTS........................... 30
Section 6.2 PRESERVATION AND DISCLOSURE OF LISTS......... 31
Section 6.3 REPORTS BY TRUSTEE........................... 31
Section 6.4 REPORTS BY COMPANY........................... 32
ARTICLE VII REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN
EVENT OF DEFAULT....................................... 32
Section 7.1 EVENTS OF DEFAULT ........................... 32
Section 7.2 PAYMENTS OF NOTES ON DEFAULT: SUIT THEREFOR.. 35
Section 7.3 APPLICATION OF MONIES COLLECTED BY TRUSTEE... 37
Section 7.4 PROCEEDINGS BY NOTEHOLDER ................... 38
Section 7.5 PROCEEDINGS BY TRUSTEE....................... 39
Section 7.6 REMEDIES CUMULATIVE AND CONTINUING........... 39
Section 7.7 DIRECTION OF PROCEEDINGS AND WAIVER OF DEFAULTS
BY MAJORITY OF NOTEHOLDERS............................. 39
Section 7.8 NOTICE OF DEFAULTS........................... 40
Section 7.9 UNDERTAKING TO PAY COSTS..................... 40
ARTICLE VIII CONCERNING THE TRUSTEE ....................... 41
Section 8.1 DUTIES AND RESPONSIBILITIES OF TRUSTEE....... 41
Section 8.2 RELIANCE ON DOCUMENTS, OPINIONS, ETC......... 42
Section 8.3 NO RESPONSIBILITY FOR RECITALS, ETC.......... 43
Section 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR
REGISTRAR MAY OWN NOTES .............................. 44
Section 8.5 MONIES TO BE HELD IN TRUST................... 44
Section 8.6 COMPENSATION AND EXPENSES OF TRUSTEE......... 44
Section 8.7 OFFICERS' CERTIFICATE AS EVIDENCE ........... 45
Section 8.8 CONFLICTING INTERESTS OF TRUSTEE............. 45
Section 8.9 ELIGIBILITY OF TRUSTEE....................... 45
Section 8.10 RESIGNATION OR REMOVAL OF TRUSTEE ........... 46
Section 8.11 ACCEPTANCE BY SUCCESSOR TRUSTEE ............. 47
Section 8.12 SUCCESSION BY MERGER, ETC.................... 48
Section 8.13 LIMITATION ON RIGHTS OF TRUSTEE AS CREDITOR.. 48
ARTICLE IX CONCERNING THE NOTEHOLDERS ..................... 49
Section 9.1 ACTION BY NOTEHOLDERS ....................... 49
Section 9.2 PROOF OF EXECUTION BY NOTEHOLDERS ........... 49
Section 9.3 WHO ARE DEEMED ABSOLUTE OWNERS............... 50
Section 9.4 COMPANY-OWNED NOTES DISREGARDED ............. 50
Section 9.5 REVOCATION OF CONSENTS: FUTURE
HOLDERS BOUND.......................................... 51
ARTICLE X NOTEHOLDERS' MEETINGS ........................... 51
Section 10.1 PURPOSE OF MEETINGS......................... 51
Section 10.2 CALL OF MEETINGS BY TRUSTEE................. 52
Section 10.3 CALL OF MEETINGS BY COMPANY
OR NOTEHOLDERS......................................... 52
Section 10.4 QUALIFICATIONS FOR VOTING................... 52
Section 10.5 REGULATIONS................................. 53
Section 10.6 VOTING ..................................... 53
Section 10.7 NO DELAY OF RIGHTS BY MEETING............... 54
ARTICLE XI SUPPLEMENTAL INDENTURES......................... 54
Section 11.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF
NOTEHOLDERS ........................................... 54
Section 11.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF
NOTEHOLDERS............................................ 56
Section 11.3 EFFECT OF SUPPLEMENTAL INDENTURE ........... 57
Section 11.4 NOTATION ON NOTES........................... 57
Section 11.5 EVIDENCE OF COMPLIANCE OF SUPPLEMENTAL
INDENTURE TO BE FURNISHED TRUSTEE ..................... 57
ARTICLE XII CONSOLIDATION, MERGER, SALE,
CONVEYANCE AND LEASE................................... 58
Section 12.1 COMPANY MAY CONSOLIDATE ETC. ON
CERTAIN TERMS.......................................... 58
Section 12.2 SUCCESSOR CORPORATION TO BE SUBSTITUTED..... 58
Section 12.3 OPINION OF COUNSEL TO BE GIVEN TRUSTEE ..... 59
ARTICLE XIII SATISFACTION AND DISCHARGE OF INDENTURE....... 59
Section 13.1 DISCHARGE OF INDENTURE ..................... 59
Section 13.2 DEPOSITED MONIES TO BE HELD IN TRUST
BY TRUSTEE............................................ 60
Section 13.3 PAYING AGENT TO REPAY MONIES HELD........... 60
Section 13.4 RETURN OF UNCLAIMED MONIES ................. 60
Section 13.5 REINSTATEMENT............................... 61
ARTICLE XIV IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS ................................ 61
Section 14.1 INDENTURE AND NOTES SOLELY CORPORATE
OBLIGATIONS ........................................... 61
ARTICLE XV CONVERSION OF NOTES............................. 62
Section 15.1 RIGHT TO CONVERT ........................... 62
Section 15.2 EXERCISE OF CONVERSION PRIVILEGE; ISSUANCE OF
COMMON STOCK ON CONVERSION; NO ADJUSTMENT FOR INTEREST
OR DIVIDENDS........................................... 62
Section 15.3 CASH PAYMENTS IN LIEU OF FRACTIONAL SHARES.. 64
Section 15.4 CONVERSION PRICE............................ 64
Section 15.5 ADJUSTMENT OF CONVERSION PRICE ............. 64
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 ............................... 76
Section 15.9 RESPONSIBILITY OF TRUSTEE................... 77
Section 15.10 NOTICE TO HOLDERS PRIOR TO CERTAIN ACTIONS.. 78
ARTICLE XVI REPURCHASE OF NOTES AT THE OPTION OF THE
HOLDER UPON REPURCHASE EVENT........................... 79
Section 16.1 RIGHT TO REQUIRE REPURCHASE................. 79
Section 16.2 NOTICES; METHOD OF EXERCISING REPURCHASE
RIGHT, ETC............................................. 79
Section 16.3 CERTAIN DEFINITIONS......................... 81
Section 16.4 REPURCHASE EVENT ........................... 81
ARTICLE XVII MISCELLANEOUS PROVISIONS ..................... 82
Section 17.1 PROVISIONS BINDING ON COMPANY'S SUCCESSORS.. 82
Section 17.2 OFFICIAL ACTS BY SUCCESSOR CORPORATION ..... 83
Section 17.3 ADDRESSES FOR NOTICES, ETC.................. 83
Section 17.4 GOVERNING LAW............................... 83
Section 17.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT; CERTIFICATES TO TRUSTEE .................... 83
Section 17.6 LEGAL HOLIDAYS ............................. 84
Section 17.7 TRUST INDENTURE ACT......................... 84
Section 17.8 NO SECURITY INTEREST CREATED ............... 85
Section 17.9 BENEFITS OF INDENTURE....................... 85
Section 17.10 TABLE OF CONTENTS, HEADINGS, ETC............ 85
Section 17.11 AUTHENTICATING AGENT ....................... 85
Section 17.12 EXECUTION IN COUNTERPARTS ................. 87
CROSS REFERENCE TABLE(1)
Trust Indenture Indenture
Act Section Section
310(a)(1) .......................................... 8.9
(a)(2) .......................................... 8.9
(a)(3) .......................................... N/A(2)
(a)(4) .......................................... N/A
(a)(5) .......................................... 8.9
(b) .......................................... 8.8
311(a) .......................................... 8.13
(b) .......................................... 8.13
(c) .......................................... N/A
312(a) .......................................... 6.1; 6.2(a)
(b) .......................................... 6.2(b)
(c) .......................................... 6.2(c)
313(a) .......................................... 6.3(a)
(b) .......................................... 6.3(a)
(c) .......................................... 6.3(a)
(d) .......................................... 6.3(b)
314(a) .......................................... 6.4
(b) .......................................... N/A
(c)(1) .......................................... 17.5
(c)(2) .......................................... 17.5
(c)(3) .......................................... 17.5
(d) .......................................... N/A
(e) .......................................... 17.5
315(a)(1) .......................................... 8.1(a)(1)
(a)(2) .......................................... 8.1(a)(2)
(b) .......................................... 7.8
(c) .......................................... 8.1
(d) .......................................... 8.1
(d)(1) .......................................... 8.1(a)(1,2)
(d)(2) .......................................... 8.1(b)
(d)(3) .......................................... 8.1(c)
(e) .......................................... 7.9
316(a) .......................................... 7.7
(a)(1)(A)........................................ 7.7
(a)(1)(B)........................................ 7.7
(a)(2) .......................................... N/A
(b) .......................................... 7.4
317(a)(1) .......................................... 7.1; 7.2
(a)(2) .......................................... 7.2
(b) .......................................... 5.4(a)(1,2)
318(a) .......................................... 17.7
_______________________________
Note:
(1) This Cross Reference Table shall not, for any purpose, be
deemed to be a part of the Indenture.
(2) N/A means Not Applicable
INDENTURE dated as of March 13, 1996, between Iomega
Corporation, a Delaware corporation (hereinafter sometimes
called the "Company", as more fully set forth in Section
1.1), and State Street Bank and Trust Company, a
Massachusetts trust company duly organized and existing under
the laws of the Commonwealth of Massachusetts, 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 3/4% Convertible
Subordinated Notes due 2001 (hereinafter sometimes called the
"Notes"), in an aggregate principal amount not to exceed
$46,000,000 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 repurchase upon a Repurchase Event, 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
delivered by the Trustee or a duly authorized authenticating
agent, as in this Indenture provided, 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
delivered, 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 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.
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(g)(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
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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, 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 Iomega
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 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
Two International Place, 4th Floor, Boston, Massachusetts
02110, Attention: Corporate Trust Division (Iomega
Corporation, 6 3/4% Convertible Subordinated Notes due 2001).
CREDIT AGREEMENTS: The term "Credit Agreements" means
that certain Loan Agreement, dated July 5, 1995, between the
Company, as borrower, and Wells Fargo Bank, N.A., as lender,
as amended, amended and restated, supplemented or otherwise
modified from time to time, and that certain Revolving Loan
Agreement dated January 12, 1996 between the Company, as
lender, and First Security Bank of Utah, N.A., as lender, as
amended, amended and restated, supplemented or otherwise
modified from time to time.
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.
DEFAULTED INTEREST: The term "Defaulted Interest" shall
have the meaning specified in Section 2.3.
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DESIGNATED SENIOR INDEBTEDNESS: The term "Designated
Senior Indebtedness" means all amounts payable under the
Credit Agreements and any other Senior Indebtedness if 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
Indebtedness shall be "Designated Senior Indebtedness" for
purposes of this 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).
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),
(e) or (f).
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
as lessee 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 any 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 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
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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.
MONEY INDEBTEDNESS: The term "Money Indebtedness" shall
have the meaning specified in Section 7.1(c).
NEW RIGHTS PLAN: The term "New Rights Plan" has the
meaning specified in Section 15.5(d).
NOTE or NOTES: The terms "Note" or "Notes" shall mean
any Note or Notes, as the case may be, authenticated and
delivered under this Indenture.
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 a 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.
-5-
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.
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 delivered 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 in Article III provided,
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 or Article XVI.
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.
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 it replaces.
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REPURCHASE EVENT: The term "Repurchase Event" has the
meaning specified in Section 16.4.
REPURCHASE PRICE: The term "Repurchase Price" has the
meaning specified in Section 16.1.
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.
RIGHTS PLAN: The term "Rights Plan" means that certain
Rights Agreement, dated July 28, 1989, between the Company
and The First National Bank of Boston, as amended,
supplemented or otherwise modified from time to time.
RIGHTS: The term "Rights" shall mean "Rights" as such
term is defined in the Rights Plan.
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 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" or "junior" to the Notes.
Notwithstanding the foregoing, the term Senior Indebtedness
shall not include 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.
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
-7-
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 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(g)(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 State Street
Bank and Trust Company, 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.
UNDERWRITER: Means Hambrecht & Quist LLC.
The definitions of certain other terms are as specified
in Sections 2.3, 2.5, Article XV and Article XVI.
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 3/4% Convertible
Subordinated Notes due 2001." Notes not to exceed the
aggregate principal amount of $40,000,000 (or $46,000,000 if
the over-allotment option set forth in Section 3(b) of the
Underwriting Agreement dated March 7, 1996 (as amended from
time to time by the parties thereto) by and between the
Company and the Underwriter is exercised in full) (except
pursuant to Sections 2.5, 2.6, 3.3, 15.2 and 16.2 hereof)
upon the execution of this Indenture, or
-8-
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 deliver said Notes
to or upon the written order of the Company, signed by its
(a) Chairman of the Board, 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.
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, 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.
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 (including any
Note that is converted after the record date and on or before
the interest payment date) shall be entitled to receive the
interest payable on such interest payment date
notwithstanding the cancellation of such Note upon any
transfer, exchange or conversion subsequent to the record
date and on or prior to such interest payment date; provided,
that in the case of any Note, or portion thereof,
-9-
redeemed on a redemption date or repurchased in connection
with a Repurchase Event on a Repurchase Date that is after a
record date and prior to (but excluding) the next succeeding
interest payment date, interest shall not be paid to the
person in whose name the Note, or portion thereof, is
registered on the close of business on such record date and
the Company shall have no obligation to pay interest on such
Note or such portion except to the extent required to be paid
upon redemption or repurchase of such Note or portion
thereof, as the case may be, pursuant to Section 3.3 or 16.1
hereof. Interest may, at the option of the Company, be paid
by check mailed to the address of such person on the registry
kept for such purposes; provided that, with respect to any
holder of Notes with an aggregate principal amount equal to
or in excess of $5,000,000, at the request of such holder in
writing to the Company (who shall then furnish written notice
to such effect to the Trustee), interest on such holder's
Notes shall be paid by wire transfer (the costs of such wire
transfer to be borne by the Company) in immediately available
funds in accordance with the wire transfer instructions
supplied by such holder to the Trustee and paying agent (if
different from the Trustee). The term "record date" with
respect to any interest payment date shall mean the March 1
or September 1 preceding said March 15 or September 15,
respectively.
Interest on the Notes shall be computed on the basis of
a 360-day year comprised of twelve 30-day months.
Any interest on any Note which is payable, but is not
punctually paid or duly provided for, on any said March 15 or
September 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
(A) or (B) below:
(A) 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
-10-
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 as of such special record
date at his 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 (B).
(B) 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 Chairman of the Board,
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 17.11), shall be entitled 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.
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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. 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 change the Note registrar or appoint one or
more co-registrars in accordance with Section 5.2 without any
prior notice to any holders, provided that a Note register
shall be at all times maintained at the Corporate Trust
Office.
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 forth in this
Section 2.5, the Company shall execute, and the Trustee shall
authenticate and deliver, 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 or
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
deliver, the Notes which the Noteholder making the exchange
is entitled to receive bearing registration numbers not
contemporaneously outstanding.
All Notes issued upon any registration of transfer or
exchange of Notes shall be the valid obligations of the
Company,
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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, repurchase 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 to a Noteholder 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.
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 deliver, 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 from the
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holder of such Note the payment of a sum sufficient to cover
the Company's reasonable out-of-pocket expenses and 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 of such Note and of the ownership
thereof.
Every substitute 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 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
definitive Notes, 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 deliver
temporary Notes (printed, typewritten or lithographed).
Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the definitive
Notes, 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 definitive Notes. Without unreasonable delay
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the Company will execute and deliver to the Trustee or such
authenticating agent definitive Notes (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 definitive Notes. 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 definitive Notes authenticated and delivered
hereunder.
Section 2.8 CANCELLATION OF NOTES PAID, ETC. All Notes
surrendered for the purpose of payment, redemption,
repurchase, 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 (provided
that in the case of any Note or portion thereof submitted for
repurchase, the Trustee shall not cancel such Note or portion
thereof until after the Repurchase Date), and no Notes shall
be issued in lieu thereof except as expressly permitted by
any of the provisions of this Indenture, provided that any
Note or portion thereof surrendered for repurchase shall only
be cancelled at such time as such Note or portion thereof has
been repurchased pursuant to Article XVI hereof. The Trustee
shall destroy canceled Notes (unless the Company directs it
to do otherwise) and, after such destruction, shall, if
requested by the Company, deliver a certificate of such
destruction 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.
ARTICLE III
REDEMPTION OF NOTES
Section 3.1 REDEMPTION PRICES. The Company may not
redeem the Notes prior to March 15, 1999. At any time on or
after March 15, 1999, 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,
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together with accrued interest to, but excluding, the date
fixed for redemption; provided that if the date fixed for
redemption is March 15 or September 15, then the interest
payable on such date shall be paid to the holder of record of
the Note on the next preceding March 1 or September 1,
respectively.
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 30 and not more than 60
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 most
recent available 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, 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, but excluding, 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. In 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
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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 with such adjustments up to $1,000 in order to
maintain the minimum denominations of the Notes. 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
redemption date and at the place or places stated in such
notice at the applicable redemption price, together with
interest accrued to (but excluding) the date fixed for
redemption, and on and after said date (unless the Company
shall default in the payment of such
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Notes at the redemption price, together with interest accrued
to, but excluding, 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 second 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 pay
the redemption price of 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
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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, a copy of which will be filed with
the Trustee prior to the date fixed for redemption, 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 (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. 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.
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 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
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in accordance with Section 3.2 or submitted for repurchase in
accordance with Section 16.2, 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 or the Repurchase Price with respect to the
Notes to be called for redemption in accordance with Section
3.2 or submitted for repurchase in accordance with Section
16.2, 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:
(1) a default in the payment of principal,
premium, interest, rent or other obligations due on any
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
(2) a default, other than a payment default,
on any 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 Person who may give it pursuant to Section
4.5 hereof. If the Trustee receives any Payment Blockage
Notice pursuant to clause (2) above, no subsequent Payment
Blockage Notice shall be effective for purposes of this
Section unless and until (A) at least 365 days shall have
elapsed since the effectiveness of the immediately prior
Payment Blockage Notice, and (B) all scheduled payments of
principal, premium, if any, and interest 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:
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(x) the date upon which the default is cured or
waived,
or
(y) in the case of a default referred to in clause (2)
above, 179 days pass after 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 shall be 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
provision 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 or provision therefor is made to the holders of the
Notes or to the Trustee.
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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 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
repurchase in accordance with Section 16.2, 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 of any kind
or character, whether in cash, property or securities (including,
without limitation, by way of setoff or otherwise), prohibited by
the foregoing, shall be received by the Trustee or the holders of
the 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
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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 all Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in
full in cash or other payment satisfactory to the holders of 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
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 payments 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 Notes; 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
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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 (subject to the
provisions hereof) 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 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.
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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 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 two Business Days
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 (a) any payment by the Company or the
Trustee to the Trustee or Noteholders of amounts in connection
with a redemption of Notes (including a redemption pursuant to
Section 3.5) if (i) notice of such redemption has been given
pursuant to Article III prior to the receipt by the Trustee of
written notice as aforesaid, and (ii) such notice of redemption is
given not earlier than sixty (60) days before the redemption date
or (b) 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
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 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
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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.
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, property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on
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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
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.
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 by mailing checks for the
interest payable to or upon the written order of the holders of
Notes entitled thereto as they shall appear on the registry books
of the Company; provided, that; with respect to any holder of
Notes with an aggregate principal amount equal to or in excess of
$5,000,000, at the request of such holder in writing to the
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Company (who shall then furnish notice to such effect to the
Trustee), interest on such holder's Notes shall be paid by wire
transfer (the cost of such wire transfer to be borne by the
Company) in immediately available funds in accordance with the
wire transfer instructions supplied by such holder to the Trustee
and paying agent (if different from the Trustee).
Section 5.2 MAINTENANCE OF OFFICE OR AGENCY. The Company
will maintain in the Borough of Manhattan, The City of New York or
in Boston, Massachusetts, 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 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 the holders of 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 and conversion agent, and each of the
Corporate Trust Office of the Trustee and the office or agency of
the Trustee in the Borough of Manhattan, The City of New York
(which shall initially be State Street Bank and Trust Company,
N.A., an affiliate of the Trustee) as one such office or agency of
the Company for each of the aforesaid purposes.
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.
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
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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 in immediately available funds 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
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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 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 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.
Section 5.7 COMPLIANCE CERTIFICATE. The Company shall
deliver to the Trustee within 120 days after the end of each
fiscal year of the Company (beginning with the fiscal year ending
on December 31, 1996) an Officers' Certificate stating whether or
not the signers know of any Event of Default that occurred during
such period. If such signers know of any Event of Default that
occurred during such period, such Officers' Certificate shall
describe the Event of Default and its status.
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
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Trustee, semiannually, not more than fifteen (15) days after each
March 1 and September 1 in each year beginning with September 1,
1996, 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 it 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 60 days after May 15 of each year commencing with
the year 1996, the Trustee shall transmit to holders of Notes such
reports dated as of May 15 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. The Trustee
shall also transmit all reports as required by Section 313(b)(2)
of the Trust Indenture Act to such holders of Notes. The Trustee
shall transmit all such reports in such manner as is required
by Section 313(c) of the Trust Indenture Act.
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(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 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. The Company shall file with
the Trustee (and the Commission 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 shall be filed
with the Trustee within 15 days after the same is so required to
be filed with the Commission.
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
(b) default in the payment of the principal of or
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 or repurchase pursuant to
Article XVI, by acceleration or otherwise, whether or not such
payment is permitted under Article IV hereof; or
(c) a failure on the part of the Company or any
Subsidiary of the Company to make any payment at maturity in
respect of any obligations (other than non-recourse obligations)
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of, or guaranteed or assumed by, the Company or any such
subsidiary for borrowed money ("Money Indebtedness") in an amount
in excess of $25,000,000 and continuance of such failure for
thirty (30) days, or a default by the Company or any such
Subsidiary with respect to any Money Indebtedness, which default
results in the acceleration of Money Indebtedness in an amount in
excess of $25,000,000 without such Indebtedness having been
discharged or such acceleration having been cured, waived,
rescinded or annulled within thirty (30) days after there shall
have been given, by registered or certified mail, to the Company
by the Trustee or to the Company and the Trustee by the holders of
not less than 10% in aggregate principal amount of the Notes then
outstanding a written notice specifying such default and requiring
the Company to cause such Money Indebtedness to be discharged or
cause such default to be cured or waived or such acceleration to
be rescinded or annulled and stating that such notice is a "Notice
of Default" hereunder; or
(d) 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
(e) 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
(f) 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
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other proceeding shall remain undismissed and unstayed 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(e) or (f)), 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. In the event a declaration of
acceleration because of an Event of Default specified in Section
7.1(c) hereof has occurred and is continuing, such declaration of
acceleration shall be automatically annulled if such default is
cured or waived or the holders of the Debentures have rescinded
their declaration of acceleration in respect of such indebtedness
within 60 days thereof and the Trustee has received written notice
of such cure, waiver or rescission and no other Event of Default
described in Section 71(c) hereof has occurred that has not been
cured or waived within 60 days of the declaration of such
acceleration in respect thereof. If an Event of Default specified
in Section 7.1(e) or (f) 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 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
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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
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 payable, 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 or repurchase 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.
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
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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
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production thereof on any trial or other proceeding relative
thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name and as trustee of an express
trust, and any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the holders of the 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
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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 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.
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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 the last paragraph of 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 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
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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 repurchase price pursuant to Article XVI 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 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 and
so long as a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
Section 7.9 UNDERTAKING TO PAY COSTS. All parties to this
Indenture agree, and each holder of any Note by his acceptance
thereof shall be deemed to have agreed, that any court may, in its
discretion, require, in any suit for the enforcement of any right
or remedy under this Indenture, or in any suit against the Trustee
for any action taken 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
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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 provisions of
Article XV or to require the Company to repurchase any Note in
accordance with Article XVI.
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, except
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
(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
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shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(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 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 and any advice
or Opinion of Counsel shall be full and complete authorization and
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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;
and
(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.
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.
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Section 8.4 TRUSTEE, PAYING AGENTS, CONVERSION AGENTS OR
REGISTRAR MAY OWN NOTES. The Trustee, any paying agent, any
authenticating 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, reasonable
compensation 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
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 reasonable costs
and expenses of defending themselves against any claim of
liability in the premises, provided that (i) each of the Trustee
or such agent or authenticating agent, as the case may be, shall
notify the Company promptly of any claim or liability asserted
against such party for which it may seek indemnification, (ii) the
Company shall defend such claim and each of the Trustee, such
agent or authenticating agent, as the case may be, shall cooperate
with the Company's defense of such claim or liability, (iii) the
Trustee, such agent and authenticating agent may hire separate
counsel and the Company shall pay the reasonable fees and expenses
of such counsel, but (A) the Company will not be required to pay
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such fees and expenses if it assumes such parties' defense and
there is no conflict of interest between the Company and such
parties in connection with such defense and (B) the Company shall
not be liable, in connection with any such claim or liability or
substantially similar or related claims or liabilities, at any
time, for the fees and expenses of more than one separate firm of
attorneys (in addition to local counsel). The Company need not
pay for any settlement made without its written consent. The
obligations of the Company under this Section 8.6 to compensate or
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(e) or (f) occurs, the expenses and the
compensation for the services are intended to constitute expenses
of administration under any bankruptcy, insolvency or similar
laws.
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 Trust 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,
together with its parent, 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
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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 shall have been so appointed and have accepted appointment
sixty (60) 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 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 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,
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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 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. 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.
(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 reasonable request of any such successor
trustee, the Company shall execute such instruments in writing as
necessary for 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
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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, either the Company or the former
trustee 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 or the former trustee fails to mail such notice within ten
(10) days after acceptance of appointment by the successor
trustee, the successor trustee shall mail or cause such notice to
be mailed to the holders of Notes.
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 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
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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 by a written instrument or at a meeting, the Company or
the Trustee shall fix in advance of such solicitation, a date as
the record date for determining holders entitled to execute such
instrument or vote at such meeting. The record date shall be not
more than fifteen (15) days prior to the date of commencement of
solicitation of such action by written instrument and not more
than sixty (60) days prior to the date of such meeting, as the
case may be. With respect to any record date set pursuant to this
Section 9.1 relating to an action by written instrument, the party
hereto which sets such record date may designate any day as the
"Expiration Date" and from time to time may change the Expiration
Date to any earlier or later day; provided that no such change
shall be effective unless notice of the proposed new Expiration
Date is given to the other party hereto in writing, and to each
holder of Notes in the manner set forth in 17.3, on or prior to
the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this
Section 9.1, the party hereto which set such record date shall be
deemed to have initially designated the 180th day after such
record date as the Expiration Date with respect thereto, subject
to its right to change the Expiration Date as provided in this
paragraph. Notwithstanding the foregoing, no Expiration Date shall
be later than the 180th day after the applicable record date.
Section 9.2 PROOF OF EXECUTION BY NOTEHOLDERS. Subject to
the provisions of Sections 8.1, 8.2 and 10.5, proof of the
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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 Note register 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.
Section 9.3 WHO ARE DEEMED ABSOLUTE OWNERS. The Company,
the Trustee, any authenticating agent, 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
authenticating 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 fully
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,
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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 purpose
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 it 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 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
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(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.
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
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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 proxyholder 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 a 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.
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
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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. Nothing 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;
(b) subject to Article IV, to convey, transfer, assign,
mortgage or pledge to the Trustee as security for the Notes, any
property or assets;
(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;
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(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
qualification of this Indenture under the Trust Indenture Act, or
under any similar federal statute hereafter enacted.
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, the Trustee shall 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.
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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.
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 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 repurchase any Note upon
the happening of a Repurchase Event 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, in each case 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 an 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
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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 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 17.11) 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.
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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 in each case 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 which shall have 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 the 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 Iomega 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
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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 or conveyance (but not in the event of such 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 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 of 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
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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 17.5 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 of Notes for two years after the date upon which the
principal of, premium, if any, or interest on such Notes, as the
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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.
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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 option, at any time after
sixty (60) days following the latest date of original issuance of
the Notes and prior to the close of business on March 15, 2001
(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 second Business Day next preceding the date fixed
for redemption of such Note or portion of a Note unless the
Company shall default in the payment due upon redemption thereof
or that, with respect to a Note or portion of a Note submitted for
repurchase, such right shall terminate at the close of business on
the second Business Date next preceding the Repurchase Date unless
the Company shall default in the payment due on repurchase) 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, 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 last
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
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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.
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 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 the 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 second
Business Day next succeeding the following interest payment date)
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be accompanied by payment, in New York Clearing House funds or
other funds acceptable to the Company, of an amount equal to the
interest payable on such interest payment date on the principal
amount 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 or the second paragraph of
Section 2.3, no 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.
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 Trading 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 date fixed for
such determination. The Company will not pay any dividend or make
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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 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 at the close of business 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
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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) in connection with
the liquidation, dissolution or winding up of the Company, whether
voluntary or involuntary, (y) paid exclusively in cash or (z)
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 immediately prior to the
Record Date (as defined in Section 15.5(h) 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 at the close of business 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 in the event the then fair market value
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(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 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.
Each share of Common Stock issued upon conversion of Notes
pursuant to this Article XV shall be entitled to receive the
appropriate number of Rights, and the certificates representing
the Common Stock issued upon such conversion shall bear such
legends, in each case as provided by and subject to the terms of
the Rights Plan as in effect at the time of such conversion
(whether or not such Rights have separated from the Common Stock
at the time of conversion). In the event that the Company
implements any new stockholders' rights plan, as amended,
supplemented or modified from time to time (a "New Rights Plan"),
such New Rights Plan shall provide that upon conversion of the
Notes the holders will receive, in addition to the Common Stock
issuable upon such conversion, the rights (whether or not such
rights have separated from Common Stock at the time of the
conversion) issuable pursuant to the New Rights Plan.
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
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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 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).
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(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 Prices (determined
as set forth in Section 15.5(h)) during the ten consecutive
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 the Record Date for such dividend or distribution 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 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 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 tender or exchange offer
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(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) that, 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) exceeds
the Current Market 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 Current Market 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 of the Company 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 Current Market 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
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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 stockholders 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 Current Market Price of the Common Stock
on the Trading Day next succeeding the Expiration Time, such
reduction to become effective as of 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,
or 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
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applicable law, a duly authorized committee thereof, whose
determination hall be conclusive.
(2) "Current Market Price" shall mean the average
of the daily Closing Prices per share of Common Stock for the ten
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 Repurchase Event 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 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 Repurchase Event 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 "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
Repurchase Date 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) or (f), 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), 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
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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 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) and (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
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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, 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 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
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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 15.6 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 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
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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 15.7 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.
Section 15.8 RESERVATION OF SHARES; SHARES TO BE FULLY PAID;
COMPLIANCE WITH GOVERNMENTAL REQUIREMENTS; LISTING OF COMMON
STOCK. The Company shall reserve, 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
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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 Nasdaq National Market 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.
Section 15.9 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 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
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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
(other than the Rights granted pursuant to the Rights Plan,
provided that the holders of the Notes receive the same notice
received by all holders of Common Stock regarding such grant in
accordance with the applicable notice provisions of the Rights
Plan); 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; 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, 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, rights or warrants
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
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holders of Common Stock of record shall be entitled to exchange
their Common Stock for securities or other 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
REPURCHASE OF NOTES AT THE
OPTION OF THE HOLDER UPON REPURCHASE EVENT
Section 16.1 RIGHT TO REQUIRE REPURCHASE. In the event that
a Repurchase Event (as hereinafter defined) shall occur, then each
holder shall have the right, at the holder's option, to require
the Company to repurchase, and upon the exercise of such right the
Company shall repurchase, all of such holder's Notes, or any
portion of the principal amount thereof that is an integral
multiple of U.S. $1,000 (provided that no single Note may be
repurchased in part unless the portion of the principal amount of
such Note to be outstanding after such repurchase is equal to U.S.
$1,000 or integral multiples of U.S. $1,000), on the date (the
"Repurchase Date") that is 30 days after the date of the Company
Notice (as defined in Section 16.2) for cash at a purchase price
equal to 100% of the principal amount plus interest accrued and
unpaid interest to, but excluding, the Repurchase Date (the
"Repurchase Price"); provided that if the Repurchase Date is March
15 or September 15, then the interest payable on such date shall
be paid to the holder of record of the Note on the next preceding
March 1 or September 1, respectively. Whenever in this Indenture
there is a reference, in any context, to the principal of any Note
as of any time, such reference shall be deemed to include
reference to the Repurchase Price payable in respect of such Note
to the extent that such Repurchase Price is, was or would be so
payable at such time, and express mention of the Repurchase Price
in any provision of this Indenture shall not be construed as
excluding the Repurchase Price in those provisions of this
Indenture when such express mention is not made.
Section 16.2 NOTICES; METHOD OF EXERCISING REPURCHASE RIGHT,
ETC.
(a) Unless the Company shall have theretofore called for
redemption all of the outstanding Notes pursuant to Article III,
on or before the 30th day after the occurrence of a Repurchase
Event, the Company or, at the request of the Company on or before
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the 15th day after such occurrence, the Trustee shall give to all
holders of Notes notice (the "Company Notice") of the occurrence
of the Repurchase Event and of the repurchase right set forth
herein arising as a result thereof. The Company shall also
deliver a copy of such notice of a repurchase right to the
Trustee.
Each notice of a repurchase right shall state:
(1) the Repurchase Date,
(2) the date by which the repurchase right must be
exercised,
(3) the Repurchase Price,
(4) a description of the procedure which a holder
must follow to exercise a repurchase right,
(5) that on the Repurchase Date the Repurchase
Price will become due and payable upon each such Note designated
by the holder to be repurchased, and that interest thereon shall
cease to accrue on and after said date,
(6) the Conversion Price, the date on which the
right to convert the Notes to be repurchased will terminate, the
places where such Notes may be surrendered for conversion, and a
statement that if the holder wishes to convert any Notes or any
portion thereof after having tendered them for repurchase, such
written notice of exercise of the right to require repurchase of
such Note or portion thereof to be repurchased must first be
withdrawn by delivery of a proper notice to the Trustee, and
(7) the place or places where such Notes are to be
surrendered for payment of the Repurchase Price and accrued
interest, if any. No failure of the Company to give the foregoing
notices or defect therein shall limit any holder's right to
exercise a repurchase right or affect the validity of the
proceedings for the repurchase of Notes.
If any of the foregoing provisions or other provisions of
this Article are inconsistent with applicable law, such law shall
govern.
(b) To exercise a repurchase right, a holder shall
deliver to the Trustee or any paying agent on or before the 30th
day after the date of the Company Notice (i) written notice of the
holder's exercise of such right, which notice shall set forth the
name of the holder, the principal amount of the Notes to be
repurchased (and, if any Note is to repurchased in part, the
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serial number thereof, the portion of the principal amount thereof
to be repurchased and the name of the Person in which the portion
thereof to remain outstanding after such repurchase is to be
registered) and a statement that an election to exercise the
repurchase right is being made thereby, and (ii) the Notes with
respect to which the repurchase right is being exercised.
(c) In the event a repurchase right shall be exercised
in accordance with the terms hereof, the Company shall pay or
cause to be paid to the Trustee or the paying agent the Repurchase
Price in cash, for payment to the holder on the Repurchase Date.
(d) If any Note (or portion thereof) surrendered for
repurchase (in accordance herewith and not properly withdrawn)
shall not be so paid on the Repurchase Date, the principal amount
of such Note (or portion thereof, as the case may be) shall, until
paid, bear interest from the Repurchase Date at the rate of 6 3/4%
per annum, and each Note shall remain convertible into Common
Stock until the principal of such Note (or portion thereof, as the
case may be) shall have been paid or duly provided for.
(e) Any Note which is to be repurchased only in part
shall be surrendered to the Trustee (with, if the Company or the
Trustee so requires, due endorsement by, or a written instrument
of transfer in form satisfactory to the Company and the Trustee
duly executed by, the holder thereof or his attorney duly
authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the holder of such Note
without service charge, a new Note or Notes, containing identical
terms and conditions, each in an authorized denomination in
aggregate principal amount equal to and in exchange for the
unrepurchased portion of the principal of the Note so surrendered.
Section 16.3 CERTAIN DEFINITIONS. For purposes of this
Article XVI,
(a) the term "beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Commission pursuant
to the Exchange Act; and
(b) the term "Person" shall include any syndicate or
group which would be deemed to be a "person" under Section
13(d)(3) of the Exchange Act.
Section 16.4 REPURCHASE EVENT. A "Repurchase Event" shall
be deemed to have occurred at such time as:
(a) any Person, other than the Company, any subsidiary
of the Company, or any employee benefit plan of the Company or any
such subsidiary, is or becomes the beneficial owner, directly or
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indirectly, through a purchase or other acquisition transaction or
series of transactions (other than a merger or consolidation
involving the Company), of shares of capital stock of the Company
entitling such Person to exercise in excess of 50% of the total
voting power of all shares of capital stock of the Company
entitled to vote generally in the election of directors; or
(b) there occurs any consolidation of the Company with,
or merger of the Company into, any other Person, any merger of
another Person into the Company, or any sale or transfer of all or
substantially all of the assets of the Company to another Person
(other than (i) any such transaction pursuant to which the holders
of the Common Stock immediately prior to such transaction have,
directly or indirectly, shares of capital stock of the continuing
or surviving corporation immediately after such transaction which
entitle such holders to exercise in excess of 50% of the total
voting power of all shares of capital stock of the continuing or
surviving corporation entitled to vote generally in the election
of directors and (ii) any merger (1) which does not result in any
reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock or (2) which is effected solely
to change the jurisdiction of incorporation of the Company and
results in a reclassification, conversion or exchange of
outstanding shares of Common Stock solely into shares of common
stock); provided, however, that a Repurchase Event shall not be
deemed to have occurred if either (a) the Closing Price per share
of the Common Stock for any five Trading Days within the period of
ten consecutive Trading Days ending immediately before the
Repurchase Event shall equal or exceed 105% of the Conversion
Price in effect on each such trading day, or (b) at least 90% of
the consideration (excluding cash payments for fractional shares)
in the transaction or transactions constituting the Repurchase
Event consists of shares of common stock traded on a national
securities exchange or quoted on the Nasdaq National Market (or
which will be so traded or quoted when issued or exchanged in such
connection with such Repurchase Event) and as a result of such
transaction or transactions such Notes become convertible solely
into such common stock.
ARTICLE XVII
MISCELLANEOUS PROVISIONS
Section 17.1 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.
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Section 17.2 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 17.3 ADDRESSES FOR NOTICES, ETC. Any notice or
demand which by any provision of this 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 Iomega Corporation, 1821 West
Iomega Way, Roy Utah, 84067, Attention: Chief Financial Officer.
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, located at Two
International Place, 4th Floor, Boston, Massachusetts 02110,
Attention: Corporate Trust Division (Iomega Corporation 6 3/4%
Convertible Subordinated Notes due 2001).
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.
Section 17.4 GOVERNING LAW. This Indenture and each Note
shall be deemed to be a contract made under the laws of the
Commonwealth of Massachusetts, and for all purposes shall be
construed in accordance with the laws of the Commonwealth of
Massachusetts.
Section 17.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS
PRECEDENT; CERTIFICATES TO TRUSTEE. Upon any application or demand
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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, an Opinion of Counsel
stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, and such other evidence of
compliance as may be required with respect to such application or
demand under the Trust Indenture Act.
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 17.6 LEGAL HOLIDAYS. In any case where the date of
maturity of interest on or principal of the Notes or the date
fixed for redemption or repurchase 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 or
repurchase, and no interest shall accrue for the period from and
after such date.
Section 17.7 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 this Section 17.7 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 17.8 NO SECURITY INTEREST CREATED. Nothing in this
Indenture or in the Notes, whether expressed or implied, shall be
construed to constitute, create or perfect 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 17.9 BENEFITS OF INDENTURE. Nothing in this
Indenture or in the Notes, whether 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 17.10 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 17.11 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, 15.2 and 16.2, 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 17.11, 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.
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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 promptly appoint a successor
authenticating agent (which may be the Trustee), shall give
written notice of such appointment to the Company and shall mail
notice of such appointment 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 17.11 shall be applicable to any authenticating agent.
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Section 17.12 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.
State Street Bank and Trust Company, hereby accepts the
trusts in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly signed, all as of the date first written
above.
IOMEGA CORPORATION
By: _/s/ Kim B. Edwards______
Name: Kim B. Edwards
Title: President and Chief
Executive Officer
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: __/s/ Jill Olson __________________
Name: __Jill Olson ____________________
Title: __Assistant Vice President______
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EXHIBIT A
IOMEGA CORPORATION
6 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2001
No. __ CUSIP 462030 AA 5
Iomega 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 __________________ or
registered assigns, the principal sum of _______________
($____________) on March 15, 2001, 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 March 15 and September 15 of each
year, commencing September 15, 1996, on said principal sum at
said office or agency, in like coin or currency, at the rate per
annum of 6 3/4%, from March 15 or September 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 March
13, 1996, until payment of said principal sum has been made or
duly provided for.
Notwithstanding the foregoing, if the date hereof is after
any March 1 or September 1, as the case may be, and before the
following March 15 or September 15, this Note shall bear interest
from such March 15 or September 15; provided, however, that if the
Company shall default in the payment of interest due on such March
15 or September 15, then this Note shall bear interest from the
next preceding March 15 or September 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 March 13, 1996. The interest
payable on the Note pursuant to the Indenture on any March 15 or
September 15 will be paid to the person in whose name this Note
(or one or more Predecessor Notes) is registered at the close of
business on the record date, which shall be the March 1 or
September 1 (whether or not a Business Day) next preceding such
March 15 or September 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; provided that, with respect to
any holder of Notes with an aggregate principal amount equal to or
in excess of $5,000,000, at the request of such holder in writing
to the Company (who shall then furnish written notice to such
effect to the Trustee), interest on such holder's Notes shall be
paid by wire transfer (the costs of such wire transfer to be borne
by the Company) in immediately available funds in accordance with
the wire transfer instructions supplied by such holder to the
Trustee and paying agent (if different from the Trustee).
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 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 the Commonwealth of Massachusetts, and for all purposes
shall be construed in accordance with and governed by the laws of
said Commonwealth.
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.
Dated: March __, 1996 IOMEGA CORPORATION
By:
Attest: ____________________
A-2
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named
Indenture.
STATE STREET BANK AND TRUST COMPANY, as Trustee
By: _________________________
Authorized Signatory
By: _________________________
As Authenticating Agent
(if different from Trustee)
A-3
[FORM OF REVERSE OF NOTE]
IOMEGA CORPORATION
6 3/4% CONVERTIBLE SUBORDINATED NOTE DUE 2001
This Note is one of a duly authorized issue of Notes of the
Company, designated as its 6 3/4% Convertible Subordinated Notes
due 2001 (herein called the "Notes"), limited to the aggregate
principal amount of $46,000,000 all issued or to be issued under
and pursuant to an indenture dated as of March 13, 1996 (herein
called the "Indenture"), between the Company and State Street Bank
and Trust Company, 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
repurchase of any Note upon the happening of a Repurchase Event 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 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 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 repurchase
price pursuant to Article XVI, a failure by the Company to convert
any Notes into Common Stock of the Company or a default in respect
of a covenant or provisions hereof which under Article XI cannot
be modified or amended without the consent of holders of all Notes
then outstanding. 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
360-day year comprised 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
B-2
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 March 15, 1999. At any time on or after March 15, 1999,
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 nor more than 60 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.
If redeemed during the 12-month period beginning March 15:
YEAR PERCENTAGE
----- -----------
1999.......................... 102.70%
2000.......................... 101.35%
Provided that if the date fixed for redemption is on March 15 or
September 15, then the interest payable on such date shall be paid
to the holder of record on the next preceding March 1 or September
1, respectively.
The Notes are not subject to redemption through the operation
of any sinking fund.
If a Repurchase Event (as defined in the Indenture) occurs
prior to March 15, 2001, the holder of this Note shall have the
right, in accordance with the provisions of the Indenture, to
require the Company to repurchase this Note for cash at a
Repurchase Price equal to 100% of the principal amount plus
accrued and unpaid interest to, but excluding, the Repurchase
Date; provided that if such Repurchase Date is March 15 or
September 15, then the interest payable on such date shall be to
the holder of record of the Note on the next preceding March 1 or
September 1, respectively. Within 30 days after the occurrence of
a Repurchase Event, the Company is obligated to give all holders
of record of Notes notice of the occurrence of such Repurchase
Event and of the repurchase right arising as a result thereof.
Subject to the provisions of the Indenture, the holder hereof
has the right, at its option, at any time after 60 days following
the latest date of original issuance of the Notes and prior to the
B-3
close of business on March 15, 2001, or, as to all or any portion
hereof called for redemption, prior to the close of business on
the second 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 $19.75 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 second Business Day next succeeding 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 second
Business Day next preceding 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, but excluding, 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.
B-4
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), 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.
Terms used in this Note and defined in the Indenture are used
herein as therein defined.
B-5
ABBREVIATIONS
The following abbreviations, when used in the inscription on
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 UNIF GIFT MIN ACT Custodian
common
(Minor)
under Uniform Gifts to Minors Act
State
TEN ENT as tenants by
the entireties
JT TEN as joint tenants
with right of
survivorship
and not as
tenants in
common
Additional abbreviations may also be used
though not in the above list.
B-6
CONVERSION NOTICE
To: IOMEGA 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 Iomega
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(s) must be guaranteed by an
eligible Guarantor Institution (banks,
stock brokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if shares of Common Stock
are to be issued, or Notes to be
delivered, other than to and in the name
of the registered holder.
________________________________
Signature Guarantee
B-7
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)
_______________________________
(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
B-8
OPTION TO ELECT REPURCHASE
UPON A REPURCHASE EVENT
To: IOMEGA CORPORATION
The undersigned registered owner of this Note hereby
acknowledges receipt of a notice from Iomega Corporation (the
"Company") as to the occurrence of a Repurchase Event 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 repurchase 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
B-9
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.
Dated: ____________________
_____________________________
_____________________________
Signature(s)
Signature(s) must be guaranteed by an
eligible Guarantor Institution (banks,
stock brokers, savings and loan
associations and credit unions) with
membership in an approved signature
guarantee medallion program pursuant
to Securities and Exchange Commission
Rule 17Ad-15 if shares of Common Stock
are to be issued, or Notes to be
delivered, other than to and in the name
of the registered holder.
_______________________________________
Signature Guarantee
B-10
