SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 8, 1994
3COM CORPORATION
(Exact name of registrant as specified in its charter)
California 0-12867 94-2605794
(State or other jurisdiction of (Commission File Number) (I.R.S. Employer)
incorporation or organization) Identification No.)
5400 Bayfront Plaza 95052
Santa Clara, California
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (408) 764-5000
Item 5. Other Events
On November 8, 1994, 3Com Corporation (the "Company") announced in a
press release that it concluded a Placement Agreement (the "Agreement"), a
copy of which is attached hereto as Exhibit 5.1 and incorporated herein by
reference, with two investment banking firms for the private placement under
Rule 144A of the Securities Act of 1933, as amended, of up to $110 million
10.25% convertible subordinated notes due 2001. The notes are convertible
into a maximum of 1,591,320 shares of the Company's Common Stock at a
conversion price of $69.125 per share. The terms of the notes are governed
by an Indenture dated November 1, 1994 by and between the Company and The
First National Bank of Boston, as trustee, a copy of which is attached hereto
as Exhibit 5.2 and incorporated herein by reference. The transaction closed
on November 16, 1994.
A copy of the press release announcing the signing of the Agreement
is attached hereto as Exhibit 5.3 and is incorporated herein by reference.
Item 7. Exhibits
Exhibit No. Description
5.1 Placement Agreement dated November 8, 1994
5.2 Indenture dated November 1, 1994
5.3 Press Release date November 8, 1994
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
this registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
3COM CORPORATION
November 16, 1994 By: /s/ Christopher B. Paisley
Christopher B. Paisley
Vice President Finance and
Chief Financial Officer
(Principal Financial Officer)
3Com Corporation
Exhibit Index
to Form 8-K
Exhibit No. Description
5.1 Placement Agreement dated November 8, 1994
5.2 Indenture dated November 1, 1994
5.3 Press Release dated November 8, 1994
EXHIBIT 5.1
PLACEMENT AGREEMENT
DATED NOVEMBER 8, 1994
3COM CORPORATION
PLACEMENT AGREEMENT
November 8, 1994
Morgan Stanley & Co. Incorporated
Goldman, Sachs & Co.
c/o Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
3Com Corporation, a California corporation (the "Company"),
proposes to issue and sell to you, the purchasers named in Schedule I
hereto (the "Purchasers"), $100,000,000 aggregate principal amount of
its 10.25% Convertible Subordinated Notes Due 2001 (the "Firm Notes")
to be issued pursuant to the provisions of an Indenture (the
"Indenture") dated as of November 1, 1994 between the Company and The
First National Bank of Boston, as Trustee (the "Trustee").
The Company also proposes to issue and sell to the Purchasers
not more than an additional $10,000,000 aggregate principal amount of
its 10.25% Convertible Subordinated Notes Due 2001 (the "Additional
Notes") if and to the extent that Morgan Stanley & Co. Incorporated,
as Manager, shall have determined to exercise, on behalf of the
Purchasers, the right to purchase such Additional Notes granted to
the Purchasers in Section 3 hereof. The Firm Notes and the
Additional Notes are hereinafter collectively referred to as the
"Notes." The Notes will be convertible, on the terms and subject to
the conditions set forth in the Indenture and the Notes, into Common
Stock, no par value, of the Company (the "Common Stock") together
with the rights (the "Rights") evidenced by such Common Stock to the
extent provided in the Rights Agreement dated as of September 8,
1989, as to be amended pursuant to the Indenture (the "Rights
Agreement"), between the Company and The First National Bank of
Boston.
The sale of the Notes to you will be made without registration
of the Notes under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on exemptions therefrom, including
without limitation the exemption provided by Section 4(2) of the
Securities Act.
In connection with the sale of the Notes, the Company has
prepared a preliminary Offering Memorandum dated November 1, 1994
(the "Preliminary Memorandum") and a final Offering Memorandum dated
November 8, 1994 (the "Final Memorandum" and, with the Preliminary
Memorandum, each a "Memorandum") setting forth or including a
description of the terms of the Notes, the terms of the offering, a
description of the Company and any material developments relating to
the Company occurring after the date of the most recent financial
statements included therein. Each of the Preliminary Memorandum and
the Final Memorandum includes or incorporates certain information
concerning the Company, the Notes and the Common Stock. The Final
Memorandum incorporates by reference each document or report filed by
the Company after the date hereof and prior to the termination of the
distribution of the Notes with the Securities and Exchange Commission
(the "Commission") pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act").
Any references herein to the Preliminary Memorandum or the Final
Memorandum shall be deemed to include all documents incorporated
therein by reference and any further document or report filed by the
Company with the Commission under the Exchange Act subsequent to the
date hereof and prior to the termination of the distribution of the
Notes. The terms "supplement," "amendment" and "amend" as used
herein shall include all documents deemed to be incorporated by
reference in the Preliminary Memorandum or Final Memorandum that are
filed subsequent to the date of such Memorandum with the Commission
pursuant to the Exchange Act.
1. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Purchasers that:
(a) (i) Each document filed or to be filed pursuant to the
Exchange Act and incorporated by reference in either Memorandum
complied or will comply when so filed in all material respects with
the Exchange Act and the applicable rules and regulations of the
Commission thereunder and (ii) the Preliminary Memorandum does not
contain and the Final Memorandum, in the form used by the Purchasers
to confirm sales and on the Closing Date (as defined below), will not
contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading,
except that the representations and warranties set forth in
clause (ii) of this Section 1(a) do not apply to statements or
omissions in either Memorandum based upon information relating to any
Purchaser furnished to the Company in writing by such Purchaser
through you expressly for use therein.
(b) The Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
State of California, has the corporate power and authority to own its
property and to conduct its business as described in each Memorandum
and is duly qualified to transact business and is in good standing in
each jurisdiction in which the conduct of its business or its
ownership or leasing of property requires such qualification, except
to the extent that the failure to be so qualified or be in good
standing would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole.
(c) Each "significant subsidiary" of the Company (as
defined in Regulation S-X, Section 210.1-02(v), each a "subsidiary")
has been duly incorporated, is validly existing as a corporation in
good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its
property and to conduct its business as described in each Memorandum
or as currently being conducted and is duly qualified to transact
business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to
be so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole.
(d) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Notes have been duly authorized and, when
executed, authenticated and delivered to and paid for by the
Purchasers in accordance with the terms of this Agreement and the
Indenture, will (i) be valid and binding obligations of the Company
enforceable in accordance with their terms, except as (A) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (B) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (ii) be entitled to the benefits of the Indenture.
(f) (1) The shares of Common Stock issuable upon
conversion of the Notes (the "Shares") have been duly authorized and
reserved for issuance and, when issued upon such conversion in accor-
dance with the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable, and the issuance of such Shares
will not be subject to any preemptive rights or similar rights and
(2) the Rights, if any, issuable upon conversion of the Notes have
been duly authorized and, when and if issued upon conversion in
accordance with the terms of the Indenture and the Rights Agreement,
will have been validly issued.
(g) The authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in each
Memorandum.
(h) The shares of Common Stock of the Company outstanding
have been duly authorized and are validly issued, fully paid and
non-assessable.
(i) The Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the Company,
enforceable in accordance with its terms except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability.
(j) The execution and delivery by the Company of, and the
performance by the Company of its obligations under, this Agreement,
the Indenture and the Notes will not contravene any provision of
applicable law or the articles of incorporation or bylaws of the
Company or any agreement or other instrument binding upon the Company
or any of its subsidiaries that is material to the Company and its
subsidiaries, taken as a whole, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over the
Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company of its obligations under
this Agreement, the Indenture and the Notes, except such as are
specified and have been obtained or such as may be required by the
securities or Blue Sky laws of the various states in connection with
the purchase and distribution of the Notes by you.
(k) There has not occurred any material adverse change, or
any development which could reasonably be expected to result in a
material adverse change, in the condition, financial or otherwise, or
in the earnings, business or operations of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Preliminary Memorandum.
(l) There are no legal or governmental proceedings pending
or threatened to which the Company or any of its subsidiaries is a
party or to which any of the properties of the Company or any of its
subsidiaries is subject other than proceedings accurately described
in all material respects in each Memorandum and proceedings that
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole, or on the power or ability of the
Company to perform its obligations under this Agreement, the
Indenture or the Notes or to consummate the transactions contemplated
by the Final Memorandum.
(m) Each of the Company and its subsidiaries has all
necessary consents, authorizations, approvals, orders, certificates
and permits of and from, and has made all declarations and filings
with, all federal, state, local and other governmental authorities,
all self-regulatory organizations and all courts and other tribunals,
which are necessary to own, lease, license and use its properties and
assets and to conduct its business in the manner described in each
Memorandum, except to the extent that the failure to obtain or file
would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(n) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended.
(o) To the best knowledge of the Company after due
inquiry, each of the Company and its subsidiaries (i) is in
compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"), (ii) has
received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective
businesses and (iii) is in compliance with all terms and conditions
of any such permit, license or approval, except where such noncom-
pliance with Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly
or in the aggregate, have a material adverse effect on the Company
and its subsidiaries, taken as a whole.
(p) Based upon the Company's review of the effect of
Environmental Laws on the business, operations and properties of the
Company and its subsidiaries, the Company has reasonably concluded
that the costs and liabilities, if any, of compliance with such
Environmental Laws would not, singly or in the aggregate, have a
material adverse effect on the Company and its subsidiaries, taken as
a whole.
(q) Each of the Company and its subsidiaries owns or
possesses, or can acquire on reasonable terms adequate and sufficient
licenses or other rights to use, all patents, patent rights,
copyrights, licenses, inventions, trademarks, service marks, trade
names, technology and know-how necessary (in any material respect) to
conduct its business as now operated and in the manner described in
each Memorandum and, except as disclosed in each Memorandum, neither
the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with (and knows of no infringement of or
conflict with) asserted rights of others with respect to any of the
foregoing which, singly or in the aggregate, would have a material
adverse effect upon the Company and its subsidiaries taken as a
whole.
(r) The Company has not taken and will not take, directly
or indirectly, any action prohibited by Rule 10b-6 under the Exchange
Act in connection with the sale and offering of the Notes.
(s) Neither the Company nor any affiliate (as defined in
Rule 501(b) of Regulation D under the Securities Act, an "Affiliate")
of the Company has directly, or through any agent, (i) sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect
of, any security (as defined in the Securities Act) which is or will
be integrated with the sale of the Notes in a manner that would
require the registration of the Notes under the Securities Act or
(ii) engaged in any form of general solicitation or general
advertising in connection with the offering of the Notes (as those
terms are used in Regulation D under the Securities Act), or in any
manner involving a public offering within the meaning of Section 4(2)
of the Securities Act.
(t) None of the Company, its Affiliates or any person
acting on its or their behalf (other than the Purchasers) has engaged
or will engage in any directed selling efforts (as that term is
defined in Regulation S under the Securities Act ("Regulation S"))
with respect to the Notes, and the Company and its Affiliates and any
person acting on its or their behalf (other than the Purchasers) has
complied and will comply with the offering restrictions requirements
of Regulation S.
(u) It is not necessary in connection with the offer, sale
and delivery of the Notes to the Purchasers under this Agreement or
in connection with the initial resale of the Notes by you in the
manner contemplated by this Agreement and the Final Memorandum to
register the Notes or the Shares under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(v) The Company has complied with all provisions of
Section 517.075, Florida Statutes (Chapter 92-198, Laws of Florida).
(w) The Notes satisfy the requirements set forth in
Rule 144A(d)(3) under the Securities Act.
2. Offering. You have advised the Company that you will make
an offering of the Notes purchased by you hereunder in accordance
with Section 6 hereof on the terms set forth in the Final Memorandum
and in the Indenture, as soon as practicable after this Agreement is
entered into as in your judgment is advisable.
3. Purchase and Delivery. The Company hereby agrees to sell
to the Purchasers, and each Purchaser, upon the basis of the
representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees, severally and not jointly, to
purchase from the Company the respective aggregate principal amount
of Firm Notes set forth in Schedule I hereto opposite their names at
a purchase price of 97.5% of the principal amount thereof (the
"purchase price") plus accrued interest, if any, from November 16,
1994 to the date of payment and delivery.
On the basis of the representations and warranties
contained in this Agreement, and subject to its terms and conditions,
the Company agrees to sell to the Purchasers the Additional Notes,
and the Purchasers shall have a one-time right to purchase, severally
and not jointly, up to $10,000,000 aggregate principal amount of
Additional Notes at the purchase price plus accrued interest, if any,
from November 16, 1994 to the date of payment and delivery.
Additional Notes may be purchased as provided in this Section 3
solely for the purpose of covering over-allotments made in connection
with the offering of the Firm Notes. If any Additional Notes are to
be purchased, each Purchaser agrees, severally and not jointly, to
purchase the aggregate principal amount of Additional Notes (subject
to such adjustments to eliminate fractional shares as Morgan Stanley
& Co. Incorporated shall determine) that bears the same proportion to
the total aggregate principal amount of Additional Notes to be
purchased as the aggregate principal amount of Firm Notes set forth
in Schedule I opposite the name of such Purchaser bears to the total
aggregate principal amount of Firm Notes.
Payment for the Firm Notes shall be made against delivery
of the Firm Notes at a closing to be held at the office of Gray Cary
Ware & Freidenrich, 400 Hamilton Avenue, Palo Alto, California at
7:00 A.M., local time, on November 16, 1994, or at such other time on
the same or such other date, not later than November 23, 1994, as
shall be designated in writing by you. The time and date of such
payment are herein referred to as the Closing Date. Payment for the
Firm Notes shall be made by certified or official bank check or
checks payable to the order of the Company in New York Clearing House
funds.
Payment for any Additional Notes shall be made against
delivery of the Additional Notes at a closing to be held at the
office of Gray Cary Ware & Freidenrich, 400 Hamilton Avenue, Palo
Alto, California at 7:00 A.M., local time, on such date (which may be
the same as the Closing Date but shall in no event be earlier than
the Closing Date nor later than ten (10) business days after the
giving of the notice hereinafter referred to) as shall be designated
in a written notice from Morgan Stanley & Co. Incorporated to the
Company of its determination, on behalf of the Purchasers, to
purchase an aggregate principal amount, specified in said notice, of
Additional Notes, or on such other date, in any event not later than
December 23, 1994 as shall be designated in writing by Morgan Stanley
& Co. Incorporated. The time and date of such payment are
hereinafter referred to as the Option Closing Date. Payment for the
Additional Notes shall be made by certified or official bank check or
checks payable to the order of the Company in New York Clearing House
funds. The notice of the determination to exercise the option to
purchase Additional Notes and of the Option Closing Date may be given
at any time within thirty (30) days after the date of this Agreement.
Certificates for the Firm Notes and Additional Notes shall
be in definitive or global form and registered in such names and in
such denominations as you shall request in writing not later than two
(2) full business days prior to the Closing Date or the Option
Closing Date, as the case may be. The certificates evidencing the
Firm Notes and Additional Notes shall be delivered to you on the
Closing Date or the Option Closing Date, as the case may be, with any
transfer taxes payable in connection with the transfer of the Notes
to the Purchasers duly paid, against payment of the purchase price
therefor.
4. Conditions to Closing. The several obligations of the
Purchasers under this Agreement to purchase the Firm Notes is subject
to the accuracy of the representations and warranties of the Company
made herein, to the performance and observance by the Company of all
the covenants and agreements herein contained on its part to be
performed and observed and to the following conditions:
(a) Subsequent to the date of this Agreement and prior to
the Closing Date,
(i) there shall not have occurred any downgrading,
nor shall any notice have been given of any intended or
potential downgrading or of any review for a possible
change that does not indicate the direction of the possible
change, in the rating accorded any of the Company's
securities by any "nationally recognized statistical rating
organization," as such term is defined for purposes of
Rule 436(g)(2) under the Securities Act; and
(ii) there shall not have occurred any change, or any
development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, of the Company and its
subsidiaries, taken as a whole, from that set forth in the
Final Memorandum that, in your judgment, is material and
adverse and that makes it, in your judgment, impracticable
to market the Notes on the terms and in the manner
contemplated in the Final Memorandum.
(b) You shall have received on the Closing Date a
certificate of the Company, dated the Closing Date and signed by the
chief executive officer and chief financial officer of the Company,
to the effect set forth in paragraph (a) above and to the effect that
the representations and warranties of the Company contained in this
Agreement are true and correct as of the Closing Date and that the
Company has complied with all of the agreements and satisfied all of
the conditions on its part to be performed or satisfied on or before
the Closing Date.
The officers signing and delivering such certificate may
rely upon the best of their knowledge as to proceedings threatened.
(c) You shall have received on the Closing Date an opinion
of Gray Cary Ware & Freidenrich, counsel for the Company, dated the
Closing Date, to the effect set forth in Exhibit A.
(d) You shall have received on the Closing Date an opinion
of Wilson, Sonsini, Goodrich & Rosati, Professional Corporation,
counsel for the Purchasers, dated the Closing Date, to the effect set
forth in Exhibit B.
(e) You shall have received on the date of this Agreement
a letter dated such date and also on the Closing Date a letter dated
the Closing Date, in each case in form and substance satisfactory to
you, from Deloitte & Touche, the Company's independent public
accountants, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in or incorporated by reference into each
Memorandum.
Your obligation to purchase Additional Notes hereunder is
subject to the delivery to you on the Option Closing Date of such
documents as you may reasonably request with respect to the good
standing of the Company, the due authorization and issuance of the
Additional Notes and other matters related to the issuance of the
Additional Notes.
5. Covenants of the Company. In further consideration of the
agreements of the Purchasers contained in this Agreement, the Company
covenants as follows:
(a) To furnish to the Purchasers, without charge, during
the period mentioned in paragraph (c) below, as many copies of the
Final Memorandum, any documents incorporated by reference therein and
any supplements and amendments thereto as the Purchasers may
reasonably request.
(b) Before amending or supplementing either Memorandum, to
furnish to you a copy of each such proposed amendment or supplement
and not to use any such proposed amendment or supplement to which you
reasonably object.
(c) If, during such period after the date hereof and prior
to the date on which all of the Notes shall have been sold by the
Purchasers, any event shall occur or condition exist as a result of
which it is necessary in your judgment to amend or supplement the
Final Memorandum in order to make the statements therein, in the
light of the circumstances when such Final Memorandum is delivered to
a purchaser, not misleading, or if, in the reasonable opinion of
counsel to the Purchasers, it is necessary to amend or supplement
such Final Memorandum to comply with applicable law, forthwith to
prepare and furnish, at its own expense, to the Purchasers, either
amendments or supplements to the Final Memorandum so that the
statements in such Final Memorandum as so amended or supplemented
will not, in the light of the circumstances when such Final
Memorandum is delivered to a purchaser, be misleading or so that the
Final Memorandum, as so amended or supplemented, will comply with
applicable law.
(d) To endeavor to qualify the Notes and the Shares for
offer and sale under the securities or Blue Sky laws of such
jurisdictions as you shall reasonably request and to maintain such
qualifications for as long as you shall reasonably request.
(e) Whether or not any sale of such Notes is consummated,
to pay all expenses incident to the performance of its obligations
under this Agreement, including: (i) the preparation of each
Memorandum and all amendments and supplements thereto, (ii) the
preparation, issuance and delivery of the Notes, (iii) the fees and
disbursements of the Company's counsel and accountants and the
Trustee and its counsel, (iv) the qualification of the Notes and the
Shares under securities or Blue Sky laws in accordance with the
provisions of Section 5(d), including filing fees and the fees and
disbursements of counsel for the Purchasers in connection therewith
and in connection with the preparation of any Blue Sky or legal
investment memoranda, (v) the printing and delivery to the Purchasers
in quantities as they shall request of copies of each Memorandum and
any amendments or supplements thereto, (vi) any fees charged by
rating agencies for the rating of the Notes, (vii) the fees and
expenses, if any, incurred in connection with the admission of the
Notes for trading in any appropriate market system, and (viii) any
stamp or value added taxes payable in connection with the sale of the
Notes to the Purchasers.
(f) Without your prior written consent, the Company will
not offer, sell, contract to sell or otherwise dispose of any shares
of its preferred stock or common stock or any securities convertible
into or exercisable or exchangeable for its preferred stock or common
stock for a period of 90 days after the date of this Agreement, other
than (i) the Notes to be sold hereunder, (ii) the Shares issuable
upon conversion of the Notes, (iii) securities issued by the Company
with a market value not exceeding $50,000,000 as full or partial
consideration in connection with the acquisition by the Company of
another corporation, (iv) pursuant to the Rights, and (v) options to
purchase Common Stock, or shares of Common Stock issued upon exercise
of such options, granted under the Company's existing stock option
and stock purchase plans; provided, however, that the foregoing shall
not preclude the Company from entering into negotiations to issue its
securities in connection with the acquisition by the Company of
another corporation so long as a binding agreement is not entered
into during such 90-day period.
(g) Neither the Company nor any Affiliate will sell, offer
for sale or solicit offers to buy or otherwise negotiate in respect
of any security (as defined in the Securities Act) which could be
integrated with the sale of the Notes in a manner which would require
the registration under the Securities Act of such Notes.
(h) Not to solicit any offer to buy or offer or sell the
Notes by means of any form of general solicitation or general
advertising (as those terms are defined in Regulation D under the
Securities Act) or in any manner involving a public offering within
the meaning of Section 4(2) of the Securities Act.
(i) While any of the Notes or Shares remain outstanding,
to make available, upon request, to any seller of such securities the
information concerning the Company specified in Rule 144A(d)(4) under
the Securities Act, unless the Company is then subject to Section 13
or 15(d) of the Exchange Act.
(j) To include information substantially in the form set
forth in Exhibit C in each Memorandum.
(k) If requested by you, to use its best efforts to permit
the Notes to be designated PORTAL securities in accordance with the
rules and regulations adopted by the National Association of
Securities Dealers, Inc. relating to trading in the PORTAL Market.
(l) Neither the Company, its Affiliates nor any person
acting on its or their behalf (other than the Purchasers) will engage
in any directed selling efforts (as that term is defined in
Regulation S) with respect to the Notes, and the Company and its
Affiliates and each person acting on its or their behalf (other than
the Purchasers) will comply with the offering restrictions of
Regulation S.
(m) Neither the Company nor any of its Affiliates shall
resell or otherwise transfer or dispose of any Notes that have been
acquired by them.
6. Offering of Securities; Restrictions on Transfer.
(a) Each Purchaser, severally and not jointly, represents
and warrants that such Purchaser is a qualified institutional buyer
as defined in Rule 144A under the Securities Act (a "QIB"). Each
Purchaser, severally and not jointly, agrees with the Company that
(a) it will not solicit offers for, or offer or sell, the Notes by
any form of general solicitation or general advertising (as those
terms are defined in Regulation D under the Securities Act) or in any
manner involving a public offering within the meaning of Section 4(2)
of the Securities Act and (b) it will solicit offers for the Notes
only from, and will offer and sell the Notes only to, persons that it
reasonably believes to be (A) in the case of offers or sales inside
the United States, (i) QIBs or (ii) other institutional accredited
investors (as defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act ("institutional accredited investors") that, prior to
their purchase of the Notes, deliver to such Purchaser a letter
containing the representations and agreements set forth in Annex A to
the Memorandum and (B) in the case of offers or sales outside the
United States, to persons other than U.S. persons ("foreign
purchasers," which term shall include dealers or other professional
fiduciaries in the United States acting on a discretionary basis for
foreign beneficial owners (other than an estate or trust)) that, in
each case, in purchasing the Notes are deemed to have represented and
agreed as provided in Exhibit C.
(b) Each Purchaser, severally and not jointly, represents,
warrants, and agrees with respect to offers and sales outside the
United States that:
(i) it understands that no action has been or will
be taken in any jurisdiction by such Purchaser that would
permit a public offering of the Notes, or possession or
distribution of either Memorandum or any other offering or
publicity material relating to the Notes, in any country or
jurisdiction where action for that purpose is required;
(ii) such Purchaser will comply with all applicable
laws and regulations in each jurisdiction in which it
acquires, offers, sells or delivers Notes or has in its
possession or distributes either Memorandum or any such
other material, in all cases at its own expense;
(iii) the Notes have not been and will not be
registered under the Securities Act and may not be offered
or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with
Regulation S under the Securities Act or pursuant to
another exemption from the registration requirements of the
Securities Act;
(iv) such Purchaser has offered the Notes and will
offer and sell the Notes (A) as part of their distribution
at any time and (B) otherwise until forty (40) days after
the later of the commencement of the Offering and the
Closing Date, only in accordance with Rule 903 of
Regulation S. Accordingly, neither such Purchaser, its
Affiliates nor any persons acting on its or their behalf
have engaged or will engage in any directed selling efforts
(within the meaning of Regulation S) with respect to the
Notes, and any such Purchaser, its Affiliates and any such
persons have complied and will comply with the offering
restrictions requirement of Regulation S;
(v) such Purchaser has (1) not offered or sold, and
will not offer or sell in the United Kingdom, by means of
any document, any Notes other than to persons whose
ordinary business it is to buy and sell shares or
debentures, whether as a principal or agent, or in
circumstances which do not constitute an offer to the
public within the meaning of the Companies Act 1985,
(2) complied and will comply with all applicable provisions
of the Financial Services Act 1986 with respect to anything
done by it in relation to the Notes in, from or otherwise
involving the United Kingdom, and (3) only issued or passed
on and will only issue and pass on to any persons in the
United Kingdom any document received by it in connection
with the issue of the Notes if that person is of a kind
described in Article 9(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1988;
(vi) such Purchaser understands that the Notes have
not been and will not be registered under the Securities
and Exchange Law of Japan, and represents that it has not
offered or sold, and agrees that it will not offer or sell,
any Notes, directly or indirectly in Japan or to or from
any resident of Japan except (i) pursuant to an exemption
from the registration requirements of the Securities and
Exchange Law of Japan and (ii) in compliance with any other
applicable requirements of Japanese law; and
(vii) such Purchaser agrees that, at or prior to
confirmation of sales of the Notes, it will have sent to
each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Notes
from it during the restricted period a confirmation or
notice to substantially the following effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered and sold
within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until forty
(40) days after the later of the commencement of the
offering and the closing date, except in either case
in accordance with Regulation S (or Rule 144A if
available) under the Securities Act. Terms used above
have the meaning given to them by Regulation S."
Terms used in this Section 6 have the meanings given to them by
Regulation S.
7. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Purchaser, and each person, if any, who controls such Purchaser
within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act, or is under common control with, or
is controlled by, such Purchaser, from and against any and all
losses, claims, damages and liabilities (including, without
limitation, any legal or other expenses reasonably incurred by such
Purchaser or any such controlling or affiliated person in connection
with defending or investigating any such action or claim) caused by
any untrue statement or alleged untrue statement of a material fact
contained in either Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a
material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages or liabilities are caused by
any such untrue statement or omission or alleged untrue statement or
omission based upon information relating to any Purchaser furnished
to the Company in writing by such Purchaser expressly for use
therein.
(b) Each Purchaser agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers
and each person, if any, who controls the Company within the meaning
of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from the
Company to such Purchaser, but only with reference to information
relating to such Purchaser furnished to the Company in writing by
such Purchaser expressly for use in either Memorandum or any
amendments or supplements thereto.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of
which indemnity may be sought pursuant to either paragraph (a) or (b)
above, such person (the "indemnified party") shall promptly notify
the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon
request of the indemnified party, shall retain counsel reasonably
satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel or (ii) the named parties to any such proceeding (including
any impleaded parties) include both the indemnifying party and the
indemnified party and representation of both parties by the same
counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings
in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all
such indemnified parties and that all such fees and expenses shall be
reimbursed as they are incurred. Such firm shall be designated in
writing by Morgan Stanley & Co. Incorporated in the case of parties
indemnified pursuant to paragraph (a) above and by the Company in the
case of parties indemnified pursuant to paragraph (b) above. The
indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with
such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as
contemplated by the second and third sentences of this paragraph, the
indemnifying party agrees that it shall be liable for any settlement
of any proceeding effected without its written consent if (i) such
settlement is entered into in good faith more than forty-five (45)
days after receipt by such indemnifying party of the aforesaid
request and (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the
date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such
settlement includes an unconditional release of such indemnified
party from all liability on claims that are the subject matter of
such proceeding.
(d) To the extent the indemnification provided for in
paragraph (a) or (b) of this Section 7 is unavailable to an
indemnified party or insufficient in respect of any losses, claims,
damages or liabilities, then each indemnifying party under such
paragraph, in lieu of indemnifying such indemnified party thereunder,
shall contribute to the amount paid or payable by such indemnified
party as a result of such losses, claims, damages or liabilities
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Company on the one hand and the Purchasers
on the other hand from the offering of such Notes or (ii) if the
allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also
the relative fault of the Company on the one hand and the Purchasers
on the other hand in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative benefits
received by the Company on the one hand and the Purchasers on the
other hand in connection with the offering of such Notes shall be
deemed to be in the same respective proportions as the net proceeds
from the offering of such Notes (before deducting expenses) received
by the Company and the total discounts and commissions received by
the Purchasers in respect thereof bear to the aggregate offering
price of such Notes. The relative fault of the Company on the one
hand and of the Purchasers on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by
the Company or by the Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Purchasers' respective
obligations to contribute pursuant to this Section 7 are several in
proportion to the respective principal amount of Notes they have
purchased hereunder, and not joint.
(e) The Company and the Purchasers agree that it would not
be just or equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the Purchasers were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in paragraph (d) above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to
include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are
not exclusive and shall not limit any rights or remedies which may
otherwise be available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this
Section 7 and the representations and warranties of the Company
contained in this Agreement shall remain operative and in full force
and effect regardless of (i) any termination of this Agreement,
(ii) any investigation made by or on behalf of the Purchasers or any
person controlling the Purchasers or by or on behalf of the Company,
its officers or directors or any person controlling the Company and
(iii) acceptance of and payment for any of the Notes.
8. Termination. This Agreement shall be subject to
termination by notice given by you to the Company, if (a) after the
execution and delivery of this Agreement and prior to the Closing
Date or the Option Closing Date, as the case may be, (i) trading
generally shall have been suspended or materially limited on or by,
as the case may be, any of the New York Stock Exchange, the American
Stock Exchange, the National Association of Securities Dealers, Inc.,
the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any
securities of the Company shall have been suspended on any exchange
or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by
either Federal or New York State authorities or (iv) there shall have
occurred any outbreak or escalation of hostilities or any change in
financial markets or any calamity or crisis that, in your judgment,
is material and adverse and (b) in the case of any of the events
specified in clauses (a)(i) through (iv), such event singly or
together with any other such event makes it, in your judgment,
impracticable to market the Notes on the terms and in the manner
contemplated in the Final Memorandum.
If this Agreement shall be terminated by the Purchasers, or
any of them, because of any failure or refusal on the part of the
Company to comply with the terms or to fulfill any of the conditions
of this Agreement, or if for any reason the Company shall be unable
to perform its obligations under this Agreement, the Company will
reimburse the Purchasers or such Purchasers as have so terminated
this Agreement with respect to themselves, severally, for all out-of-
pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Purchasers in connection with
this Agreement or the offering contemplated hereunder.
9. Miscellaneous. If, on the Closing Date, or the Option
Closing Date, as the case may be, any one or more of the Purchasers
shall fail or refuse to purchase Notes that it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount
of Notes which such defaulting Purchaser or Purchasers agreed but
failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of Notes to be purchased on such date, the
other Purchasers shall be obligated severally in the proportions that
the principal amount of Firm Notes set forth opposite their
respective names in Schedule I bears to the aggregate principal
amount of Firm Notes set forth opposite the names of all such
nondefaulting Purchasers, or in such other proportions as Morgan
Stanley & Co. Incorporated may specify, to purchase the Notes which
such defaulting Purchaser or Purchasers agreed but failed or refused
to purchase on such date; provided, that in no event shall the
principal amount of Notes that any Purchaser has agreed to purchase
pursuant to Section 3 be increased pursuant to this Section 9 by an
amount in excess of one-ninth of such principal amount of Notes
without the written consent of such Purchaser. If, on the Closing
Date or the Option Closing Date, as the case may be, any Purchaser or
Purchasers shall fail or refuse to purchase Notes which it or they
have agreed to purchase hereunder on such date and the aggregate
principal amount of Notes with respect to which such default occurs
is more than one-tenth of the aggregate principal amount of Notes to
be purchased on such date and arrangements satisfactory to Morgan
Stanley & Co. Incorporated and the Company for the purchase of such
Notes are not made within thirty-six (36) hours after such default,
this Agreement shall terminate without liability on the part of any
nondefaulting Purchaser or of the Company. In any such case either
you or the Company shall have the right to postpone the Closing Date,
or the Option Closing Date, as the case may be, but in no event for
longer than seven (7) days, in order that the required changes, if
any, in the Final Memorandum or in any other documents or arrange-
ments may be effected. Any action taken under this paragraph shall
not relieve any defaulting Purchaser from liability in respect of any
default of such Purchaser under this Agreement.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
This Agreement shall be governed by and construed in
accordance with the internal laws of the State of New York.
The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed a
part of this Agreement.
Please confirm your agreement to the foregoing by having an
authorized officer sign in the space provided below for that purpose
and returning to us a copy hereof, whereupon this Placement Agreement
shall constitute a binding agreement between us.
Very truly yours,
3 COM CORPORATION
By:/s/ Christopher B. Paisley
Name: Christopher B. Paisley
Title: Vice President, Finance and
Chief Financial Officer
Agreed, November 8, 1994
New York, New York
MORGAN STANLEY & CO. INCORPORATED
GOLDMAN, SACHS & CO.
By: MORGAN STANLEY & CO. INCORPORATED
By: /s/ Frank P. Quattrone
Name: Frank P. Quattrone
Title: Managing Director
SCHEDULE I
Principal
Amount of
Firm Notes
to be
Purchasers Purchased
Morgan Stanley & Co. Incorporated $ 50,000,000
Goldman, Sachs & Co. $ 50,000,000
Total $100,000,000
$
EXHIBIT A
Opinion of Counsel for the Company
The opinion of Gray Cary Ware & Freidenrich, counsel for the
Company, to be delivered pursuant to Section 4(c) of the Placement
Agreement shall be to the effect that:
(A) the Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has the corporate power and
authority to own its property and to conduct its business as
described in the Final Memorandum (references herein to the
Final Memorandum being taken to mean the same, as amended or
supplemented), and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries taken as a
whole;
(B) each subsidiary (as defined in Section 1(c) of the
Placement Agreement) of the Company has been duly incorporated,
is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has the corporate
power and authority to own its property and to conduct its
business as described in the Final Memorandum and as presently
being conducted and is duly qualified to transact business and
is in good standing in each jurisdiction in which the conduct of
its business or its ownership or leasing of property requires
such qualification, except to the extent that the failure to be
so qualified or be in good standing would not have a material
adverse effect on the Company and its subsidiaries, taken as a
whole;
(C) the Placement Agreement has been duly authorized,
executed and delivered by the Company;
(D) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Purchasers in
accordance with the terms of the Placement Agreement, will
(x) be valid and binding obligations of the Company enforceable
in accordance with their terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws
affecting creditors' rights generally and (B) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (y) be entitled to the benefits of the
Indenture;
(E) the Shares reserved for issuance upon conversion of
the Notes have been duly authorized and reserved for issuance
and, when issued upon conversion of the Notes in accordance with
the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable and will not be subject to
any preemptive or similar rights, and the Rights issuable upon
conversion of the Notes have been duly authorized and, when and
if issued upon conversion in accordance with the terms of the
Indenture and the Rights Agreement, will have been validly
issued;
(F) the authorized capital stock of the Company conforms
as to legal matters to the description thereof contained in each
Memorandum;
(G) the shares of Common Stock of the Company outstanding
prior to the reservation for issuance of the Shares of Common
Stock of the Company issuable upon conversion of the Notes have
been duly authorized and are fully paid and nonassessable, and
not subject to any preemptive or similar rights;
(H) the Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (y) rights of acceleration, if applicable, and the
availability of equitable remedies may be limited by equitable
principles of general applicability;
(I) the execution and delivery by the Company of, and the
performance by the Company of its obligations under, the
Placement Agreement, the Indenture and the Notes will not
contravene (i) any provision of applicable law, (ii) the
articles of incorporation or bylaws of the Company, (iii) to
such counsel's knowledge, any agreement or other instrument
binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole,
or (iv) to such counsel's knowledge, any judgment, order or
decree of any governmental body or agency or court having
jurisdiction over the Company or any subsidiary and no consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the Company or its subsidiaries of their obligations under the
Placement Agreement, the Indenture or the Notes, except such as
may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the
securities;
(J) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or to which
any of the properties of the Company or any of its subsidiaries
is subject other than proceedings fairly summarized in all
material respects in the Final Memorandum and proceedings which
such counsel believes are not likely to have a material adverse
effect on the Company and its subsidiaries, taken as a whole, or
on the power or ability of the Company to perform its
obligations under the Placement Agreement, the Indenture, or the
Notes or to consummate the transactions contemplated by the
Final Memorandum;
(K) the Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms
are defined in the Investment Company Act of 1940, as amended;
(L) the Notes satisfy the eligibility requirements of
Rule 144A(d)(3) under the Securities Act;
(M) the statements in the Final Memorandum under the
captions "Description of Notes", "Description of Capital Stock",
"Certain Federal Income Tax Considerations", "Plan of
Distribution" and "Transfer Restrictions" and in "Item 3* Legal
Proceedings" of the Company's most recent annual report on
Form 10-K, in "Part II, and Item 1*Legal Proceedings" of any
quarterly report on Form 10-Q and in "Item 2*Acquisition or
Disposition of Assets" and "Item 5*Other Events" of any current
report on Form 8-K included or incorporated by reference in the
Final Memorandum, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred
to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
*(N) to the best knowledge of such counsel after due
inquiry, the Company and its subsidiaries (i) are in compliance
with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals
required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in compliance with all
terms and conditions of any such permit, license or approval,
except as otherwise described in or contemplated by the Final
Memorandum and except where such noncompliance with
Environmental Laws, failure to receive required permits,
licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals which such
counsel believes are not likely, singly or in the aggregate, to
have a material adverse effect on the Company and its
subsidiaries, taken as a whole;
*(O) To the best knowledge of such counsel, each of the
Company and its subsidiaries owns or possesses, or could obtain
on reasonable terms adequate and sufficient licenses or other
rights to use, all patents, patent rights, copyrights, licenses,
inventions, trademarks, service marks, trade names, technology
and know-how necessary (in any material respect) to conduct its
business as now operated and in the manner described in each
Memorandum and, except as disclosed in each Memorandum, neither
the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with (and knows of no
infringement of or conflict with) asserted rights of others with
respect to any of the foregoing which, singly or in the
aggregate, would have a material adverse effect upon the Company
and its subsidiaries taken as a whole;
(P) such counsel is of the opinion that each document
incorporated by reference in the Final Memorandum (except for
financial statements and schedules and other statistical data
included therein as to which such counsel need not express any
opinion), complied as to form when filed with the Commission in
all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder;
(Q) such counsel believes that (except for financial
statements and schedules and other statistical data included
therein as to which such counsel need not express any belief)
the Final Memorandum when issued did not, and as of the date
such opinion is delivered does not, contain any untrue statement
of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; and
(R) based upon the representations, warranties and
agreements of the Company in Sections 1(s), 1(t), 5(g) and 5(h)
of the Placement Agreement and of the Purchasers in Section 6 of
the Placement Agreement and on the representations and
agreements contained in Exhibit C to the Placement Agreement, it
is not necessary in connection with the offer, sale and delivery
of the Notes to the Purchasers under the Placement Agreement or
in connection with the initial resale of such Notes by the
Purchasers in accordance with Section 6 of the Placement
Agreement to register the Notes under the Securities Act of
1933, it being understood that no opinion is expressed as to any
subsequent resale of any security.
With respect to paragraphs (P) and (Q) above, counsel may state
that his opinion and belief are based upon his participation in the
preparation of the Final Memorandum (and any amendments or
supplements thereto) and documents incorporated therein by reference
and review and discussion of the contents thereof, but are without
independent check or verification except as specified.
EXHIBIT B
Opinion of Wilson, Sonsini, Goodrich & Rosati
The opinion of Wilson, Sonsini, Goodrich & Rosati, Professional
Corporation, to be delivered pursuant to Section 4(d) of the
Placement Agreement shall be to the effect that:
(A) the Placement Agreement has been duly authorized,
executed and delivered by the Company;
(B) the Notes have been duly authorized and, when executed
and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Purchasers in
accordance with the terms of the Placement Agreement, will
(x) be valid and binding obligations of the Company enforceable
in accordance with their terms, except as (A) the enforceability
thereof may be limited by bankruptcy insolvency or similar laws
affecting creditors' rights general and (B) rights of
acceleration, if applicable, and the availability of equitable
remedies may be limited by equitable principles of general
applicability and (y) be entitled to the benefits of the
Indenture;
(C) the Shares reserved for issuance upon conversion of
the Notes have been duly authorized and reserved for issuance
and, when issued upon conversion of the Notes in accordance with
the terms of the Notes and the Indenture, will be validly
issued, fully paid and nonassessable and will not be subject to
any preemptive or similar rights;
(D) the Indenture has been duly authorized, executed and
delivered by, and is a valid and binding agreement of, the
Company, enforceable in accordance with its terms except as
(x) the enforceability thereof may be limited by bankruptcy,
insolvency or similar laws affecting creditors' rights generally
and (y) rights of acceleration, if applicable, and the
availability of equitable remedies may be eliminated by
equitable principles of general applicability;
(E) the statements in the Final Memorandum under the
captions "Description of Notes", "Certain Federal Income Tax
Considerations", "Plan of Distribution" and "Transfer
Restrictions", insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to
therein, fairly present the information called for with respect
to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(F) such counsel believes that (except for financial
statements and schedules and other statistical data as to which
such counsel need not express any belief) the Final Memorandum
when issued did not, and as of the date such opinion is
delivered does not, contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and
(G) based upon the representations, warranties and
agreements of the Company in Sections 1(s), 1(t), 5(g) and 5(h)
of the Placement Agreement and of the Purchasers in Section 6 of
the Placement Agreement and on the representations and
agreements contained in Exhibit C to the Placement Agreement, it
is not necessary in connection with the offer, sale and delivery
of the Notes to the Purchasers under the Placement Agreement or
in connection with the initial resale of such Notes by the
Purchasers in accordance with Section 6 of the Placement
Agreement to register the Notes under the Securities Act of
1933, it being understood that no opinion is expressed as to any
subsequent resale of any security.
With respect to paragraph (F) above, such counsel may state that
their belief is based upon their participation in the preparation of
the Final Memorandum (and any amendments or supplements thereto)
other than documents incorporated therein by reference and review and
discussion of the contents thereof, including incorporated documents,
but are without independent check or verification except as
specified.
EXHIBIT C
Each Preliminary Memorandum and Final Memorandum shall contain
language to the following effect:
"Each purchaser of the Notes will be deemed to:
(1) represent that it is purchasing the Notes for its
own account or an account with respect to which it
exercises sole investment discretion and that it or such
account is a QIB or an institutional accredited investor or
a foreign purchaser that is outside the United States (or a
foreign purchaser that is a dealer or other professional
fiduciary in the United States acting on a discretionary
basis for foreign beneficial owners (other than an estate
or trust));
(2) acknowledge that the Notes and the Shares
issuable upon conversion of the Notes have not been and
will not be registered under the Securities Act and may not
be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons except as set forth
below;
(3) agree that if it should resell or otherwise
transfer the Notes or the Shares issuable upon conversion
of the Notes within three (3) years after the original
issuance of the Notes, it will do so only (a) to the
Company or any subsidiary thereof, (b) inside the United
States to a QIB in compliance with Rule 144A, (c) inside
the United States to an institutional accredited investor
that, prior to such transfer, furnishes to the Trustee, as
registrar for the Notes (or, in the case of the Shares, the
transfer agent for the Shares), a signed letter containing
certain representations and agreements relating to the
restrictions on transfer of the Notes (or the Shares, as
the case may be) (the form of which letter can be obtained
from the Trustee for the Notes or the transfer agent for
the Shares), (d) outside the United States in compliance
with Rule 904 under the Securities Act or (e) pursuant to
the exemption from registration provided by Rule 144 under
the Securities Act (if available);
(4) agree that it will give each person to whom it
transfers such Notes notice of any restrictions on transfer
of such securities.
Each institutional accredited investor (other than a QIB) that
is an original purchaser of the Notes will be required to sign
an agreement to the foregoing effect in the form attached hereto
as Annex A. In the case of any certificated Notes (or in the
case of the Shares, the transfer agent for the Shares), prior to
any proposed transfer of the Notes within three (3) years after
the original issuance thereof, the holder thereof must check the
appropriate box set forth on the certificate representing the
Note relating to the manner of such transfer and submit the
certificate representing the Note to the Trustee. If (i) such
transfer is to an institutional accredited investor or a
purchaser who is not a U.S. person in accordance with Rule 904
under the Securities Act or (ii) any holder proposes to transfer
Shares issued upon conversion of the Notes, in either case
within three (3) years after the original issuance of the Notes,
the holder (or beneficial holder, as the case may be) will be
required to furnish to the Trustee (or in the case of Shares,
the transfer agent for the Shares) such certifications, legal
opinions or other information as it may reasonably require to
confirm that the proposed transfer is being made pursuant to an
exemption from, or in a transaction not subject to, the
registration requirements of the Securities Act.
Each certificate representing the Notes will bear the
following legend:
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTI-
TUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7)
UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL ACCREDITED
INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THE NOTE EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION,
(2) AGREES THAT IT WILL NOT WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE COMMON
STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A) TO
3COM CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED
INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, A SIGNED LETTER
CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING
TO THE RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN
CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED HEREBY
WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH
NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH
ABOVE RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE FIRST NATIONAL BANK OF BOSTON, AS
TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S.
PERSON, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO
THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANS-
ACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE
NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
Each stock certificate representing Common Stock
issued upon conversion of the Notes will bear the following
legend:
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO,
OR FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF AGREES
THAT UNTIL THE EXPIRATION OF THREE YEARS AFTER THE ORIGINAL
ISSUANCE OF THE NOTE UPON THE CONVERSION OF WHICH THE
COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1) IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED
HEREBY EXCEPT (A) TO 3COM CORPORATION OR ANY SUBSIDIARY
THEREOF, (B) INSIDE THE UNITED STATES TO A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) IN COMPLIANCE WITH RULE 144A, (C) INSIDE
THE UNITED STATES TO AN INSTITUTIONAL "ACCREDITED INVESTOR"
(AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE
SECURITIES ACT) THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
THE FIRST NATIONAL BANK OF BOSTON, AS TRANSFER AGENT, A
SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND
AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
COMMON STOCK EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN
BE OBTAINED FROM SUCH TRANSFER AGENT), (D) OUTSIDE THE
UNITED STATES IN COMPLIANCE WITH RULE 904 UNDER THE
SECURITIES ACT OR (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT
(IF AVAILABLE), (2) PRIOR TO SUCH TRANSFER, IT WILL FURNISH
TO THE FIRST NATIONAL BANK OF BOSTON, AS TRANSFER AGENT,
SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION
OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE UPON
THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED HEREBY
WAS ISSUED OR UPON THE EARLIER SATISFACTION OF THE FIRST
NATIONAL BANK OF BOSTON, AS TRANSFER AGENT, THAT THE COMMON
STOCK HAS BEEN OR IS BEING OFFERED AND SOLD IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT.
Each Preliminary Memorandum and Final Memorandum shall
also contain language to the following effect:
"Each person receiving this Offering Memorandum
acknowledges that (i) such person has been afforded an
opportunity to request from the Company and to review all
additional information considered by it to be necessary to
verify the accuracy of or to supplement the information
herein, (ii) it has not relied on the Initial Purchasers or
any person affiliated with the Initial Purchasers in
connection with its investigation of the accuracy of such
information or its investment decision and (iii) no person
has been authorized to give any information or to make any
representation concerning the Company or the Notes or the
Shares of Common Stock offered hereby other than as
contained herein and information given by duly authorized
officers and employees of the Company in connection with
investors' examination of the Company and the terms of the
offering, and, if given or made, such other information or
representations should not be relied upon as having been
authorized by the Company or the Initial Purchasers."
ANNEX A
Form of Letter to be Delivered by Accredited Investors
3Com Corporation
5400 Bayfront Plaza
P.O. Box 58154
Santa Clara, California 95052-8415
Morgan Stanley & Co. Incorporated
Goldman Sachs & Co.
c/o Morgan Stanley & Co. Incorporated
1251 Avenue of the Americas
New York, New York 10020
Dear Sirs:
We are delivering this letter in connection with an offering of
10.25% Convertible Subordinated Notes Due 2001 (the "Notes"), which
are convertible into shares of the Company's Common Stock, no par
value (the "Common Stock"), all as described in the Offering
Memorandum (the "Offering Memorandum") relating to the offering.
We hereby confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1), (2) or (3) under the Securities Act of 1933 (the
"Securities Act") or an entity in which all of the equity owners
are accredited investors within the meaning of Rule 501(a)(1),
(2) or (3) under the Securities Act (an "Institutional
Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own
account or for the account of one or more other Institutional
Accredited Investors or as fiduciary for the account of one or
more trusts, each of which is an "accredited investor" within
the meaning of Rule 501(a)(7) under the Securities Act and for
each of which we exercise sole investment discretion or (B) we
are a "bank", within the meaning of Section 3(a)(2) of the
Securities Act, or a "savings and loan association" or other
institution described in Section 3(a)(5)(A) of the Securities
Act that is acquiring Notes as fiduciary for the account of one
or more institutions for which we exercise sole investment
discretion;
(iii) in the event that we purchase any Notes, we will
acquire Notes having a minimum purchase price of not less than
$250,000 for our own account or for any separate account for
which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits
and risks of purchasing the Notes;
(v) we are not acquiring Notes with a view to distribution
thereof or with any present intention of offering or selling any
of Notes or the Common Stock issuable upon conversion thereof,
except as permitted below; provided that the disposition of our
property and property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum and
acknowledge that we have had access to such financial and other
information, and have been afforded the opportunity to ask such
questions of representatives of the Company and receive answers
thereto, as we deem necessary in connection with our decision to
purchase Notes.
We understand that Notes are being offered in a transaction not
involving any public offering within the United States within the
meaning of the Securities Act and that Notes and the shares of Common
Stock issuable upon conversion thereof have not been and will not be
registered under the Securities Act, and we agree, on our own behalf
and on behalf of each account for which we acquire any Notes, that if
in the future we decide to resell or otherwise transfer such Notes or
the Common Stock issuable upon conversion thereof, such Notes or
Common Stock may be resold or otherwise transferred only (i) to 3Com
Corporation, or any subsidiary thereof, (ii) inside the United States
to a person who is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) in a transaction meeting the
requirements of Rule 144A, (iii) inside the United States to an
Institutional Accredited Investor that, prior to such transfer,
furnishes to the trustee for such securities a signed letter
containing certain representations and agreements relating to the
restrictions on transfer of such securities (the form of which letter
can be obtained from such trustee), (iv) outside the United States in
a transaction meeting the requirements of Rule 904 under the
Securities Act or (v) pursuant to the exemption from registration
provided by Rule 144 under the Securities Act (if applicable) and
(vi) in each case, in accordance with any applicable securities laws
of any State of the United States or any other applicable
jurisdiction and in accordance with the legends set forth on the
Notes. We further agree to provide any person purchasing any of the
Notes or the Common Stock issuable upon conversion thereof from us a
notice advising such purchaser that resales of such securities are
restricted as stated herein. We understand that the registrar and
transfer agent for the Notes and the Common Stock will not be
required to accept for registration of transfer any Notes or any
shares of Common Stock issued upon conversion of the Notes, except
upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with. We
further understand that any Notes and any shares of Common Stock
issued upon conversion of the Notes will be in the form of definitive
physical certificates and that such certificates will bear a legend
reflecting the substance of this paragraph.
We acknowledge that the Company, others and you will rely upon
our confirmations, acknowledgements and agreements set forth herein,
and we agree to notify you promptly in writing if any of our
representations or warranties herein ceases to be accurate and
complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(Name of Purchaser)
By
Name:
Title:
Address:
EXHIBIT 5.2
INDENTURE
DATED NOVEMBER 1, 1994
3COM CORPORATION
AND
THE FIRST NATIONAL BANK OF BOSTON
Trustee
INDENTURE
Dated as of November 1, 1994
10 1/4% Convertible Subordinated Notes due 2001
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS
Section 1.1 Definitions
Affiliate
Applicable Price
Board of Directors
Business Day
Commission
Common Stock
Company
Conversion Price
Corporate Trust Office
Custodian
Depositary
Exchange Act
Event of Default
Fundamental Change
Indenture
Officers' Certificate
Opinion of Counsel
outstanding
Note or Notes
Noteholder; holder
Note register
Person
PORTAL Market
Predecessor Note
QIB
Reference Market Price
Responsible Officer
Restricted Notes
Rights Agreement
Rights
Rule 144A
Securities Act
Senior Indebtedness
subsidiary
Trading Day
Trust Indenture Act
Trustee
ARTICLE II - ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes
Section 2.2 Form of Note
Section 2.3 Date and Denomination of Notes; Payments of
Interest
Section 2.4 Execution of Notes
Section 2.5 Exchange and Registration of Transfer of
Notes; Restrictions on Transfer; Depositary
Section 2.6 Mutilated, Destroyed, Lost or Stolen Notes
Section 2.7 Temporary Notes
Section 2.8 Cancellation of Notes Paid, Etc.
ARTICLE III - REDEMPTION OF NOTES
Section 3.1 Redemption Price
Section 3.2 Notice of Redemption; Selection of Notes
Section 3.3 Payment of Notes Called for Redemption
Section 3.4 Conversion Arrangement on Call for
Redemption
Section 3.5 Redemption at Option of Holders
ARTICLE IV - SUBORDINATION OF NOTES
Section 4.1 Agreement of Subordination
Section 4.2 Payments to Noteholders
Section 4.3 Subrogation of Notes
Section 4.4 Authorization by Noteholders
Section 4.5 Notice to Trustee
Section 4.6 Trustee's Relation to Senior Indebtedness
Section 4.7 No Impairment of Subordination
Section 4.8 Certain Conversions Deemed Payment
Section 4.9 Remitted Payments
Section 4.10 Article Applicable to Paying Agents
ARTICLE V - PARTICULAR COVENANTS OF THE COMPANY
Section 5.1 Payment of Principal, Premium and Interest
Section 5.2 Maintenance of Office or Agency
Section 5.3 Appointments to Fill Vacancies in
Trustee's Office
Section 5.4 Provisions as to Paying Agent
Section 5.5 Corporate Existence
Section 5.6 Rule 144A Information Requirement
Section 5.7 Resale of Certain Notes
Section 5.8 Stay, Extension and Usury Laws
ARTICLE VI - NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists
Section 6.2 Preservation and Disclosure of Lists
Section 6.3 Reports by Trustee
Section 6.4 Reports by Company
ARTICLE VII - REMEDIES OF THE TRUSTEE AND NOTEHOLDERS
ON AN EVENT OF DEFAULT
Section 7.1 Events of Default
Section 7.2 Payments of Notes on Default; Suit Therefor
Section 7.3 Application of Monies Collected by Trustee
Section 7.4 Proceedings by Noteholder
Section 7.5 Proceedings by Trustee
Section 7.6 Remedies Cumulative and Continuing
Section 7.7 Direction of Proceedings and Waiver of
Defaults by Majority of Noteholders.
Section 7.8 Notice of Defaults.
Section 7.9 Undertaking to Pay Costs.
ARTICLE VIII - CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee.
Section 8.2 Reliance on Documents, Opinions, Etc.
Section 8.3 No Responsibility for Recitals, Etc.
Section 8.4 Trustee, Paying Agents, Conversion Agents
or Registrar May Own Notes.
Section 8.5 Monies to Be Held in Trust.
Section 8.6 Compensation and Expenses of Trustee.
Section 8.7 Officers' Certificate as Evidence
Section 8.8 Conflicting Interests of Trustee.
Section 8.9 Eligibility of Trustee.
Section 8.10 Resignation or Removal of Trustee.
Section 8.11 Acceptance by Successor Trustee
Section 8.12 Succession by Merger, Etc.
Section 8.13 Limitation on Rights of Trustee as Creditor
ARTICLE IX - CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders
Section 9.2 Proof of Execution by Noteholders.
Section 9.3 Who Are Deemed Absolute Owners
Section 9.4 Company-Owned Notes Disregarded
Section 9.5 Revocation of Consents; Future
Holders Bound
ARTICLE X - NOTEHOLDERS' MEETINGS
Section 10.1 Purpose of Meetings
Section 10.2 Call of Meetings by Trustee
Section 10.3 Call of Meetings by Company or Noteholders
Section 10.4 Qualifications for Voting
Section 10.5 Regulations
Section 10.6 Voting
Section 10.7 No Delay of Rights by Meeting
ARTICLE XI - SUPPLEMENTAL INDENTURES
Section 11.1 Supplemental Indentures Without Consent
of Noteholders
Section 11.2 Supplemental Indentures with Consent of
Noteholders
Section 11.3 Compliance with Trust Indenture Act; Effect
of Supplemental Indentures
Section 11.4 Notation on Notes
Section 11.5 Evidence of Compliance of Supplemental
Indenture to Be Furnished Trustee
ARTICLE XII - CONSOLIDATION, MERGER, SALE, CONVEYANCE
AND LEASE
Section 12.1 Company May Consolidate, Etc. on Certain Terms
Section 12.2 Successor Corporation to Be Substituted
Section 12.3 Opinion of Counsel to Be Given Trustee
ARTICLE XIII - SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture
Section 13.2 Deposited Monies to Be Held in Trust by
Trustee
Section 13.3 Paying Agent to Repay Monies Held
Section 13.4 Return of Unclaimed Monies
Section 13.5 Reinstatement
ARTICLE XIV - IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
Section 14.1 Indenture and Notes Solely Corporate
Obligations
ARTICLE XV - CONVERSION OF NOTES
Section 15.1 Right to Convert
Section 15.2 Exercise of Conversion Privilege; Issuance
of Common Stock on Conversion; No
Adjustment for Interest or Dividends
Section 15.3 Cash Payments in Lieu of Fractional Shares
Section 15.4 Conversion Price
Section 15.5 Adjustment of Conversion Price
Section 15.6 Effect of Reclassification, Consolidation,
Merger or Sale
Section 15.7 Taxes on Shares Issued
Section 15.8 Reservation of Shares; Shares to Be Fully
Paid; Compliance with Governmental
Requirements; Listing of Common Stock
Section 15.9 Responsibility of Trustee
Section 15.10 Notice to Holders Prior to Certain Actions
ARTICLE XVI - MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors
Section 16.2 Official Acts by Successor Corporation
Section 16.3 Addresses for Notices, Etc
Section 16.4 Governing Law
Section 16.5 Evidence of Compliance with Conditions
Precedent; Certificates to Trustee
Section 16.6 Legal Holidays
Section 16.7 Trust Indenture Act
Section 16.8 No Security Interest Created
Section 16.9 Benefits of Indenture
Section 16.10 Table of Contents, Headings, Etc.
Section 16.11 Authenticating Agent
Section 16.12 Execution in Counterparts
INDENTURE dated as of November 1, 1994, between 3COM
CORPORATION, a California corporation (hereinafter sometimes called
the "Company", as more fully set forth in Section 1.1), and The First
National Bank of Boston, a national banking association organized and
existing under the laws of the United States of America, 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 10 1/4% Convertible Subordinated Notes
due 2001 (hereinafter sometimes called the "Notes"), in an aggregate
principal amount not to exceed $110,000,000 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
repayment upon a Fundamental Change, a form of conversion notice and
a certificate of transfer to be borne by the Notes are to be
substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when
executed by the Company and authenticated and 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 con-
trolled by or under direct or indirect common control with such
specified Person. For the purposes of this definition, "control,"
when used with respect to any specified Person means the power to
direct or cause the direction of the management and policies of such
Person, directly or indirectly, whether through the ownership of
voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the
foregoing.
Applicable Price: The term "Applicable Price" shall mean
(i) in the event of a Fundamental Change in which the holders of the
Company's Common Stock receive only cash, the amount of cash received
by the holder of one share of Common Stock and (ii) in the event of
any other Fundamental Change, the arithmetic average of the Closing
Price for the Company's Common Stock (determined as set forth in
Section 15.5(g)) during the ten Trading Days (as defined in
Section 15.5(g)) prior to the record date for the determination of
the holders of Common Stock entitled to receive cash, securities,
property or other assets in connection with such Fundamental Change,
or, if there is no such record date, the date upon which the holders
of the Common Stock shall have the right to receive such cash,
securities, property or other assets in connection with the
Fundamental Change.
Board of Directors: The term "Board of Directors" shall mean
the Board of Directors of the Company or a committee of such Board
duly authorized to act for it hereunder.
Business Day: The term "Business Day" shall mean a day, other
than a Saturday, a Sunday, or legal holiday, on which the Trustee and
banking institutions located in Boston, Massachusetts and the Borough
of Manhattan, The City of New York, are open for the purpose of
conducting a commercial banking business.
Commission: The term "Commission" shall mean the Securities
and Exchange Commission.
Common Stock: The term "Common Stock" shall mean any stock of
any class of the Company which has no preference in respect of
dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and
which is not subject to redemption by the Company. Subject to the
provisions of Section 15.6, 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 3Com Corporation, a
California 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 Blue Hills Office Park, 150 Royall Street,
Canton, Massachusetts, 02021 Attention: Corporate Trust Division,
Mail Stop 45-02-15 (3Com Corporation 10 1/4% Convertible Subordinated
Notes due 2001).
Custodian: The term "Custodian" shall mean The First National
Bank of Boston, as custodian with respect to the Notes in global
form, or any successor entity thereto.
default: The term "default" shall mean any event that is, or
after notice or passage of time, or both, would be, an Event of
Default.
Depositary: The term "Depositary" means, with respect to the
Notes issuable or issued in whole or in part in global form, the
person specified in Section 2.5(d) as the Depositary with respect to
such Notes, until a successor shall have been appointed and become
such pursuant to the applicable provisions of this Indenture, and
thereafter, "Depositary" shall mean or include such successor.
Exchange Act: The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
Event of Default: The term "Event of Default" shall mean any
event specified in Section 7.1(a), (b), (c), (d) or (e).
Fundamental Change: The term "Fundamental Change" means the
occurrence of any transaction or event in connection with which all
or substantially all the Common Stock shall be exchanged for,
converted into, acquired for or constitute the right to receive
(whether by means of an exchange offer, liquidation, tender offer,
consolidation, merger, combination, reclassification,
recapitalization or otherwise) consideration which is not all or
substantially all common stock which is (or will, upon consummation
of such transaction or event, be) listed on a national securities
exchange or approved for quotation in the National Association of
Securities Dealers, Inc., Automated Quotation System or any similar
system of automated dissemination of quotations of securities prices;
provided that the issuance of Rights or a transaction or event which
causes the Rights to become exercisable to purchase capital stock of
any person, or to become evidenced by separate certificates, shall
not be deemed to constitute a Fundamental Change solely by virtue of
such Rights so being issued or becoming exercisable or evidenced by
such a separate certificate.
Indenture: The term "Indenture" shall mean this instrument as
originally executed or, if amended or supplemented as herein
provided, as so amended or supplemented.
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 and (b) by the Treasurer
or any Assistant Treasurer, Secretary or any Assistant Secretary or
Controller of the Company, which is delivered to the Trustee. Each
such certificate shall include the statements provided for in
Section 16.5 if and to the extent required by the provisions of such
Section.
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, which is delivered to the Trustee. Each such opinion shall
include the statements provided for in Section 16.5 if and to the
extent required by the provisions of such Section.
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 payment or
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 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
Section 3.2.
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; 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.
Person: The term "Person" shall mean a corporation, an
association, a partnership, an individual, a joint venture, a joint
stock company, a trust, an unincorporated organization or a
government or an agency or a political subdivision thereof.
PORTAL Market: The term "PORTAL Market" shall mean the Private
Offerings, Resales and Trading through Automated Linkages Market
operated by the National Association of Securities Dealers, Inc. or
any successor thereto.
Predecessor Note: The term "Predecessor Note" of any
particular Note shall mean every previous Note evidencing all or a
portion of the same debt as that evidenced by such particular Note;
and, for the purposes of this definition, any Note authenticated and
delivered under Section 2.6 in lieu of a lost, destroyed or stolen
Note shall be deemed to evidence the same debt as the lost, destroyed
or stolen Note that it replaces.
QIB: The term "QIB" shall mean a "qualified institutional
buyer" as defined in Rule 144A.
Reference Market Price: The term "Reference Market Price"
shall initially mean $27.083, and in the event of any adjustment to
the Conversion Price pursuant to Sections 15.5(a), (b), (c) or (d),
the Reference Market Price shall also be adjusted so that the ratio
of the Reference Market Price to the Conversion Price after giving
effect to any such adjustment shall always be the same as the ratio
of $27.083 to the Conversion Price specified in the form of Note
attached hereto (without regard to any adjustment thereto).
Responsible Officer: The term "Responsible Officer", when used
with respect to the Trustee, shall mean an officer of the Trustee in
the Corporate Trust Office assigned and duly authorized by the
Trustee to administer its corporate trust matters.
Restricted Notes: The term "Restricted Notes" means any Note
that bears or is required to bear the legends set forth in Section
2.5.
Rights Agreement: The term "Rights Agreement" means that
certain Rights Agreement, dated as of September 8, 1989 between the
Company and the Rights Agent (as such term is defined therein) as
amended from time to time.
Rights: The term "Rights" shall mean "Rights" as such term is
defined in the Rights Agreement or any New Rights Agreement (as
defined in Section 15.5 hereof).
Rule 144A: The term "Rule 144A" shall mean Rule 144A as
promulgated under the Securities Act.
Securities Act: The term "Securities Act" shall mean the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
Senior Indebtedness: The term "Senior Indebtedness" shall mean
the principal of, premium, if any, on, interest on (including inter
alia post-petition interest), and any other payment due pursuant to
any of the following, whether outstanding at the date hereof or
hereafter incurred or created:
(a) all indebtedness of the Company for money borrowed
(including any indebtedness secured by a mortgage or other lien
which is (i) given to secure all or part of the purchase price
of property subject thereto, whether given to the vendor of
such property or to another or (ii) existing on property at the
time of acquisition thereof);
(b) all indebtedness of the Company evidenced by notes,
debentures, bonds or similar instruments (excluding any such
indebtedness for trade payables or constituting the deferred
purchase price of assets or services incurred in the ordinary
course of business) and all indebtedness of the Company con-
sisting of reimbursement obligations due and owing with respect
to letters of credit and bank guarantees;
(c) all lease obligations of the Company which are
capitalized on the books of the Company in accordance with
generally accepted accounting principles and all lease
obligations of the Company under any lease or related document
(including a purchase agreement) which provides that the
Company is contractually obligated to purchase or cause a third
party to purchase and thereby guarantee a minimum residual
value of the leased property to the landlord and the
obligations of the Company under such lease or related document
to purchase or to cause a third party to purchase such leased
property;
(d) all indebtedness consisting of commitment or
standby fees due and payable to lending institutions with
respect to credit facilities available to the Company;
(e) all indebtedness consisting of obligations of the
Company due and payable under interest rate and currency swaps,
floors caps or other similar arrangements intended to fix
interest rate obligations or hedge foreign currency exposure;
(f) all indebtedness of others of the kinds described
in the preceding clauses (a), (b), (d) or (e) and all lease
obligations of others of the kind described in the preceding
clause (c) assumed by or guaranteed in any manner by the
Company or in effect guaranteed by the Company through an
agreement to purchase, contingent or otherwise, and all
indebtedness of the Company under any such guarantees or other
arrangements; and
(g) all renewals, extensions, refundings, deferrals,
amendments, modifications or supplements of indebtedness (or
guarantees) of the kinds described in any of the preceding
clauses (a), (b), (d), (e) or (f) and all renewals or
extensions of lease obligations of the kinds described in
either of the preceding clauses (c) or (f);
unless, in the case of any particular indebtedness, lease, renewal,
extension, refunding, amendment, modification or supplement, the
instrument or lease creating or evidencing the same or the assumption
or guarantee of the same expressly provides that such indebtedness,
lease, renewal, extension, refunding, amendment, modification or
supplement is not superior in right of payment to, or is pari passu
with, the Notes. Notwithstanding the foregoing, Senior Indebtedness
shall not included any indebtedness or lease obligation of any kind
of the Company to any subsidiary of the Company.
subsidiary: The term "subsidiary" of any specified Person
shall mean (i) a corporation a majority of whose capital stock with
voting power under ordinary circumstances, to elect directors is at
the time directly or indirectly owned by such Person, or (ii) any
other Person (other than a corporation) in which such Person or such
Person and a subsidiary or subsidiaries of such Person or a
subsidiary or subsidiaries of such Person directly or indirectly, at
the date of determination thereof, has at least majority ownership.
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 The First National Bank
of Boston 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.
The definitions of certain other terms are as specified in
Section 3.5 and Article XV.
ARTICLE II
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION
AND EXCHANGE OF NOTES
Section 2.1 Designation, Amount and Issue of Notes. The Notes
shall be designated as "10 1/4% Convertible Subordinated Notes due
2001". Notes not to exceed the aggregate principal amount of
$110,000,000 upon the execution of this Indenture, or from time to
time thereafter, may be executed by the Company and delivered to the
Trustee for authentication, and the Trustee shall thereupon
authenticate and deliver said Notes to or upon the written order of
the Company, signed by its (a) President, Executive or Senior Vice
President or any Vice President and (b) Treasurer or Assistant
Treasurer or its Secretary or any Assistant Secretary, without any
further action by the Company hereunder.
Section 2.2 Form of Notes. The Notes and the Trustee's
certificate of authentication to be borne by such Notes shall be
substantially in the form set forth in Exhibit A, which is
incorporated in and made a part of this Indenture.
Any of the Notes may have such letters, numbers or other marks
of identification and such notations, legends and endorsements as the
officers executing the same may approve (execution thereof to be
conclusive evidence of such approval) and as are not inconsistent
with the provisions of this Indenture, or as may be required to
comply with any law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any securities exchange or
automated quotation system on which the Notes may be listed, or to
conform to usage.
Any Note in global form shall represent such of the outstanding
Notes as shall be specified therein and shall provide that it shall
represent the aggregate amount of outstanding Notes from time to time
endorsed thereon and that the aggregate amount of outstanding Notes
represented thereby may from time to time be increased or reduced to
reflect transfers or exchanges permitted hereby. Any endorsement of
a Note in global form to reflect the amount of any increase or
decrease in the amount of outstanding Notes represented thereby shall
be made by the Trustee or the Custodian, at the direction of the
Trustee, in such manner and upon instructions given by the holder of
such Notes in accordance with this Indenture. Payment of principal
of and interest and premium, if any, on any Note in global form shall
be made to the holder of such Note.
The terms and provisions contained in the form of Note attached
as Exhibit A hereto shall constitute, and are hereby expressly made,
a part of this Indenture and to the extent applicable, the Company
and the Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound thereby.
Section 2.3 Date and Denomination of Notes; Payments of
Interest. The Notes shall be issuable in registered form without
coupons in denominations of $1,000 principal amount and integral
multiples thereof. Every Note shall be dated the date of its
authentication, 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. As provided in Section 15.2,
and subject to the exception contained therein, interest shall not be
payable to such person in the case of any Note or Notes, or portion
thereof, which have been called for redemption and which are
converted on a date subsequent to such record date and prior to such
interest payment date. 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, interest on such holder's Notes, at the election of such
holder, shall be paid by wire transfer 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 April 15 or October 15 preceding said May
1 or November 1.
Interest on the Notes shall be computed on the basis of a year
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 May 1 or November 1
(herein called "Defaulted Interest") shall forthwith cease to be
payable to the Noteholder on the relevant record date by virtue of
his having been such Noteholder; and such Defaulted Interest shall be
paid by the Company, at its election in each case, as provided in
clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the Notes (or
their respective Predecessor Notes) are registered at the close
of business on a special record date for the payment of such
Defaulted Interest, which shall be fixed in the following
manner. The Company shall notify the Trustee in writing of the
amount of Defaulted Interest to be paid on each Note and the
date of the payment (which shall be not less than twenty-five
(25) days after the receipt by the Trustee of such notice,
unless the Trustee shall consent to an earlier date), and at
the same time the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date
of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of such
Defaulted Interest which shall be not more than 15 days and not
less than ten (10) days prior to the date of the 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
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 (2).
(2) The Company may make payment of any Defaulted
Interest in any other lawful manner not inconsistent with the
requirements of any securities exchange and automated quotation
system on which the Notes may be listed or designated for
issuance, and upon such notice as may be required by such
exchange and automated quotation system, if, after notice given
by the Company to the Trustee of the proposed payment pursuant
to this clause, such manner of payment shall be deemed
practicable by the Trustee.
Section 2.4 Execution of Notes. The Notes shall be signed in
the name and on behalf of the Company by the facsimile signature of
its President, its Chief Executive Officer, any of its Executive Vice
Presidents, or any of its Vice Presidents and attested by the
facsimile signature of its Secretary, Chief Financial Officer 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 authenti-
cating agent appointed by the Trustee as provided by Section 16.11),
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.
In case any officer of the Company who shall have signed any of
the Notes shall cease to be such officer before the Notes so signed
shall have been authenticated and delivered by the Trustee, or
disposed of by the Company, such Notes nevertheless may be
authenticated and delivered or disposed of as though the person who
signed such Notes had not ceased to be such officer of the Company;
and any Note may be signed on behalf of the Company by such persons
as, at the actual date of the execution of such Note, shall be the
proper officers of the Company, although at the date of the execution
of this Indenture any such person was not such an officer.
Section 2.5 Exchange and Registration of Transfer of Notes;
Restrictions on Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate
Trust Office a register (the register maintained in such office
and in any other office or agency of the Company designated
pursuant to Section 5.2 being herein sometimes collectively
referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall
provide for the registration of Notes and of transfers of
Notes. The Trustee is hereby appointed "Note registrar" for
the purpose of registering Notes and transfers of Notes as
herein provided. The Company may appoint one or more co-
registrars in accordance with Section 5.2.
Upon surrender for registration of transfer of any Note
to the Note registrar or any co-registrar, and satisfaction of
the requirements for such transfer set forth in this Section
2.5, the Company shall execute, and the Trustee shall authen-
ticate 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 and
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 Com-
pany, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon
such registration of transfer or exchange.
All Notes presented or surrendered for registration of
transfer or for exchange, redemption or conversion shall (if so
required by the Company or the Note registrar) be duly
endorsed, or be accompanied by a written instrument or instru-
ments of transfer in form satisfactory to the Company, and the
Notes shall be duly executed by the Noteholder thereof or his
attorney duly authorized in writing.
No service charge shall be made for any registration of
transfer or exchange of Notes, but the Company may require
payment of a sum sufficient to cover any tax or other govern-
mental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.
Neither the Company nor the Trustee shall be required to
exchange or register a transfer of (a) any Notes for a period
of 15 days next preceding any selection of Notes to be redeemed
or (b) any Notes or portions thereof selected or called for
redemption pursuant to Article III or (c) any Notes or portion
thereof surrendered for conversion pursuant to Article XV.
(b) So long as the Notes are eligible for book-entry
settlement with the Depositary, or unless otherwise required by
law, all Notes to be traded on the PORTAL Market shall be
represented by a Note in global form registered in the name of
the Depositary or the nominee of the Depositary. The transfer
and exchange of beneficial interests in such Note in global
form, which does not involve the issuance of a Note in defini-
tive form, shall be effected through the Depositary, in accor-
dance with this Indenture (including the restrictions on
transfer set forth herein) and the procedures of the Depositary
therefor.
At any time at the request of the beneficial holder of an
interest in a Note in global form to obtain a Note in
definitive form, such beneficial holder shall be entitled to
obtain a definitive Note upon written request to the Trustee
and the Custodian in accordance with the procedures of the
Custodian and Depositary for the issuance thereof. Upon
receipt of any such request, the Trustee or the Custodian, at
the direction of the Trustee, will cause, in accordance with
the standing instructions and procedures existing between the
Depositary and the Custodian, the aggregate principal amount of
the Note in global form to be reduced and, following such
reduction, the Company will execute and the Trustee will
authenticate and deliver to such beneficial holder (or its
nominee) a Note or Notes in the appropriate aggregate principal
amount in the name of such beneficial holder (or its nominee)
and bearing such restrictive legends as may be required by this
Indenture.
Any transfer of a beneficial interest in a Note in global
form which cannot be effected through book-entry settlement
must be effected by the delivery to the transferee (or its
nominee) of a definitive Note or Notes registered in the name
of the transferee (or its nominee) on the books maintained by
the Note registrar. With respect to any such transfer, the
Trustee or the Custodian, at the direction of the Trustee, will
cause, in accordance with the standing instructions and
procedures existing between the Depositary and the Custodian,
the aggregate principal amount of the Note in global form to be
reduced and, following such reduction, the Company will execute
and the Trustee will authenticate and deliver to the transferee
(or such transferee's nominee, as the case may be), a Note or
Notes in the appropriate aggregate principal amount in the name
of such transferee (or its nominee) and bearing such
restrictive legends as may be required by this Indenture.
(c) So long as the Notes are eligible for book-entry
settlement, or unless otherwise required by law, upon any
transfer of a definitive Note to a QIB in accordance with Rule
144A, and upon receipt of the definitive Note or Notes being so
transferred, together with a certification from the transferor
that the transferee is a QIB (or other evidence satisfactory to
the Trustee), the Trustee shall make or direct the Custodian to
make, an endorsement on the Note in global form to reflect an
increase in the aggregate principal amount of the Notes
represented by the Note in global form, the Trustee shall
cancel such definitive Note or Notes and cause, or direct the
Custodian to cause, in accordance with the standing
instructions and procedures existing between the Depositary and
the Custodian, the aggregate principal amount of Notes
represented by the Note in global form to be increased accord-
ingly; provided that no definitive Note, or portion thereof, in
respect of which the Company or an Affiliate of the Company
held any beneficial interest shall be included in such Note in
global form until such definitive Note is freely tradable in
accordance with Rule 144(k); provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a
beneficial interest in the Note in global form to the Company
or an Affiliate of the Company.
Any Note in global form may be endorsed with or have
incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this Indenture
as may be required by the Custodian, the Depositary or by the
National Association of Securities Dealers, Inc. in order for
the Notes to be tradeable on the PORTAL Market or as may be
required for the Notes to be tradeable on any other market
developed for trading of securities pursuant to Rule 144A or
required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities
exchange upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any
special limitations or restrictions to which any particular
Notes are subject.
(d) Every Restricted Note shall be subject to the
restrictions on transfer provided in the legend required to be
borne by each Restricted Note pursuant to Section 2.5, unless
such restrictions on transfer shall be waived by the written
consent of the Company, and the holder of each Restricted Note,
by such Noteholder's acceptance thereof, agrees to be bound by
such restrictions on transfer. As used in Sections 2.5(d),
2.5(e) and 2.5(f), the term "transfer" encompasses any sale,
pledge, transfer or other disposition of any Restricted Note or
Common Stock issued upon conversion of any Restricted Note.
Until three years after the original issuance date of any
Note, any certificate evidencing such Note (and all securities
issued in exchange therefor or substitution thereof, other than
Common Stock, if any, issued upon conversion thereof, which
shall bear the legend set forth in Section 2.5(e), if
applicable) shall bear a legend in substantially the following
form, unless otherwise agreed by the Company (with written
notice thereof to the Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT
BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) ("INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND
IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN OFFSHORE
TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED
HEREBY RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED
HEREBY OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF
SUCH NOTE EXCEPT (A) TO 3COM CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES TO THE FIRST NATIONAL
BANK OF BOSTON, AS TRUSTEE, A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE NOTE EVIDENCED HEREBY
(THE FORM OF WHICH LETTER CAN BE OBTAINED FROM SUCH
TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO
THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY
TRANSFER OF THE NOTE EVIDENCED HEREBY WITHIN THREE YEARS
AFTER THE ORIGINAL ISSUANCE OF SUCH NOTE, THE HOLDER MUST
CHECK THE APPROPRIATE BOX SET FORTH ABOVE RELATING TO THE
MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO
THE FIRST NATIONAL BANK OF BOSTON, AS TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON, THE
HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE FIRST
NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THIS LEGEND WILL BE REMOVED AFTER THE
EXPIRATION OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF
THE NOTE EVIDENCED HEREBY. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
Any Note (or security issued in exchange or substitution
therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon surrender of
such Note for exchange to the Note registrar in accordance with
the provisions of this Section 2.5, be exchanged for a new Note
or Notes, of like tenor and aggregate principal amount, which
shall not bear the restrictive legend required by this
Section 2.5(d).
Notwithstanding any other provisions of this Indenture
(other than the provisions set forth in this Section 2.5(d)), a
Note in global form may not be transferred as a whole except by
the Depositary to a nominee of the Depositary or by a nominee
of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
The Depositary shall be a clearing agency registered
under the Exchange Act. The Company initially appoints The
Depository Trust Company to act as Depositary with respect to
the Notes in global form. Initially, the global Note shall be
issued to the Depositary, registered in the name of Cede & Co.,
as the nominee of the Depositary, and deposited with the
Custodian for Cede & Co.
If at any time the Depositary for the Note notifies the
Company that it is unwilling or unable to continue as Deposi-
tary for the Note in global form, the Company may appoint a
successor Depositary. If a successor Depositary is not
appointed by the Company within 90 days after the Company
receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the
authentication and delivery of Notes, will authenticate and
deliver, Notes in definitive form, in an aggregate principal
amount equal to the principal amount of the Note in global
form, in exchange for such Note in global form.
If a definitive Note is issued in exchange for any
portion of a Note in global form after the close of business at
the office or agency where such exchange occurs on any record
date and before the opening of business at such office or
agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of
such Note, but will be payable on such interest payment date
only to the person to whom interest in respect of such portion
of such Note in global form is payable in accordance with the
provisions of this Indenture.
Definitive Notes issued in exchange for all or a part of
a Note in global form pursuant to this Section 2.5 shall be
registered in such names and in such authorized denominations
as the Depositary, pursuant to instructions from its direct or
indirect participants or otherwise, shall instruct the Trustee.
Upon execution and authentication, the Trustee shall deliver
such definitive Notes to the persons in whose names such
definitive Notes are so registered.
At such time as all interests in a Note in global form
have been redeemed, converted, repurchased or canceled, such
Note in global form shall be canceled by the Trustee in accord-
ance with standing procedures and instructions existing between
the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a global Note is exchanged for
definitive Notes, redeemed, converted, or canceled, exchanged
for definitive Notes or transferred to a transferee who
receives definitive Notes therefor or any definitive Note is
exchanged or transferred for part of a Note in global form, the
principal amount of such Note in global form shall, in
accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be reduced
or increased, as the case may be, and an endorsement shall be
made on such Note in global form, by the Trustee or the
Custodian, at the direction of the Trustee, to reflect such
reduction or increase.
(e) Until three years after the original issuance date
of any Note, any stock certificate representing Common Stock
issued upon conversion of such Note shall bear a legend in
substantially the following form, unless otherwise agreed by
the Company (with written notice thereof to the Trustee):
THE COMMON STOCK EVIDENCED HEREBY HAS NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF U.S. PERSONS EXCEPT AS SET
FORTH IN THE FOLLOWING SENTENCE. THE HOLDER HEREOF
AGREES THAT UNTIL THE EXPIRATION OF THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THE NOTE UPON THE CONVERSION OF
WHICH THE COMMON STOCK EVIDENCED HEREBY WAS ISSUED, (1)
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK
EVIDENCED HEREBY EXCEPT (A) TO 3COM CORPORATION OR ANY
SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN COMPLIANCE WITH RULE 144A,
(C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2),
(3) OR (7) UNDER THE SECURITIES ACT) THAT, PRIOR TO SUCH
TRANSFER, FURNISHES TO THE FIRST NATIONAL BANK OF BOSTON,
AS TRANSFER AGENT, A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THE COMMON STOCK EVIDENCED
HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
SUCH TRANSFER AGENT), (D) OUTSIDE THE UNITED STATES IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR
(E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED
BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (2)
PRIOR TO SUCH TRANSFER, IT WILL FURNISH THE FIRST
NATIONAL BANK OF BOSTON AS TRANSFER AGENT, SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS IT
MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS
BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND (3) IT WILL DELIVER TO EACH
PERSON TO WHOM THE COMMON STOCK EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. THIS LEGEND WILL BE REMOVED AFTER THE EXPIRATION
OF THREE YEARS FROM THE ORIGINAL ISSUANCE OF THE NOTE
UPON THE CONVERSION OF WHICH THE COMMON STOCK EVIDENCED
HEREBY WAS ISSUED OR UPON THE EARLIER SATISFACTION OF THE
FIRST NATIONAL BANK OF BOSTON, AS TRANSFER AGENT, THAT
THE COMMON STOCK HAS BEEN OR IS BEING OFFERED AND SOLD IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT. AS
USED HEREIN, THE TERMS "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
(f) Any certificate evidencing a Note that has been
transferred to an Affiliate of the Company within three years
after the original issuance date of the Note, as evidenced by a
notation on the Assignment Form for such transfer or in the
representation letter delivered in respect thereof, shall,
until three years after the last date on which the Company or
any Affiliate of the Company was an owner of such Note, bear a
legend in substantially the following form, unless otherwise
agreed by the Company (with written notice thereof to the
Trustee):
THE NOTE EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED
OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT
(A) TO 3COM CORPORATION OR ANY SUBSIDIARY THEREOF, (B) IN
A TRANSACTION REGISTERED UNDER THE SECURITIES ACT OR (C)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) AND (2)
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE NOTE
EVIDENCED HEREBY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO
THE EFFECT OF THIS LEGEND. IF THE PROPOSED TRANSFER IS
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT, THE HOLDER MUST, PRIOR
TO SUCH TRANSFER, FURNISH TO THE FIRST NATIONAL BANK OF
BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS THE COMPANY MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. AS USED HEREIN, THE TERMS "UNITED
STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
Any stock certificate representing Common Stock issued upon
conversion of such Note shall also bear a legend in substan-
tially the form indicated above, unless otherwise agreed by the
Company (with written notice thereof to the Trustee).
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 satis-
faction of the destruction, loss or theft of such Note and of the
ownership thereof.
The Trustee or such authenticating agent may authenticate any
such substituted Note and deliver the same upon the receipt of such
security or indemnity as the Trustee, the Company and, if applicable,
such authenticating agent may require. Upon the issuance of any
substituted Note, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature
or has been called for redemption or is about to be converted into
Common Stock shall become mutilated or be destroyed, lost or stolen,
the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of
the same (without surrender thereof except in the case of a mutilated
Note), as the case may be, if the applicant for such payment or
conversion shall furnish to the Company, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity
as may be required by them to save each of them harmless for any
loss, liability, cost or expense caused by or connected with such
substitution, and, in case of destruction, loss or theft, evidence
satisfactory to the Company, the Trustee and, if applicable, any
paying agent or conversion agent of the destruction, loss or theft 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 authenticate and
deliver temporary Notes (printed 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 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, conversion,
exchange or registration of transfer, shall, if surrendered to the
Company or any paying agent or any Note registrar or any conversion
agent, be surrendered to the Trustee and promptly canceled by it, or,
if surrendered to the Trustee, shall be promptly canceled by it, and
no Notes shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Indenture. The Trustee
shall destroy canceled Notes (unless the Company directs it to do
otherwise) and, after such destruction, shall 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 November 1, 1997. On or after such date, the Company
may, at its option, redeem all or from time to time any part of the
Notes on any date prior to maturity, upon notice as set forth in
Section 3.2, and at the optional redemption prices set forth in the
form of Note attached as Exhibit A hereto, together with accrued
interest to the date fixed for redemption.
Section 3.2 Notice of Redemption; Selection of Notes. In case
the Company shall desire to exercise the right to redeem all or, as
the case may be, any part of the Notes pursuant to Section 3.1, it
shall fix a date for redemption and it or, at its request, the
Trustee in the name of and at the expense of the Company, shall mail
or cause to be mailed a notice of such redemption at least 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
last addresses as the same appear on the registry books of the
Company. Such mailing shall be by first class mail. The notice if
mailed in the manner herein provided shall be conclusively presumed
to have been duly given, whether or not the holder receives such
notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Note designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Note.
Each such notice of redemption shall specify the aggregate
principal amount of Notes to be redeemed, the date fixed for
redemption, the redemption price at which Notes are to be redeemed,
the place or places of payment, that payment will be made upon
presentation and surrender of such Notes, that interest accrued to
the date fixed for redemption will be paid as specified in said
notice, and that on and after said date interest thereon or on the
portion thereof to be redeemed will cease to accrue. Such notice
shall also state the current Conversion Price and the date on which
the right to convert such Notes or portions thereof into Common Stock
will expire. If fewer than all the Notes are to be redeemed, the
notice of redemption shall identify the Notes to be redeemed. 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 Business Day prior to the redemption date
specified in the notice of redemption given as provided in this
Section 3.2, the Company will deposit with the Trustee or with one or
more paying agents (or, if the Company is acting as its own paying
agent, set aside, segregate and hold in trust as provided in
Section 5.4) an amount of money sufficient to redeem on the redemp-
tion date all the Notes so called for redemption (other than those
theretofore surrendered for conversion into Common Stock) at the
appropriate redemption price, together with accrued interest to the
date fixed for redemption. 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 redemp-
tion of such Note shall be paid to the Company upon its 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 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, by lot, pro rata or in such other manner as the Trustee
shall deem equitable and fair, the Notes or portion thereof (in
multiples of $1,000) to be redeemed. 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 treat as outstanding any Notes surrendered for conversion
during the period of 15 days next preceding the mailing of a notice
of redemption and need not treat as outstanding any Note
authenticated and delivered during such period in exchange for the
unconverted portion of any Note converted in part during such period.
Section 3.3 Payment of Notes Called for Redemption. If notice
of redemption has been given as above provided, the Notes or portion
of Notes with respect to which such notice has been given shall,
unless converted into Common Stock pursuant to the terms hereof,
become due and payable on the date and at the place or places stated
in such notice at the applicable redemption price, together with
interest accrued to the date fixed for redemption, and on and after
said date (unless the Company shall default in the payment of such
Notes at the redemption price, together with interest accrued to said
date) interest on the Notes or portion of Notes so called for
redemption shall cease to accrue and such Notes shall cease after the
close of business on the Business Day next preceding the date fixed
for redemption to be convertible into Common Stock and, except as
provided in Sections 8.5 and 13.4, to be entitled to any benefit or
security under this Indenture, and the holders thereof shall have no
right in respect of such Notes except the right to receive the
redemption price thereof and unpaid interest to 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 the date fixed for redemption; provided that any semi-annual
payment of interest becoming due on the date fixed for redemption
shall be payable to the holders of such Notes registered as such on
the relevant record date subject to the terms and provisions of
Section 2.3 hereof.
Upon presentation of any Note redeemed in part only, the
Company shall execute and the Trustee shall authenticate and deliver
to the holder thereof, at the expense of the Company, a new Note or
Notes, of authorized denominations, in principal amount equal to the
unredeemed portion of the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any
Notes or mail any notice of optional redemption during the
continuance of a default in payment of interest or premium on the
Notes or of any Event of Default of which, in the case of any Event
of Default other than under Sections 7.1(a) or 7.1(b), a Responsible
Officer of the Trustee has knowledge. If any Note called for
redemption shall not be so paid upon surrender thereof for redemp-
tion, 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 the date fixed
for redemption, of such Notes. Notwithstanding anything to the
contrary contained in this Article III, the obligation of the Company
to pay the redemption price of such Notes, together with interest
accrued to 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 deemed
to have been 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 incurred by the Trustee in
the defense of any claim or liability arising out of or in connection
with the exercise or performance of any of its powers, duties,
responsibilities or obligations under this Indenture.
Section 3.5 Redemption at Option of Holders.
(a) If there shall occur a Fundamental Change, then
each Noteholder shall have the right, at such holder's option,
to require the Company to redeem all of such holder's Notes, or
any portion thereof that is an integral multiple of $1,000
principal amount, on the date (the "Repurchase Date") that is
30 days after the date of the Company Notice (as defined in
Section 3.5(b) below) of such Fundamental Change (or, if such
30th day is not a Business Day, the next succeeding Business
Day). Such repayment shall be made at the following prices
(expressed as percentages of the principal amount) in the event
of a Fundamental Change occurring during the 12-month period
beginning November 1:
Year Percentage Year Percentage
1994 105.125% 1998 102.196
1995 104.393 1999 101.464%
1996 103.661 2000 100.732
1997 102.929
and 100% at November 1, 2001; provided that if the Applicable
Price with respect to the Fundamental Change is less than the
Reference Market Price, the Company shall redeem such Notes at
a price equal to the foregoing redemption price multiplied by
the fraction obtained by dividing the Applicable Price by the
Reference Market Price; provided that if such repayment date is
May 1 or November 1, then the interest payable on such date
shall be paid to the holder of record of the Note on the next
preceding April 15 or October 15. In each case, the Company
shall also pay to such holders accrued interest to the
Repurchase Date on the redeemed Notes.
Upon presentation of any Note redeemed in part only, the
Company shall execute and the Trustee shall authenticate and
deliver to the holder thereof, at the expense of the Company, a
new Note or Notes, of authorized denominations, in principal
amount equal to the unredeemed portion of the Notes so
presented.
(b) On or before the tenth day after the occurrence of
a Fundamental Change, the Company, or, at its request (which
must be received by the Trustee at least five Business Days
prior to the date the Trustee is requested to give notice as
described below), the Trustee in the name of and at the expense
of the Company, shall mail or cause to be mailed to all holders
of record on the date of the Fundamental Change a notice (the
"Company Notice") of the occurrence of such Fundamental Change
and of the redemption right at the option of the holders
arising as a result thereof. Such notice shall be mailed in
the manner and with the effect set forth in the first paragraph
of Section 3.2. The Company shall also deliver a copy of the
Company Notice to the Trustee at such time as it is mailed to
Noteholders.
Each Company Notice shall specify the circumstances
constituting the Fundamental Change, the Repurchase Date, the
price at which the Company shall be obligated to redeem Notes,
the latest time on the Repurchase Date by which the holder must
exercise the redemption right (the "Fundamental Change
Expiration Time"), that the holder shall have the right to
withdraw any Notes surrendered prior to the Fundamental Change
Expiration Time, a description of the procedure which a
Noteholder must follow to exercise such redemption right and to
withdraw any surrendered Notes, the place or places where the
holder is to surrender such holder's Notes, and the amount of
interest accrued on each Note to the Repurchase Date.
No failure of the Company to give the foregoing notices
and no defect therein shall limit the Noteholders' redemption
rights or affect the validity of the proceedings for the
repurchase of the Notes pursuant to this Section 3.5.
(c) For a Note to be so repaid at the option of the
holder, the Company must receive at the office or agency of the
Company maintained for that purpose in the Borough of
Manhattan, The City of New York or, at the option of such
holder, the Corporate Trust Office, such Note with the form
entitled "Option to Elect Repayment Upon A Fundamental Change"
on the reverse thereof duly completed, together with such Notes
duly endorsed for transfer, on or before the Fundamental Change
Expiration Time. All questions as to the validity, eligibility
(including time of receipt) and acceptance of any Note for
repayment shall be determined by the Company, whose
determination shall be final and binding absent manifest error.
(d) On or prior to the Business Day prior to the
Repurchase Date, the Company will deposit with the Trustee or
with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as
provided in Section 5.4) an amount of money sufficient to repay
on the Repurchase Date all the Notes to be repaid on such date
at the appropriate redemption price, together with accrued
interest to the Repurchase Date. Payment for Notes surrendered
for redemption (and not withdrawn) prior to the Fundamental
Change Expiration Time will be made promptly (but in no event
more than three Business Days) following the Repurchase Date by
mailing checks for the amount payable to the holders of such
Notes entitled thereto as they shall appear on the registry
books of the Company.
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 or assignment thereof, accepts and agrees to be bound by
such provisions.
The payment of the principal of, premium, if any, and interest
on all Notes 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. In the event and during
the continuation of any default in the payment of principal, premium,
interest or any other payment due on any Senior Indebtedness
continuing beyond the period of grace, if any, specified in the
instrument or lease evidencing such Senior Indebtedness, then, unless
and until such default shall have been cured or waived or shall have
ceased to exist, no payment shall be made by the Company with respect
to the principal of, or 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 the happening of such
default.
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 money or money's worth,
or payment thereof provided for in money or money's worth, before any
payment is made on account of the principal (and 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 the
happening of such dissolution, winding-up, liquidation or
reorganization); and upon any such dissolution or winding-up or
liquidation or reorganization for 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, as calculated by
the Company, 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 money or money's worth, after giving
effect to any concurrent payment or distribution to or for the
holders of Senior Indebtedness, before any payment or distribution is
made to the holders of the Notes or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, 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 money or money's worth, or
provision is made for such payment in money or money's worth in
accordance with its terms, 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 money or money's worth, after
giving effect to any concurrent payment or distribution to or for the
holders of such Senior Indebtedness (but subject to the power of a
court of competent jurisdiction to make other equitable provision,
which shall have been determined by such court to give effect to the
rights conferred in this Article upon the Senior Indebtedness and the
holders thereof with respect to Notes or the holders thereof or the
Trustee, by a lawful plan or reorganization or readjustment under
applicable bankruptcy law).
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 such reorganization
or readjustment, and (ii) the rights of the holders of Senior
Indebtedness (other than leases) and of leases which are assumed 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. Nothing in this Section 4.2 shall
apply to claims of, or payments to, the Trustee under or pursuant to
Section 8.6.
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 of (and premium, if any) and
interest on the Notes shall be paid in full; and, for the purposes of
such subrogation, no payments or distributions to the holders of the
Senior Indebtedness of any cash, property or securities to which the
holders of the Notes or the Trustee would be entitled except for the
provisions of this Article IV, and no payment over pursuant to the
provisions of this Article IV, to or for the benefit of the holders
of Senior Indebtedness by holders of the Notes or the Trustee, shall,
as between the Company, its creditors other than holders of Senior
Indebtedness, and the holders of the Notes, be deemed to be a payment
by the Company to or on account of the Senior Indebtedness; and no
payments or distributions of cash, property or securities to or for
the benefit of the holders of the Notes pursuant to the subrogation
provisions of this Article IV, which would otherwise have been paid
to the holders of Senior Indebtedness shall be deemed to be a payment
by the Company to or for the account of the Notes. It is understood
that the provisions of this Article IV are and are intended solely
for the purposes of defining the relative rights of the holders of
the Notes, on the one hand, and the holders of the Senior
Indebtedness, on the other hand.
Nothing contained in this Article IV or elsewhere in this
Indenture or in the Notes is intended to or shall impair, as between
the Company, its creditors other than the holders of Senior
Indebtedness, and the holders of the Notes, the obligation of the
Company, which is absolute and unconditional, to pay to the holders
of the Notes the principal of (and premium, if any) and interest on
the Notes as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the
relative rights of the holders of the Notes and creditors of the
Company other than the holders of the Senior Indebtedness, nor shall
anything herein or therein prevent the Trustee or the holder of any
Note from exercising all remedies otherwise permitted by applicable
law upon default under this Indenture, subject to the rights, if any,
under this Article IV of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon
the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article IV, the Trustee, subject to the provi-
sions 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 certi-
ficate 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 by Noteholders. Each holder of a
Note by his acceptance thereof authorizes and directs the Trustee in
his behalf to take such action as may be necessary or appropriate to
effectuate the subordination provided in this Article IV and appoints
the Trustee his attorney-in-fact for any and all such purposes.
Section 4.5 Notice to Trustee. The Company shall give prompt
written notice in the form of an Officers' Certificate to a
Responsible Officer of the Trustee and to any paying agent of any
fact known to the Company which would prohibit the making of any
payment of monies to or by the Trustee or any paying agent in respect
of the Notes pursuant to the provisions of this Article IV.
Notwithstanding the provisions of this Article IV or any other
provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts which would prohibit the
making of any payment of monies to or by the Trustee in respect of
the Notes pursuant to the provisions of this Article IV, unless and
until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company
(in the form of an Officers' Certificate) or a 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 to the contrary hereinbefore set
forth, nothing shall prevent (a) any payment by the Company or the
Trustee to the Noteholders of amounts in connection with a redemption
of Notes 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, (b) any payment by
the Company or the Trustee to the Noteholders of amounts in
connection with a repurchase of Notes if (i) notice of such
redemption has been given pursuant to Section 3.5 prior to the
receipt by the Trustee of written notice as aforesaid, and (ii) such
notice of redemption is given not earlier than thirty (30) days
before the Repurchase Date, or (c) any payment by the Trustee to the
Noteholders of monies deposited with it pursuant to Section 13.1.
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 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 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, (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 and (c)
securities into which the Notes become convertible pursuant to
Article XV. 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 Remitted Payments. Nothing contained in this
Article or elsewhere in this Indenture, or in any of the Notes, shall
prevent the Company at any time from making payments at any time of
principal amount, premium, if any, or interest, if any, in respect of
the Notes in accordance with the provisions hereof, except as
otherwise provided in this Article.
Section 4.10 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.
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, interest on such holder's Notes
shall, at the election of such holder, be paid by wire transfer 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, an office
or agency where the Notes may be surrendered for registration of
transfer or exchange or for presentation for payment or for
conversion or redemption and where notices and demands to or upon the
Company in respect of the Notes and this Indenture may be served.
The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency
not designated or appointed by the Trustee. If at any time the
Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served
at the Corporate Trust Office or the office of the Trustee in the
Borough of Manhattan, The City of New York.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or
surrendered for any or all such purposes and may from time to time
rescind such designations; provided that no such designation or
rescission shall in any manner relieve the Company of its obligation
to maintain an office or agency in the Borough of Manhattan, The City
of New York, for such purposes. The Company will give prompt written
notice to any such designation or rescission and of any change in the
location of any such other office or agency.
The Company hereby initially designates the Trustee as paying
agent, Note registrar, Custodian and conversion agent, and each of
the Corporate Trust Office of the Trustee and the office of the
Trustee in the Borough of Manhattan, The City of New York (which
shall initially be BancBoston Trust Company of New York, an Affiliate
of the Trustee located at 55 Broadway, 3rd Floor, New York, New York,
10006) one such office or agency of the Company for each of the
aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee
agrees to mail, or cause to be mailed, the notices set forth in
Section 8.10(a) and the third paragraph of Section 8.11.
Section 5.3 Appointments to Fill Vacancies in Trustee's
Office. The Company, whenever necessary to avoid or fill a vacancy
in the office of Trustee, will appoint, in the manner provided in
Section 8.10, a Trustee, so that there shall at all times be a
Trustee hereunder.
Section 5.4 Provisions as to Paying Agent.
(a) If the Company shall appoint a paying agent other
than the Trustee, or if the Trustee shall appoint such a paying
agent, it will cause such paying agent to execute and deliver
to the Trustee an instrument in which such agent shall agree
with the Trustee, subject to the provisions of this
Section 5.4:
(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any,
or interest on the Notes (whether such sums have been paid to
it by the Company or by any other obligor on the Notes) in
trust for the benefit of the holders of the Notes;
(2) that it will give the Trustee notice of any
failure by the Company (or by any other obligor on the Notes)
to make any payment of the principal of and premium, if any, or
interest on the Notes when the same shall be due and payable;
and
(3) that at any time during the continuance of an
Event of Default, upon request of the Trustee, it will
forthwith pay to the Trustee all sums so held in trust.
The Company shall, before each due date of the principal
of, premium, if any, or interest on the Notes, deposit with the
paying agent a sum sufficient to pay such principal, premium,
if any, or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of any
failure to take such action.
(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 not-
withstanding, the Company may, at any time, for the purpose of
obtaining a satisfaction and discharge of this Indenture, or
for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Company or any paying agent
hereunder as required by this Section 5.4, such sums to be held
by the 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 not-
withstanding, the agreement to hold sums in trust as provided
in this Section 5.4 is subject to Sections 13.3 and 13.4.
Section 5.5 Corporate Existence. Subject to Article XII, the
Company will do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence.
Section 5.6 Rule 144A Information Requirement. During the
period beginning on the latest date of the original issuance of the
Notes and ending on the date that is three years from such date, the
Company covenants and agrees that it shall, during any period in
which it is not subject to Section 13 or 15(d) under the Exchange
Act, make available to any holder or beneficial holder of Notes which
continue to be Restricted Notes or any Common Stock issued upon
conversion thereof in connection with any sale thereof and any
prospective purchaser of Notes or such Common Stock from such holder
or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or
beneficial holder of the Notes or such Common Stock and it will take
such further action as any holder or beneficial holder of such Notes
or such Common Stock may reasonably request, all to the extent
required from time to time to enable such holder or beneficial holder
to sell its Notes or Common Stock without registration under the
Securities Act within the limitation of the exemption provided by
Rule 144A, as such rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such
Common Stock, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
Section 5.7 Resale of Certain Notes. During the period
beginning on the original issuance date of the Notes and ending on
the date that is three years from such date, the Company will not
resell, and will use its best efforts to prevent any of its
Affiliates from reselling, (x) any Notes which constitute "restricted
securities" under Rule 144 or (y) any securities into which such
Notes have been converted under this Indenture, which constitute
"restricted securities" under Rule 144.
Section 5.8 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.
ARTICLE VI
NOTEHOLDERS' LISTS AND REPORTS BY
THE COMPANY AND THE TRUSTEE
Section 6.1 Noteholders' Lists. The Company covenants and
agrees that it will furnish or cause to be furnished to the Trustee,
semiannually, not more than 15 days after each May 1 and November 1
in each year beginning with May 1, 1995, and at such other times as
the Trustee may request in writing, within 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 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 1995, 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.
(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 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.
Section 6.4 Reports by Company. The Company shall file with
the Trustee, 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 admini-
strative 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 30 days; or
(b) default in the payment of the principal of and
premium, if any, on any of the Notes as and when the same shall
become due and payable either at maturity or in connection with
any redemption pursuant to Article III, by declaration or
otherwise; or
(c) failure on the part of the Company duly to observe
or perform any other of the covenants or agreements on the part
of the Company in the Notes or in this Indenture (other than a
covenant or agreement a default in whose performance or whose
breach is elsewhere in this Section 7.1 specifically dealt
with) continued for a period of 60 days after the date on which
written notice of such failure, requiring the Company to remedy
the same, shall have been given to the Company by the Trustee,
or to the Company and a Responsible Officer of the Trustee by
the holders of at least 25 percent in aggregate principal
amount of the Notes at the time outstanding determined in
accordance with Section 9.4; or
(d) the Company shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such
relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding
commenced against it, or shall make a general assignment for
the benefit of creditors, or shall fail generally to pay its
debts as they become due; or
(e) an involuntary case or other proceeding shall be
commenced against the Company seeking liquidation, reorganiza-
tion or other relief with respect to it or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a
period of 90 consecutive days;
then, and in each and every such case (other than an Event of Default
specified in Section 7.1(d) or (e)), unless the principal of all of
the Notes shall have already become due and payable, either the
Trustee or the holders of not less than 25 percent in aggregate
principal amount of the Notes then outstanding hereunder determined
in accordance with Section 9.4, by notice in writing to the Company
(and to the Trustee if given by Noteholders), may declare the princi-
pal of all the Notes and the interest accrued thereon to be due and
payable immediately, and upon any such declaration the same shall
become and shall be immediately due and payable, anything in this
Indenture or in the Notes contained to the contrary notwithstanding.
If an Event of Default specified in Section 7.1(d) or (e) occurs, the
principal of all the Notes and the interest accrued thereon shall be
immediately and automatically due and payable without necessity of
further action. This provision, however, is subject to the
conditions that if, at any time after the principal of the Notes
shall have been so declared due and payable, and before any judgment
or decree for the payment of the monies due shall have been obtained
or entered as hereinafter provided, the Company shall 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 enforce-
able under applicable law) and on such principal and premium, if any,
at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.6, and
if any and all defaults under this Indenture, other than the
nonpayment of principal of and premium, if any, and accrued interest
on Notes which shall have become due by acceleration, shall have been
cured or waived pursuant to Section 7.7 -- then and in every such
case the holders of a majority in aggregate principal amount of the
Notes then outstanding, by written notice to the Company and to the
Trustee, may waive all defaults or Events of Default and rescind and
annul such declaration and its consequences; but no such waiver or
rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right
consequent thereon. The Company shall notify a Responsible Officer
of the Trustee, promptly upon becoming aware thereof, of any Event of
Default.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been
discontinued or abandoned because of such waiver or rescission and
annulment or for any other reason or shall have been determined
adversely to the Trustee, then and in every such case the Company,
the holders of Notes, and the Trustee shall be restored respectively
to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of 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 30 days, or (b) in case default shall
be made in the payment of the principal of or premium, if any, on any
of the Notes as and when the same shall have become due and payable,
whether at maturity of the Notes or in connection with any
redemption, by 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 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 bank-
ruptcy 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.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or adopt on behalf of any
Noteholder any plan of reorganization or arrangement affecting the
Notes or the rights of any Noteholder, or to authorize the Trustee to
vote in respect of the claim of any Noteholder in any such
proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Trustee
without the possession of any of the Notes, or the production thereof
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 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 pro-
ceedings involving the interpretation of any provision of this
Indenture to which the Trustee shall be a party) the Trustee shall be
held to represent all the holders of the Notes, and it shall not be
necessary to make any holders of the Notes parties to any such
proceedings.
Section 7.3 Application of Monies Collected by Trustee. Any
monies collected by the Trustee pursuant to this Article VII shall be
applied in the order following, at the date or dates fixed by the
Trustee for the distribution of such monies, upon presentation of the
several Notes, and stamping thereon the payment, if only partially
paid, and upon surrender thereof, if fully paid:
First: To the payment of all amounts due the Trustee
under Section 8.6.
Second: Subject to the provisions of Article IV, in case
the principal of the outstanding Notes shall not have become
due and be unpaid, to the payment of interest on the Notes in
default in the order of the maturity of the installments of
such interest, with interest (to the extent that such interest
has been collected by the Trustee) upon the overdue
installments of interest at the rate borne by the Notes, such
payments to be made ratably to the persons entitled thereto;
Third: Subject to the provisions of Article IV, in case
the principal of the outstanding Notes shall have become due,
by declaration or otherwise, and be unpaid to the payment of
the whole amount then owing and unpaid upon the Notes for
principal and premium, if any, and interest, with interest on
the overdue principal and premium, if any, and (to the extent
that such interest has been collected by the Trustee) upon
overdue installments of interest at the rate borne by the
Notes; and in case such monies shall be insufficient to pay in
full the whole amounts so due and unpaid upon the Notes, then
to the payment of such principal and premium, if any, and
interest without preference or priority of principal and
premium, if any, over interest, or of interest over principal
and premium, if any, or of any installment of interest over any
other installment of interest, or of any Note over any other
Note, ratably to the aggregate of such principal and premium,
if any, and accrued and unpaid interest; and
Fourth: Subject to the provisions of Article IV, to the
payment of the remainder, if any, to the Company or any other
person lawfully entitled thereto.
Section 7.4 Proceedings by Noteholder. No holder of any Note
shall have any right by virtue of or by availing of any provision of
this Indenture to institute any suit, action or proceeding in equity
or at law upon or under or with respect to this Indenture, or for the
appointment of a receiver, trustee, liquidator, custodian or other
similar official, or for any other remedy hereunder, unless such
holder previously shall have given to the Trustee written notice 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 60 days after its receipt of such
notice, request and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and no
direction inconsistent with such written request shall have been
given to the Trustee pursuant to Section 7.7; it being understood and
intended, and being expressly covenanted by the taker and holder of
every Note with every other taker and holder and the Trustee, that no
one or more holders of Notes shall have any right in any manner
whatever by virtue of or by availing of any provision of this
Indenture to affect, disturb or prejudice the rights of any other
holder of Notes, or to obtain or seek to obtain priority over or
preference to any other such holder, or to enforce any right under
this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes (except as
otherwise provided herein). For the protection and enforcement of
this Section 7.4, each and every Noteholder and the Trustee shall be
entitled to such relief as can be given either at law or in equity.
Notwithstanding any other provision of this Indenture and any
provision of any Note, the right of any holder of any Note to receive
payment of the principal of and premium, if any, and interest on such
Note, on or after the respective due dates expressed in such Note, or
to institute suit for the enforcement of any such payment on or after
such respective dates against the Company shall not be impaired or
affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of
either the Trustee or the holder of any other Note, in his own behalf
and for his own benefit, may enforce, and may institute and maintain
any proceeding suitable to enforce, his rights of conversion as
provided herein.
Section 7.5 Proceedings by Trustee. In case of an Event of
Default the Trustee may in its discretion proceed to protect and
enforce the rights vested in it by this Indenture by such appropriate
judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained
in this Indenture or in aid of the exercise of any power granted in
this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Section 7.6 Remedies Cumulative and Continuing. Except as
provided in Section 2.6, all powers and remedies given by this
Article VII to the Trustee or to the Noteholders shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any
thereof or of any other powers and remedies available to the Trustee
or the holders of the Notes, by judicial proceedings or otherwise, to
enforce the performance or observance of the covenants and agreements
contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power
accruing upon any default or Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or
shall be construed to be a waiver of any such default or any
acquiescence therein; and, subject to the provisions of Section 7.4,
every power and remedy given by this Article VII or by law to the
Trustee or to the Noteholders may be exercised from time to time, and
as often as shall be deemed expedient, by the Trustee or by the
Noteholders.
Section 7.7 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4 shall have the right to direct the time,
method, and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power conferred
on the Trustee; provided, however, that (a) such direction shall not
be in conflict with any rule of law or with this Indenture, and (b)
the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction. The holders of a
majority in aggregate principal amount of the Notes at the time
outstanding determined in accordance with Section 9.4 may on behalf
of the holders of all of the Notes waive any past default or Event of
Default hereunder and its consequences except (i) a default in the
payment of interest or premium, if any, on, or the principal of, the
Notes, (ii) a failure by the Company to convert any Notes into Common
Stock, (iii) a default in the payment of redemption price pursuant to
Article III or (iv) a default in respect of a covenant or provisions
hereof which under Article XI cannot be modified or amended without
the consent of the holders of all Notes then outstanding. Upon any
such waiver the Company, the Trustee and the holders of the Notes
shall be restored to their former positions and rights hereunder; but
no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever
any default or Event of Default hereunder shall have been waived as
permitted by this Section 7.7, said default or Event of Default shall
for all purposes of the Notes and this Indenture be deemed to have
been cured and to be not continuing; but no such waiver shall extend
to any subsequent or other default or Event of Default or impair any
right consequent thereon.
Section 7.8 Notice of Defaults. The Trustee shall, within 90
days after the occurrence of a default, mail to all Noteholders, as
the names and addresses of such holders appear upon the registry
books of the Company, 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 direc-
tors and/or Responsible Officers of the Trustee in good faith
determine that the withholding of such notice is in the interests of
the Noteholders.
Section 7.9 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 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than ten percent in
principal amount of the Notes at the time outstanding determined in
accordance with Section 9.4, or to any suit instituted by any
Noteholder for the enforcement of the payment of the principal of or
premium, if any, or interest on any Note on or after the due date
expressed in such Note or to any suit for the enforcement of the
right to convert any Note in accordance with the provisions of
Article XV.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.1 Duties and Responsibilities of Trustee. The
Trustee, prior to the occurrence of an Event of Default and after the
curing of all Events of Default which may have occurred, undertakes
to perform such duties and only such duties as are specifically set
forth in this Indenture. In case an Event of Default has occurred
(which has not been cured or waived) the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of his
own affairs.
No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, 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 on the part of the
Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but, in the case of any
such certificates or opinions which by any provisions
hereof are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Indenture;
(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 it shall be provided that 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, 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 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 investi-
gation 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.
Section 8.4 Trustee, Paying Agents, Conversion Agents or
Registrar May Own Notes. The Trustee, any paying agent, any
conversion agent or Note registrar, in its individual or any other
capacity, may become the owner or pledgee of Notes with the same
rights it would have if it were not Trustee, paying agent, conversion
agent or Note registrar.
Section 8.5 Monies to Be Held in Trust. Subject to the
provisions of Section 13.4, all monies received by the Trustee shall,
until used or applied as herein provided, be held in trust for the
purposes for which they were received. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the
extent required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as may be
agreed from time to time by the Company and the Trustee.
Section 8.6 Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the
Trustee shall be entitled to, 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 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 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 or bad faith
on the part of the Trustee or such agent or authenticating agent, as
the case may be, and arising out of or in connection with the
acceptance or administration of this trust or in any other capacity
hereunder, including the costs and expenses of defending themselves
against any claim of liability in the premises. The obligations of
the Company under this Section 8.6 to compensate or indemnify the
Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall be secured by a lien prior to that
of the Notes upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the
holders of particular Notes. The obligation of the Company under
this Section shall survive the satisfaction and discharge of this
Indenture.
When the Trustee and its agents and any authenticating agent
incur expenses or render services after an Event of Default specified
in Section 7.1(d) or (e) occurs, the expenses and the compensation
for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
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 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, and such Officers' Certificate,
in the absence of negligence or bad faith on the part of the Trustee,
shall be full warrant to the Trustee for any action taken or omitted
by it under the provisions of this Indenture upon the faith thereof.
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 a combined
capital and surplus of at least $50,000,000. If such person
publishes reports of condition at least annually, pursuant to law or
to the requirements of any supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of
such person shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at
any time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
Section 8.10 Resignation or Removal of Trustee.
(a) The Trustee may at any time resign by giving written
notice of such resignation to the Company and the Company shall
mail, or cause to be mailed, notice thereof to the holders of
Notes at their addresses as they shall appear on the registry
books of the Company. 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 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 dupli-
cate, executed by order of the Board of Directors, one copy of
which instrument shall be delivered to the Trustee so removed
and one copy to the successor trustee, or, subject to the
provisions of Section 7.9, any Noteholder who has been a bona
fide holder of a Note or Notes for at least six 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 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 request of any such
successor trustee, the Company shall execute any and all instruments
in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee
ceasing to act shall, nevertheless, retain a lien upon all property
and funds held or collected by such trustee as such, except for funds
held in trust for the benefit of holders of particular Notes, to
secure any amounts then due it pursuant to the provisions of Section
8.6.
No successor trustee shall accept appointment as provided in
this Section 8.11 unless at the time of such acceptance such
successor trustee shall be qualified under the provisions of Section
8.8 and be eligible under the provisions of Section 8.9.
Upon acceptance of appointment by a successor trustee as
provided in this Section 8.11, the Company 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
registry books of the Company. If the Company fails to mail such
notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to
be mailed at the expense of the Company.
Section 8.12 Succession by Merger, Etc. Any corporation into
which the Trustee may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all of the trust
business of the Trustee, shall be the successor to the Trustee here-
under, provided such corporation shall be qualified under the
provisions of Section 8.8 and eligible under the provisions of
Section 8.9 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
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 the collection of
the claims against the Company (or any such other obligor).
ARTICLE IX
CONCERNING THE NOTEHOLDERS
Section 9.1 Action by Noteholders. Whenever in this Indenture
it is provided that the holders of a specified percentage in
aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any
notice, consent or waiver or the taking of any other action), the
fact that at the time of taking any such action, the holders of such
specified percentage have joined therein may be evidenced (a) by any
instrument or any number of instruments of similar tenor executed by
Noteholders in person or by agent or proxy appointed in writing, or
(b) by the record of the holders of Notes voting in favor thereof at
any meeting of Noteholders duly called and held in accordance with
the provisions of Article X, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of
Noteholders. Whenever the Company or the Trustee solicits the taking
of any action by the holders of the Notes, the Company or the Trustee
may fix in advance of such solicitation, a date as the record date
for determining holders entitled to take such action. The record
date shall be not more than 15 days prior to the date of commencement
of solicitation of such action.
Section 9.2 Proof of Execution by Noteholders. Subject to the
provisions of Sections 8.1, 8.2 and 10.5, proof of the execution of
any instrument by a Noteholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as
shall be satisfactory to the Trustee. The holding of Notes shall be
proved by the registry of such Notes or by a certificate of the Note
registrar.
The record of any Noteholders' meeting shall be proved in the
manner provided in Section 10.6.
Section 9.3 Who Are Deemed Absolute Owners. The Company, the
Trustee, any paying agent, any conversion agent and any Note
registrar may deem the person in whose name a Note shall be
registered upon the books of the Company to be, and may treat him as,
the absolute owner of such Note (whether or not such Note shall be
overdue and notwithstanding any notation of ownership or other
writing thereon) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and interest on such
Note, for conversion of such Note and for all other purposes; and
neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for
the time being, or upon his order, shall be valid, and, to the extent
of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Note.
Section 9.4 Company-Owned Notes Disregarded. In determining
whether the holders of the requisite aggregate principal amount of
Notes have concurred in any direction, consent, waiver or other
action under this Indenture, Notes which are owned by the Company or
any other obligor on the Notes or by any person directly or
indirectly controlling or controlled by or under direct or indirect
common control with the Company or any other obligor on the Notes
shall be disregarded and deemed not to be outstanding for the purpose
of any such determination; provided that for the purposes of
determining whether the Trustee shall be protected in relying on any
such direction, consent, waiver or other action only Notes which a
Responsible Officer knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded
as outstanding for the purposes of this Section 9.4 if the pledgee
shall establish to the satisfaction of the Trustee the pledgee's
right to vote such Notes and that the pledgee is not the Company, any
other obligor on the Notes or a person directly or indirectly
controlling or controlled by or under direct or indirect common
control with the Company or any such other obligor. In the case of a
dispute as to such right, any decision by the Trustee taken upon the
advice of counsel shall be full protection to the Trustee. Upon
request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Notes,
if any, known by the Company to be owned or held by or for the
account of any of the above described persons; and, subject to
Section 8.1, the Trustee shall be entitled to accept such Officers'
Certificate as conclusive evidence of the facts therein set forth and
of the fact that all Notes not listed therein are outstanding for the
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 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
(4) to take any other action authorized to be taken by
or on behalf of the holders of any specified aggregate princi-
pal 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 in Boston
or Canton, Massachusetts 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 registry books of the Company. Such notice shall also be
mailed to the Company. Such notices shall be mailed not less than 20
nor more than 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 20 days after receipt of such request, then the
Company or such Noteholders may determine the time and the place in
Boston or Canton, Massachusetts, or the Borough of Manhattan, The
City of New York for such meeting and may call such meeting to take
any action authorized in Section 10.1, by mailing notice thereof as
provided in Section 10.2.
Section 10.4 Qualifications for Voting. To be entitled to
vote at any meeting of Noteholders a person shall (a) be a holder of
one or more Notes on the record date pertaining to such meeting or
(b) be a person appointed by an instrument in writing as proxy by a
holder of one or more Notes. The only persons who shall be entitled
to be present or to speak at any meeting of Noteholders shall be the
persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
Section 10.5 Regulations. Notwithstanding any other provi-
sions 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 person 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 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;
(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 registerable as to
principal only) and to provide for exchangeability of such
Notes with the Notes issued hereunder in fully registered form
and to make all appropriate changes for such purpose;
(f) to cure any ambiguity or to correct or supplement
any provision contained herein or in any supplemental indenture
which may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising
under this Indenture which shall not materially adversely
affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Notes; or
(h) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect
the qualifications of this Indenture under the Trust Indenture
Act, or under any similar federal statute hereafter enacted.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein
contained and to accept the conveyance, transfer and assignment of
any property thereunder, but the Trustee shall not be obligated to,
but may in its discretion, enter into any supplemental indenture
which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section 11.1 may be executed by the Company and the Trustee without
the consent of the holders of any of the Notes at the time
outstanding, notwithstanding any of the provisions of Section 11.2.
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 or affect 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, or impair or change
the obligation of the Company to make redemption of any Note upon the
happening of a Fundamental Change in a manner adverse to the holder
of Notes, or impair the right to convert the Notes into Common Stock
subject to the terms set forth herein, including Section 15.6,
without the consent of the holder of each Note so affected, or
(ii) reduce the aforesaid percentage of Notes, the holders of which
are required to consent to any such supplemental indenture, without
the consent of the holders of all Notes then outstanding.
Upon the request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or
Assistant Secretary authorizing the execution of any such supple-
mental 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 is discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders
under this Section 11.2 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such
consent shall approve the substance thereof.
Section 11.3 Compliance with Trust Indenture Act; Effect of
Supplemental Indentures. Any supplemental indenture executed
pursuant to the provisions of this Article XI shall comply with the
Trust Indenture Act, as then in effect. 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 16.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes
then outstanding.
Section 11.5 Evidence of Compliance of Supplemental Indenture
to Be Furnished Trustee. The Trustee, subject to the provisions of
Sections 8.1 and 8.2, may receive an Officers' Certificate and an
Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant hereto complies with the requirements of
this Article XI.
ARTICLE XII
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 12.1 Company May Consolidate, Etc. on Certain Terms.
Subject to the provisions of Section 12.2, nothing contained in this
Indenture or in any of the Notes shall prevent any consolidation or
merger of the Company with or into any other corporation or
corporations (whether or not affiliated with the Company), or
successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent
any sale, conveyance or lease (or successive sales, conveyances or
leases) of all or substantially all of the property of the Company,
to any other corporation (whether or not affiliated with the
Company), authorized to acquire and operate the same and which shall
be organized under the laws of the United States of America, any
state thereof or the District of Columbia; provided, however, and the
Company hereby covenants and agrees, 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 3Com
Corporation any or all of the Notes issuable hereunder which
theretofore shall not have been signed by the Company and delivered
to the Trustee; and, upon the order of such successor corporation
instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver, or cause to be authenticated and
delivered, any Notes which previously shall have been signed and
delivered by the officers of the Company to the Trustee for
authentication, and any Notes which such successor corporation
thereafter shall cause to be signed and delivered to the Trustee for
that purpose. All the Notes so issued shall in all respects have the
same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Notes had been issued at the date of
the execution hereof. In the event of any such consolidation,
merger, sale, conveyance or lease, the person named as the "Company"
in the first paragraph of this Indenture or any successor which shall
thereafter have become such in the manner prescribed in this Article
XII may be dissolved, wound up and liquidated at any time thereafter
and such person shall be released from its liabilities as obligor and
maker of the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or
lease, such changes in phraseology and form (but not in substance)
may be made in the Notes thereafter to be issued as may be
appropriate.
Section 12.3 Opinion of Counsel to Be Given Trustee. The
Trustee, subject to Sections 8.1 and 8.2, shall receive an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that any
such consolidation, merger, sale, conveyance or lease and any such
assumption complies with the provisions of this Article XII.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 13.1 Discharge of Indenture. When (a) the Company
shall deliver to the Trustee for cancellation all Notes theretofore
authenticated (other than any Notes which have 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 authenticated and delivered) not theretofore
canceled or delivered to the Trustee for cancellation, including
principal and premium, if any, and interest due or to become due to
such date of maturity or redemption date, as the case may be, and if
in either case the Company shall also pay or cause to be paid all
other sums payable hereunder by the Company, then this Indenture
shall cease to be of further effect (except as to (i) remaining
rights of registration of transfer, substitution and exchange and
conversion of Notes, (ii) rights hereunder of Noteholders to receive
payments of principal of and premium, if any, and interest on, the
Notes and the other rights, duties and obligations of Noteholders, as
beneficiaries hereof with respect to the amounts, if any, so
deposited with the Trustee and (iii) the rights, obligations and
immunities of the Trustee hereunder), and the Trustee, on demand of
the Company accompanied by an Officers' Certificate and an Opinion of
Counsel as required by Section 16.5 and at the cost and expense of
the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; the Company, however,
hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee and to
compensate the Trustee for any services thereafter reasonably and
properly rendered by the Trustee in connection with this Indenture or
the Notes.
Section 13.2 Deposited Monies to Be Held in Trust by Trustee.
Subject to Article IV and Section 13.4, all monies deposited with the
Trustee pursuant to Section 13.1 shall be held in trust and applied
by it 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
demand 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 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 (i) 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 and (ii) the holders of at least a majority in principal
amount of the then outstanding Notes so request by written notice to
the Trustee, 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, SHAREHOLDERS,
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, shareholder, officer or director, as such, past,
present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by
the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly
waived and released as a condition of, and as a consideration for,
the execution of this Indenture and the issue of the Notes.
ARTICLE XV
CONVERSION OF NOTES
Section 15.1 Right to Convert. Subject to and upon compliance
with the provisions of this Indenture, the holder of any Note shall
have the right, at his 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 November 1, 2001 (except that, with
respect to any Note or portion of a Note which shall be called for
redemption or delivered for repurchase, such right shall terminate,
except as provided in Section 15.2, at the close of business on the
Business Day next preceding the date fixed for redemption of such
Note or portion of a Note unless the Company shall default in payment
due upon redemption thereof) to convert the principal amount of any
such Note, or any portion of such principal amount which is $1,000 or
an integral multiple thereof, into that number of fully paid and non-
assessable shares of Common Stock (as such shares shall then be
constituted) obtained by dividing the principal amount of the Note or
portion thereof surrendered for conversion by the Conversion Price in
effect at such time, by surrender of the Note so to be converted in
whole or in part in the manner provided in Section 15.2. A holder of
Notes is not entitled to any rights of a holder of Common Stock until
such holder has converted his Notes to Common Stock, and only to the
extent such Notes are deemed to have been converted to Common Stock
under this Article XV.
Section 15.2 Exercise of Conversion Privilege; Issuance of
Common Stock on Conversion; No Adjustment for Interest or Dividends.
In order to exercise the conversion privilege with respect to any
Note in definitive form, the holder of any such Note to be converted
in whole or in part shall surrender such Note, duly endorsed, at an
office or agency maintained by the Company pursuant to Section 5.2,
accompanied by the funds, if any, required by the 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 Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in
the same name as the registration of such Note, be duly endorsed by,
or be accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or his duly authorized
attorney.
In order to exercise the conversion privilege with respect to
any interest in a Note in global form, the beneficial holder must
complete the appropriate instruction form for conversion pursuant to
the Depository's book-entry conversion program, deliver by book-entry
delivery an interest in such Note in global form, furnish appropriate
endorsements and transfer documents if required by the Company or the
Trustee or conversion agent, and pay the funds, if any, required by
this Section 15.2 and any transfer taxes, if required pursuant to
Section 15.7.
As promptly as practicable after satisfaction of the require-
ments 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 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 denomi-
nations 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 opening of business on 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 any record date for the payment
of interest to the close of business on the following interest
payment date) be accompanied by payment, in funds acceptable to the
Company, of an amount equal to the interest otherwise payable on such
interest payment date on the principal amount being converted;
provided, however, that no such payment need be made if there shall
exist at the time of conversion a default in the payment of interest
on the Notes; provided further, however, that no such payment shall
be required in respect of any Note or portion thereof being called
for redemption by the Company on November 1, 1997. An amount equal
to such payment (or, in the case of a redemption by the Company on
November 1, 1997, equal to the interest which would be payable on
such date if such Note or portion were not converted prior to such
interest payment date) shall be paid by the Company on such interest
payment date to the holder of such Note at the close of business on
such record date; provided, however, that if the Company shall
default in the payment of interest on such interest payment date,
such amount shall be paid to the person who made such required
payment or, in the case of a redemption by the Company on November 1,
1997, to the person who converted such Note. Except as provided
above in this Section 15.2, 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.
Upon the conversion of an interest in a Note in global form,
the Trustee, or the Custodian at the direction of the Trustee, shall
make a notation on such Note in global form as to the reduction in
the principal amount represented thereby.
Section 15.3 Cash Payments in Lieu of Fractional Shares. No
fractional shares of Common Stock or scrip representing fractional
shares shall be issued upon conversion of Notes. If more than one
Note shall be surrendered for conversion at one time by the same
holder, the number of full shares which shall be issuable upon
conversion shall be computed on the basis of the aggregate principal
amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock
would be issuable upon the conversion of any Note or Notes, the
Company shall make an adjustment and payment therefor in cash at the
current market value thereof to the holder of Notes. The current
market value of a share of Common Stock shall be the Closing Price on
the first Business Day immediately preceding the day on which the
Notes (or specified portions thereof) are deemed to have been
converted and such Closing Price shall be determined as provided in
Section 15.5(g).
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 shareholders 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 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 shareholders 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 shareholders 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 shareholders 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
shareholders 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 Cur-
rent Market Price, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date fixed
for determination of shareholders 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 shareholders 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
shareholders entitled to receive such rights or warrants had
not been fixed.
(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, immediately
prior to the Record Date (as defined below) for such
distribution of the Securities, converted its Notes into Common
Stock, the Conversion Price shall be reduced so that the same
shall be equal to the price determined by multiplying the
Conversion Price in effect on the Record Date by a fraction of
which the numerator shall be the Current Market Price per share
of the Common Stock on the Record Date less the fair market
value (as determined by the Board of Directors or, to the
extent permitted by applicable law, a duly authorized committee
thereof, whose determination shall be conclusive, and described
in a resolution of the Board of Directors or such duly
authorized committee, as the case may be), 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 reduc-
tion 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 (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 (or, to the extent permitted by
applicable law, a duly authorized committee thereof) 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.
The Company will promptly amend the Rights Agreement (in
no event later than December 31, 1994) (the "Rights Agreement
Amendment") to provide that upon conversion of any Note or
portion thereof the Noteholder will receive, in addition to the
Common Stock issuable upon such conversion, the Rights which
would have attached to such shares of Common Stock if the
Rights had not become separated from the Common Stock pursuant
to the provisions of the Rights Agreement. In the event that
the Company implements any new shareholders' rights plan (a
"New Rights Agreement"), such New Rights Agreement shall
provide that upon conversion of the Notes the holders will
receive, in addition to the Common Stock issuable upon such
conversion, such Rights (whether or not such Rights have
separated from Common Stock at the time of conversion) issuable
pursuant to such New Rights Agreement.
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. If any
such rights or warrants, including any such existing rights or
warrants distributed prior to the date of this Indenture
(including the Rights), are subject to Trigger Events, upon the
satisfaction of each of which such rights or warrants shall
become exercisable to purchase different securities, evidences
of indebtedness or other assets, then the occurrence of each
such Trigger Event shall be deemed to be such date of issuance
and record date with respect to new rights or warrants (and a
termination or expiration of the existing rights or warrants
without exercise by the holder thereof) (so that, by way of
illustration and not limitation, the dates of issuance of any
Rights shall be deemed to be the dates on which such Rights
become exercisable to purchase capital stock of the Company,
and not the date on which such Rights may be issued, or may
become evidenced by separate certificates, if such Rights are
not then so exercisable). In addition, in the event of any
distribution of rights or warrants, or any Trigger Event with
respect thereto (including the Rights), 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 par 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
(including the Rights) which shall have expired or been ter-
minated 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 indebted-
ness, 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 shareholders entitled to receive such dividend
or other distribution" and "the date fixed for such determina-
tion" within the meaning of Sections 15.5(a) and (b) and
(B) any shares of Common Stock included in such dividend or
distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the
meaning of Section 15.5(a).
(e) In case the Company shall, by dividend or
otherwise, distribute to all holders of its Common Stock cash
(excluding (x) any quarterly cash dividend on the Common Stock
to the extent the aggregate cash dividend per share of Common
Stock in any fiscal quarter does not exceed the greater of (A)
the amount per share of Common Stock of the next preceding
quarterly cash dividend on the Common Stock to the extent not
requiring 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 Current
Market Price) of the Common Stock on the Trading Day (as
defined in Section 15.5(g)) next preceding the date of
declaration of such dividend and (y) any dividend or distribu-
tion in connection with the liquidation, dissolution or winding
up of the Company, whether voluntary or involuntary), then, in
such case, unless the Company elects to reserve such cash for
distribution to the holders of the Notes 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 of cash which such
holder would have received if such holder had, immediately
prior to the Record Date for such distribution of cash,
converted its Notes into Common Stock, 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 Record Date by a fraction of which the
numerator shall be the Current Market Price of the Common Stock
on the Record Date less the amount of cash so distributed (and
not excluded as provided above) applicable to one share of
Common Stock and the denominator shall be such Current Market
Price of the Common Stock, such reduction to be effective
immediately prior to the opening of business on the day
following the Record Date; provided, however, that in the event
the portion of the cash so distributed applicable to one share
of Common Stock is equal to or greater than the Current Market
Price of the Common Stock on the Record Date, in lieu of the
foregoing adjustment, adequate provision shall be made so that
each Noteholder shall have the right to receive upon conversion
the amount of cash such holder would have received had such
holder converted each Note on the Record Date. In the event
that such dividend or distribution is not so paid or made, the
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 for all or any portion of the Common
Stock shall expire and such tender or exchange offer shall
involve the payment by the Company or such subsidiary of
consideration per share of Common Stock having a fair market
value (as determined by the Board of Directors or, to the
extent permitted by applicable law, a duly authorized committee
thereof, 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, 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, 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) 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 appli-
cable law, a duly authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" shall mean the average
of the daily Closing Prices per share of Common Stock for
the ten consecutive Trading Days immediately prior to the
date in question; provided, however, that (1) if the "ex"
date (as hereinafter defined) for any event (other than
the issuance or distribution or Fundamental Change
requiring such computation) that requires an adjustment
to the Conversion Price pursuant to Section 15.5(a), (b),
(c), (d), (e) or (f) 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, distri-
bution or Fundamental Change requiring such computation)
that requires an adjustment to the Conversion Price pur-
suant to Section 15.5(a), (b), (c), (d), (e) or (f)
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, distri-
bution or Fundamental Change requiring such computation
is prior to the day in question, after taking into
account any adjustment required pursuant to clause (1) or
(2) of this proviso, the Closing Price for each Trading
Day on or after such "ex" date shall be adjusted by
adding thereto the amount of any cash and the fair market
value (as determined by the Board of Directors or, to the
extent permitted by applicable law, a duly authorized
committee thereof in a manner consistent with any deter-
mination 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) or (f) occurs on or after the Expiration Time
for the tender or exchange offer requiring such computa-
tion and prior to the day in question, the Closing Price
for each Trading Day on and after the "ex" date for such
other event shall be adjusted by multiplying such Closing
Price by the reciprocal of the fraction by which the
Conversion Price is so required to be adjusted as a
result of such other event. For purposes of this para-
graph, 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 determi-
nation 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.
(h) The Company may make such reductions in the
Conversion Price, in addition to those required by
Sections 15.5 (a), (b), (c), (d), (e) and (f), as the Board of
Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase
Common Stock resulting from any dividend or distribution of
stock (or rights to acquire stock) or from any event treated as
such for income tax purposes. To the extent permitted by
applicable law, the Company from time to time may reduce the
Conversion Price by any amount for any period of time if the
period is at least 20 days, the reduction is irrevocable during
the period and the Board of Directors (or, to the extent
permitted by applicable law, a duly authorized committee
thereof) 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 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.
(i) 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(i) 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.
(j) 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 effect the legality or
validity of any such adjustment.
(k) In any case in which this Section 15.5 provides
that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the
occurrence of such event (i) issuing to the holder of any Note
converted after such record date and before the occurrence of
such event the additional shares of Common Stock issuable upon
such conversion by reason of the adjustment required by such
event over and above the Common Stock issuable upon such
conversion before giving effect to such adjustment and (ii)
paying to such holder any amount in cash in lieu of any
fraction pursuant to Section 15.3.
Section 15.6 Effect of Reclassification, Consolidation, Merger
or Sale. If any of the following events occur, namely (i) any
reclassification or change of outstanding shares of Common Stock
(other than a change in par value, or from par value to no par value,
or from no par value to par value, or as a result of a subdivision or
combination), (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 conform to 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 ("non-electing
share"), then for the purposes of this Section 15.6 the kind and
amount of securities, cash or other property receivable upon such
consolidation, merger, statutory exchange, sale or conveyance for
each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares. Such
supplemental indenture shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments
provided for in this Article.
The Company shall cause notice of the execution of such
supplemental indenture to be mailed to each holder of Notes, at his
address appearing on the Note register provided for in Section 2.5 of
this Indenture, within 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.
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 provide, free from preemptive rights, out of its
authorized but unissued shares or shares held in treasury, sufficient
shares of Common Stock to provide for the conversion of the Notes
from time to time as such Notes are presented for conversion.
Before taking any action which would cause an adjustment
reducing the Conversion Price below the then par value, if any, of
the shares of Common Stock issuable upon conversion of the Notes, the
Company will take all corporate action which may, in the opinion of
its counsel, be necessary in order that the Company may validly and
legally issue shares of such Common Stock at such adjusted Conversion
Price.
The Company covenants that all shares of Common Stock which may
be issued upon conversion of Notes will upon issue be fully paid and
non-assessable by the Company and free from all taxes, liens and
charges with respect to the issue thereof.
The Company covenants that if any shares of Common Stock to be
provided for the purpose of conversion of Notes hereunder require
registration with or approval of any governmental authority under any
federal or state law before such shares may be validly issued upon
conversion, the Company will in good faith and as expeditiously as
possible endeavor to secure such registration or approval, as the
case may be.
The Company further covenants that if at any time the Common
Stock shall be listed on the 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; provided,
however, that if the Company is permitted by the rules of such
exchange or automated quotation system to list such Common Stock
after the first conversion of the Notes into Common Stock in
accordance with the provisions of this Indenture, the Company
covenants to list such Common Stock issuable upon conversion of the
Notes in accordance with the requirements of such exchange or
automated quotation system at such time.
Section 15.9 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 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 pursuant to Section 15.5; or
(b) the Company shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or
warrants; or
(c) of any reclassification or reorganization of the
Common Stock of the Company (other than a subdivision or
combination of its outstanding Common Stock, or a change in par
value, or from par value to no par value, or from no par value
to par value), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders
of the Company is required, or of the sale or transfer of all
or substantially all of the assets of the Company; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding-up of the Company;
the Company shall cause to be filed with the Trustee and to be mailed
to each holder of Notes at his address appearing on the Note register
provided for in Section 2.5 of this Indenture, as promptly as
possible but in any event at least 15 days prior to the applicable
date hereinafter specified, a notice stating (x) the date on which a
record date is to be taken for the purpose of such dividend,
distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to
be entitled to such dividend, distribution or rights are to be
determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or
winding-up is expected to become effective or occur, and the date as
of which it is expected that holders of Common Stock of record shall
be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up.
Failure to give such notice, or any defect therein, shall not affect
the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up.
ARTICLE XVI
MISCELLANEOUS PROVISIONS
Section 16.1 Provisions Binding on Company's Successors. All
the covenants, stipulations, promises and agreements in this
Indenture contained by the Company shall bind its successors and
assigns whether so expressed or not.
Section 16.2 Official Acts by Successor Corporation. Any act
or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer
of the Company shall and may be done and performed with like force
and effect by the like board, committee or officer of any corporation
that shall at the time be the lawful sole successor of the Company.
Section 16.3 Addresses for Notices, Etc. Any notice or demand
which by any 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
3Com Corporation, 5400 Bayfront Plaza, P.O. Box 58154, Attention:
General Counsel. 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 Blue Hills Office Park, 150 Royall Street, Canton, Massachusetts,
02021 Attention: Corporate Trust Division (1994 3Com Corporation
Indenture).
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 16.4 Governing Law. This Indenture and each Note
shall be deemed to be a contract made under the laws of New York, and
for all purposes shall be construed in accordance with the laws of
New York.
Section 16.5 Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by the
Company to the Trustee to take any action under any of the provisions
of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have
been complied with, and an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been
complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition
or covenant provided for in this Indenture shall include (1) a
statement that the person making such certificate or opinion has read
such covenant or condition; (2) a brief statement as to the nature
and scope of the examination or investigation upon which the
statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to whether
or not, in the opinion of such person, such condition or covenant has
been complied with.
Section 16.6 Legal Holidays. In any case where the date of
maturity of interest on or principal of the Notes or the date fixed
for redemption of any Note will not be a Business Day, then payment
of such interest on or principal of the Notes need not be made on
such date, but may be made on the next succeeding Business Day with
the same force and effect as if made on the date of maturity or the
date fixed for redemption, and no interest shall accrue for the
period from and after such date.
Section 16.7 Trust Indenture Act. This Indenture is hereby
made subject to, and shall be governed by, the provisions of the
Trust Indenture Act required to be part of and to govern indentures
qualified under the Trust Indenture Act provided, however, that,
unless otherwise required by law, notwithstanding the foregoing, this
Indenture and the Notes issued hereunder shall not be subject to the
provisions of subsections (a)(1), (a)(2), and (a)(3) of Section 314
of the Trust Indenture Act as now in effect or as hereafter amended
or modified.
Section 16.8 No Security Interest Created. Nothing in this
Indenture or in the Notes, expressed or implied, shall be construed
to constitute a security interest under the Uniform Commercial Code
or similar legislation, as now or hereafter enacted and in effect, in
any jurisdiction where property of the Company or its subsidiaries is
located.
Section 16.9 Benefits of Indenture. Nothing in this Indenture
or in the Notes, expressed or implied, shall give to any Person,
other than the parties hereto, any paying agent, any authenticating
agent, any Note registrar and their successors hereunder, the holders
of Notes and the holders of Senior Indebtedness, any benefit or any
legal or equitable right, remedy or claim under this Indenture.
Section 16.10 Table of Contents, Headings, Etc. The table of
contents and the titles and headings of the articles and sections of
this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or
restrict any of the terms or provisions hereof.
Section 16.11 Authenticating Agent. The Trustee may appoint
an authenticating agent which shall be authorized to act on its
behalf and subject to its direction in the authentication and
delivery of Notes in connection with the original issuance thereof
and transfers and exchanges of Notes hereunder, including under
Sections 2.4, 2.5, 2.6, 2.7, 3.3 and 3.5, as fully to all intents and
purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and
deliver Notes. For all purposes of this Indenture, the
authentication and delivery of Notes by the authenticating agent
shall be deemed to be authentication and delivery of such Notes "by
the Trustee" and a certificate of authentication executed on behalf
of the Trustee by an authenticating agent shall be deemed to satisfy
any requirement hereunder or in the Notes for the Trustee's
certificate of authentication. Such authenticating agent shall at
all times be a person eligible to serve as trustee hereunder pursuant
to Section 8.9.
Any corporation into which any authenticating agent may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, consolidation or conversion to
which any authenticating agent shall be a party, or any corporation
succeeding to the corporate trust business of any authenticating
agent, shall be the successor of the authenticating agent hereunder,
if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any
further act on the part of the parties hereto or the authenticating
agent or such successor corporation.
Any authenticating agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The
Trustee may at any time terminate the agency of any authenticating
agent by giving written notice of termination to such authenticating
agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
authenticating agent shall cease to be eligible under this Section,
the Trustee shall 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, and the Trustee
shall be entitled to be reimbursed for such payments, subject to
Section 8.6.
The provisions of Sections 8.2, 8.3, 8.4, 9.3 and this
Section 16.11 shall be applicable to any authenticating agent.
Section 16.12 Execution in Counterparts. This Indenture may
be executed in any number of counterparts, each of which shall be an
original, but such counterparts shall together constitute but one and
the same instrument.
The First National Bank of Boston hereby accepts the trusts in
this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
TRAILER HERE. IN WITNESS WHEREOF, the parties hereto have
caused this Indenture to be duly signed, and their respective
corporate seals to be hereunto affixed and attested, all as of
the date first written above.
3COM CORPORATION
By: /s/ Christopher B. Paisley
Title: Vice President, Finance and
and Chief Financial Officer
Attest:
[SEAL]
THE FIRST NATIONAL BANK OF BOSTON, as Trustee
By: /s/ James E. Schultz
Title: Senior Account Administrator
Attest:
[SEAL]
EXHIBIT A - FORM OF NOTE
[FORM OF FACE OF NOTE]
FORM OF LEGEND FOR GLOBAL NOTE: UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE NOTE EVIDENCED HEREBY HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT)
("INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THE NOTE EVIDENCED HEREBY IN AN
OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN THREE
YEARS AFTER THE ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY
RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY OR THE
COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH NOTE EXCEPT (A)
TO 3COM CORPORATION OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE
UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO
SUCH TRANSFER, FURNISHES TO THE FIRST NATIONAL BANK OF BOSTON,
AS TRUSTEE, A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THE
NOTE EVIDENCED HEREBY (THE FORM OF WHICH LETTER CAN BE OBTAINED
FROM SUCH TRUSTEE), (D) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH RULE 904 UNDER THE SECURITIES ACT OR (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THE NOTE EVIDENCED HEREBY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE NOTE EVIDENCED
HEREBY WITHIN THREE YEARS AFTER THE ORIGINAL ISSUANCE OF SUCH
NOTE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS NOTE TO THE FIRST NATIONAL BANK OF BOSTON, AS
TRUSTEE. IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR OR A PURCHASER WHO IS NOT A U.S. PERSON,
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE FIRST
NATIONAL BANK OF BOSTON, AS TRUSTEE, SUCH CERTIFICATIONS, LEGAL
OPINIONS OR OTHER INFORMATION AS IT MAY REASONABLY REQUIRE TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND
WILL BE REMOVED AFTER THE EXPIRATION OF THREE YEARS FROM THE
ORIGINAL ISSUANCE OF THE NOTE EVIDENCED HEREBY. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT.
3Com Corporation
10 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2001
No.1
3Com Corporation, a corporation duly organized and validly
existing under the laws of the State of California (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 _____________________
________________________________________ DOLLARS on November 1, 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, in such coin or
currency of the United States of America as at the time of payment
shall be legal tender for the payment of public and private debts,
and to pay interest, semi-annually on May 1 and November 1 of each
year, commencing May 1, 1995, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 10 1/4%, from
the May 1 or November 1, 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 November 16, 1994, until payment of said principal
sum has been made or duly provided for. Notwithstanding the
foregoing, if the date hereof is after any April 15 or October 15, as
the case may be, and before the following May 1 or November 1, this
Note shall bear interest from such May 1 or November 1; provided,
however, that if the Company shall default in the payment of interest
due on such May 1 or November 1, then this Note shall bear interest
from the next preceding May 1 or November 1 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 November 16, 1994. The interest
so payable on any May 1 or November 1 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 April
15 or October 15 (whether or not a Business Day) next preceding such
May 1 or November 1; 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.
The aggregate principal amount of the Note in global form
represented hereby may from time to time be reduced or increased to
reflect exchanges of a part of this Note in global form for
definitive Notes or exchanges of definitive Notes for a part of this
Note in global form or conversions or redemptions of a part of this
Note in global form or cancellations of a part of this Note in global
form or transfers of definitive Notes in return for a part of this
Note in global form or transfers of a part of this Note in global
form effected by delivery of definitive Notes, in each case, and in
any such case, by means of notations on the Schedule of Exchanges,
Conversions, Redemptions, Cancellations and Transfers on the last
page hereof. Notwithstanding any provision of this Note to the
contrary, (i) exchanges of a part of this Note in global form for
definitive Notes, (ii) exchanges of definitive Notes for a part of
this Note in global form, (iii) conversions or redemptions of a part
of this Note in global form, (iv) cancellations of a part of this
Note in global form, (v) transfers of definitive Notes in return for
a part of this Note in global form and (vi) transfers of a part of
this Note in global form effected by delivery of definitive Notes may
be effected without the surrendering of this Note in global form,
provided that appropriate notations on the Schedule of Exchanges,
Conversions, Redemptions, Cancellations and Transfers are made by the
Trustee, or the Custodian at the direction of the Trustee, to reflect
the appropriate reduction or increase, as the case may be, in the
aggregate principal amount of this Note in global form resulting
therefrom or as a consequence thereof.
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 State of New York, and for all purposes shall be construed in
accordance with and governed by the laws of said State.
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.
3COM CORPORATION
By:
Title:
Dated:
[SEAL]
Attest:
_
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named
Indenture.
THE FIRST NATIONAL BANK OF BOSTON, as Trustee
By:
As Authenticating Agent (if different from Trustee)
By:
Authorized Signatory
[FORM OF REVERSE OF NOTE]
3Com Corporation
10 1/4% CONVERTIBLE SUBORDINATED NOTE DUE 2001
This Note is one of a duly authorized issue of Notes of the
Company, designated as its 10 1/4% Convertible Subordinated Notes due
2001 (herein called the "Notes"), limited to the aggregate principal
amount of $110,000,000, all issued or to be issued under and pursuant
to an Indenture dated as of November 1, 1994 (herein called the
"Indenture"), between the Company and The First National Bank of
Boston, 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 or affect 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, or impair or change the obligation of the Company to
make redemption of any Note upon the happening of a Fundamental
Change in a manner adverse to the holder of the Notes, or impair the
right to convert the Notes into Common Stock subject to the terms set
forth in the Indenture, including Section 15.6 thereof, without the
consent of the holder of each Note so affected or (ii) reduce the
aforesaid percentage of Notes, the holders of which are required to
consent to any such supplemental indenture, without the consent of
the holders of all Notes then outstanding. It is also provided in
the Indenture that, prior to any declaration accelerating the
maturity of the Notes, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf
of the holders of all of the Notes waive any past default or Event of
Default under the Indenture and its consequences except a default in
the payment of interest or any premium on or the principal of any of
the Notes, a default in the payment of redemption price pursuant to
Article III or a failure by the Company to convert any Notes into
Common Stock of the Company. Any such consent or waiver by the
holder of this Note (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all future
holders and owners of this Note and any Notes which may be issued in
exchange or substitute hereof, irrespective of whether or not any
notation thereof is made upon this Note or such other Notes.
The indebtedness evidenced by the Notes is, to the extent and
in the manner provided in the Indenture, expressly subordinate and
subject in right of payment to the prior payment in full of all
Senior Indebtedness of the Company, as defined in the Indenture,
whether outstanding at the date of the Indenture or thereafter
incurred, and this Note is issued subject to the provisions of the
Indenture with respect to such subordination. Each holder of this
Note, by accepting the same, agrees to and shall be bound by such
provisions and authorizes the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-
fact for such purpose.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of
and any premium and interest on this Note at the place, at the
respective times, at the rate and in the coin or currency herein
prescribed.
Interest on the Notes shall be computed on the basis of a year
of twelve 30-day months.
The Notes are issuable in registered form without coupons in
denominations of $1,000 and any multiple of $1,000. At the office or
agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture,
without payment of any service charge but with payment of a sum
sufficient to cover any tax or other governmental charge that may be
imposed in connection with any registration or exchange of Notes,
Notes may be exchanged for a like aggregate principal amount of Notes
of other authorized denominations.
The Notes will not be redeemable at the option of the Company
prior to November 1, 1997. On or after such date 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 the date
fixed for redemption.
If redeemed during the 12-month period beginning November 1:
Year Percentage Year Percentage
1997 102.929% 1999 101.464%
1998 102.196 2000 100.732
and 100% at November 1, 2001; provided that if the date fixed for
redemption is a May 1 or November 1, then the interest payable on
such date shall be paid to the holder of record on the next preceding
April 15 or October 15, respectively.
The Notes are not subject to redemption through the operation
of any sinking fund.
If a Fundamental Change (as defined in the Indenture) occurs at
any time prior to November 1, 2001, the Notes will be redeemable on
the 30th day after notice thereof at the option of the holder. Such
payment shall be made at the following prices (expressed as
percentages of the principal amount) in the event of a Fundamental
Change occurring during the 12-month period beginning November 1:
Year Percentage Year Percentage
1994 105.125% 1998 102.196%
1995 104.393 1999 101.464
1996 103.661 2000 100.732
1997 102.929
and 100% at November 1, 2001; provided in each case that if the
Applicable Price (as defined in the Indenture) is less than the
Reference Market Price (as defined in the Indenture), the Company
shall redeem such Notes at a price equal to the foregoing repayment
price multiplied by the fraction obtained by dividing the Applicable
Price by the Reference Market Price. In each case, the Company shall
also pay accrued interest, if any, on such Notes to the repayment
date; provided that if such repayment date is May 1 or November 1,
then the interest payable on such date shall be paid to the holder of
record of the Note on the next preceding April 15 or October 15. The
Company shall mail to all holders of record of the Notes a notice of
the occurrence of a Fundamental Change and of the redemption right
arising as a result thereof on or before the 10th day after the
occurrence of such Fundamental Change.
Subject to the provisions of the Indenture, the holder hereof
has the right, at its option, at any time after 60 days following
original issuance of the Notes and prior to the close of business on
November 1, 2001, or, as to all or any portion hereof called for
redemption, prior to the close of business on the Business Day
immediately preceding the date fixed for redemption (unless the
Company shall default in payment due upon redemption thereof), to
convert the principal hereof or any portion of such principal which
is $1,000 or an integral multiple thereof, into that number of shares
of Company's Common Stock, as said shares shall be constituted at the
date of conversion, obtained by dividing the principal amount of this
Note or portion thereof to be converted by the conversion price of
$69_ 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 opening of business on the following 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 following interest payment date) must be
accompanied by an amount, in funds acceptable to the Company, equal
to the interest payable on such interest payment date on the
principal amount at maturity being converted; provided further,
however, that no such payment shall be required if the Company
exercises its right to redeem the Notes on November 1, 1997. No
fractional shares will be issued upon any conversion, but an
adjustment in cash will be made, as provided in the Indenture, in
respect of any fraction of a share which would otherwise be issuable
upon the surrender of any Note or Notes for conversion.
Any Notes called for redemption, unless surrendered for
conversion on or before the close of business on the date fixed for
redemption, may be deemed to be purchased from the holder of such
Notes at an amount equal to the applicable redemption price, together
with accrued interest to the date fixed for redemption, by one or
more investment bankers or other purchasers who may agree with the
Company to purchase such Notes from the holders thereof and convert
them into Common Stock of the Company and to make payment for such
Notes as aforesaid to the Trustee in trust for such holders.
Upon due presentment for registration of transfer of this Note
at the office or agency of the Company in the Borough of Manhattan,
The City of New York, or at the option of the holder of this Note, at
the Corporate Trust Office, a new Note or Notes of authorized
denominations for an equal aggregate principal amount will be issued
to the transferee in exchange thereof, subject to the limitations
provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith.
The Company, the Trustee, any authenticating agent, any paying
agent, any conversion agent and any Note registrar may deem and treat
the registered holder hereof as the absolute owner of this Note
(whether or not this Note shall be overdue and notwithstanding any
notation of ownership or other writing hereon made by anyone other
than the Company or any Note registrar), for the purpose of receiving
payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor
any other authenticating agent nor any paying agent nor any other
conversion agent nor any Note registrar shall be affected by any
notice to the contrary. All payments made to or upon the order of
such registered holder shall, to the extent of the sum or sums paid,
satisfy and discharge liability for monies payable on this Note.
No recourse for the payment of the principal of or any premium
or interest on this Note, or for any claim based hereon or otherwise
in respect hereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in the Indenture or any
indenture supplemental thereto or in any Note, or because of the
creation of any indebtedness represented thereby, shall be had
against any incorporator, shareholder, officer or director, 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.
ABBREVIATIONS
The following abbreviations, when used in the inscription of
the face of this Note, shall be construed as though they were written
out in full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT -
TEN ENT - as tenants by the Custodian
entireties (Cust)
JT TEN - as joint tenants with under
right of survivorship (Minor)
and not as tenants in
common
Uniform Gifts to
Minors Act
(State)
Additional abbreviations may also be used
though not in the above list.
CONVERSION NOTICE
To: 3Com 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 3Com 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 a commercial
bank or trust company or a
member firm of a major
stock exchange 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
Fill in for registration of
shares 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
OPTION TO ELECT REPAYMENT
UPON A FUNDAMENTAL CHANGE
To: 3Com Corporation
The undersigned registered owner of this Note hereby
irrevocably acknowledges receipt of a notice from 3Com Corporation
(the "Company") as to the occurrence of a Fundamental Change with
respect to the Company and requests and instructs the Company to
repay the entire principal amount of this Note, or the portion
thereof (which is $1,000 or a multiple thereof) below designated, in
accordance with the terms of the Indenture referred to in this Note
at the redemption price, together with accrued interest to such date,
to the registered holder hereof.
Dated: ________________________ ________________________________
________________________________
Signature(s)
Principal amount to be converted
(if less than all):
$__________
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.
________________________________
Social Security or Other
Taxpayer Identification Number
ASSIGNMENT
For value received ____________________________ hereby sell(s),
assign(s) and transfer(s) unto ___________________________________
(Please insert social security or other taxpayer identifying number
of assignee) the within Note, and hereby irrevocably constitutes and
appoints _________________________________________________________
attorney to transfer the said Note on the books of the Company, with
full power of substitution in the premises.
In connection with any transfer of the within Note within three
years of the date of original issuance of such Note, the undersigned
confirms that such Note is being transferred:
To 3Com Corporation or a subsidiary thereof; or
Pursuant to and in compliance with Rule 144A under
the Securities Act of 1933, as amended; or
To an Institutional Accredited Investor pursuant to
and in compliance with the Securities Act of 1933,
as amended; or
Pursuant to and in compliance with Regulation S under
the Securities Act of 1933, as amended; or
Pursuant to and in compliance with Rule 144 under
the Securities Act of 1933, as amended;
and unless the box below is checked, the undersigned confirms that
such Note is not being transferred to an "affiliate" of the Company
as defined in Rule 144 under the Securities Act of 1933, as amended
(an "Affiliate").
The transferee is an Affiliate of the Company, as
amended.
Dated: ____________________
Signature(s)
Signature(s) must be guaranteed
by a commercial bank or trust
company or a member firm of a
major stock exchange if shares
of Common Stock are to be issued,
or Notes to be delivered, other
than to or in the name of the
registered holder.
Signature Guarantee
SCHEDULE OF EXCHANGES, CONVERSIONS, REDEMPTIONS, CANCELLATIONS
AND TRANSFERS FOR DEFINITIVE DEBENTURES
The following exchanges of a part of this Debenture in global
form for definitive Debentures or of definitive Debentures for a part
of this Debenture in global form have been made:
Date of
Exchange
Amount of
decrease in
Principal Amount
of this Debenture
in global form
Amount of
increase in
Principal Amount
of this Debenture
in global form
Principal Amount
of this Debenture
in global form
following such
decrease or increase
Signature of
authorized officer
or trustee or
Debentures Custodian
EXHIBIT 5.3
PRESS RELEASE
DATED NOVEMBER 8, 1994
[3Com Logo] 3Com Corporation (408) 764-5000
5400 Bayfront Plaza 345546 Telex
P.O. Box 58145
Santa Clara, CA 95052-8145
For More Information:
Kate Patterson
3Com Investor Relations
(408) 764-6802
FOR IMMEDIATE RELEASE
November 8, 1994
3COM ANNOUNCES PRIVATE CONVERTIBLE DEBT FINANCING
SANTA CLARA, Calif. - 3Com Corporation (NASDAQ:COMS), a leading
global data networking company, today concluded an agreement with
investment banking firms for the private placement under Rule 144A of
up to $110 million 10.25 percent convertible subordinated notes due
2001. The notes, non-callable for three years, are convertible into
a maximum of 1,591,320 shares of 3Com common stock at a conversion
price of $69.125 per share. The transaction is expected to close
next week.
The proceeds will be used for general corporate purposes.
The notes have not been and will not be registered under the
Securities Act of 1933 and may not be offered or sold within the
United States absent registration or an available exemption from such
registration requirements.
This announcement does not constitute an offer to sell or the
solicitation of offers to buy any security and shall not constitute
an offer, solicitation or sale of any security in any jurisdiction in
which such offer, solicitation or sale would be unlawful.
Founded in 1979, 3Com Corporation pioneered the data networking
industry. Today, 3Com offers customers a broad range of ISO 9000-
compliant global data networking solutions that include routers,
hubs, remote access servers, switches and adapters for Ethernet,
Token Ring, and high-speed networks. 3Com is a Fortune 500 company
headquartered in Santa Clara, Calif. and maintains worldwide research
and development, manufacturing, marketing, sales and support
capabilities.
